Examination of Witnesses (Questions 300-319)
6 JULY 2004
MR MARTIN
HAVENHAND, MR
TOM RIORDAN
AND MR
MARTIN BRIGGS
Q300 Chairman: But we are looking for
a deeper understanding here.
Mr Briggs: I think the understanding
actually has to be a shift to understand what a broad based regional
policy requires, so that it is not simply targeted at one department.
For example, I fully acknowledge what Martin says about the symbolic
shift of sponsorship responsibility to the DTI after 2001, which
was in many respects welcome, but a critical part of this picture
is actually integrating regional and urban policy, for example.
It is fundamental that you have somebody who does not see themselves
as the owner of one stream of public policy and there to deliver
that irrespective of what everyone else is doing—other things
just get in the way, to speak. We have to have somebody who cross
connects. From our point of view the people who are very much
involved and directly engaged, the Treasury, ODPM, DTI certainly—I
am not sure that there is always the understanding of that broad
based regional policy ambition that I have described—and
others who have begun to get engaged, we are at a stage too where
people are looking on their engagement as, "Shall we have
a strategic dialogue? But we do not really want to give away any
direct power or authority." The people in that camp—and
we have talked about the policy areas, Education, Skills, Transport—we
would say that Stage two often will not be seen to take you far
enough because it is one thing to have a strategic dialogue and
it is another thing jointly to sign up to hard testable objectives
that reinforce what Regional Economic Strategies are trying to
do. So that is Stage two and we hope it is a stage along the path,
and we see progress that needs to be achieved. There are others,
like Defra and DCMS, who do not really think in a regional dimension,
where we need to encourage people to think in that way.
Q301 Chairman: What contribution, what
involvement to date has, say, the Department of Culture and Media
had, and how important is the awareness of the Department of Culture
and Media to regional development, in your eyes?
Mr Briggs: It is partly about
individuals and, let us be frank about that, the arrival of Richard
Caborne at DCMS, has introduced an individual with a passion for
the Regional Economic Agenda, who understands that interconnection
and who has made—
Q302 Chairman: Who was missing beforehand.
Mr Briggs: Who was missing beforehand
and has made huge strides. We have seen on the back of that, for
example, RDAs taking over responsibility for the tourism agenda
in regions in a way that I think will uniformly help us to raise
our game in relation to tourism as an economic driver. We are
at an early stage with that; we are just 18 months in, but that
will make a big difference. There are other areas where we need
to embed that sort of thing, in relation to culture, in relation
to sports to some degree, much more thoroughly. We look to claw
that ground one step at a time and embed that change of thinking,
but it is a cultural thing.
Q303 Mr Beard: When you talk about the
need for a clearly defined regional policy, is it more than requiring
the Government to say that in future all departments will harmonise
their activities in a particular region, under the supervision
of the Regional Development Authority; is that what it amounts
to?
Mr Briggs: The first part of that
statement is certainly the objective of a broad based regional
policy, which looks to make sure that every aspect of public policy
reinforces regional economic success. The second is more arguable.
Q304 Mr Beard: Which do you call the
second?
Mr Briggs: The question that it
should be under the authority of the RDAs, I think, was something
like the phrase you used.
Q305 Mr Beard: Not the Authority because
that is not relevant. It is to be harmonised with everybody else
and the RDA is the conductor of the orchestra.
Mr Briggs: I think in relation
to economic policy that is absolutely how it should be. We need
to recognise that there are other dimensions to public policy—social,
for example, where Martin mentioned earlier that Regional Assemblies
have an important role to play in that process too.
Mr Riordan: I think the DCMS example
is quite a good one in that respect, in that what we want them
to do is both region-proof their policies, so to make sure they
realise how geographically it has an impact across the regions;
but also, we are having a very useful dialogue with them at the
moment about what is the economic link between culture and sport
and a successful economy—back to the young people point.
It is a very important way to latch people into the economy and
get them interested, rather than coming to listen to people like
me. Get them in with sports people, that is how you can latch
them in. I think there are links that can be made at a local level
that would be really helpful. The final point is the finances,
where getting the Lottery and the funding that comes through DCMS
to latch in much better to both local government spending and
the RDAs and to other spending is very important, because what
tends to happen is that the poor partners on the ground, the people
trying to run the projects, have to get hold of one little bit
of money, then they have to get hold of another bit, then get
hold of another bit. We are trying to push all that forward so
that we agree what the priority is at the start with all those
funders, and then get the project moving probably two years more
quickly than we otherwise would do.
Q306 Mr Mudie: I also think you have
a key role because in the leisure strategy—I have thought
about it—for example, the Hebden Bridge experience, where
it is almost a cluster of talent, feeds off itself and attracts
others, and suddenly you have an economic phenomenon on your hands,
and it is building on that, bringing in colleges, being prepared
to put money in to get talented youngsters coming to this area,
feeding off in the evening and building up leisure. If we do not
have manufacturing the service has to be looked at, and the leisure
side of the economy is a very important economic side. It needs
all the partners, and it needs the partners being prepared to
put brass in before it happens.
Mr Riordan: That is a productivity
issue and the disparities issue. One of the big selling points
of those regions that may be lagging behind is their quality of
life and the cultural offer that they can give to people, and
that has to be one of our assets that we sell so that we attract
these highly skilled workers.
Q307 Chairman: Looking at departments
that have a big influence in employment areas, like the Department
of Health, Defence, the Home Office, what cultural change should
they undertake in order to put on these regional dimensional glasses,
because there is a cultural change that is needed, is there not?
Mr Briggs: I think it needs to
be tacked at both the regional and the national end. At the regional
end we have underway at the moment a proposal that we have worked
out with our government office in the region to bring together
the key accountable officers in each of those public policy streams
at the regional level into a shadow executive board, which can
shape a business plan across those different areas of responsibility
that reflects the region's economic strategy. But in reality that
can only be about the stage two that I have described, influencing
each other, picking up the interconnections, and the fundamental
shift has to occur at the national level. I am sorry to keep harping
on about Lyons, but I think that Michael Lyons says some very
important things about the way in which public policy is shaped
and formed and the degree to which all the thinking and much of
the decision-making about delivery is tied within a certain small,
charmed, geographical circle. 73% of senior civil servants work
within a mile or two of this place, for example, and that creates
a problem in public policy.
Q308 Mr Mudie: Martin, how do your activities
differ from Martin's [Havenhand] and why?
Mr Briggs: The similarities are
unsurprising because I think fundamentally the economic challenge
we face is similar. The differences are driven by the differences
in particular regional circumstances. Not just at the regional
level but sub-regionally too. For example, in the northern part
of my region, the former coalfields area, there are some very
close relationships with the work that Martin's team are doing
in South Yorkshire. There is a clear read across in the objectives
and the way in which we work at them. In the southern part of
my region, Northamptonshire, on the other hand, it is fundamentally
affected by—if we look at John Prescott's Sustainable Communities
Plan of the Milton Keynes South Midlands Growth Proposals—a
very different economic dynamic. The challenge for us is looking
at those different regional and sub-regional qualities, how to
translate the economic strategy focusing on raising levels of
enterprise, levels of innovation, levels of investment, and translate
that into what we and others need to do against those different
economic settings in those different localities. So what you see
different in Yorkshire from the East Midlands will be fundamentally
about the different sorts of economic challenges that we face.
Q309 Mr Mudie: That is from where you
have been. You can say we are doing different things at the moment
because we have different starting points, different areas, different
old industries, et cetera. Will there be a difference between
your economic model or outcome to Yorkshire's? Wherever we go,
do Regional Development Agencies have the objective, having all
the same industries, all the same in each area, or do you have
something that will make you regional? Do you see yourself as
having a different regional output?
Mr Briggs: I just say briefly
that the cluster work, which we touched on earlier, does show
very considerable differentiation. It shows some common features,
for example the role of the creative industries in our major connovations
is in itself an important cluster activity; but if you look at
cluster activity in Yorkshire, or the northwest or the East Midlands
or the West Midlands, that will be driven by the starting point
to some degree because you have a series of world class or aspirate
world class universities, a series of technology transfer mechanisms,
but you seek to work with what is there, albeit in embryonic form,
rather than everybody having the aspiration that they are going
to go for a bio-technology world class centre of excellence. You
cannot do that, and I think you will see that Regional Economic
Strategies do differentiate.
Q310 Chairman: How many bio-technology
centres do you think the UK could accommodate?
Mr Briggs: It depends at what
level they are operating, but in terms of truly world class I
think we are talking about two, possibly three.
Chairman: We were in America two weeks
ago, in Raleigh-Durham, and they mentioned there that the USA—a
250 million population—could accommodate six at the maximum.
The point is that everybody wants to get into bio-technology,
and this is a worry for people like ourselves and the different
regions.
Q311 Mr Mudie: That is right, John. When
we were in Washington and we asked the embassy what you were all
looking for as a development agency, they all said the same thing,
which saddened us, which is why we ask the question.
Mr Briggs: I have to say, it is
not helpful to criticise people at second hand, but I think that
is a slightly lazy response because I think quite a lot of work
has been done to differentiate. Clearly there are areas in which
we will see ourselves competing, and sometimes competition can
be healthy, providing it is not simply on the back of public funds,
of course. Actually, there is a lot of differentiation in the
cluster focus of different regions and, maybe, rather than criticising
my colleagues in Washington, I say we need to work harder to explain
to them where we are.
Q312 Chairman: This is a genuine issue
here, Martin, in that feedback we got from Washington and New
York, last year and this year, is that Development Agencies come
along, they see each other in a sense as rivals, and they are
going for the same goal. That is the point that George is making.
Mr Havenhand: The point I would
make is that in the North of England we try to reduce that by
having the North of England approaching marketing, where we have
been working collaboratively, particularly on the chemicals agenda
and the bio activities. So I would hope we did not say in the
North of England that we wanted three; clearly, that would not
be our approach. If I could just pick up on George's point? The
difference within the regions is very much around the cluster
bases, but I think also the transport arrangements are critical.
When you look at the North of England, the issue of the west-east
trade routes is very important for us in regard to the difference.
As opposed to taking our trades to markets down through the southern
ports we are emphasising the need to get goods, particularly from
the northwest, through to Europe through the eastern ports, and
there is still too much traffic going south and we need to make
better use of the infrastructure that we have in improving that
particular link. So, again, that will be a different dimension
as to how we would be operating in terms of our infrastructures.
Q313 Chairman: The Government has set
a PSA target to "make sustainable improvements in the economic
performance of all English regions and over the long-term reduce
the persistent gap in growth rates between the regions".
Is the Government ambitious enough for that target, because going
back to what Steve Fothergill said when he came here, he said
that it is quite an easy target to attain, and the only way to
narrow the substantial existing regional disparities would require
faster growth in the north than the south, and that is a very
challenging task.
Mr Briggs: As I said earlier on,
I think the second part of that aspiration is difficult because
I think narrowing that differential—not in all, but in most
developed national economies, most OECD economies over the last
generation, we have seen disparities grow at a regional level
rather than shrink. There is a lot of analysis of why that is
the case and much of it, I think, does revolve around the role
that knowledge, skills and technology transfer play in all of
that. So I would differ a little from Steve. I think if we are
serious about narrowing the differentials that is a very demanding
target and I think the question of how we relate that to the UK's
overall economic growth is one of the most testing ones of all.
Where there are tensions between the English Agencies, indeed
they do resolve exactly around that issue—what is the balance
between achieving national and international excellence in, for
example, science, which Tom referred to earlier on, against the
balance for achieving greater regional equality? Those two may
point you in very different directions in terms of public spending
priorities.
Mr Havenhand: If I could add to
that? You asked the question, is it ambitious enough? I think
the target itself is a good target for us to pursue, but I think
timescale is a real issue. I think the point that Mr Mudie has
made about, we have been here five years, can we keep waiting
for the improvements to take place? So I think there ought to
be a time dimension to this about how it is we should be closing
the gaps in this particular area.
Q314 Chairman: We have a few core questions
to ask you. What part do regions play in determining the UK's
international competitiveness, and whom do you regard as your
main competitors?
Mr Briggs: To take your first
point, I think regions do play an important, but of course not
an exclusive, role. It is no different a question from what can
you influence at regional level in terms of economic performance
as opposed to what you influence at national level. There are
two points to make. First of all, what we seek to do in Regional
Economic Strategies is to make regions fit for purpose in attracting
international investment, and that brings us back to the skills
and transport issues and the degree of influence we have over
those. Secondly, there is a very specific role which has been
long established in relation to inward investment of trade work,
for example, where work with specific companies needs to take
place not just at a national or international level, but people
need to be plugged into specific project opportunities, and that
happens at regional and local level. I would say that despite
the fears people had five years back, the RDAs, as bigger and
more influential bodies, have shown far fewer signs of competing
unhelpfully with each other regionally and locally, than their
predecessor, inward investment bodies—
Q315 Chairman: Who are your main competitors?
Mr Briggs: Do you mean in terms
of regions?
Q316 Chairman: No, I am talking here
about international competitiveness because the impression that
we have, as a Committee, from our visits outside the UK, is that
regions need to adapt to the new, global competitive pressures
and improve productivity to lead to substantial regional economies.
We are playing a game of "catch-up" with the United
States and we also have to compete now with the low cost areas
in Europe, particularly since the expansion of the EU. So how
do you look to the future and stop regions outside London and
the southeast being left behind? It is a larger question, related
to globalisation.
Mr Briggs: I will answer briefly
and specifically. We do not see the main competition coming from
European regions, except in certain specific cases. I think much
of the evidence of the East Midlands, where we chose a Regional
Economic Strategy ambition, of top 20 regions in Europe by 2010,
that against European regions English regions are performing quite
well. North America remains a huge challenge. Committee members
will be aware that there is a lot of argument about what the productivity
differential actually shows us about the performance of North
American and European economies over the last five or ten years.
Part of that is about productivity in the public sector, which
is, I guess, too long for us to discuss today. North America is
clearly, and remains, a dynamic competitor for much of the investment
that English regions are seeking. In Asia Pacific, I think a fundamentally
different set of questions is arising, particularly around China
and particularly around India. Part of the difficulty is that
so many of those involved have, I think, a distorted view of the
sort of competition that those areas are presenting to the English
regions.
Q317 Chairman: Do you have an office
in China and India?
Mr Briggs: We have a hub in Singapore,
which then services a series of offices that operate in South
Asia, and we have an Indian network as well.
Q318 Chairman: I went to visit Rotterdam
Chamber of Commerce last year, and they stated to me that they
have had an office in Beijing for the past 16 years. That indicated
to me that they are way ahead of the game in terms of anything
that has happened in the UK. You are saying you have a hub in
Singapore, but nothing in China and India, and these are the growth
areas.
Mr Briggs: Sorry, that hub in
Singapore manages a presence in China, but also in Malaysia and
also in India.
Q319 Chairman: How long have you had
that?
Mr Briggs: We have had our present
arrangement in place for two years now.
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