White Paper, "Your Region, Your Choice: Revitalising the English Regions"

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Mr. Raynsford: I am afraid that I shall disappoint the hon. Gentleman if he thought that I would rise to the bait of using the ''obscurity'' of this Committee to be more candid. Perhaps he has an underdeveloped sense of the significance of ministerial statements in any location, however obscure they may seem to be. Notwithstanding that, I tried to be fairly candid in my opening remarks and I shall try to be as open as I can in answering questions.

The hon. Gentleman thought that annex E indicated a rather consistent pattern of regional devolution in other countries, but the evidence is that asymmetric patterns do exist in other countries. Taking Spain at random, the smallest region of Navarra consists of a mere 540,000 people; the largest region of Andalousia has 7.3 million people. The proposals for the United Kingdom have a much smaller difference—about 7.5 million for the largest and 2.5 million for the smallest. There will be variations, but they will not be as wide.

On the hon. Gentleman's second point, the Spanish arrangements involve considerable variation in the degree of autonomy enjoyed by different regions. For example, the Basque province and Catalonia have very extensive devolved powers. Other regions in Spain have substantially fewer devolved powers.

Mr. Anthony Steen (Totnes): It has not done them much good.

Mr. Raynsford: The hon. Gentleman says that it has not done them much good—

The Chairman: Order. We ought to stick to the rule and have no banter. The Minister is answering questions.

Mr. Raynsford: I bow to your wise judgment, Mr. O'Brien. I have no doubt that the hon. Member for Totnes (Mr. Steen) will return to that matter and I will happily answer his question.

There are significant variations in Europe, and we allow for variations and asymmetric options in England. The situation is asymmetrical in that the extent of devolution will vary between Scotland, Wales, Northern Ireland and the English regions, and the option is asymmetrical in that there can be elected regional assemblies in some English regions and not in others. There is a parallel with what applies elsewhere and I do not think that we are doing anything inappropriate.

As for the question about whether it was all worth the effort, I must point out to the hon. Member for St. Ives (Andrew George) that the Liberal Democrats have for a long time been advocates of regional devolution. My discussions with members of his party and consultations that I have held throughout the country have shown that, even if people are not in complete agreement with all our proposals, they generally welcome them, as his opening remarks bore out. I am sure that we shall have a productive debate in the next year or so about the extent of devolved powers and how they might change.

The hon. Gentleman asked about the future of Government offices and quangos. Implicit in our White Paper is the fact that Government offices will

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have increased powers and will play a continuing and significant role. In London, even after the creation of the Greater London Authority, the Government office continues to have a role. Its role has changed now that there is an elected body within the quasi-region—this city—but it still exists. Government offices will continue to exist in all regions, even in those that have elected regional assemblies. The powers will vary, which is another element of the asymmetry to which I referred.

As for quangos, they are bodies that everyone loathes when out of government but finds extraordinarily useful when in power. That pattern has been repeated for many years. Since I have been a Member of the House, or even since I began to follow politics, I have read denunciations of quangos from people who have gone on, when in government, to create large numbers of them. We are not in the business of creating large numbers of quangos, but we recognise a need for bodies that are independent of Government to perform certain functions. Most people would accept that bodies such as the Environment Agency are appropriately designed to meet particular needs that are not best discharged by Government. However, a framework should exist for democratic accountability whenever possible.

The elected regional assembly provides an opportunity to introduce such democratic accountability to cover functions that are presently discharged by quangos, which do not have a line of regional accountability. For example, the Housing Corporation dispenses large sums in all regions; it is accountable to Ministers and through them to Parliament, but it has no framework for regional accountability. There are proposals that it will have one, however—we propose to change the lines of accountability. Anyone who suggested that all quangos should be abolished, however, would be somewhat naive. That is not our intention.

Ms Candy Atherton (Falmouth and Camborne): I welcome the White Paper.

I have two questions. First, if the Government felt that a referendum were appropriate, what mechanism would be used for that? At what point do the Government think that a call will come—through local authorities or the media, or through popular expression from the wider region? Secondly, what will be the optimum size of unitaries in the new structures?

Mr. Raynsford: My hon. Friend asks two important questions. In the relatively near future, we shall consult further the mechanism for deciding where referendums will be held. We have been taking soundings and will set out our proposals in the next month or so, and we shall invite comments on them before decisions are taken. We shall listen to the views of local authorities, existing assemblies and other bodies established in the regions, including representatives from business, trade unions, the voluntary sector, social and economic partners and members of the public. Precisely how best that can be achieved will be the subject of further consultation.

On my hon. Friend's second point, which I have completely forgotten—

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Ms Atherton: The size of unitary authorities.

Mr. Raynsford: That is an interesting issue because we have made it clear that it will be up to the Boundary Committee to decide on the best wholly unitary structure in any particular area. As I have said several times since the White Paper was published, we do not want to set limits to that. We believe that, in some areas, a wholly unitary structure based on existing counties might be an appropriate solution. Certainly, several people in Cornwall have expressed a view that that might be a good solution and one that would contribute towards the aspirations of the people of Cornwall for more self-governance.

I know that others take a different view and believe that division into several unitary authorities, larger than the existing districts but smaller than existing counties, might be a preferable option. That will be for the Boundary Committee to decide. Obviously, there are some limits. It would be inappropriate to set up a unitary authority that was so small that it was incapable of discharging its functions. Responsibilities for education and social services cannot be discharged well by a very small authority. It will be necessary to take heed of that when we give guidance to the Boundary Committee, but I am keen that we should not be unduly prescriptive, because we want to take account of the different circumstances in various areas and do not want to preclude options such as a wholly unitary structure based on existing counties.

Mr. Andrew Lansley (South Cambridgeshire): I want to take the Minister on to the subject of finance and ask him how the regional assembly is to spend its money. If I understood him correctly, he said that the regional assembly would be able to move money in a single block budget according to regional priorities. Two questions arise from that. First, in so far as that money is substantially the same money that will be made available to the regional development agency, as part of its single pot, from April 2003, is the Minister proposing that the regional assembly should be able to override the regional development agency's choices about how it allocates money from that single pot? In that case, the single pot would no longer be the regional development agency's money but that of the regional assembly. Secondly, the table on page 45 of the White Paper gives an example of the budget for the north-east. It includes in the budget that is the responsibility of the assembly £89 million of European programmes money. Is the Minister suggesting that the regional assembly would be able to reallocate those European resources to any other purpose that is specifically provided for under European programmes?

Mr. Raynsford: The hon. Gentleman asks some searching questions, which raise some pertinent issues. As he will appreciate, it is important to achieve a balance between giving elected regional assemblies flexibility to use their finances as they think most effective, while ensuring that particular channels of finance are not diverted from the purposes for which they are intended. There is a tension between those aims. We plan to square the circle by using a framework that allocates a block grant to the

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regional assembly, so that it has some discretion, but also ensures that there are a few agreed outcomes, which would be negotiated between the regional assembly and central Government.

Equally, the RDA will continue to be a business-led body, which will make its own proposals, and there will be discussion with the Secretary of State about implementation of the business plan for the region. The region will not have full discretion to shift resources between different headings. However, at the margins there will be significant flexibility. That is right; we want to extend to devolved bodies, whether local government or regional, the opportunity and freedom to determine their budgets in the best way. We have made it clear that it is our intention that there will not be a significant difference in the funding for those regions that have regional assemblies and those that do not. A reward grant will be implicit in the public service agreement so, to that extent, additional finance will be available to regional assemblies.

The response of local authority representatives to the availability of reward grant in relation to local PSAs has been extremely positive—they have welcomed them. We are trying to tread a clear line between conflicting pressures; ensuring that there is flexibility to spend and that sums allocated for particular purposes are not unduly diverted, while giving incentives to elected regional assemblies to make the best use of their resources.

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