Memorandum by the British Chambers of
Commerce (BCC) (DRA 59)
INTRODUCTION
The British Chambers of Commerce welcome the
opportunity to participate in the debate on Regional Government
for England. Business plays a key role in wealth creation in the
regions and should have a central voice in this debate. We trust
that our opinions will be given commensurate weight in the deliberations
of the Committee on this matter.
RESPONSE FROM
THE BCC
Having consulted the BCC network, which represents
135,000 businesses across the UK economy, the opinions of business
are represented below.
INTRODUCTION
— The British Chambers of Commerce
(BCC) can appreciate the perceived benefits of devolution. Business
understands that regional decision making, if it is to be increased,
will also have to be legitimised by the election of directly accountable
people to take those decisions.
— The prospect of bringing decisions
closer to the people is not something that any reasonable person
could oppose on its own. Decisions being taken by people with
their ear closer to the ground can only be of benefit to the regions.
But we believe that the manner in which the Government is proposing
to achieve this would cost jobs by strangling business with red
tape and extra taxation, without the benefits of increased productivity,
economic activity and skills that a genuinely powerful regional
assembly would be able to bring to a region. Business is not against
regional government; it is against the system of regional government
that is proposed in the draft Bill.
KEY POINTS
— A survey of the BCC network in the
summer of 2003 found that not one Chamber was in favour of the
proposals for English Regional Government as set out in the White
Paper. Those who were seeking further information and those who
were against (with an approximate 50-50 split) made up the responses
to the survey. In its current form the BCC could not support regional
government for England. We will outline below the changes needed
for our stance to alter.
— The old DTLR, before its re-organisation,
expressed the view that it would be useful to know what obstacles
stood in the way of business support for regional assemblies for
England. We included in our response to the White Paper the following:
— Business could accept Regional Assemblies
(RAs) if:
— A referendum were first offered
to all of England as to whether the people would prefer an elected
regional assembly option or a set-up whereby English MPs met at
Westminster on designated days to discuss purely English issues.
An English Parliament would cost no more money and would provide
parity with the rest of the UK without affecting the excellent
work done on the whole by the Regional Development Agencies (RDAs)
and regional scrutinising chambers[87].
It would be less expensive and more representative as there would
be no confusion as to accountability.
— The Government Offices (GOs)
in the regions are drastically reduced in size and scope.
— There was a reduction in public
sector employees, therefore reducing the burden on taxpayers and
business, over and above that announced in the Budget of March
2004.
— The Regional Assemblies (RAs)
being introduced would be cost neutral on both business and the
citizen.
— Power, not influence, would be
devolved to the regions, creating autonomous bodies and not an
extra tier of politicians, with little to do except meet central
Government targets.
— The electorate were fully aware
of the administrative and financial consequences of their vote
after a fully informative Government education campaign.
— The creation of unitary local
government is not taken as an opportunity to alter boundaries
to the benefit of one particular interest group or another but
is used to create a transparent, streamlined system of sub-national
government across England.
— The vote were preceded by a great
deal more information so that an informed discussion can take
place. This is not possible at the moment.
— The project can meet the five
tests set by Yorkshire Forward; 1) that it will help business,
2) that it will give regions real power, 3) that it will help
the region's people obtain jobs, 4) that it will improve decision-making
and 5) that it will reduce bureaucracy. At present the White Paper
fails on all five counts.
— The Government can alter the
business view that RDAs are better for business than RAs ever
will be.
— A provision in the referendum
legislation permits a new referendum to abolish an RA if 5% of
the regions population sign a petition to call such a referendum.
— The business community is given
membership of the assembly or specific statutory consultation
rights at the very least.
— The BCC is also concerned as to the
cost implications for these new assemblies and that most areas
of decision making are being drawn up from local to regional level,
rather than drawn down from national to regional level. There
is little in the Draft Bill to convince us of the necessity of
the proposals contained in it, as the Assemblies do not seem to
have been given anything worthwhile to do, and there is even less
detail about how much they will cost. We are not against these
Assemblies for the sake of it. Certain regions of the UK are failed
by the current centralised system and would possibly benefit from
devolution. However, we are currently not in favour of RAs because
they do not represent real devolution, it is a flawed project
throughout and promises to be very costly. The BCC therefore advises
the Government to improve or abandon this project before it wastes
a great deal of money on a system of government that few people
want and even less people need.
— It is fair to say that most of these
concerns have not been addressed or answered and, whilst this
is the case, business support for the proposals will not be forthcoming.
— As business is the engine of regional
as well as national economic growth it is a mistake not to ensure
that employers are in favour of such a vital proposal before any
further progress is attempted. The BCC is amongst the number of
groups who have studied the draft Bill and judged the proposals
on their merits. We are disappointed with what is contained in
the draft Bill. However, if a more suitable proposal were to be
made in future by the Government we may be able to support Regional
Assemblies. We suggest to the Government that, if it wishes to
have widespread support for its proposals, then it should produce
a policy that is more worthy of this support.
— The draft Bill proposes nothing like
the systems, backed up by different legal or constitutional settlements,
present in Scotland or Spain. If it were to do so then we would
be less sceptical.
— The Government should also include
in the legislation a fixed budget for the first five years of
the life of a regional assembly to which the body is obliged to
adhere. This will inform every council taxpayer in the area how
much he or she will be required to pay for the first term of an
assembly and will at least give each voter an idea of the implications
of their vote. The situation that arose in London whereby the
initial Government estimate of a zero cost at the time of proposal
was replaced by an estimate of 3p per week on the average council
tax bill at the time of the referendum and finally became a 50p
per week increase in 2002 cannot be repeated across England. As
Council Tax is currently a difficult topic, given its unsustainable
increases, the wisdom of indirectly funding Regional Assemblies
using a precept on the Council Tax must at least be questioned.
— Business also wishes to have adequate
direct representation on the Regional Assemblies. The changes
that have been made to the draft Bill, by way of increasing stakeholder
involvement, are welcome. The fact that the proposals leave it
to the Assembly to determine the specific mechanisms do, however,
lead to concern that the business community could yet be marginalized.
Without voting representation on the new RAs, business believes
that its voice will not be fully heard. The success of the Regional
Assemblies will depend on their engagement with business, the
wealth-creators in the regions. Currently business is involved
in the regional institutions and they work well together. Economic
development has benefited from this relationship. In future business
interests will be ignored, as has already been the case in London,
to the detriment of the entire region. It is business that creates
wealth and jobs and this vital role should be recognised in the
regional political process.
— Business initially reacted to the
proposals for regional government for England by rejecting them
out of hand. However, since the proposals were published (despite
the strong misgivings regarding the White Paper's plans) business
has recognised that, providing they are formally involved in the
process, a strong, powerful regional assembly could boost regional
economic competitiveness. They would need to alter their ways
of working depending on where current policy responsibilities
were transferred. However, a grave concern for business is the
situation of a firm that operates in an area that has a regional
assembly and an area that has not, given that the Government will
allow this situation to arise under its current proposals. This
would be logistically difficult for a smaller business. The Government
should address this point before it goes any further with this
project.
— It is also causing some concerns
in certain areas of the country, where the people disagree with
the regional boundaries. Given the arbitrary and random nature
of these boundaries it is hard not to feel some sympathy with
this sentiment. The North East and Yorkshire regions are seen
to have a historical identity behind them, despite the Yorkshire
region not being contiguous with the county boundary (Lincolnshire
is included in Yorkshire and the Humber) and the North East not
being the synonymous with Tyneside but the other regions do not
have any common identity at all. The current proposals strike
the business community as an attempt to create such an identity
elsewhere for reasons that the Government is reluctant to explain.
This lack of identification is made worse when the regions are
so large in some cases as to still be unwieldy. Is someone in
a remote rural part of a Northern Region really better off being
ruled from Manchester, Durham or Leeds than from London? It is
hard to see a difference between either situation, aside from
the credibility for government that London has that the others
have not.
— The example of London's regional
government, however, is one that highlights another gap in the
Government's thinking. Spanish devolution is a success because
its regions have ultimate control over certain policy areas and
spend more of the public sector budget than the national government
does. London is less successful because it does not. The English
regions will spend less than 2% of the public sector budget and
will have no legislative power. Therefore, for example transport
in London, has levels of government at each other's throats over
PPP for the Tube or congestion charging. Policy conflict and drift
is the result, leading to poor services, extra costs and disengagement
from the political system. This system of conflict is now proposed
for the whole of England. It is not an enticing prospect, especially
with very little in the way of proposals for slimming down other
levels of government as Regional Assemblies are introduced. Planning
policy demonstrates the problem. In London unitary local government
and the national government dealt with planning, now an extra
tier has been added. A similar plan is proposed for the three
Northern Regions. 90 per cent of Yorkshire and the Humber is covered
by unitary local government, as is two thirds of the North West's
population and so a regional assembly would be an extra tier.
Concerns on this issue must be addressed. Furthermore, turnout
in London's referendum was 36%. Would this be enough for the Government
to assume approval? They have not said, but we believe it is slim
evidence for public support.
— Business would suggest the above
changes to the current plans so that they could support Regional
Assemblies. However, for these Assemblies to also support business
they would have to:
— Include business on their decision-making
bodies.
— Develop a light touch in regulatory
matters.
— Ensure a genuine balance between
environmental and economic concerns on planning policy, which
local government has generally failed to do; and
— Do very little, but do it very well.
This will ensure that costs are kept down and that the policies
that they implement will benefit the economic growth of their
region.
CONCLUSION
— To conclude, regional assemblies
in England will not be a success unless the concerns of business
are addressed and taken into account. The Government must improve
its proposals before a vote to ensure that business can support
them. We would be happy to support such plans if they were to
benefit our members. At present these benefits are not clear to
our members and the onus is on the Government to explain them
to a sceptical private sector.
— Wales and Scotland have shown, in
their own unique way of working, that business can be involved
in the process. However, it is still early days in both of these
regions and English devolution will not be of a similar make-up.
Challenges still remain in Wales and Scotland and these are even
greater in England. The major question to be analysed over time
is whether consultation is taken seriously or is simply a cosmetic
exercise. It is surely right to wait and see how devolution affects
Scotland and Wales before rolling it out across England, especially
when devolution proposed for England is a diluted version of that
in Scotland and Wales yet may come at a similar price. A further
concern is the impact that elected Regional Assemblies may have
on the good work that is done at present by Regional Development
Agencies.
— If regulation and costs are the only
things that regional assemblies are to bring to the regions, as
is currently the case, then the assemblies will damage regional
competitiveness. It is for this reason that business will campaign
against them unless the Government radically alters its plans.
— The BCC believes that the Government
can do better than this and further believes that it should do
better than this. For example, a regional assembly should take
overall control of all regional agencies, such as the Learning
and Skills Council, or it will remain a weak body with little
power. Similarly, having the ability to "recommend"
to the Secretary of State for Transport is not good enough. Regional
transport policy should come under the control of the regional
assembly. This would be real power and would be worth supporting
on behalf of the regions and their businesses.
— The BCC therefore advises the Government
to improve or abandon this project before it wastes a great deal
of money on a system of government that few people want and even
fewer people need.
— If the Government improves its plans
then business could support Regional Assemblies and, more importantly,
Regional Assemblies will then also support business.
87 We make the distinction between chambers - the regional
chambers scrutinising the RDAs and Chambers of Commerce. Back
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