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The Chief Secretary to the Treasury (Mr. Andrew Smith): The Government announced in the Budget substantial increases in provision for Scotland as a consequence of the increases in health spending in England. The increases in 200304 through to 200708 are £224 million, £858 million, £1.6 billion, £2.3 billion and £3.2 billion.
Mr. Lazarowicz: The £8 billion increase in public expenditure that that amounts to is welcomed by my constituents and will, I am sure, be welcomed throughout Scotland. Does my right hon. Friend agree that Scotland can benefit from those increases only if the UK economy as a whole is soundly managed? Can he tell me what he considers would be the effects on future public expenditure trends in Scotland if it were to go along the
Mr. Smith: My hon. Friend is right about the benefits to Scotland of good management of the United Kingdom economy as a whole. The stability that we have put in place, the 1.5 million extra jobs and the expansion in public investment that we can fund demonstrate how Scotland benefits both from being part of the United Kingdom and from devolution and the ability to control matters in the areas that are devolved to the Scottish Parliament and Executive. My hon. Friend is right that those who argue for independence would bring about an economic calamity for the people of Scotland.
Mr. Smith: Not for the first time, the hon. Gentleman is wrong. Waiting times in Scotland are one month less than in England. He reveals that the Conservatives will look for any excuse to stand at the Dispatch Box and run down the national health service, deny the funding that we are providing and remind their constituents that their agenda is the privatisation of the NHS. People will ask, "How much will we have to pay for private insurance, operations or a visit to the doctor under the Tories?" They will never trust the Tories with the NHS again.
Today, my right hon. Friend the Secretary of State for Transport, Local Government and the Regions and I are presenting our White Paper, "Your Region, Your Choice" for more democracy and less bureaucracy. Copies are available in the Vote Office.
Throughout the United Kingdom and Europe, there has been a growing recognition of the importance of regions as a focus for economic growth and social identity. The Government have challenged the notion that the only decisions worth making are those taken in Whitehall and Westminster.
We recognise that people in Birmingham or Bradford, Liverpool or Lowestoft, Falmouth or Faversham, Newcastle or Norwich deserve to have their voices heard, too. We believe that Britain as a whole cannot achieve its full potential unless all our regions share in success and, indeed, drive it.
When we offered devolution, we placed our trust in the people of Scotland and Wales. Today, I am announcing measures to bring decision making closer to the people of England by strengthening regional powers and giving them the choice of regional government.
We trust the people to make that choice and, if they wish, to choose to elect a regional assembly and give a new voice to their region. The White Paper gives effect to our manifesto commitment to provide for directly elected regional assemblies for those regions that want them.
My interest in regional policy goes back more than 30 years. In the early 1980s, Michael Foot asked me to draw up a new policy framework to secure agreement for devolution for Scotland, Wales and the English regions. Some hon. Members will remember that that caused some local difficulty as well as problems in the House. The result was the alternative regional strategy, published in 1982, which set out a framework for devolving power to Scotland and Wales, and decentralising power to the English regions.
In 1994, I appointed Bruce Millan, the former Secretary of State for Scotland and European Commissioner to chair the Labour party's regional policy commission. His report, "Renewing the Regions" said that,
The Government have always recognised the regions' potential. In 1997, we inherited one of the most centralised systems of government in the western world. We have changed that. In our first term, we devolved power to Scotland, Wales and Northern Ireland. The Opposition opposed that. In England in our first term, we restored to London democratic citywide government, which the Opposition had abolished.
We have reformed local government; strengthened and broadened the Government offices for the regions; and set up nine regional development agencies, which, in their first two years, created or safeguarded more than 80,000 jobs. We also helped establish a network of regional chambers and assemblies, which have improved accountability and given the regions a new voice.
Today's White Paper takes that a step further. It sets out a range of options for people in the English regions. But, whatever they decide, the White Paper will strengthen regional policy across England. In all regions, we are giving extra resources and greater flexibility to the regional development agencies, and regional chambers will have greater responsibilities and a greater role in regional planning. In all regions, we will also give extra responsibilities to the Government offices to strengthen regional decision making and to ensure that government is joined-up in the regions. But for those regions that wish to proceed to directly elected regional assemblies, the White Paper sets out the process. Members are well aware of the different needs and aspirations of our English regions. There is a strong and growing demand in some regions to have a distinct democratic voice and a greater say over their own future. The people of the English regions should rightly have the same choice as we gave to the people of Scotland, Wales and London.
The White Paper is about striking the right balance, trusting the people, responding to the needs of a modern, diverse and more progressive society, and creating the conditions for greater prosperity and reducing disparity in and between our regions. The key, therefore, is flexibility. This will require a pragmatic approach and the consent of the people of the regions. Where there is a referendum in favour of them, we will establish elected regional assemblies, and I believe that where one or two regions lead, others will follow.
The White Paper sets out the powers, functions and financial arrangements for these new elected regional assemblies. They will have real power and funding to improve the quality of life of people in their region, particularly by improving regional economic performance. Indeed, raising growth by just 0.5 per cent. for the worst-performing regions would increase our national wealth by £20 billion in 10 years. As my right hon. Friend the Chancellor's pre-Budget report made clear, if all our regions raised their productivity to the national average, the average person in the United Kingdom would be £1,000 a year better off.
Regional assemblies will be responsible for developing joined-up regional strategies on issues such as sustainable development, economic development and regeneration, skills and employment, planning, transport, housing, health improvement, and culture. Assemblies will have a range of powers to help them to deliver those strategies. For example, they will allocate funding for economic development, housing, tourism, arts and sport. They will also be responsible for the regional development agencies, appointing the board and approving the regional economic strategy.
Regional assemblies will be funded primarily by central Government grant, and they will have complete freedom to spend that grant as they judge best. We will agree targets with them and provide a single pot for regional government. In addition, they will have the power to raise further funds through a precept on council tax and through borrowing. Naturally, budgets will vary depending on the
Elected assemblies will need to be big enough properly to represent the interests of the different communities in the region, but not so big that they become unmanageable. We therefore propose that assemblies should have 25 to 35 members.
It is important that an assembly of that size should have broad political representation. In Scotland, Wales and London, we have used the additional member system of proportional representation to elect Members of the Parliament and the assemblies. On balance, we have decided to use the same system for English regional assemblies. The boundaries of each region will be the existing ones used by the Government offices for the regions and the regional development agencies.
In addition to elected regional assemblies, we would like to see greater involvement of groups such as the business community, trade unions, voluntary organisations and environmental groups. We want to encourage the regional assemblies to draw on the experience and skills of individuals in the region who may not be able to stand for election themselves. We want to build on the experience of the Scottish Civic Forum, the partnership arrangements in Wales, the London Civic Forum and the arrangements introduced in a number of English regional chambers. Different regions may want to use different models. We are asking for views on that. For example, there could be appointed assembly members who could play an active part in the role of the assemblies, but would not have the right to vote.
Regional assemblies represent a new tier of political accountability. They will work closely with their local authority partners. However, in areas that currently have county and district councils, an assembly would have a third tier of government. We believe that it would be simpler and more efficient if in those cases we moved to a fully unitary system of local government. So where it is decided to hold a referendum for an elected assemblyand only in those regionsthere will first be an independent review of local government structures, conducted by the boundary commission for England. That review will examine the two-tier areas of the region, and make proposals for wholly unitary local government. Existing unitary authorities in the region will not be affected.
We believe that when a referendum is held voters should know the proposed structure of local government, and should be clear about who would do what in their area. I emphasise that the review takes place only in regions where a referendum will be held, and that any restructuring of local government will take place only if there is a "yes" vote in the referendum.
We intend to introduce legislation to provide for referendums and local government reviews as soon as parliamentary time allows. We intend to allow a referendum to be held before the end of this Parliament. After a region has voted for an elected assembly, we intend to introduce further legislation enabling assemblies to be established. That would make it possible for the first regional assembly to be up and running early in the next Parliamentunder a Labour Government, of course.
All English regions will benefit from our strong regional policy, and we will continue to develop the regional structures and agencies that we established in our first term. Furthermore, our White Paper offers the opportunity of a new constitutional settlement for the English regions, a choice that has been denied them for far too long.
The opponents of our proposals must answer this question: if devolution is good enough for the Scottish and the Welsh, why should they deny that choice to the people of England? Our proposals will give the regions of England new choices, new powers, and a new voice. By devolving power, we can elevate our democracy; by empowering our regions, we can engage people more effectively; by harnessing the energy of the regions, we can drive forward the nation's economic growth; by embracing diversity, we can strengthen the United Kingdom; and by liberating the potential of our regions, we will be helping Britain to prosper.