WEDNESDAY 12 APRIL 2000
_________
Members present:
Mr Andrew F Bennett, in the Chair
Mr Hilary Benn
Mr Tom Brake
Christine Butler
Mr Brian H Donohoe
Mrs Gwyneth Dunwoody
Mrs Louise Ellman
Mr Clifford Forsythe
Mrs Teresa Gorman
Mr James Gray
Miss Anne McIntosh
Mr Bill O'Brien
Mr Bill Olner
_________
EXAMINATION OF WITNESS
MR STEPHEN TIMMS, MP, Financial Secretary, HM Treasury, examined.
Chairman
679. Welcome to the Committee. Before asking Mr Timms to
introduce himself I want to place on record the appreciation of the Committee
to all those who helped on our visit to Yorkshire last week. We are very
grateful to everybody, including all the staff of the Committee, who arranged
the visit. The only slight fly in the ointment was the amount of snow and
wind that we encountered. The visit was very useful. Mr Timms, I welcome you
to the Committee. Please introduce yourself for the record and perhaps you
have a few words to say by way of introduction.
(Mr Timms) Thank you, Chairman. I am Stephen Timms, the Financial
Secretary at the Treasury. I shall begin by saying how much I welcome this
opportunity to appear before the Committee again. Urban regeneration is a key
issue for the whole Government. In the Treasury we are working closely with
other departments to develop a strategy that joins together all of us. We
welcome the report of Lord Rogers of Riverside. We are giving very careful
consideration to the recommendations that he has made. The Government's
strategy will be set out in more detail in the Urban White Paper which will
be published later this year. We have made a number of responses already to
Lord Rogers' recommendations. You may want to talk about some of them. He
focused on physical regeneration and I think it is important that we also look
at social and economic measures in considering how to take his proposals
forward. Of course, today the consultation version of the Social Exclusion
Unit's national strategy for neighbourhood renewal is being launched. I
believe that the final version of that will appear in the summer. We are
working closely with the DTI on the economic regeneration side of the package.
You may want to ask me about some of those measures. I am looking forward
very much to this discussion and to hearing the Committee's views on how we
can take this very important programme forward.
Mrs Ellman
680. In what specific ways will the Treasury contribute to
creating urban renaissance?
(Mr Timms) We see this very much as a joint package of work. We shall
be working very closely with the DETR, the DTI and other government
departments to take forward the ideas that will emerge in the Urban White
Paper. There are a number of recommendations in the Rogers' report which are
specifically for the Treasury. At the moment we are looking very carefully
at what he has proposed. In the Budget we have announced that we are
attracted to the idea of an exemption from stamp duty for developments on
brownfield sites. The Paymaster General will take forward consultation on
that specific measure. That is something that is clearly Treasury-specific.
More broadly, on taking forward these measures, it is important that we work
across government, and we are committed to doing that.
681. Are you considering any other changes on taxation?
(Mr Timms) Lord Rogers made a number of recommendations on taxation and
we are looking at all of them. We have not resolved what to do on those
recommendations as yet, but we are actively considering all the proposals that
he has made, including the proposals on taxation.
682. Are there any specific proposals that you would like to bring
to our attention?
(Mr Timms) There is nothing specific that I can announce today, beyond
what we announced in the Budget, but there are some very ambitious proposals
in the Rogers' report. I am a fan of the report. I think it is a visionary
and an inspirational document. It proposes a large number of ideas that we
need to work on, to reflect on and to do detailed work on, particularly in the
area of tax. A lot of detailed work is called for by his ideas. What he says
about fiscal measures is, "Here's a set of interesting ideas that may help".
There needs to be a debate around them and there needs to be lots of detailed
work done on precisely what the impact of those measures would be if they were
introduced, or some variation of them was introduced, and that is the work
that we need to do before we are in a position to say, "Yes, we want to take
this measure forward", or, "No, we do not want to take that measure forward".
We have made an important and a significant start on the consultation on the
statutory exemption for brownfield site development.
683. The previous government introduced active legislation to
restrict local authority involvement in companies. Has the Treasury been
consulted about any proposals to rescind or to alter that legislation?
(Mr Timms) I am not aware of any consultation on that, but if you would
like me to check, I would be happy to do so.
Mrs Ellman: Yes, I would please.
Mr Forsythe
684. It is estimated that some œ200 billion is spent in United
Kingdom towns and cities each year, yet public spending on all urban
regeneration programmes amounts to less than œ1.5 billion. Are there ways of
bringing in more state spending to help the situation?
(Mr Timms) The point that you have made underlines very forcefully a key
part of what Lord Rogers said, with which I agree, which is that the key is
to make sure that all of that very large sum of money being spent at the
moment is being spent in an effective way. We need to make sure that it is
being spent in a joined-up way and that there are not unhelpful contradictory
things being done by different bits of government. Clearly, urban regeneration
spending itself is a substantial sum and, in my experience, has the potential
to have a significant impact on conditions in our cities. But the real task
is to make sure that the great bulk of government spending in our urban areas
is spent effectively and well. We can achieve much more if we can spend that
œ200 billion well - if the figure you have given is correct - than we can by
the relatively comparatively modest amounts of additional targeted investment
in what we would normally call urban regeneration. It is a very telling
statistic.
685. The UK public spending on urban infrastructure and management
lags well behind most EU countries. Are you happy with that?
(Mr Timms) I would be interested to see the data on which that statement
is based. I have not seen those figures. They sound interesting. My guess
is that there are tricky issues of definition here about precisely what counts
as, as you term it, urban infrastructure and management.
686. Urban infrastructure and management.
(Mr Timms) Yes. I would be interested to see that data. I do not think
that the fundamental problem is a shortage of funding. Of course, the
Chancellor has announced that we shall be able to double the proportion of GDP
that will go into public investment between now and 2004. So things are
moving strongly in the right direction on that front because of the excellent
way in which the economy has been performing. Going back to your first point,
I think that the effectiveness of what is being spent is the real test rather
than the debate about whether œ200 billion more ought to be spent under a
particular heading.
Mr Gray
687. I have a supplementary to Mrs Ellman's question. I think she
referred to the fact that the previous government decided that if a local
authority takes a stake of more than 50 per cent in an outside company or in
setting up an outside company it takes 49 per cent or less, that none the less
would count within the PSBR. Does your Government take the same view?
(Mr Timms) The question was whether I had been consulted about a
proposal to change that measure. I personally have not been.
688. I am asking whether you should be.
(Mr Timms) I said that I would check that.
Mr Gray: I am asking you whether you should be consulted. What is
your view? Do you believe that companies with 51 per cent owned by local
authorities is or is not within the PSBR?
Chairman: We have been offered a note and if we are unhappy with the
note, then we can pursue it further.
Mr Gray
689. As long as the note is more substantial than just whether or
not you have been consulted. Please do not write back saying simply that you
have not been consulted. All we want is an answer to whether you believe that
a 51 per cent owned local authority company does or does not come within the
PSBR.
(Mr Timms) It is not a matter that I have recently reflected on, but I
am happy to do so.
690. That is fine. I really want to ask about VAT. Lord Rogers
said equalise it at zero per cent, which you cannot do under European law.
I know that is the case. Why did the Chancellor not take some steps towards
that in the Budget?
(Mr Timms) I think we have taken a significant first step by initiating
the consultation on stamp duty. However, Lord Rogers gave a full set of
recommendations - 105 in all. A number of them are proposals that require a
very good deal of careful analysis, discussion and reflection before being
implemented. I do not think that we are yet in a position to say whether it
would be right to do this or that on VAT or quite how to respond to a number
of the recommendations that he made. We are looking at them all very
carefully. In due course, we shall be able to say which of them we think it
would be right to take forward. My reading of the report was that the spirit
in which he made those proposals was, "Here is a list of what we think are
interesting proposals ---
691. Let us go back to VAT. He made a specific recommendation to
equalise at zero. In your evidence you say that if it were equalised, an
increased number of houses would be created in inner city areas. How did you
come to that view?
(Mr Timms) Let me point you to what Lord Rogers actually said on the tax
measures: "Over 50 different measures were subjected to tests in terms of
their potential to influence market behaviour and their overall effectiveness,
practicality and acceptability. The measures which survived these tests are
presented in this section. None of them are without difficulties but they all
have some merit. We hope that some of them can be introduced". That is on
page 272 of the report. That refers to the spirit in which he put forward the
tax recommendations that are in his report.
692. We accept that. We too have read the report. I want to
focus on your view of the VAT equalisation effect on housing. I shall repeat
the question. In your evidence you state that there would be an increase in
the number of houses in inner city areas if VAT were equalised. How did you
come to that conclusion?
(Mr Timms) I am not clear about which part of my evidence you are
referring to.
693. Paragraph 7(a) in the second paragraph: "through research
commissioned by the DETR in 1997".
(Mr Timms) I am not sure that that relates to the point that you
associate with it.
694. Am I right in thinking that Customs and Excise are currently
studying the equalisation of VAT?
(Mr Timms) I have made it clear that we are looking at all ---
695. It is quite a specific question. Are Customs and Excise
currently undertaking a study into the effect of the equalisation of VAT?
(Mr Timms) We are looking at all Lord Rogers' recommendations on tax,
including VAT.
696. I am raising a specific point. I understand that Customs and
Excise are currently undertaking a specific study into the effect of the
number of houses that would be increased in inner city areas as a result of
the equalisation of VAT on conversions. Is that correct?
(Mr Timms) There is a wide range of work going on within the Treasury on
all the recommendations that Lord Rogers has made. We are certainly looking,
in detail, at the proposals that he has made on VAT.
697. I shall take that as either you do not know or a yes. I am
not certain which it is. This Committee has been told by our advisers that
Customs and Excise are currently undertaking a specific examination of the
number of houses that would be increased if VAT were equalised. I am asking
you whether or not that study is happening. To say that you are looking at
all the recommendations is not an answer to the question.
(Mr Timms) I do not actually know whether the work is being carried out
by Customs and Excise, but we are certainly looking at the impact that would
follow were Lord Rogers' VAT proposals ---
698. The fact that you do not know is probably why you do not
mention it in your evidence. It seems odd, if Customs and Excise are doing
that, that you do not mention it.
(Mr Timms) I am telling the Committee that there is a wide range of
research being carried out within the Treasury, and for these purposes I
include in that within the Customs and Excise and Inland Revenue, on the tax
proposals that Lord Rogers has made. It is an exhaustive piece of work that
is being carried out. All I am saying is that I am not sure which bit ---
699. Perhaps you would let the Committee know. When you let the
Committee know about the specific Customs and Excise study, it would be
helpful to know when it will be completed and perhaps you will let the
Committee know the outcome of the study. Can you do that?
(Mr Timms) I can certainly check where among our various organisations
that work is being carried out and where it has got to.
700. The other proposal that Lord Rogers goes on about is the
possibility of some kind of greenfield levy, a tax of some kind on building
houses on greenfield sites. Would that help to regenerate the inner cities?
Do you think it would or would it merely put up the prices of houses on
greenfield sites?
(Mr Timms) I do not think that he proposes a tax on greenfield
development. He talks about VAT, but my understanding of his conclusions is
that apart from the VAT measures, an additional tax on greenfield development
would not be appropriate.
701. Leaving aside Lord Rogers, many people are talking about
putting some kind of tax - whether VAT or a levy - on building houses on a
greenfield site. Some people say that would not help to discourage building
on greenfield sites. Are you in favour of such a tax or not?
(Mr Timms) There are two separate approaches. In answering, I want to
be clear which one we are talking about. I have said that we are looking at
all the proposals made about VAT, including the greenfield element of that,
but my understanding of the conclusions, apart from VAT, is that it would not
be appropriate to introduce a tax on greenfield development and I concur with
that view.
702. VAT of 17.5 per cent would be an extra cost if you build a
house on a greenfield site. The question I am asking you is, do you think
that some kind of tax on a house built on a greenfield site would help urban
regeneration?
(Mr Timms) We are looking at all Lord Rogers' VAT proposals, including
what he has proposed ---
703. You could send us a letter stating that. We are asking a
specific question about specific proposals and for you constantly to say that
you are looking at them ---
(Mr Timms) We are looking at them all. I do not want to mislead the
Committee.
Mr Olner: The previous administration put VAT up to 17.5 per cent.
Chairman: Let us move on.
Mr Benn
704. When do you expect the review of stamp duty to be completed?
(Mr Timms) We shall move fairly swiftly to put the consultation in hand.
The Paymaster General will take that forward.
Chairman: The phrase "we shall move fairly swiftly" needs to be defined
by Ministers.
Mrs Dunwoody
705. Is that in Treasury terms or in everybody else's terms?
(Mr Timms) In common parlance.
706. That is not the same as European time and African time?
(Mr Timms) No. I do not think that there is any reason for hanging
around on this. I am not sure what the Paymaster General's precise timetable
is for it, but we shall move fairly quickly. I do not imagine that it needs
to be a very lengthy process. Certainly by the time that we get to the pre-
Budget report in November, I would expect the consultation to have been
completed and a conclusion to have been drawn.
Chairman
707. Presumably that may mean that there will still a question
mark over it when the Urban White Paper is published.
(Mr Timms) Yes, I think it might be over ambitious to expect everything
to have been concluded in time for the Urban White Paper, but certainly by the
pre-Budget report.
Mr Benn
708. Do you know whether those involved in property development
will be consulted as part of this review?
(Mr Timms) Yes. Our intention is that the Inland Revenue will approach
the appropriate representative bodies, including those with interests in
property development. Of course, anybody who wants to express a view should
not hesitate to put their view forward and all submissions that we receive
will be carefully considered.
709. Looking at the issue that we are discussing this morning, is
the Treasury concerned about the low rate of return that there is on property
compared with equities and other investments? We have had quite a bit of
evidence that has expressed concern about that.
(Mr Timms) On the whole, I think our view is that the property market is
in quite good shape at the moment. There has been good growth in the value
of commercial property in the UK in the past couple of years. I think there
is a good stream of investment in property in hand at the moment. We do not
have any great misgivings about the state of the property market at the
moment.
Chairman: Are you sure about that? The phrase "as safe as houses" used
to be used. When the Select Committee was in Yorkshire last week, it saw that
50 per cent of the shops in Heckmondwike were empty which meant they were not
producing much of a return. There are also substantial numbers of houses that
people have bought in parts of Leeds that are almost unsaleable.
Mr Benn
710. Therefore, that makes regeneration of inner cities rather
difficult, hence the question.
(Mr Timms) What I said about the state of the property market is right,
but it clearly is the case that there are pockets across the country where
there are serious problems. I think that is the concern at the heart of the
document that is being published today, arising from the work of the Social
Exclusion Unit and the various policy action teams, which have looked very
specifically at the problems of shops, for example, in disadvantaged areas.
There certainly are serious localised problems in this area and in a number
of others and they need to be addressed in a joined-up way by the Government's
strategy. I do not see a general problem of weakness in the property market.
711. In the light of what you have just said, do you think that
there may be a case for having a different rate of stamp duty in those areas
that are under particular stress, where property values are a problem?
(Mr Timms) Yes. I think there would be some difficulty in having
different rates of stamp duty. I would not entirely rule it out, but there
are administrative difficulties in introducing that arrangement. It is a one-
off tax, so it is not as though there is a system of tax being paid every year
in the way that council tax and business rates are.
712. If you draw a ring around an area, it would be easy to
identify which properties would qualify and which would not. I am not clear
what the administrative problems are.
(Mr Timms) It is a further complexity in the tax system. I am not
ruling it out. If the Committee wants to recommend that there should be an
arrangement of that sort, we would certainly consider it. Given that the tax
falls only when a property is for sale, rather than on an annual basis as
rates do, I remain to be convinced that that change would be one that is worth
making.
Chairman
713. I am not sure whether you want to look at the piece of paper
that has been passed to you.
(Mr Timms) I think what I have said stands.
Mrs Dunwoody
714. What concerns the Royal Institution of Chartered Surveyors is
the fact that changes in stamp duty may not be the way to encourage people to
regenerate property. For example, they said that if they received capital
gains tax relief on polluted sites, or if they received changes that would
encourage people to put in money, that may be more useful, and that stamp duty
may, in effect, wipe off a lot from the value of properties without
necessarily encouraging the result that you want.
(Mr Timms) I know that the RICS expressed concerned about the impact of
the change to stamp duty in the Budget. I was surprised by the figure. I
think they suggested that there would be a fall of œ13 billion from the
capital value of commercial property arising from that change. I was
surprised by that, given that commercial property prices have risen by nearly
7 per cent since the half a per cent rate increase in the Budget last year.
I do not share the RICS's view of the impact on the commercial property market
of stamp duty changes. However, we shall certainly want to take full account
of the views of the RICS and others in the consultation process that the
Paymaster General is leading on, about whether and if so how, we should
implement the exemption from stamp duty for brownfield developments.
715. I think they were making the point that property investment
could be risky and that is one point that the Urban Task Force picked up.
Would you support 100 per cent capital allowance on the cost of refurbishing
flats above shops?
(Mr Timms) Again, that is one of the proposals that Lord Rogers has
suggested in one of his lists. It is one that we are looking at. It is not
one about which we have reached a conclusion yet. From my experience in
Newham, in East London, from time to time we tried quite hard to bring back
into use flats over shops. It is an under-used resource. There are lots of
unused residential accommodation across the country in flats above shops. If
we could find a way of bringing those into use, that could be extremely
helpful. Whether Lord Rogers' suggestion is the way to do that, I am not
sure. There have been disappointing results, in my experience, in trying to
do that in the past, but we shall look at what he has said.
716. In that case, which of the Government's measures do you think
would be most helpful in supporting venture capital where it seeks to carry
out developments in difficult locations?
(Mr Timms) On the venture capital front, we are taking a wide range of
measures. Stop me if this is not the point on which you wanted me to
elaborate. The Chancellor announced in the Budget a substantial increase in
public support for venture capital funding, with the œ1 billion target
umbrella fund for investment over the next three to five years, using
government resources, using resources from the European investment bank, which
is a new element in the equation, and leveraging in private sector resources
as well. We want at least one venture capital fund to benefit from that in
each of the nine English regions.
717. Would that have a special remit that said that that money
would be particularly helpful in developing unpopular or run-down locations?
(Mr Timms) The remit to be given to each of the funds will be a matter
for each of the RDAs to determine.
718. I understand that, but the Treasury must have to take a
general overall view of which of the measures they think will begin to bring
into operation some of Lord Rogers' recommendations.
(Mr Timms) We are not going to be very prescriptive about the objectives
that the RDAs should set for their funds. It is important that there is
maximum flexibility for each of the agencies about the terms that they set for
the funds. Of course, it is important that the funds should secure commercial
returns and be managed in a normal commercial way. However, my expectation
would be that the RDA would see that as an opportunity to achieve new
investment that otherwise would not take place in the areas that Lord Rogers
is concerned about.
Mrs Ellman
719. Does the Treasury agree with the principle of a revolving
land assembly fund?
(Mr Timms) Perhaps you can tell me what the principle of a revolving
land assembly fund is.
720. It would involve setting up a revolving fund with public and
private sector contributions so that land assembly and preparing land for
development, particularly in difficult sites, could be brought forward more
quickly than otherwise would be possible, and where the share of profits from
the development are returned to the fund and made available for redevelopment.
There is a current proposal in the Treasury for a city revolving fund. There
is the principle of the Treasury contribution and supporting a revolving fund.
(Mr Timms) The agencies are already allowed to keep their receipts from
land disposals and to reinvest them. If it is the principle that you are
asking about, I think the principle is already reflected in the fact that RDAs
can do that. Whether there should be additional Treasury funding to help that
process, additional Treasury support, that is a matter that we shall consider
in the spending review to be completed by the summer. I think the principle
is already accepted, but the extent of financial support for that is a matter
that will be determined in the spending review.
721. Would you also be willing to look at the increasing RDAs'
ability to be involved more directly in land assembly on a regional basis,
whether through additional funding or through more flexibility on existing
funds? Will that principle be supported by the Treasury?
(Mr Timms) Yes, I would see that as being considered to be within the
context of what is happening, leading up to the spending review.
722. We have also received evidence of difficulties being caused
by the ending of GATT funding and the support given to developers to help to
regenerate sites. Can the Treasury offer any observations on that or, better
still, any help?
(Mr Timms) You are referring to the changes and what has happened in the
EU.
723. That is right.
(Mr Timms) I know that the DETR at the moment is looking at alternative
proposals, alternative ways of achieving what was achieved by the previous
GATT funding arrangements. They are working with the Commission to establish
a regeneration framework to ensure that the regeneration funding does not
unfairly distort competition and so incur EU disapproval. Again, I would
expect the proposals arising from that consideration to be considered within
the spending review for this summer.
724. RDAs and local authorities are concerned about the impact on
their budgets of the need to find matched funding for the European structural
programmes. Will the Treasury offer additional support to the RDAs and other
bodies so that matched funding can be provided in areas like the objective
area of Merseyside, but not at the expense of other important programmes in
the same part of the region?
(Mr Timms) At the risk of sounding a little repetitive, I think that is
a question that will be resolved within the spending review for the summer.
725. You expect it to be resolved?
(Mr Timms) It will certainly be addressed. Whether it will be resolved
to everybody's satisfaction is too early to say.
Chairman
726. I am a little worried about your answer on GATT funding. You
say that it will be all right as long as it does not distort competition. Is
it not intended to distort competition? It actually makes it easier for an
unfavourable site to compete with a favourable site. That is really
distorting competition, is it not? It is levelling up, but it is distorting
competition.
(Mr Timms) Yes. There are ways of achieving that objective and other
parallel objectives that accord with the approach that is required by the EU.
At the moment the purpose of the discussion between the DETR and the EU is to
identify how that can be achieved without breaching the EU anti-competition
rules.
Mr Gray
727. What sort of thing are you talking about?
(Mr Timms) I can think of a number of alternative proposals. I think it
is probably for DETR Ministers to say what they have in mind.
Mrs Gorman: What degree of attention do you pay to the comparison
between the RDA, local government and even the lottery type initiatives in the
EU as compared with what the private sector can do? It seems to me that in
the past those large bodies, that receive large dollops of money to do things,
have not had a great success record. Small businesses coming into areas
provide the yeast that does something for them, and that would bring us on.
Instead of these rather grandiose schemes, including mucking about with GATT,
capital gains and stamp duty, we should look at things like the unified
business rate. That often drives businesses away.
Chairman: Can we have a question?
Mrs Gorman
728. Are you looking at the right factors if you are talking about
urban renewal? I would like to hear more from you, sometime before you leave,
about the role of small businesses and how we can encourage them and what the
Treasury can do there with regard to things like the unified business rate
which you control. It makes a massive difference as to whether a business is
viable or not.
(Mr Timms) I do not see these two as alternatives. There is enormous
value - certainly that is my experience in East London - in effective, well-
targeted, well-managed urban regeneration investment. However, I agree with
you that small businesses and small business growth in inner city and urban
areas is enormously important. Yesterday, together with Hilary Armstrong, I
took part in a seminar arranged by the DETR about the new markets initiative
in the US that the Clinton administration has developed over the past year.
They want to focus attention on the commercial potential in inner city areas
for new businesses, for fast growing businesses and to say to people, "Look,
there are big commercial opportunities here for new business growth and
therefore, as a spin-off from that, for new job creation". I agree that the
role of small businesses, and some not-so-small businesses, can promote the
growth of existing businesses in inner city areas and can have a huge
beneficial impact. I think that needs to be at the core of our approach. I
do not see it as one or the other. We need to have well-targeted investment
in urban regeneration matters. There is some thinking taking place on the
point about small business rates. For example, the White Paper on modern
local government proposed that when we introduced local rates for businesses,
we ought to consider introducing measures to reduce the burden on small
businesses, which I think addresses the point that you made. I entirely agree
with you about the importance of successful small businesses in transforming
the economic prospects in our disadvantages areas.
Mr O'Brien
729. Minister, in your earlier remarks you referred to the Rogers
report. I was impressed by the support that you give to the report. A lot
depends on it in relation to urban regeneration. We have to decide how we are
to fund regeneration. In your memorandum you refer to PFI schemes. What
estimates has the department made of the sums that may be invested in such
projects for regeneration of town centres and so on?
(Mr Timms) I do not think that we have attempted to put a figure on that
specifically. There is quite a significant potential role for PFI in projects
like new schools - in my area a new secondary school has been built through
PFI - and improved transport facilities. A number of recent announcements
about that have been welcomed. We need to do all that we can to use public
support to lever in private investment. I do not think that we have yet
attempted to put a figure on precisely what the PFI contribution is to those
investments.
730. In your memorandum you give an example of the old docks in
Hull, where a partnership was introduced to reinvigorate the run-down area.
The Chairman referred to the run-down areas that we saw last week in town
centres. In many urban areas town centres are deprived areas. What role can
PFI play to regenerate those town centres? Have you made any assessment of
that?
(Mr Timms) We have not attempted to put a figure on it, but
qualitatively I think that PFI can make a significant contribution. To some
extent that goes back to the point that I was making earlier. Increasingly,
we need to look at the commercial opportunities that are available in areas
that in the past people have not tended to look to for commercial
opportunities. Because of the large numbers of people who live in our
disadvantaged areas, there are substantial and potentially very attractive
opportunities there. I think we can use PFI to realise some of those
opportunities on a partnership approach. I cannot give you a figure, but I
think the scale of the potential contribution that PFI can make in that area
is very substantial.
731. Can I press you further? In relation to the needs of urban
regeneration and urban renaissance, do they feature in the comprehensive
spending review that has been announced? If so, how do they feature and if
not, why not?
(Mr Timms) That certainly will feature in the spending review and will
be a significant element of it. There are issues arising from Lord Rogers'
report and a range of the departmental issues will be considered in the
context of the spending review. By the summer we shall resolve what the
amount of funding will be for each of them. It is a significant element.
732. Do I take it from that that the public service agreement of
the various departments, to which you refer, will be amended in line with the
needs and objectives of the Urban Task Force in the regeneration of some town
centres and urban areas?
(Mr Timms) Yes. In particular we are working with the DETR, but also
other government departments, on the PSA targets that they will adopt after
the spending review to ensure that urban regeneration is taken into account
properly. That is a significant element of what we are doing within the
spending review.
Chairman
733. The new commitment to regeneration: is that a nice set of
words but pretty useless in practice?
(Mr Timms) No, I do not think so. I think that we are seeing a new
commitment to regeneration. As I said earlier, I think that Lord Rogers has
provided us with a visionary and inspirational document about the challenge
that we face and the sorts of things that we need to do to meet it. In the
Urban White Paper we shall set out how we shall rise to the challenge that he
has set out. That will lead to significant changes for the better on the
ground.
734. You have not done anything yet? Is it just pie in the sky
for the future?
(Mr Timms) No, I do not think that is true. We have done a lot.
735. Just give me one example.
(Mr Timms) The announcements in the Budget four weeks ago about public
transport investment: the extension of the Docklands Light Railway to London
City Airport, the tram system extensions and a number of measures of that kind
just in the past month. Across the area, a great deal has been done. There
is the New Deal for communities. A huge amount has been put in hand.
Mr Gray
736. In your answer to this particular point you talk about the
cross-cutting issue. What is a cross-cutting issue?
(Mr Timms) A cross-cutting issue is one that needs to be addressed by a
range of departments and not just by one.
737. Joined-up?
(Mr Timms) Yes.
Mr Brake
738. Perhaps I can read something to the Minister from the
Guardian, although I am sure he reads that newspaper? "Downing Street has
intervened to review the country's waste policy following the Guardian's
disclosure of abuses of the œ1 bn landfill tax and of widespread illegal
dumping across Britain". Can you tell the Committee what role you and Customs
and Excise are playing in this review?
(Mr Timms) There were a number of allegations in the Guardian and on
television in relation to abuses of the landfill tax credit scheme. As you
can imagine, we take a pretty dim view of abuses of that sort and Customs and
Excise are investigating diligently all the allegations that have been made.
If abuse is identified as a result of that, we shall take very firm action in
response.
739. Do you have a timetable for that review and when the report
will be published?
(Mr Timms) I am describing an investigation into allegations of abuse.
I do not know how long that investigation will take. It will need to be
thorough. If we establish that there has been abuse and fraud, we shall take
very stiff action in response.
740. Were Customs and Excise not aware of allegations of fraud or
instances of fraud? Certainly this Committee has been made aware of concerns
about golf courses and so on.
(Mr Timms) I would encourage anyone who has evidence of fraud to bring
it forward. If the Committee has evidence of fraud on landfill tax, Customs
and Excise would very much like to see it. From time to time, there have been
allegations, in rather general terms, about problems which certainly have been
investigated when they have arisen. I think what was in The Guardian was
rather new and potentially very serious. If those allegations are found to
have been true then Customs & Excise, as I say, will take very stiff action
in response.
741. Have you seen the report that I understand has been sent to
Customs & Excise?
(Mr Timms) I have seen the articles in The Guardian, I have not seen
additional material that has been sent in, no.
742. Will you endeavour to look at it when Customs & Excise
receive it?
(Mr Timms) As the Minister responsible for the Landfill Tax I will be
kept fully briefed by them on their progress in any investigation.
Mrs Gorman
743. As a Member of Parliament with a number of landfill sites in
her area, may I say that this tax has had an equal and opposite effect so far
as fly tipping goes in my area. I do write frequently to Mr Meacher and I get
the usual bland letters back telling me that all this lovely money collected
in the Landfill Tax is going to environmental and regeneration schemes, of
which we see nothing in my part of the world. I would urge you to review the
whole subject of this tax. If ever there was a tax that had an opposite
effect it seems to me this is it. What are you going to do about it? Why
will nobody take any notice of all the rubbish dumped in the farm lanes around
me because of the tax?
(Mr Timms) The Landfill Tax was introduced by the previous government.
The Landfill Tax Credit Scheme has been quite widely praised and a lot of
people ----
744. Not by the people in my area.
(Mr Timms) A lot of people say that there have been very significant
environmental improvements funded through the Landfill Tax Credit Scheme. I
think that needs to be said as well. In terms of fraud, we take an extremely
dim view of that and if there is fraud being perpetrated we will take the
appropriate legal action.
Mr Olner
745. You have spoken fairly frankly this morning with a deal of
caution on regeneration but I want to probe you on degeneration and that is
the problem with Rover at Longbridge. I want to know how quickly the Treasury
is able to lever monies in to stop degeneration in areas like this when a
catastrophic industrial problem arises.
(Mr Timms) I suspect that you know more than I do about what is
happening currently. There is the task force that has been established.
There was the announcement recently of additional funding for retraining where
that is needed. We have been able to respond pretty swiftly to the BMW
announcement and we have been working across Government to make sure that we
have a properly co-ordinated response.
746. What I am seeking is the fact that whilst I can understand
the Treasury being cautious, I would not like too many hoops and obstacles
placed up there so that the Government or the Treasury would not be able to
match venture capital monies coming in to save the majority of Rover.
(Mr Timms) I have talked about venture capital and what is being done on
that front with the Regional Venture Capital Fund. The RDA clearly is party
to the discussions that are going on about where we go on Rover. I think all
I can say is that there is a very determined response that has been made
across Government to the entirely unexpected BMW announcement and we are
determined to do everything that we can working with those in the area to
minimise the potentially damaging consequences.
747. Are you saying to us you have got joined-up thinking with DTI
and there have been no obstacles placed in front of any possible solution by
the Treasury?
(Mr Timms) We are working very closely with DTI and with DfEE as well on
the training and employment aspects.
Chairman
748. On this question about competition policy and out of town
shopping developments particularly, there have been these persistent leaks or
suggestions or hints that competition policy is going to make those sorts of
developments easier and they almost always come from your Department. Is
there really any truth in them or would you like to hit them over the head
absolutely and finally now?
(Mr Timms) We have introduced the requirement that the planning system
should take competition into account. The intention of that is that planning
decisions should be taken on the basis of all the relevant costs and benefits,
including the wider social benefits that competition can bring. I think that
is very important. Equally, we understand the need to ensure the vitality of
existing urban shopping centres and proper protection of the environment. So
any development should only go ahead when all of those factors are taken into
account. I think that is the framework that we have set for these decisions
to be made and I think it is the right framework.
Mrs Dunwoody
749. You know, there is a problem with that, Mr Timms, is there
not, because competition and maintaining the interests of your run down
centres, whether they are towns or cities, can really be in direct opposition
one to another? It was quite clear from the planning laws what the situation
was and that people were expected to look at the implications of granting
planning for supermarkets on the outside. What you appear to be saying is
"fine, but we expect people to look at competition and to look at all the
social costs". That is a very difficult formula to give people and actually
I am not sure what the hell it means.
(Mr Timms) I do think it is important that competitiveness, competition
issues, is addressed here because it is in everybody's interests.
750. So it is important to say if I want to build my supermarket
outside because I can make more money there, I have the right to do so?
(Mr Timms) It is important to reflect that if there are better, newer
ways of providing services which are more cost-effective that it is possible
for that to be done. There is no reason why people in our city areas should
have to pay more for their shopping than people elsewhere. I think that is
important.
751. So how do you align that with the need to take account of the
social costs of inner city areas of that kind of development on the outskirts?
(Mr Timms) Those issues have been addressed by the Policy Action Team
that has been set up under the Social Exclusion Unit framework and they are
addressed in the consultation report that is being published today about
taking forward our strategy for renewing disadvantaged areas. I think part
of the answer though does lie in people looking back to the older shopping
areas and seeing that there are, in fact, attractive commercial opportunities
that can be realised in those areas. I would want to emphasise that. I think
part of what has happened has been a sort of fashion that people have moved
out of the inner city areas ----
752. I am sure that if we had the time we could go over exactly
how we have got to the situation in my constituency where we have seven
supermarkets in a row on the outskirts and a dying centre in the town. I am
asking you something different. I am saying that the Treasury has a major
role because it determines tax, it determines the overall fiscal policies and
it determines whether or not we are able to change the way we deal with our
real problems of urban regeneration. What we want from you is a fairly
straightforward statement that what matters is not this idea that we give
people planning permission on the basis of their competitiveness but that we
give it to them on the basis of the planning interests and the social
interests of the areas concerned. Why are you really saying to me that you
have drawn in this extra complication, because I expect somebody to want to
build a supermarket where they are going to sell things? I am of the straight
forward generation of people who believe that people normally only do things
for profit where they think they are going to make a profit. How is it you
are saying to us, on the one hand, yes, competitiveness and, on the other
hand, yes, of course, consider the interests of the socially deprived areas?
(Mr Timms) I think what I am saying is that all of those issues need to
be taken account of in planing decisions.
753. Okay, I give in.
(Mr Timms) It is important ---
Chairman
754. When I started this group of questions I was hoping for a
straight forward "yes".
(Mr Timms) Can I say just one extra sentence on this. I think it is
important that there should be competition in retailing for people living in
our urban areas.
Mrs Dunwoody: Sure.
Chairman
755. A small market town, does it need one supermarket outside or
does it need two for competition?
(Mr Timms) That is a matter for the local authority to determine in the
planning process.
756. That was a short answer at least. On these issues of capital
and revenue expenditure, some local authorities seem to think that your rules
are extremely inflexible in terms of what is capital and what is revenue.
Could you not relax them a little bit and trust the local authorities?
(Mr Timms) I am meeting with the Local Government Association this
afternoon and we are looking at issues of local government funding. I am not
sure whether they have pressed us on that point specifically in the current
discussions.
757. They have certainly been pressing us, so perhaps you will
take it into account. At that point, can I thank you very much for your
evidence.
(Mr Timms) Thank you very much indeed. EXAMINATION OF WITNESS
THE LORD FALCONER OF THOROTON, QC, a Member of the House of Lords,
Minister of State, Cabinet Office, Head of the Regional Co-
ordination Unit, examined.
Chairman
758. Can I apologise that we are running a minute or two late.
(Lord Falconer of Thoroton) Not at all.
759. Could I ask you to introduce yourself for the record and I
understand you would like to say a few brief words to us to start off.
(Lord Falconer of Thoroton) Thank you very much indeed. I am Charles
Falconer, Minister of State at the Cabinet Office and the Minister with day
to day responsibility for the Regional Co-ordination Unit. Could I just say
a very few brief words before answering any questions. There has obviously
been a widespread welcome for the policies and programmes directed at
improving local levels of service in key areas such as education, health and
crime. The Regional Development Agencies and the Regional Offices are
receiving widespread support on providing a focus for better strategic
planning. The thrust of the Performance and Innovation Unit's report
"Reaching Out", was nevertheless that there were too many Government
initiatives causing confusion, there was not enough co-ordination and there
was too much time spent by potential bidders in negotiating their way through
the system. To meet these problems the report proposed, and the Government
has accepted, a two-tier approach. First, the role of the Government Offices
in the regions needs to be built up to enable them to become the principal
representatives of central Government in the regions. They can co-ordinate
central Government activity in the regions. They can ensure that central
Government departments work in a co-ordinated way in their input into local
strategies. They can ensure that central Government has a better
understanding of regional and local issues. However, a built up role for the
Government Offices in the regions is not enough. Government at central level
needs to co-ordinate better policy initiatives with a regional or local
impact. There needs to be better collective consideration of proposals to
change regional or local networks. The Regional Co-ordination Unit has been
set up to manage Government offices and to provide co-ordination at Whitehall
level of area based initiatives. The core of the new unit has already been
set up and it will be fully functioning by 1 April 2001. I have got day to
day ministerial responsibility for it reporting to the Deputy Prime Minister.
The unit is sited in the Department of the Environment, Transport and the
Regions but has cross-cutting responsibilities and its staff will be selected
from all departments. It will publish an Action Plan in July 2000 for the
detail of how we deliver our remit. The Regional Co-ordination Unit will have
a clear role to play in delivery of the objectives that the Department of
Environment, Transport and the Regions have identified as the objectives for
urban and rural areas in a memorandum to this Committee because of its co-
ordinating function. The forthcoming White Paper will draw together the broad
range of current thinking on urban development. The draft National Strategy
for Neighbourhood Renewal, published today, draws together the work of 18
Policy Action Teams and a cross-cutting review of the Government intervention
in deprived areas forms part of the current spending review process. These
are inter-dependent initiatives which are governed in part by the timing
decisions in the Spending Review. The full implications of the Urban White
Paper for the new unit depend on decisions yet to be taken. We have now set
up a core Regional Co-ordination Unit and are moving towards full
implementation by April of next year. The links with urban policy,
particularly neighbourhood renewal, are clear. I hope I will be able to help
the Committee in any way I can in examining the role of the unit in relation
to the forthcoming White Paper.
760. Thank you very much, but I have to say that the cynic in me
says that the advice was that we had too many players so we create another
one.
(Lord Falconer of Thoroton) I fully understand that. One of the
aims is to try to make sure that people do not, as it were, go off on their
own, invent their own initiative, do not have regard to what other initiatives
are coming down the piece from Whitehall and equally have a much better
understanding of what the regional needs are before they embark on another,
for example, area based initiative. The intention is most certainly not what
you have just suggested, Chairman, namely another tier of bureaucracy, the
attempt is to try to bring together what already exists.
Mrs Ellman
761. The Cabinet Office report talks about confusion and
incoherence of Government policies in localities. The statement you have just
given to us seems to emphasise a highly centralist approach and you even refer
to Government Offices simply as Government representation in the regions, not
anything the other way on. Do you not feel that you should be listening to
people in the regions? Do you not think that some of this incoherence could
be addressed by having elected regional representatives who are talking to the
Government about what is actually happening in the regions?
(Lord Falconer of Thoroton) The intention is certainly not to create
a more centralist approach. Indeed, one of the problems identified in the
report is that there are too many initiatives conceived in Whitehall without
reference to what is going on on the ground and what will help on the ground.
The report contains positive recommendations about how you better listen to
what the position is on the ground and one particular point that it makes is
that you have got to have somewhere in each region somebody who will be able
to tell central Government, as it were, what is happening in that particular
region, what is best for that particular region. One of the things it is
trying to achieve, the setting up of the Regional Co-ordination Unit, is to
avoid ill-informed centralism. It is trying to make a better link between the
regions and the sector. It is trying to make sure that the regions are better
listened to. In relation to elected representatives in the regions, in so far
as you are saying should there be some new form of regional government, the
report is obviously completely neutral about that, it is saying in effect that
structures have got to be set up whereby the centre is better informed about
what is going on in the regions. That is one aspect of it. One way of doing
that is to use the Government Office network more effectively. It also says
that the system it proposes, which is in the process of being set up, should
be robust enough to deal with whatever form of regional government may develop
in the future, it does not cut off any particular route towards any particular
form.
762. Is not the incoherence about the failure to adequately
implement those policies in the regions and in localities? What structures
would you be looking to in your new role within the regions and within the
localities to inform you better about how to improve what has happened?
(Lord Falconer of Thoroton) First of all, you have got to deal with
the problem of central Government producing conflicting initiatives which do
not best meet the regions, that is stage one. Stage two, you have got to try
to bring the players at local level together, or at regional level, and at
sub-regional level, best to make use of whatever policies central Government
has got. One way of doing that would be local strategic partnerships.
Another way of ensuring that central Government's input in relation to this
is clearer is that you have a representative in the regions of the whole of
central Government rather than just bits of it. I am trying to avoid talking
about the whole ---
Mrs Dunwoody
763. Is that not what regional offices are supposed to do?
Forgive me, my Lord. Is it not the idea that regional offices actually do
that? What are they if they are not doing that?
(Lord Falconer of Thoroton) That is what they should be doing but if
you come to a regional office and they do not speak with this Department, the
Department of Health for example, they do not speak to that Department, the
Ministry of Agriculture, Fisheries and Food, then they are not speaking for
the whole of central Government, they are speaking for, as it were, isolated
bits of central Government. You would be far better off if they spoke in an
authoritative way for the whole of central Government and there was a feeling,
which was reflected strongly in the PIU Report, that they were not speaking
for the whole of central Government in a way that was authoritative.
Miss McIntosh
764. Can I follow up the earlier point by asking is the creation
of this unit recognition that there has been a complete failure of joined-up
Government between central and regional levels?
(Lord Falconer of Thoroton) We are learning the lessons of areas
where you could improve co-ordination, both across central Government, between
central Government and local government, and between the players in the
regions as well.
Chairman: That is fairly long for saying "yes".
Mr Gray
765. Forgive me, but it seems to me there are two problems here.
One is that you cannot make up your mind whether or not to give local people
the right to make their own decisions, and in your report you say that
Government Offices should have more discretion on how to achieve results, and
the next minute you are saying one of the awful things in Whitehall we do not
like is that those things are all different in different places, so "we,
clever 'Yes, Minister', Stalinist, Centralist bloke, are going to tell you lot
down there what you are doing to do". Surely you have not thought that
dichotomy out, if that is the right word?
(Lord Falconer of Thoroton) I think that is completely wrong. In
very, very many areas the solutions that come locally are the best. In other
areas ideas that come on a national cross-English basis will provide in
another area a better solution. There will often be disagreement about what
is the best solution in any particular area. Surely the best solution would
come from proper discussion between the region and below and central
Government. That tension should produce the best result.
766. I am sure that is what Mr Stalin would probably have said.
Can you give us a few examples of these policies that you think would be
better laid down from Whitehall than decided locally?
(Lord Falconer of Thoroton) For example, take dealing with people in
deprived areas. In some ways it would be better if mainstream programmes,
like health or education, had targets to deal with people in deprived areas
in bringing up standards in deprived areas. At the moment they are not
sufficiently targeted to do that.
767. You just said that the Department for Education is not
sufficiently targeted to bring up standards in deprived areas.
(Lord Falconer of Thoroton) No, what I am saying is that mainstream
education expenditure is targeted on targets right across the nation. There
are pockets of deprivation where especial help might be needed. The best way
that has been proved to be done in some areas is by producing such things as
Education Action Zones, similarly in relation to health, Health Action Zones.
From central Government they provide pots of money which bring up areas of
deprivation to levels which are less unacceptable than they are at the moment.
768. Can we focus on that one thing. Surely we have got three
organisations in place already? We have got the Department for Education, and
I hope that your hon. friend is doing the best to help deprived areas.
(Lord Falconer of Thoroton) Certainly.
769. Secondly, we have got county councils and local education
authorities looking into this and I am sure the local education authorities
are doing this. Thirdly, there are Government Offices already doing it. What
on earth is your new centralist organisation in Whitehall going to do that
David Blunkett and the county councils and the Government Offices are not
doing?
(Lord Falconer of Thoroton) To bring deprived areas up to more
equilibrium with areas that are not deprived you need to focus in part all
agencies' activities on particular areas. If you do not co-ordinate the way
that you do it then you end up with often contradictory initiatives taking
place both from a local level and from a central level. You also impose on
people who are bidding for pots of money, as it were, bureaucratic burdens
which take up more of their time than they should. Therefore, you want to
make sure that at the very least the initiatives that are coming from central
Government are co-ordinated in a way that best delivers aid to the areas that
most need it.
Mr Gray: This is classic "Yes, Minister", New Labour waffle, is it
not, all this stuff about task forces and local strategic partnerships.
Mrs Dunwoody: I thought it sounded like Mrs Thatcher.
Mr Gray
770. What on earth are local strategic partnerships? Cross-
cutting is a word we have heard two or three times. This is all bullshit, is
it not?
(Lord Falconer of Thoroton) No, it is not. Mr Gray, you may regard
bringing agencies together as just "bullshit", but in particular areas surely
you have got to try to get all the relevant people together, get them working
in a co-ordinated way to try to bring the best assistance to the area.
Mrs Gorman: Lord Falconer, do you see yourself as Superman buzzing
into these areas, pulling all these things together and then whipping out
again?
Mrs Dunwoody: That is William Hague.
Mrs Gorman
771. It sounds like a Superman task.
(Lord Falconer of Thoroton) I certainly do not see myself as a
Superman. The role of the Regional Co-ordination Unit is there to try to
bring people together to focus on what is the best way to bring assistance to
particular areas, what is the best way to ensure that areas that need help do
not end up spending their time filling in slightly different forms at slightly
different times of the year to receive slightly differently targeted aid.
Mrs Gorman: Can I ask a supplementary on that?
Chairman
772. Not at this moment. Given that co-ordination is the key to
this, how do we fit this dynamic Action Plan which we are going to have by
July into the Urban White Paper?
(Lord Falconer of Thoroton) The Department of the Environment,
Transport and the Regions has provided memoranda to this Committee which
identify what the Government's broad objectives are for urban and rural areas
as well. The White Paper, as it were, will bring together all of the things
that are presently going on and policies for the future to achieve those five.
One of the things that it is vital to ensure is that there be co-ordination
of policies across Whitehall and in the regions to achieve these objectives.
One of the building blocks in relation to that will be the role of the
Regional Co-ordination Unit to try to bring that co-ordination.
773. So that building block is going to be there before the White
Paper?
(Lord Falconer of Thoroton) Yes, it will be. Because there are lots
of area based initiatives, for example, that are already in existence, there
will be discussion of area based initiatives in the course of the current
spending review. The Regional Co-ordination Unit is not the only element in
the Urban White Paper that is already, as it were, out in the open, there is
the neighbourhood renewal---
774. I just want to be clear whether you are going to announce the
Action Plan in July before or after the Urban White Paper is published?
(Lord Falconer of Thoroton) I do not know the precise timing of it.
I suspect that the Action Plan will come at about the same time. The Action
Plan of the Regional Co-ordination Unit will be focusing on how do you deal
with the current issues of co-ordination.
Mr Benn
775. Would you accept that the Government expects local
authorities to produce too many plans?
(Lord Falconer of Thoroton) There is a heavy bureaucratic burden.
The PIU Report very much repeats the complaints that come from throughout the
regions and under the regions to the effect that there are too many narrowly
based plans that have to be produced.
776. How will the work of this new unit contribute to overcoming
that?
(Lord Falconer of Thoroton) We will look at areas where you can
focus on particular outcomes and see whether or not tiers of bureaucracy,
tiers of planning, not in the legal sense but in the sense that you are
meaning, Mr Benn, can be got rid of and you can focus better on the delivery
of a particular outcome.
777. In practice how will your unit enable the voice of the people
at the bottom who say "we are going to too many meetings, we are spending too
much time filling in forms to bid for pots of money" to be heard much more
loudly by those at the top of the system than is the case currently?
(Lord Falconer of Thoroton) By the building up of the role of the
Government Offices. Central Government is represented in the regions by the
Government Offices, they are the people who must be perceived to be the voice
of central Government in the regions. They must be perceived in the regions
to have clout with central Government so that if people in the regions are
saying "this is much too confusing, this is much too bureaucratic, there are
too many plans that have to be set out" that will be transmitted back to HQ,
as it were, and will then be taken into account and hopefully reflected in
policy formation in Whitehall.
778. Given that the whole culture is very much that the Government
Offices are indeed the voice of the centre in the regions, ie "We get the
messsage down, we try and explain to you what it means, we implement the
policy", is that an enormous culture shift?
(Lord Falconer of Thoroton) Yes, it is.
779. Can you realistically expect the Government Offices to turn
round and say to a Secretary of State, "You have got it wrong? You need to
do it differently." Is that in practice going to happen?
(Lord Falconer of Thoroton) In order for the voice of the regions to
be heard better the Government Offices' role has to be an effective two-way
street, which is not just doing various things for various departments, it
must be the person gives the description of what Government is doing outwards
but also receives, understands and passes back messages inwards to Whitehall
as well. You are right, Mr Benn, to say that involves a significant culture
shift.
780. Can I ask about the Comprehensive Spending Review process,
because if one were to expect this new approach in policy to have an impact,
one would expect to see the Spending Review 2000 to be different in some way
from its predecessor? I would be interested to know what it is about the
process that you and colleagues are engaged in currently in taking decisions
about the Spending Review process which is going to mean we do not end up with
lots of different departmental initiatives. Do you think there is a pressure
still from the Treasury on the public service agreements to focus on
departments individually rather than to look at the picture in the round,
which is what you are trying to do?
(Lord Falconer of Thoroton) The Spending Review is trying very much
to look at the picture in the round. The best example of that is one you know
of, which is the Government's intervention in deprived areas, the cross-
cutting group, which is looking at how you deal with deprived areas across the
piece. The principle of the PIU Report is that before you embark on an area
based initiative as an individual department, you have to pass it through the
Regional Co-ordination Unit so they can see how it fits in with other things.
That approach will be reflected in the way Spending Review 2000 is dealt with,
so that one hopes out of it will not come area based initiatives which do not
connect with other area based initiatives which do not connect with what the
regions want which do not adequately connect with mainstream focus.
781. So we would expect public service agreements which arise out
of Spending Review 2000 to look rather different in that respect from the ones
from the previous round?
(Lord Falconer of Thoroton) I think you would and I think you would
also expect to see public service agreements between individual Government
Offices and Whitehall to indicate what the Government Offices have to deliver,
which again is something foreshadowed in this report.
Mr Brake: Lord Falconer, can I give you something concrete to work
with? The division of responsibility between Government Offices and the RDAs
is confused, can you give us your solution to that problem, perhaps without
using the phrases "cross-cutting" or "joined up"?
Mrs Gorman
782. Or two-way street!
(Lord Falconer of Thoroton) The RDAs are not an emanation of Central
Government, they are agencies set up in the regions to deliver a strategic
framework for the future of the particular regions. That gives them a
completely different role from the Government Offices. The role of the
Government Office is to speak for and listen for Central Government in the
regions. So their roles are completely different and it is entirely correct
that their roles should be completely different. They perform completely
different functions.
Mr Brake
783. Let us consider, perhaps more specifically, social inclusion.
Where would that lie between those two bodies?
(Lord Falconer of Thoroton) The RDAs in their remit have to focus
strategically on how you reduce social exclusion in their particular regions.
Equally, Central Government has particular policies on social exclusion. The
RDAs' strategic framework for dealing with social exclusion should fit in with
Central Government's policies on social exclusion, they have got to work
together in relation to that. The fact that one speaks for the region and one
speaks for Central Government means they come at it from different angles but
working together in a co-ordinated way will produce better results.
784. Which of those two do you think should take the lead overall?
Central Government or the RDAs?
(Lord Falconer of Thoroton) It is for the RDAs to set out a
strategic framework for eradicating social exclusion in their area, it is for
Central Government to have policies as to how you deal with social exclusion.
They both have a role, they both have to work together. The single
regeneration budget, for example, is dealt with by the RDAs and it is right
and sensible that it is. That is proving an effective means of fighting
social exclusion in the regions.
785. So either neither do or both take the lead. There is a
similar problem, I think, in relation to regional planning guidance and the
RDAs' economic strategies. When this Committee looked at that we identified
this was going to be a major problem, and the Government suggestion that the
planning guidance and the strategy were going to be of equal status simply was
not going to work because there would be conflict. How do you see that being
resolved?
(Lord Falconer of Thoroton) It is impossible to avoid the simple
fact that there are different agencies doing different things because
different tasks have to be performed. What you want to achieve in relation
to all of this is a clear division of responsibility and proper working
together. It is of great use from time to time for there to be somebody or
some body who will try to co-ordinate the various bodies working together, and
that in a sense is the role of the RCU.
786. So in fact, yes, the regional planning guidance and the
regional economic strategies will have equal status, but then it will be your
new unit which will resolve any conflict. Is that what you are suggesting?
(Lord Falconer of Thoroton) Where there are problems, where there
are disputes, between the regional players, what the PIU Report suggests is
that the Government Office can very frequently, though not always, play a
useful role in arbitrating disputes between the various players at regional
level. Whether that is appropriate I think will depend on the particular
region or the particular problem.
Christine Butler
787. Do you think the Regional Co-ordination Unit, which you have
talked about at length this morning, actually could help or hinder the
possibility of regional government?
(Lord Falconer of Thoroton) I think it is neutral in relation to
that.
788. We are not there yet, so how can it be?
(Lord Falconer of Thoroton) What the Report says is that these
arrangements are being set up in such a way that they do not stand in the way
of any development which might take place in relation to any form of regional
government. I think that must be right, must it not? If you have a unit
whose aim is to try and get the agencies get the headquarter departments to
work in a more focused way together, that does not in any way inhibit whatever
developments there may be for the particular form of regional government.
789. I was taking the view that it might help in fact because we
do not have all the departments down at the regional level yet. Which ones
would you be looking to import into the regions which are not there currently?
(Lord Falconer of Thoroton) Most are there in the regions in some
form or another. What we are trying to achieve is that the Government Offices
know overall what each government department is seeking to achieve in the
particular region and is able to speak authoritatively on their behalf.
Obviously the Department of Health, for example, is in the regions, but the
Government Office is not going to become in any way the sort of person who
runs health in the regions, but they have to know what the overall policies
of the Health Department are and speak in an authoritative way in relation to
them.
790. We have the police forces and we have the health authorities
within the regions.
(Lord Falconer of Thoroton) Yes.
791. Their role will not be changed but I am a bit confused as to
what you expect the Government Office to do in terms of delivering, or is it
just disseminating information to them? How will it actually engage with the
health autorities and the police forces, for instance, so as to deliver what
you have called a more co-ordinated approach?
(Lord Falconer of Thoroton) Take the following position: we have at
the moment health action zones, employment action zones, we have mainstream
health expenditure, we have mainstream education expenditure, we have
mainstream expenditure by the police authorities on police in a particular
area, we have crime reduction programmes. Instead of, for example, the crime
reduction programme not identifying in a particular region what is going on
here at the moment, what is the best sort of plan for that particular region,
let us see how we co-ordinate the two ---
792. Excuse me, I wrote the preface to our own crime reduction
strategy, and that is not the point, that is focused and that says the
relationship is clearly to be one between the local authority and the police
and many other partners too. I am not quite sure whether the Cabinet Office
has thought this one through. That is just an example. It is very local and
the health authority and the primary care groups and primary care trusts are
set up to deliver locally. I am trying to get you to tell me and the
Committee what the Government Office could do, having imported more
information from them or whatever, in other words got more of the Whitehall
departments to it. How could that help matters? How will it relate to what
we have already at local level?
(Lord Falconer of Thoroton) What the Report identified was that
Central Government would, for example, identify a pot of money, call it
something like a health action zone or an education action zone, the regions
would then say when that initiative - and I take those by way of example - was
set up there was not sufficient connection with what would actually help in
particular regions because there was not enough communication between regions
on the one hand and, as it were, Central Government on the other. So what you
want in a sense is a means by which there is good communication back up the
regions into Whitehall, so that before you have area based initiatives, which
in effect are identified pots of money which go to particular parts of the
country, you best identify (a) how it will help particular regions and (b) how
it fits into what other expenditure is going on in the regions.
793. You are making it sound more like a watch dog reporting back
rather than implementing and cascading down.
(Lord Falconer of Thoroton) It has got both elements, has it not?
Unless you listen first to what is best going to help in a particular area you
cannot inform the development of policy. Once you have decided what the
policy is there should be somebody in the region who can say on behalf of
Central Government, "This is what we want to achieve, here is the range by
which we can help to achieve that."
Mrs Dunwoody
794. Does that mean, for example, where there has been a health
initiative plan - and in the North West we have one in Liverpool, one in
Manchester and something in the south of the region - the role of the co-
ordinating person, whoever that may be, would be to say, "Just a moment,
although you have gone through the performance of getting money for this
specific purpose and although you have complied with all the things you have
to comply with to get access to that money, we think some of that should be
spent in a slightly different way"?
(Lord Falconer of Thoroton) No. The co-ordinating unit at Whitehall
level will say, "Before you decide to have this XYZ area based initiative,
let's see if it is really going to help." Assume it has got through that
stage, then when it comes to the expenditure of money in particular regions,
the Government Offices would be in a position to say, "Here is available this
money, this is what we hope to try and achieve from it, let's see what is the
best way to achieve it."
795. So you would be diverting the normal line - which would be
for a planning office in the health sector in the North West to work out what
its priorities are, what its problems are and then go through the Department
of Health - at some point early on in order to say, "No, because our
priorities are different overall"?
(Lord Falconer of Thoroton) No, I would not be diverting it. I am
saying at broad policy level you would have the Regional Co-ordination Unit
making sure the initiative as a matter of principle was a worthwhile thing to
do having regard to the regions. Once it was decided it was, which is an
overall national policy issue, then the Government Offices would play whatever
the appropriate role was having regard to the particular initiative to ensure
that the money was effectively spent and as easily obtained as was reasonably
possible. I do not think I would be diverting any other existing process.
Chairman
796. While we are on this question of the Government Offices, are
you actually going to get MAFF to come into the same set up, or are they going
to go on as a separate power structure?
(Lord Falconer of Thoroton) They have a separate arrangement at the
moment and they have separate geographical regions.
Mrs Dunwoody
797. But you are actually sacking large numbers of those, are you
not, my Lord? You are having a go at large numbers of them in my
constituency.
(Lord Falconer of Thoroton) I am ---
Mrs Dunwoody: You are co-ordinating; you are pulling together all these
Whitehall departments. So perhaps I should have a go at you about how you are
trying to get rid of my civil servants. It is actually a valid point. At the
moment, MAFF has a different structure.
Chairman
798. Let us be clear, this Committee has pursued for some years
this question that MAFF is an empire on its own. Let us test your power. Are
you going to get them in or are they going to stay out of your co-ordination?
(Lord Falconer of Thoroton) At the present time there are
discussions going on as to how MAFF may better integrate into the Government
Offices.
Chairman: That is a beautiful answer!
Mrs Dunwoody: My money is on MAFF, I have to say!
Mr Forsythe
799. My Lord, the Report called for a strengthened role for
Government Offices in the Regions but they have been losing functions, they
have been losing people and indeed they have been losing budgets, so how are
you going to improve that position?
(Lord Falconer of Thoroton) As I said to Mrs Dunwoody earlier on in
the discussion, you give the Government Offices the role of being the
authoritative voice of Central Government in the Regions speaking for the
whole of Government. So that is how you build up this role in the regions.
That does not necessarily mean obviously that the Government Offices will be
the people who, as it were, deliver the money through the various programmes,
but what it means is that if you speak to the Government Office you know you
are speaking to Central Government in the region which at the present time you
do not necessarily know you are because of, for example, MAFF is a separate
arrangement from the Government Offices.
Chairman
800. I am glad you brought that back up again!
(Lord Falconer of Thoroton) It seemed to have a particular appeal
for you!
Mr Forsythe
801. So that is actually strengthening?
(Lord Falconer of Thoroton) It strengthens it if the Government
Offices are then perceived to have more clout with headquarters.
Mrs Dunwoody
802. So you are going to give them back their money and their
clout and you are going to make them much stronger, and you have the Treasury
right behind you and they are going to make it very clear?
(Lord Falconer of Thoroton) When you say "give them back their
money", I am not sure ---
803. This is what has happened, they have been losing money.
(Lord Falconer of Thoroton) Things like the TECs, which people
inside the Government Offices presently help to run, are going to be dealt
with by the New Learning and Skills Councils so that is a function taken away,
but that does not affect the basic proposal which is to build up their role
as the authoritative voice of Central Government in the regions.
Mr Forsythe
804. I cannot see how you can actually weaken someone's functions
and say you are strengthening it at the same time.
(Lord Falconer of Thoroton) The role that the PIU Report envisages
for the Government Offices is not the role of dishing out the money from
Central Government, it is the role of being the eyes and ears of Government
and the co-ordinator of the implementation of Central Government in the
regions. Simply to take away here or there a particular performance function
does not affect that basic premise of the Report.
805. You say you are going to making them more flexible. How are
you going to do that?
(Lord Falconer of Thoroton) More flexible means in a particular
region how they may most effectively achieve the delivery of Central
Government policy will vary, because in some regions there will be very little
need to co-ordinate because the local partners themselves have got together
in an effective way and know how best to deliver, and in other regions they
will have to have a more proactive role, but it will vary from region to
region. No one size fits all.
Mr Benn
806. The attention which the Government has given to try and
target resources where they can make the most difference is something which,
certainly in the area I represent, is widely welcomed. May I just say in
passing it is a great improvement on what went before. The feeling I get
talking to people is that they often say, "We like this but we would just like
some more flexibility. If we could think of ways of matching resources which
have been made available through these different pots and funds and
initiatives and zones and so on, in a way which we think can achieve the same
outcome that the Government wants to achieve but gives us a bit more
discretion to use those resources in a different way, we think that would be
better." Is the plan now to move to allow that greater flexibility? Can the
system accommodate it?
(Lord Falconer of Thoroton) Mr Benn, you echo what a lot of people
have said to the people who wrote the PIU Report. Too much inflexibility
frequently leads to inadequately targeting the money where it is most needed.
One of the things the Regional Co-ordination Unit would do is to make sure
that when the policies are crafted at Whitehall level they do have the right
degree of flexibility which in its turn means they must be properly informed
by consultation from the regions inwards before they are crafted. You only
do that if you know what people are saying on the ground is needed in the
regions or sub-regions to achieve a particular result. So I endorse what you
say and I very much hope that as time goes on the effect of the unit and the
effect of the better communication from the Government Offices to the centre
and back will lead to the appropriate degree of flexibility in relation to the
crafting of area based initiatives.
807. One of the specific criticisms has been that there is too
much of a focus on outputs and not enough on the general outcome at the end.
(Lord Falconer of Thoroton) Yes.
808. If you accept that, how is that going to be reflected in the
way we do things differently in the future, compared to how we have done them
in the past?
(Lord Falconer of Thoroton) In a sense, Mr Benn, you answer your own
question by the question. You focus on outcomes, you make sure your area
based initiatives are done in such a way that they will actually produce those
outcomes on the ground throughout the regions. In order to focus Government
Offices better on that, we hope we will enter into public service agreements
directly with the Government Offices where those outcomes in particular
regions are identified.
809. So if that was taken on board, the PSAs would look different
again in the future?
(Lord Falconer of Thoroton) There would, for example, be a whole new
series of PSAs between individual Government Offices and the centre.
810. Just picking up the other point you made, in order to check
whether what the Government is proposing to do is what people want on the
ground, how do we make that happen in practice given that government
departments tend to want to make announcements and then people work out
afterwards whether precisely what has been announced is going to help or not?
How do we get the Government to be able to say, "We are thinking of doing
this, tell us what you want, we can take it into account in making a
decision", rather than having the announcement first and then trying to get
it straight afterwards?
(Lord Falconer of Thoroton) Proper consultation is the answer.
Proper links at all levels with the people who you need to consult with before
you embark on a particular policy initiative. This is by no means remotely
the whole story, regional co-ordination, but surely it is one significant and
worthwhile element? You make sure the Government Offices, who are that part
of Central Government which is actually in the regions, are kept in all the
loops before such an announcement might be made, and you have the Regional Co-
ordination Unit to ensure the individual departments do not make an
announcement before that element of consultation has taken place. But, as I
say, it is one element. I do not for one moment suggest it is the only one
but it is a significant and worthwhile one.
811. And yet there are a lot of pressures in the system which
encourage government departments to do the opposite.
(Lord Falconer of Thoroton) I could not agree more and therefore it
must be all the more worthwhile to place in a few pressures which go the
opposite way.
Mrs Ellman
812. How are you going to persuade government departments at the
centre to work together to deliver regional objectives? You keep talking all
the time about Central Government and how Central Government should listen to
other people, but suppose there are regional objectives set by the regions,
how are you going to ensure that central government departments deliver? When
we have had evidence from civil servants from various departments on other
inquiries in this Committee it has been very clear they are looking at their
individual powers in terms of departments, their individual budgets and that
they see working together and relating to regions as a weakening of their own
powers. How are you going to tackle that?
(Lord Falconer of Thoroton) Two things. First, you are absolutely
right to say that the nature of Government is that it makes individual
departments as time goes on look at their departmental objectives rather than
across Government objectives. One way is you set up a structure at Central
Government level whereby the process compels the Government as a whole to look
across the piece at whether or not this meets regional objectives. You have
said in two of your questions that I refer to Central Government, to a large
measure because you want to change the process by which Central Government
addresses these issues in order to ensure that they have a more regional
focus. So part one of my answer to your question is, by putting in existence
at Central Government level a unit which by its process compels people to look
at the regional dimension and not simply look at their own departmental
dimension. Part two is the building up of the role of Government Offices who
provide therefore a regional voice in Central Government's considerations of
policies which might have an impact regionally or locally.
813. Have you considered, or would you consider, assessing the
effectiveness of individual partners by measuring their contribution to joint
working in regional development?
(Lord Falconer of Thoroton) As a general audit?
814. As an indicator of performance. That is what they had to
achieve.
(Lord Falconer of Thoroton) If one is trying, for example, to target
one's policies on social exclusion throughout the country and therefore
regionally and sub-regionally, one would be able to identify across government
departments - which one does with the Social Exclusion Unit, and the Regional
Co-ordination Unit will have its part to play as well - one would be able to
see across the whole picture what each government department was contributing
to that. In terms of, could one do it for all regional development, which is
beyond things like social exclusion, that might be quite difficult, but I will
think about it. I had not thought about it before you had raised it.
Mrs Dunwoody
815. What does Cabinet Government do if it does not consult across
the departments at a level at which decisions can be taken which will impact
on policy and which should be decided before the public spending round is made
public?
(Lord Falconer of Thoroton) It obviously does do that but the nature
of all Governments is that in each department each Cabinet Minister is
speaking for his department. There need to be some parts of Government which
are saying, "Let me speak for not health, not education, not a particular
other department, but a particular goal which Government has" and focus the
process on looking at how best to achieve that particular goal.
816. But surely that is the object of Government. That is the
whole purpose of Cabinet Government ---
(Lord Falconer of Thoroton) It is but ---
817. --- that all the individual Ministers are called together in
order they may collectively reach a conclusion which will enable them to put
into operation their regional policies out in the country. That is the basis
on which United Kingdom Government works, is it not?
(Lord Falconer of Thoroton) I entirely agree with that but ---
818. So what is it that your Policy Unit suggests that will be
different, will have impact and which is planned not to interfere with the
running of individual departments but to slot together their work so that the
mosaic is a clear one which people can see and understand?
(Lord Falconer of Thoroton) A unit like the Regional Co-ordination
Unit or the Social Exclusion Unit comes to a particular issue without looking
at it from the perspective of one department. I fully appreciate the point
you are making, of course bringing each department together through the
Cabinet system means that people come into a room and discuss it and reach
collectively a conclusion, but it assists that process if there are units in
Government that look at the matter from a perspective different from just one
department. That must assist and facilitate.
819. But Cabinet by its very nature means individual ministries
will collectively come to a consensus position which enables them to follow
particular policies of the Government. We do not have a series of parallel
streams just going up which disappear into the sky - or do we? - we have a
structure which brings them together within the business of government and
which leaves responsibility with individual Ministers and with the Prime
Minister.
(Lord Falconer of Thoroton) The experience that one has had of
government departments - and this is going back over many, many years - is
that they do operate in silos. They operate with departmental objectives in
mind, it is therefore of assistance to break down that silo approach to have
units which cut across government departments.
820. Forgive me, my Lord, but I have grave suspicions that nobody
in Whitehall knows what a silo is, but I am prepared to be corrected on that.
I still am not clear what revolutionary abilities, policies, machinery you are
going to bring together which has not existed before and has not been properly
used.
(Lord Falconer of Thoroton) I do not suggest it is revolutionary ---
821. I am sorry, forgive me. Revolutionary!
(Lord Falconer of Thoroton) What we hope to bring is a means by
which departments are forced to focus on the issue; how does this particular,
for example, area based initiative contribute to the overall effect of the
regions of government policy.
Mrs Gorman
822. I understand your bubbling enthusiasm for this wonderful new
cause and it is jaded people like me who remember similar initiatives in the
past, like doing something about deregulation and that wonderful unit which
was going to co-ordinate across but got its knuckles rapped every time it put
a foot inside one of the department's doors. What authority do you perceive
you are going to need to overcome that driving initiative which makes a
Minister get up on a Monday morning and want a sound bite for himself on the
Today programme? Because that is what you are going to be having to do.
(Lord Falconer of Thoroton) The Government as a whole has accepted
the recommendations of the PIU Report, so it is now Government policy. As a
Government we want to achieve what is best and what is going to make the most
impact in relation to the regions. The way we seek to achieve this is to set
up a process by which before policy initiatives are agreed by the Government
they have to go through the Regional Co-ordination Unit so there can be a
focus on the extent to which they contribute to impacting on the regions or
locally.
823. What power will you have to implement that though to overcome
a Minister's desire to get on the Today programme and tell us about his latest
wonderful scheme?
(Lord Falconer of Thoroton) The Government has accepted the PIU
Report as Government policy. We have agreed collectively this should be the
approach we take.
824. Does this not mean a whole new culture for Secretaries of
State?
(Lord Falconer of Thoroton) No, I do not think it does. What it
means is that before policies are announced - not all policies but those which
impact regionally or locally - there has to be consideration of what their
effect will be on the regions. A process is put up whereby you have to
consider that aspect of things before there is agreement on the policy and
that seems sensible.
825. Can I just ask one other supplementary question which is out
of my own head rather than read on paper? We have heard about joined-up
government, the two-way street and going up and down on the piece, what about
the grown-up government? Do you not think that there is a role in any of this
wonderful planning for enterpreneurs to do something in urban regeneration?
We have heard practically nothing about that this morning. Because they are
the people who actually begin to turn things round, are they not; private
sector locally?
(Lord Falconer of Thoroton) They have a huge ---
826. What is your thinking about that? It does not seem to appear
in your plans at all.
(Lord Falconer of Thoroton) They will very frequently be players in
local strategic partnerships designed to deliver regeneration in particular
areas. They play a hugely important part in the role of the Regional
Development Agencies. All of the Regional Development Agencies which this
Government set up have been chaired by people who are experienced in business.
So we very, very fully appreciate the very important role of entrepreneurship
and the private sector in regenerating the regions in this country.
Mr Gray
827. This may seem like a light-hearted question but, nonetheless,
I think it is quite a serious one. Listening carefully to you and very
patiently, it does sound just exactly like the setting up in the first episode
of Yes, Minister of the Department for Ministerial Administrative Affairs,
completely meaningless, does absolutely nothing at all but keeps a few civil
servants happy and keeps a couple of Ministers off the streets. Is that an
unreasonable parallel?
(Lord Falconer of Thoroton) I think it a wholly unreasonable,
negative and cynical approach to what is a very, very important issue. If you
take that approach, Mr Gray, it is not surprising that in a sense you are
sitting on the side lines because it seems to me that there are these problems
which the PIU Report identified, namely if you want to make a difference in
regions and in localities you have to focus the money that Central Government
is spending effectively. I hope that this Regional Co-ordination Unit and the
recommendation which has been accepted will make some significant difference
to that. I certainly think it is very worthwhile trying as best we can to
make it effective. You can be cynical if you like on the edges but I think
we just have to roll up our sleeves and try and make that difference.
Chairman
828. I will lower my level of cynicism. You have put a great deal
of faith in the Government Offices in the Regions, what career structure do
you see for the people in those offices? Are they sent out from Whitehall
from a particular department to spend a couple of years in a regional office
and then get back to the safety and comfort of Whitehall?
(Lord Falconer of Thoroton) In the last two months I have been round
every single one of these regional offices and the people who work in the
regional offices are incredibly impressive and they vary from some people who
have decided they want to come away from the centre and work full-time in the
regions, to other people who have come in for a period of time with a view to
going back, to other people who have been recruited to the regional offices.
What one wants is a strong sense of working in a regional office is a
worthwhile career move in the Civil Service. There should be as much
interchange as possible between headquarters' parts of departments and
regional offices because the more interchange and the stronger the sense it
is a good career move, the more effective the Government will be.
829. Would it not be helpful to make it clear that anyone
expecting to get a senior job in any government department should have spent
some time in the regions?
(Lord Falconer of Thoroton) It is a matter for the Civil Service
rather than Government Ministers to determine what counts in your favour in
relation to career prospects, but I know from speaking to senior civil
servants that being in a Government Office is regarded as a good thing.
830. It is considered to be a very good thing for somebody else,
but how many of the people at the top have actually been there?
(Lord Falconer of Thoroton) In Goverment Offices?
831. No, in the senior ranks of the Civil Service how many have
actually served in regional offices?
(Lord Falconer of Thoroton) I do not know what the answer to that
is.
832. Would you like to perhaps make a few enquiries?
(Lord Falconer of Thoroton) I will certainly make a few enquiries.
There is one permanent secretary at the moment who was head of a regional
office but I should tell you that regional office was London.
Chairman: But of course! On that note, thank you very much indeed.
