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The Deputy Prime Minister: I do not agree. [Laughter.] That is my right.

The hon. Gentleman should bear in mind exactly what he did when his party was in power. He supported an Administration who abolished the Greater London council, Greater Manchester, South Yorkshire, Tyne and Wear, West Midlands, West Yorkshire and Merseyside. There was no referendum. There was no consultation. They just abolished those councils. It is a cheek for him to stand up today and talk about what we might be doing. We have made it clear that the issue of regional government will be decided by the people in the regions. They will know what kind of local government structure they want: it will be their choice. That is why the White Paper is called XYour Region, Your Choice".

Several hon. Members rose—

The Deputy Prime Minister: I think that I have given way enough for now.

Before I sum up, I want to say something about part 4, which creates a new power for the funding of the eight existing regional chambers. We helped to set up those chambers to contribute to the preparation of regional economic strategies by the regional development agencies. The chambers are made up of local representatives and key stakeholders—in some cases with a majority of Tory councillors, but we will

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leave that aside—from the social, economic and environmental sectors in the regions. The right hon. Member for Haltemprice and Howden (David Davis) is laughing. He knows that one of his party's chairmen is a member of an assembly. He has not heard that the party in London is against it.

The chambers have been a success story. I take this opportunity to thank all those involved, from all political parties, for the hard work that they have put into getting the chambers up and running and working together for the benefit of their regions. They have taken on an increasingly significant role. All chambers now scrutinise the work of the RDAs, and many are involved in the production of regional sustainable development frameworks and the preparation of regional planning guidance.

Tony Wright (Cannock Chase): Before my right hon. Friend sums up, may I ask him not to undersell this measure? He may remember that in 1945, Clement Attlee said that the referendum was a device alien to all our traditions. It has now become central to them. We used to make them up as we went along. Surely the importance of the Bill is that we now run referendums coherently and fairly. Is that not a great advance?

The Deputy Prime Minister: It is. That is an important point. Knowing this to be a controversial measure on which people had strong views, I thought that it was right to have a referendum. It was in our manifesto. We have introduced the Bill to let the people make the choice. I personally would like to see regional government throughout the UK but I am prepared to let the people make the choice. I must advocate our case—I will in those circumstances—make clear what I believe is the best way forward, and then the decision will be made in a referendum.

Five of the eight chambers have taken on the role of the regional planning body. In light of the positive responses that we have received to our planning Green Paper, we now believe that it is right for all eight regional chambers to carry out that role in the absence of an elected regional assembly.

At present, the chambers get most of their funding from local authorities. As the role of the chambers expands, in particular on planning, a more general funding mechanism is needed. That is why the funding power provided by part 4 is required.

The Bill is at the heart of our programme to modernise our constitution, to decentralise power and to deliver better public services. It is a crucial step towards establishing a democratic voice for the English regions—a voice that has been denied them for far too long. We want to give the people of our regions the right to choose—the ability to decide what is best for them. The Conservative party's amendment would deny the people in the regions that choice. It would deny them the opportunity for change.

The Conservative party does not like devolution but it eventually comes on board. Remember that it opposed on Second Reading the Referendums (Scotland and Wales) Bill in May 1997, but later changed its mind. It opposed on Second Reading the Greater London Authority (Referendum) Bill in November 1997, but later changed its mind. It opposed

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on Second Reading the Government of Wales Bill in December 1997, but later changed its mind. It opposed on Second Reading the Scotland Bill in January 1998, but later changed its mind, and it opposed on Second Reading the Greater London Authority Bill in December 1998, but later changed its mind. At least it is consistent in its opposition. First it opposes and then it changes its mind. I am sure, bearing in mind that track record, that it will not be too long before it has another rethink. I ask the House to reject the amendment and to support the Bill, which I commend to the House.

Several hon. Members rose—

Mr. Deputy Speaker: Order. Mr. Speaker has selected the amendment in the name of the Leader of the Opposition. I remind hon. Members that there will be a 12- minute limit on Back-Bench speeches.

5.8 pm

David Davis (Haltemprice and Howden): I beg to move, To leave out from XThat" to the end of the Question, and to add instead thereof:

That this House declines to give a Second Reading to the Regional Assemblies (Preparations) Bill because it is a centralising measure that will have the effect of undermining local democracy; it places too much power in the hands of the Secretary of State to determine the timing of each referendum in each region; it fails to protect the right of individual communities to determine the local government structure that suits them best; the arrangements for referenda are inadequate and insufficiently defined; it fails to recognise that unitary authorities are not an appropriate solution in all parts of the country; it fails to recognise the needs of rural areas; and it is incapable of protecting long-established county councils.

The Deputy Prime Minister advances three main arguments for regional government. He claims that there are economic benefits, that people want to feel part of a region and that he is introducing democracy to existing regional bureaucracies. I will examine each of those claims in turn and pass by some of the constitutional theories that he seemed to invent during his speech.

What are the economic benefits of regional government? The Deputy Prime Minister said in his White Paper:

XElected regional assemblies will develop a strategic vision"

and that they will

Ximprove economic performance".

All available evidence suggests exactly the opposite. Let us consider what is happening abroad. Many European countries, generally those that are much larger than England, have existing layers of regional government, but it is striking that in those countries disparities between the regions are getting larger, not smaller.

Let us consider what is happening here. In the past few years, existing regional quangos have lobbied for more taxpayers' money for their area—understandably—and since the quangos have been established, disparities have grown larger, not smaller, just as they have in Europe. Furthermore, the subsidies have largely funded inter-regional competition, rather than specialisation to the areas competitive advantage.

Mr. Tony Lloyd (Manchester, Central): The right hon. Gentleman mentioned Germany. Of course, we

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must differentiate between regions in the former East Germany and those in the west. Does he accept that there is far less variation in the old federal republic than we experience in this country? There is enormously less variation, and it is a much fairer system.

Mr. Davis: I was talking about the trend in the difference between the regions. I am not comparing old East German regions with old West German ones. I am following the CBI, which said that the differences are getting worse.

The same is true in Britain: where we have regional government things are getting worse. The Government's own preferred measure of unemployment, the labour force survey, reveals that the highest unemployment rate in the country is 7 per cent. Where? In London, where there is a new tier of government. The second highest rate is 6.5 per cent. Where? In Scotland, where there is a new tier of government.

Let me offer a quotation:

XBusiness is disappointed that the government is pushing ahead with Regional Assemblies. English regions do need to help improve economic development, but this is not the right way to do it. They will simply add complications to the decision-making process and undermine the efforts of the Regional Development Agencies."

Those are not my words, but those of the CBI's deputy director general, Mr. John Cridland, who also said:

XThe Government needs to take action to improve economic performance and leadership skills in all regions rather than concentrating on establishing expensive talking shops in just a few areas."

Perhaps the Deputy Prime Minister believes that there is more support from business for regional government in the north-east. That is probably his best target.

Joyce Quin (Gateshead, East and Washington, West): The right hon. Gentleman mentioned London and Scotland in support of his preposterous theory. I note that he did not mention Wales. Is that because the figures do not back up his case? Given that he is not now opposing the devolution settlement in Scotland, Wales and London, is he not for once tempted to get ahead of the game and accept the principle of devolution, rather than having to play catch-up with public opinion?

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