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Westminster Hall

Tuesday 1 November 2011

[Mr James Gray in the Chair]

UK Relations: Libya

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Newmark.)

9.30 am

Daniel Kawczynski (Shrewsbury and Atcham) (Con): Thank you for calling me to speak in the debate, Mr Gray. Some time ago, the late Robin Cook—a man of considerable intellect and experience—spoke about an ethical foreign policy. This new drive, which would shape Britain’s engagement with countries around the world, would be based on our ability to engage in a more ethical way in the modern era, thus protecting our image and branding throughout the international community. Was that a naive objective? As I say, it was formulated and proposed by somebody with considerable experience, and it was certainly a commendable aspiration.

However, following the disastrous engagement in Iraq, and the illegal war that the Labour party pursued there, Mr Blair had a problem with his party and the country. He therefore sought out somebody who would enable him to show the world that although he was making war by force, he could also make peace through international diplomacy. Who better to choose than an isolated figure, ridiculed in the Arab League, with no friends? Mr Blair chose Colonel Gaddafi, who was so bereft of friends that he could be enticed into the little deal—the little charade or rapprochement—that Mr Blair pursued with him.

We were told at the time that as a quid pro quo for this rapprochement, the weapons of mass destruction that Colonel Gaddafi had amassed would be handed over and sent for evaluation and, ultimately, dismantling somewhere in North Carolina in the United States of America. I do not know about you, Mr Gray, but I do not know what those weapons of mass destruction consisted of, how many there were, or what their quality and calibre was. For all I know, Gaddafi may have had just a pea-shooter; his total inability to defend himself in the recent war certainly shows a rather chaotic approach to military strategy.

I did not want rapprochement with Gaddafi, purely because I knew from many friends in Libya, and from having visited the country, of the appalling human rights abuses that this tyrant perpetrated against his people over decades. I hope Members will agree that that does not fit in with the ethical foreign policy espoused with such fanfare by the previous Labour Government.

I have a gripe with not just the Labour Government, but the Scottish National party Government in Scotland. When they were about to release the convicted bomber al-Megrahi, I pleaded with Alex Salmond and the Scottish Justice Secretary not to do so. I also pleaded with the former Labour Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), on the Floor of the House to intervene with the Scottish

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Government to prevent the bomber being released. Of course, he told me, “This is nothing to do with us. This is a purely Scottish matter.” Despite the fact that releasing al-Megrahi could have had huge ramifications for the United Kingdom’s foreign policy, the previous Labour Government said, “It’s nothing to do with us.” I am absolutely convinced that our current Prime Minister would not have acted in such a way.

Glyn Davies (Montgomeryshire) (Con): Does my hon. Friend regret that the Scottish Government have not apologised for what happened, given that although their action was taken on the assumption that the man had less than six months to live, he is, as far as I know, still alive?

Daniel Kawczynski: Yes, I totally concur with my hon. Friend. Indeed, I think that we were told that he had less than three months, not six months, to live, but he is still alive somewhere in Tripoli, two years on.

So passionately did I feel about the release of al-Megrahi that I even travelled to Qatar for an international conference. In front of a totally Arab audience in debates in Doha, I and others won the debate on a motion saying that the house deplored the release of the Lockerbie bomber. A young girl from the United Arab Emirates told me, “On the one hand, you expect us to join you in your war against international terrorism, but on the other hand, you are releasing a convicted bomber who was involved in the worst terrorist atrocity committed on UK soil since the second world war.” That was a very salient, pertinent point, and it certainly stuck in my mind.

Robert Halfon (Harlow) (Con): I thank my hon. Friend for securing this important debate. Does he agree that the release of al-Megrahi marked the low point in the previous Government’s appeasement of Gaddafi? Does he also agree that they were hiding behind the fig leaf of devolution, given all the revelations that there have been about the surrounding commercial deals between them and Libya at the time?

Daniel Kawczynski: I totally concur with my hon. Friend. The United Kingdom’s reputation was greatly damaged at the time. As I suggested, other Arab League leaders were so contemptuous of this bizarre, tyrannical clown that they told me and others, “If the United Kingdom cannot grapple effectively with Gaddafi, who can they effectively engage with and have a meaningful relationship with?”.

I stopped the previous Labour Foreign Secretary, the right hon. Member for South Shields (David Miliband)—the man who aspired to lead the Labour party—in the Members’ Lobby to ask him about PC Yvonne Fletcher. The Foreign Office had ignored her relatives for years—letter after letter had gone ignored—so to get him finally to meet them, I had to write an open letter on Conservative Home demanding that he did so. Before I did that, however, I stopped him in the Members’ Lobby and asked him to raise these issues and to assist me in fighting for PC Yvonne Fletcher and the victims of the IRA, who had suffered because of Gaddafi’s funding of it. To quote him verbatim, he said, “Don’t rock the boat now, Kawczynski. We’re in very delicate negotiations with Colonel Gaddafi—rapprochement. We don’t want you rocking the boat.” He basically told me to shut up

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and not to try to stir things up. That is why I believe his judgment was wrong, and why I commend the Labour party on not electing him as leader; I do not think that he is fit to be the leader of the Labour party, given his action then.

I hope that the shadow Minister will agree that this was not Labour’s best moment or its finest hour. How would the Libyan people view us now, if all they had to go on was the incredible rapprochement between Mr Blair and Colonel Gaddafi, and all the pictures of them smiling together in the tent where they met? I contrast that with the superb leadership that our current Prime Minister has shown in helping to secure UN resolution 1973 in order to ensure that NATO’s intervention to protect the citizens of Libya was legal.

I remember going back to my apartment after a late-night vote in February, and watching Colonel Gaddafi on Sky News promising that he would hunt the rebels down city by city, street by street and wardrobe by wardrobe—that was the expression he used. He promised the world that a bloodbath would ensue on the streets of Benghazi and Tobruk if he were given an unfettered opportunity to pursue that. That night I texted the Prime Minister’s Parliamentary Private Secretary three or four times, pleading with him to take the message to the Prime Minister that we must intervene to help those courageous people in Libya, fighting for their freedom against a brutal tyrant. I thank the Prime Minister for taking the decision to support the people, and I rejoice in, and thank God for, the fact that not a single member of British service personnel lost their life. If we contrast that with previous military operations, we see that it is something for which we should all be extremely grateful.

Our interaction with Libya reminds me of something that the Prime Minister said at the Conservative party conference:

“It’s not the size of the dog in the fight—it’s the size of the fight in the dog”.

That encapsulates how, despite the extraordinary problems that this country has—the huge economic deficit that the Labour party so kindly bequeathed us—we can still intervene around the world and help people who are worse off than us, and protect them when they struggle for the freedom that we have enjoyed for such a long time.

Among the things that I have done as a Member of Parliament in the past six years, one of the most pertinent to this debate and the most solemn has been to stand in the British war cemetery in Tripoli. It has beautiful green grass, immaculately cut, and beautiful headstones, immaculately washed. It contrasts with the surrounding district, which is rather shabby and dusty. I stood for hours looking at the headstones of our young service personnel who died so tragically, liberating Tripoli during the second world war. It is deeply striking that so many of them were so young: 22 or 23—some as young as 20. They all died in January 1942 in the liberation of Tripoli, and there is row after row of headstones. I hope that those sacrifices during the second world war, and what we have done, today show the people of Libya that they can trust and depend on us. I pay tribute to a dear friend of mine from my constituency—Mr Ted Sharp, who was a desert rat. I have spent many hours listening

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to his stories of how there were no food supplies at one stage; some of the desert rats were like skeletons. They went through terrible suffering to free Libya.

The manner in which Colonel Gaddafi died rather shocked me, but I did not shed many tears for his passing. The way in which he was killed shows how despised he was by the Libyan people, but I was disappointed that he was not captured and put on trial. It would have given me great satisfaction to see him atone for the brutality he meted out to his own people for so long.

Robert Halfon: Does my hon. Friend agree that what happened to Gaddafi and the manner of his death make it all the more important that his family be put on trial, both in Libya and the International Court of Justice, to ensure that the rule of law is followed, and that those people atone properly for their crimes?

Daniel Kawczynski: I very much agree with my hon. Friend.

Bob Stewart (Beckenham) (Con): At the point of capture, it is difficult to control forces that were not particularly under control in the first place; the testosterone is flowing. People probably just wanted to get rid of Gaddafi there and then. I do not blame those soldiers who killed Gaddafi. Like my hon. Friend, I regret it, but I understand exactly what was going on. They were in the height of battle, their testosterone was flowing, and they just went for it and killed him, because he was the tyrant.

Daniel Kawczynski: I agree. In fact, my understanding is that one of the people involved in his death was from Misrata, and his sister had been raped by Libyan soldiers loyal to Colonel Gaddafi, so I concur with my hon. Friend.

To return to the point made by my hon. Friend the Member for Harlow (Robert Halfon), I have tabled an early-day motion on the issue, calling on the Government of Niger to respect international law and acquiesce in ensuring that the relevant members of the Gaddafi clan—up to 30 loyalists are allegedly in Niger—are extradited to the International Court of Justice at The Hague. My first question to the Minister is this: what discussions is his Department having with the Government of Niger—and with the Governments of Mali and Algeria, where other Gaddafi loyalists are said to be seeking sanctuary? The most important of those loyalists is, of course, Saif al-Islam Gaddafi, who apparently is hovering somewhere around the Libya-Niger border. I hope that that man will not be killed. I would like him to be brought to justice in the Court at The Hague, and would like to hear what the Minister is doing to interact with the Government of Niger, and others, to achieve that.

Bob Stewart: I apologise for making a second intervention, but I have given evidence in five trials at The Hague, and the writ of the International Criminal Court runs only when a national jurisdiction has indicated that it has no intention of trying individuals who have committed war crimes in its territory. I should like the Gaddafi family and their supporters to go back to Libya. There will be a problem, because of the death

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penalty, but that is what I should like, because it is how the Court should work. A national jurisdiction tries those in question first, and if that does not work, they go to The Hague. I would prefer those people to go back to Tripoli.

Daniel Kawczynski: That is an interesting point, and the Minister will have to deal with the Government’s position on that. Do we want those people sent to The Hague, or should they go to Libya? I defer to the experience of my hon. Friend the Member for Beckenham (Bob Stewart) in those matters.

I am very supportive of the national transitional council, but I am deeply concerned—I feel passionate about it—that there has been no plebiscite. No referendum has been announced on the sort of constitution that the country will have. We have been told that there will be parliamentary elections in eight months’ time, and presidential elections in 18 months. I am extremely concerned that the NTC has already unilaterally decided to state that there will be presidential elections. I think that the last thing the Libyan people want is another Head of State who is a politician. They need to be consulted, so that they can decide what sort of constitution they want. I think that they want a unifying figure: someone who commands respect throughout the country, who is untainted by any previous association with the Gaddafi regime, and who can bring the whole country together in a unifying way. I am not embarrassed to put those issues forward; I do not flinch from doing so. Yes, it is a matter for the Libyan people, but our country has put our service personnel’s lives at risk, and we have a right to advise and caution the NTC in that regard.

Graham Stringer (Blackley and Broughton) (Lab): I congratulate the hon. Gentleman on securing this important debate. He is making a fairly straightforward case about international justice and constitutional law, which I follow and by and large agree with. Is he concerned, as I am, about the stories coming out regarding atrocities committed by anti-Gaddafi forces?

Daniel Kawczynski: Yes. The hon. Gentleman makes a good point; there are allegations of atrocities on both sides. My hon. Friend the Member for Beckenham talked about testosterone and the desire to take revenge, and we have heard that serious human rights violations and massacres have taken place, such as the shooting of up to 50 Gaddafi loyalists with their hands tied behind their backs in Sirte. The hon. Member for Blackley and Broughton (Graham Stringer) raises an important point, and I would like to hear from the Minister what the Government’s attitude is to ensuring that people are brought to justice.

I believe that the unifying figure who is untainted by Gaddafi and who commands respect in Libya is Crown Prince Mohammed, the heir to the Libyan throne. I have had the great honour and privilege of meeting him; he has lived in London since Gaddafi exiled him and his father from Libya. Gaddafi burned their house down in front of them and then banished them, and they have lived in London ever since. Crown Prince Mohammed’s father subsequently died, but His Royal Highness continues to live in London. Having met him on numerous occasions, I consider him to be, if I may say so, a friend. He is a tremendous counsellor, and I

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respect him greatly. I have met many leaders around the world in the past six years, but few of them have impressed me as much as Crown Prince Mohammed.

A few weeks ago, I raised directly with the Prime Minister how important it is for him, or at least one of his aides, to meet Crown Prince Mohammed to seek his guidance and views. Foreign Office officials have met Crown Prince Mohammed, but to my knowledge no Foreign Office Minister has yet met him, which I am concerned about. I understand that the Foreign Office does not want to be seen to be manipulating the situation in Tripoli—of course it is for the Libyan people to make decisions—but a member of the el-Senussi family who has extraordinary respect in his own country is living in London; the least the Foreign Office can do is engage with him effectively and properly and find out from him what is happening on the streets of Libya.

The Foreign Office will of course be told a lot by the national transitional council about what the council wants the Foreign Office to know, but I am hearing from Libya—from town councils and the people on the streets of Tobruk, Benghazi and other cities—that many people are holding exhibitions about the history of Libya, which is something that they were deprived of under Gaddafi. Many people are holding exhibitions about the royal family, the late King Idris and Crown Prince Mohammed.

The Foreign Office must be careful. Having spent so much taxpayer money on pursuing the liberation of Libya, we want to ensure that the Libyan people are consulted, and that their will comes through. If they wish to have a constitutional monarchy, as I believe they do, that should be put to them in a referendum, so that they can decide of their own accord, rather than the unelected NTC unilaterally deciding that the Libyan people should have a politician as their Head of State in perpetuity.

Bob Stewart: I, too, have met Crown Prince Mohammed, although he is not as big a friend to me as he is to my hon. Friend. I know that Crown Prince Mohammed has had contact with the Foreign and Commonwealth Office, so it is fully aware of the situation. I subscribe totally to my hon. Friend’s contention that there should be a general election before a presidential one, and I, too, would like someone such as Crown Prince Mohammed to become Libya’s Head of State. However, it cannot be done just like that; the Libyan people have to ask for it. That is fair.

Daniel Kawczynski: I agree with my hon. Friend, but after 42 years of absolute and tyrannical despotism, it is not unreasonable to have a referendum or plebiscite. Let the people decide. Give them the options. We in this country had a ludicrous referendum on changing the voting system, which I was furious about, as chairman of the all-party group for the promotion of first past the post.

Mr James Gray (in the Chair): Order. The hon. Gentleman is straying off the subject.

Daniel Kawczynski: Sorry, Mr Gray. I had to get that one in; I could not resist. If we can have referendums on trivia such as changing the voting system, the people of Libya should be given the once-in-a-lifetime opportunity

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to decide what constitution they want. I thank God that we have such a wonderful Head of State as Her Majesty. Some of the most stable countries in the world, such as Denmark, have monarchies. Interestingly, even in the Arab world, people have not rebelled or shown hostility to Governments in countries that have monarchies. I therefore think that monarchy is a stabilising factor.

I would like Niger to hand over Saif al-Islam and others associated with Gaddafi’s regime either to Libya, as my hon. Friend the Member for Beckenham suggested, or the Court in The Hague. I want Saif al-Islam to be captured alive, and I hope that the Government will give me their perspective on that. Do they, too, want him captured alive, so that he can account for some of the crimes committed?

I would like the Government to help the Libyan authorities to find all the money stolen—the billions that have been squirreled away in vaults and bank accounts all over the world, from Liechtenstein to the Cayman Islands. Given the expertise that we have in our country, we should offer the Libyan Government some assistance. London is the financial capital of the world, and we can play a part in helping the Libyan authorities to find all the frozen and other assets that have hitherto not been traced.

One of the most important aspects of the matter is compensation for IRA victims. Colonel Gaddafi provided the IRA with Semtex for many years. I was slightly concerned to read a report in The Sunday Times last week that a private law firm was already asking the NTC to hand over £450 million in compensation. I have two concerns about that. First, that is unduly hasty. Although I am desperate for the families of IRA victims to receive compensation, it might be slightly too hasty to start asking for £450 million in compensation when Libya is practically on its knees, with limited electricity, water and other supplies, even though I would support such a request in the future.

Secondly—I shall emphasise this time and again—I certainly do not want a private law firm to be responsible for bilateral negotiations with the Libyan Government on compensation for IRA victims. It is not for a private law firm to undertake that huge job. I want every single penny piece of that money, when it is handed over, to go to the victims of IRA atrocities. I do not want a private law firm to get £1 million, £2 million, £10 million or £15 million—according to the various reports—of that money. Every single penny piece has to go to the victims. I have raised that point with the Prime Minister in a private meeting, and I expect to hear from the Foreign Office that it will take responsibility for the negotiations to ensure that the private law firm does not make any profit out of the case. We, the state, sacrificed hundreds of millions of pounds and put the lives of our service personnel at risk to liberate Libya, and it is for us to ensure that compensation goes to the victims of IRA atrocities. We do not want some private law firm dishing out the money and making the profits.

Christmas eve will mark the 60th anniversary of the liberation of Libya. I would love to attend the celebrations, but obviously I must be with my family at that time. I am sure that the Libyans would greatly appreciate it if somebody from the Foreign Office went to Tripoli to celebrate their 60th anniversary of freedom.

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Will the Minister tell us what will happen about the prosecution of the killer of PC Yvonne Fletcher? Are we happy for this matter to be brought to justice in a Libyan court, or do we want the killer to be extradited to the United Kingdom? In the past, I have said that British justice could not be attained in a Libyan court under Gaddafi’s jurisdiction. During the Gaddafi regime, Scotland Yard had been going back and forth between Tripoli and the UK, and when it was close to getting its man, Gaddafi, in yet another game of cat and mouse, stopped issuing visas. However, things have changed, so I would be interested to hear what our line on that is.

When the new Secretary of State for Defence went to Libya, he said to British companies, “Pack your bags and come here to reconstruct Libya.” I totally agree with him; there are huge opportunities for British firms to help with the reconstruction of Libya. Will the Minister tell us what UK Trade & Investment is doing on that? I had the pleasure of meeting Lord Green, the head of UKTI, in the House of Commons recently, and he told me about some of the changes that he wants to put in place to make his organisation more effective. I would like to know exactly what is happening on the ground.

Many consultants have come to see me and have said, “Look, we have been tasked with finding various companies to do x, y and z in Libya, but we cannot find British companies to do it. The only companies that are prepared to do anything are Danish, Austrian or German, and we are desperate to find a British company to carry out the work.” British companies are hesitant about going to Libya because of security issues and other such matters. I very much regret that. We are the ones who go in and liberate the country, and then everyone else goes in and gets all the business. The British are rather circumspect about such things, but we cannot afford to be. We should not be embarrassed to go out there with our companies for the mutually beneficial reason of reconstructing the country. We must stop this British sentimentality. We must not think, “Oh no, we must not sully our fingers with the business aspects of this.”

The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne): I would not normally interrupt a speech at this point, but I would like to reassure my hon. Friend on this niche specific issue. Lord Green went to Libya in late September, and there have been conferences here on investment opportunities in Libya. The UKTI staff are very much part of our team at the embassy in Tripoli. I hope that efforts are being made—efforts that my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) will support—because we are well aware of the opportunities, and wish to seize them in the proper way.

Daniel Kawczynski: I thank the Minister for that. I recently had a meeting with a lieutenant-colonel who had served in Basra. He told me that when he met Mr Blair, he said, “Okay, we brought peace to Basra, so where are all the suits?”. In other words, he wanted to know why Mr Blair had not brought in British companies to reconstruct Basra. Some of the huge problems that we have had in Iraq stem from the fact that we were too slow in bringing in British companies to reconstruct the country. However, we could not have just said, “Look,

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pack your bags and go to Iraq.” Many companies would have found that difficult, and we are now saying the same of Libya.

Jim Shannon (Strangford) (DUP): In my constituency, there are a number of companies that are very keen to do business in the region. The trip that the Minister mentioned may have been an opportunity for them to do just that, but the incentive for British business to get involved is not fully pushed by Government. Does the hon. Gentleman feel that the Government should do more to encourage local companies, especially when so many are keen to do business?

Daniel Kawczynski: I agree with the hon. Gentleman. I have had meetings with leading industrialists, and with various Army officers who have served in Iraq and other parts of the world and who have experience of such matters. We have compiled a report, which we will send to the Prime Minister and the Minister, outlining some of the things that the Government have to put in place to ensure that there is confidence, and encouragement for British companies to go out there. The French are brilliant at that; they have a body called COFACE, which I visited in Paris many years ago. It is a nationwide organisation that insures, underpins and takes some of the risk out of French companies going abroad and investing in such projects. The Government should start up a similar insurance fund. We will put in £50 million, the Libyans will put in £50 million, and we will get another few hundred million from wealthy Arab countries. We will then pool the money, and it will act as an insurance policy for British companies that are reconstructing Libya.

I will send the report to the Minister, as well as to the Prime Minister, because we must get a grip on the issue. I could tell the Minister the names of hundreds of companies that I have met in the past six months that would like to work in Libya, but do not know how to go about it. They ask me about guarantees and about what kind of political support is in place.

Yesterday, I met the Labour peer, Baroness Symons, whom I respect greatly. She said that there had been good engagement with Libya previously. I hope that the Minister is aware that the Law Society has been in Libya to help with the rule of law and arbitration. The British Council has operated in Libya, advising on issues to do with women. Welsh universities have signed memorandums of understanding with the Libyan Education Minister to work and interact with Libyan universities. The Westminster Foundation for Democracy has been helping to develop democratic institutions and civil society. Crown Agents were also in the country, working on anti-corruption measures. Those wonderful institutions were already working in Libya under Gaddafi, and I pay tribute to the previous Labour Government for getting them into the country. However, I do not know how successful those institutions were under the brutal Gaddafi regime. Certainly, now that Libya is free, I hope that the Minister will do everything possible to help the Law Society, the British Council, Welsh universities, the Westminster Foundation for Democracy, Crown Agents and others to get to Libya to underpin all that work and to help start reconstructing the country.

The European Union had negotiations with the Gaddafi regime on various trade agreements, and I hope that those are speeded up as well. Apparently, Dominic

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Asquith has been a representative of Her Majesty’s Government in Libya, and I am keen to know what his views are.

Libya has been a passion for me all my life. When I was growing up in Poland under the communist regime, we had nothing. The regime was brutal and tyrannical, and everything was rationed. My late uncle and his family worked in Libya, and they used to send oranges from Tripoli to Warsaw. Receiving those oranges at kindergarten was like a miraculous experience. Children in Warsaw in 1978 did not know what oranges were; we had never seen these things. We peeled the oranges delicately, we ate them, we made marmalade out of the peel, we drew them and we talked about them. They were incredible to us. Of course, most days now I peel an orange and I do not think about it, but as a child in 1978 I thought, “What sort of paradise must this be for them to have these sorts of things?”. My interest in Libya has stemmed from that early childhood experience.

I love the Libyan people and I love Libya. I am so passionate about the country, and I am so grateful that the brutal tyrant has been deposed. I look forward to the people of the UK having a very strong friendship with the people of Libya for the rest of my lifetime.

10.11 am

Stephen Gilbert (St Austell and Newquay) (LD): Thank you very much, Mr Gray, for calling me to speak. It is a pleasure to serve under your chairmanship this morning.

I congratulate my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) on securing this timely debate. In introducing it, he once again showed his expertise and personal experience, and we are indeed lucky to have him. He set out a compelling account of some of the legacy issues involved in the future of Libya, and he raised other important issues.

As we know, a week ago on 23 October the national transitional council of Libya celebrated the country’s new-found and hard-fought independence. That marked the end of the first chapter in a new story for Libya. Back in March, I welcomed UN Security Council resolutions 1970 and 1973, as well as NATO’s Operation Unified Protector. It was my view then, and it remains my view today, that we could not have stood by and watched the inevitable bloody reprisals of a despotic regime. We were right to take action, and we were right to do so with the clear backing of international law and indeed of neighbouring countries.

Like my hon. Friend, I commend our forces, who stood in harm’s way in the long tradition of our military’s fight against tyranny. However, the success that should be praised above all, as my hon. Friend so eloquently put it, belongs to the Libyan people who rose up, defied a dictator and seized control of their own destiny. They are doubly brave, because they have not only thrown off the shackles of the Gaddafi state but embarked on the long and arduous journey towards a free and democratic society of their own choosing.

As we have seen in other countries during the Arab spring, and indeed as we have seen throughout history, democracy is a long and hard journey, and it is not a quick or close destination. Like the people of every democracy, including the British people, the Libyans have much work to do, and we must help them whenever they ask for it. Securing the future of Libya must now be a priority for Her Majesty’s Government.

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Since the end of the conflict, we have seen swift action by the Department for International Development to put in place a programme of humanitarian aid. That work builds on DFID’s success during the conflict in providing much needed aid on the ground in Libya—at the borders and inside the Libyan border—to help those who needed help most. DFID’s work has been seamless with the work of other organisations, such as the World Health Organisation, the International Organisation for Migration and the International Committee of the Red Cross. It is right that DFID continues to play a leading role in the stabilisation and reconstruction efforts in Libya.

As we know, the national transitional council itself has called for a continuing NATO military presence in the region. I, like many others in the House, welcomed the end of NATO military operations in Libya at midnight last night, but we must be prepared to offer assistance if the need for it arises. Consequently, I welcome the recent visit of the Chief of the Defence Staff to the Doha conference on Libya and the support that he offered to the national transitional council, in terms of assistance with specific capability requests for military support as Libya makes its transition to democracy.

With the end of military operations and the return to relative peace and normality, a new and exciting chapter in Libyan history is beginning. It is my view that Britain must build on the work that we have started with the Libyans—for example, we are already providing support for policing. I commend the work of the stabilisation unit to date, and I hope that the Minister will give assurances that it will be properly resourced in the future. We must continue to help to build the institutions of a civil society and to promote the rule of law.

It is vital that the relevant Departments of the UK Government involved in all areas of reconstruction, assistance, enterprise and business work together in a co-ordinated fashion to achieve the optimum results in the shortest possible time. Unco-ordinated efforts run the risk of duplicating work, wasting resources and hampering the emergence of a well-defined, strong and confident Libya.

We should also be working with other countries involved in the reconstruction of Libya, particularly our NATO partners. It would be nonsense if we succeeded in working together to protect the Libyan people in war but were unable to help them coherently in peace.

Bob Stewart: The most important matter that must be addressed by those in authority in Libya is ensuring the security and well-being of the Libyan people. Unless those aims are achieved and unless they remain a constant focus, we run the risk of other, less scrupulous people seizing power in Libya. Also, I totally accept the hon. Gentleman’s point that we could put British military teams into Libya to help to train the Libyan armed forces.

Stephen Gilbert: The hon. Gentleman has made my point far more eloquently than me. He has also pre-empted a point that I will come on to later, which is the deweaponisation of Libya.

Overall, we need to see clear direction on the relative importance of the bilateral support to Libyan efforts. At the moment, DFID is ramping up its efforts in

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Libya, while the Ministry of Defence is scaling down its efforts. If we are to remain engaged in an integrated way, all Departments need to be at the table, and we need clarity from the Government about our overall objectives. How active will we be, Minister? What is good enough in terms of the peace-building effort? And is our main focus going to be trade, governance, stability or all those issues?

An example of the current confusion is the potential divergence between the DFID-led public safety efforts, which my hon. Friend the Member for Shrewsbury and Atcham has mentioned, and the MOD’s interest in the security architecture. Unless Her Majesty’s Government know what they are trying to achieve collectively in Libya, it will be hard to determine where the various pieces of the jigsaw fit together.

It is important that we are realistic about what the UN and the EU can and cannot do, and what they will and will not do, in Libya. At present, far too many assumptions are being made in Whitehall that the UN will deliver everything that we want it to deliver in the time frames required. It will not do that, particularly within the security sector. Bilateral engagement with Libya by the UK and our NATO allies will be required, but with a view to bringing in the UN, where possible and as soon as possible.

In seeking to aid Libya in its transition, we must also be mindful of how our actions are seen. We should only seek to help Libyan people at their own behest. All our stabilisation efforts must be owned by the local communities. We must never impose, nor appear to be imposing, our systems, beliefs, culture or demands upon the Libyan people. If there is to be a successful transition in Libya to a strong democratic state, it must be a transition that the Libyans themselves have decided upon. Only then will it become entrenched and real.

Of paramount importance in post-war Libya is ensuring that the very weapons used to free the people do not remain in the country long enough to enslave them once again. When a country is awash with small arms, it is at risk of descending into sectarianism, vigilantism and terror. We are already helping the national transitional council in seeking the dangerous weapons that were stockpiled by Gaddafi, and DFID is already helping with demining projects, but we must go further and encourage a much wider demilitarisation of Libya and its people.

Economically, relations between the UK and the new Libya should now move towards development support and enterprise opportunity. In order to prosper fully, Libya will require serious investment and expertise. To that end, I welcome my hon. Friend’s suggestion that there should be an insurance scheme to protect British businesses as they venture into Libya to set up operations.

Daniel Kawczynski: I have visited the beautiful Roman ruins in Libya of Leptis Magna and Sabratha, which are the best Roman ruins to be found anywhere around the Mediterranean. Does my hon. Friend agree that there is also huge potential for British tourism in Libya to see not only those ruins but the beautiful Libyan coastline?

Stephen Gilbert: There are opportunities not only for British business in reconstruction, but for British tourism and for cultural exchanges between our universities and

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schools. I hope that the relationship between the UK and Libya will flourish on all levels. I am sure that, as we speak, many travel agencies are considering my hon. Friend’s suggestion.

I repeat my call for a co-ordinated UK and European economic response to the Arab spring. Whether in Libya or elsewhere in the region, it is vital that we deliver the benefits of economic pluralism to the people to sit alongside their new and hard-won political pluralism. The Libyan people have thrown off the yoke of repression and conformity, and we must now play our part in lifting them and others out of poverty. We must work to see a strong, confident and open Libya setting its own destiny, offering our help where necessary and when asked, and finally able to deliver security and prosperity to its people.

10.20 am

Robert Halfon (Harlow) (Con): It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) on securing the debate. He displays incredible knowledge of the subject, and his book on Gaddafi is an important read. I thank him for setting up the British Mena—middle east and north Africa—Council for parliamentarians, which gives some balance to the debate. I also congratulate my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert) on his thoughtful remarks.

Daniel Kawczynski: I am sorry to intervene so early in my hon. Friend’s speech, but he has kindly mentioned my book on Colonel Gaddafi, which I gave to the Prime Minister before the last election. Does he know that in the book I thank him for all his work on Anglo-Libyan relations, referring to him as a rising star in the Conservative party who will be in a future Conservative Government?

Robert Halfon: I thank my hon. Friend. Being British, I blush at such compliments. I do not want this to turn into a mutual love-in.

Yesterday marked the end of British military involvement in Libya, seven months after the no-fly zone was authorised, and I would argue that it was one of the most successful NATO operations in history. It proved, all the more importantly after the Iraq conflict, that intervention can work and that Britain can fight for peace and democracy. Although I was disappointed at the manner of Gaddafi’s death because it would have been better for him to be tried in the international courts, I wish that my grandfather, Renato Halfon, was alive now to have seen his demise.

In 1968, after some anti-Jewish pogroms, my grandfather was forced to leave Libya and, as an Italian Jew, he went to Rome. He had planned to return to Tripoli once the pogroms had subsided, but Gaddafi took power in 1969 and all the Jewish businesses and my grandfather’s home were taken. The same thing happened to the Jews and the Italians. Luckily, my grandfather had sent my father to England some years earlier. I love Britain—I was born here and would not live anywhere else—but I feel a deep concoction of Jewish and Italian from Libya, which has been awakened by recent events. I listened with considerable interest to the story that my hon. Friend the Member for Shrewsbury and Atcham

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told about being in Poland, particularly the part about the oranges, and about what motivated him to fight for freedom in Libya.

It has been good to have conversations with my father and his friends from Libya to try to understand what it was like in those days. My grandfather had a clothing business and sold clothes to the British, and he always said that they were the only people who paid on time. He loved this country more than anything; he thought that the streets were metaphorically paved with gold and that everyone in England was a gentleman. It is worth remembering that King Idris was installed as monarch of Libya in 1951 by the British, in the aftermath of the war, when Libya gained independence from Italy and the old colonial name Tripolitania disappeared.

Although my grandfather and many other people had contempt for Gaddafi, we must acknowledge that in the early days the colonel was not a monster. My father remembers him becoming a rapidly popular figure, who before the coup used to walk down the famous Italian street in Tripoli, Corso Vittorio Emanuele—I think it is now called Jadat Istiklal—shaking hands with passers-by, including my father, wearing a broad serene smile and speaking loudly. He was articulate and nurtured dreams of pan-Arabism, and because of King Idris’s benign weakness, he became known as the liberator. Astonishing as it might seem, he was seen as sympathetic to western interests, and so the Americans, who controlled the large Wheelus air base outside Tripoli, did nothing to stop the coup d’état against the king. No one imagined that Gaddafi would become the monster he did and impose a 42-year totalitarian regime. Now he has gone, everyone is asking, “What next? Will it be a repeat of Iraq in the aftermath of the overthrow of Saddam Hussein?”

It is worth emphasising that a yearning for freedom is deep in every human breast and should be nurtured and supported. The Libyan people deserve freedom just as much as we do in the west. For years, the realist school of foreign policy—I am sure that the Minister is not of that school—has argued that the middle east is not ready for democracy and that democracy cannot be dropped from a B-52 bomber, but actually it can. The NATO planes showed that by providing cover as the rebels advanced on Tripoli, although that is not the only way to do it. We must remember that liberty is a human right for everyone, whatever their background or race. Sometimes it requires military intervention, and sometimes it requires hearts and minds—so-called soft power. Our foreign policy should be directed at supporting groups of resistance to dictators, and at funding radio and TV stations and the internet, in the same way as the CIA did in the cold war to try to combat communism. Where is the middle east equivalent of Radio Free Europe?

What is not required is appeasement. Appeasement often works in the short term but never in the long. The previous Government, as well as some of our universities and businesses, lost their moral bearings when it came to dealing with the Libyan regime. I happened to support Tony Blair and the invasion of Iraq, yet the complete contrast between that and what his Government did with Libya was astonishing. While senior new Labour Government figures hobnobbed with Gaddafi and his family, academic institutions accepted millions of pounds in blood money from the regime, and companies rushed

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to Libya to sign commercial deals. The London School of Economics, in perhaps the most shameful episode in the university’s history, went cap in hand to Gaddafi and treated him like some kind of king from over the water. I am glad that one of the professors implicated in that disgusting scandal resigned today, according to reports in

The Times


The leader of the Labour party talks about predator and producer capitalism, and I do not think there has been a more horrific example of predator corporate capitalism than the commercial dealings between the previous Government and so-called big business and the Libya regime. I do not say that to make a party political point; I just cannot get my head around how the previous Government could do some good things in Iraq but behave so disgracefully when it came to Libya. The release of the Lockerbie murderer, al-Megrahi, marked the low point of that kind of appeasement by the establishment, and I would argue that the political establishment’s flirtation with Gaddafi was akin to the appeasement of Hitler before the second world war by British upper-class aristocrats.

In having the courage to support intervention and ignore the armchair generals who said we could not or should not get involved, the Prime Minister did much to correct Britain’s moral compass, but I urge the Minister and the Government to launch a serious inquiry into the previous Government’s relations with Gaddafi. We must learn from what went wrong, so that we never, ever, do such a thing again with such an evil regime.

Bob Stewart: It was not so much the armchair generals. The armchair generals were right that we had no land forces that we could have put in. We did what we were able to do, which was to use our Air Force, but we certainly could not put troops on the ground, so the armchair generals and the Government were right to say that we could not do so.

Robert Halfon: I bow to my hon. Friend’s incredible experience in these matters, but I was not arguing about what kind of intervention it was. In fact, Britain has shouldered too heavy a burden, and other NATO countries should have done more. However, many so-called armchair generals argued against any intervention per se.

Daniel Kawczynski: Many British businessmen coming back from Tripoli have alleged to me that they heard that Mr Blair personally benefited financially from various transactions with the Gaddafi regime—

Mr James Gray (in the Chair): Order. The hon. Gentleman is stepping beyond the usual realms of courtesy in this place.

Robert Halfon: I have made my point about the previous Government’s appeasement of Gaddafi, which sets the context, but I understand what my hon. Friend has said.

Of course, getting rid of a tyrant does not mean that we have got rid of tyranny. The experience of much of Iraq shows that the first steps after dictatorship are incredibly important. NATO and western Governments must continue to nurture genuinely democratic forces in

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post-Gaddafi Libya and help to rebuild the country. Any prospect of extreme Islamists or al-Qaeda gaining ground must be ruthlessly crushed. However, the threat of Islamists should not be overstated. They are less prevalent in northern Africa than in the rest of the middle east. It may take a few years to achieve democracy, but that was also the case in Japan and Germany after the second world war.

I am vice-chairman of the all-party parliamentary group for the autonomous Kurdistan region in Iraq. That region sets a precedent for democracy. The Kurdish people suffered chemical genocide under Saddam Hussein and lived in terror under the Ba’athist regime. I have visited the region, and I have seen the democracy, the rule of law, the religious tolerance, the free press and the vigorous political opposition. It can be done, and the Libyan transitional national council must do the same.

The signs are encouraging. There are reports that the Libyan leader of the opposition invited the representative of Libyan Jews in the UK, Raphael Luzon, back to Tripoli to take part in the political process. Yesterday, I met Mr Luzon, who is a senior Jewish politician, in the House of Commons. He is known by the key people in the transitional council, who, he said yesterday, invited him back to work with the Government and perhaps stand for office, which is a very encouraging sign.

As we reopen our embassy in Tripoli, now is the time for the British Government to encourage the forces of liberalism in Libya. We should impress on the national transitional council interim Government that we stand with them against Islamic fundamentalists, and that we hope they will revive a good relationship with Christians, Jews and other minorities.

I also hope that the Foreign Office can help to obtain compensation for exiled Libyan Jews. Gaddafi’s law 57 of July 1970 gave the Libyan regime powers to seize the property of Jews who had fled after the pogroms of 1967 and before. Not a penny in compensation has been paid to dispossessed Libyan Jews or other victims of the Gaddafi family. As the country reconciles, I ask the Minister to consider compensating victims and the families of those who have been killed with some of the assets sequestered from Gaddafi. We now know that Colonel Gaddafi’s son lived in some splendour in a large house in north London—bizarrely, it is not far from where I spent a few years of my childhood.

During the past 60 years, Arab states have ethnically cleansed ancient Jewish communities, creating the largest population of refugees in the region—far larger than that of the Palestinians—and incurring property losses many times greater. My grandfather lost his material possessions when he was forced to leave Libya, but at least he could get away and rebuild his life here, unlike the Libyan people who have been oppressed for so long. We hope that their suffering is coming to an end. I commend what the Government have done, and I hope that they will work closely with the new Libyan leadership to help them develop democracy. I look forward to visiting Tripoli when it is more stable and retracing my dear grandfather’s and father’s footsteps.

10.35 am

Ian Lucas (Wrexham) (Lab): It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) on securing this timely debate.

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I have limited time. I start with Robin Cook, as did the hon. Member for Shrewsbury and Atcham. With respect to him, he misquoted Robin Cook, as people so often do. Robin Cook, for whom I have great admiration, said on Monday 12 May 1997:

“The Labour Government does not accept that political values can be left behind when we check in our passports to travel on diplomatic business. Our foreign policy must have an ethical dimension”.

As the debate has progressed, that matter has become even more relevant to today’s discussion. The debate has been more backward-looking than I expected, but it is helpful to consider some of the points made as we look forward to the future of Libya and progress in that country, which hon. Members from all parties welcome.

I am sorry that there has been a partisan element to this debate, because I know that the speakers, whom I respect, believe in an ethical dimension to foreign policy. They seem, however, to have short memories. Robin Cook established his reputation in the arms to Iraq debate in the 1990s. That debate involved a Conservative Government, and—

Mr James Gray (in the Chair): Order. We are drifting a little wide of the topic. We should focus on UK relations with Libya.

Ian Lucas: Well, there has been a great deal of criticism of Labour regarding the ethical dimension of foreign policy, and we must—

Mr James Gray (in the Chair): Order. My ruling is that we return to the question under debate, namely UK relations with Libya. Nothing else is in order.

Ian Lucas: I accept your ruling, Mr Gray, although Hansard will record our previous discussion of other matters.

We need a balanced approach when considering the history of different parties’ approach to foreign affairs. From the outset, the Leader of the Opposition made clear his support for the Prime Minister’s decision to support, quite rightly, the actions in Libya. When difficult interventions were happening in Libya, he supported the Prime Minister throughout. Of course, there were times when particular aspects of policy were not succeeding, when the Opposition held the Government to account, as is our role.

There is now a broader consensus across the House on the ethical dimension of foreign policy. It is unhelpful to misrepresent the previous Government’s position—

Mr James Gray (in the Chair): Order. The hon. Gentleman must now return to the question under debate, or he will resume his seat. We are discussing UK relations with Libya, not the ethical foreign policy of the previous Labour Government, or indeed any Government. The question is UK relations with Libya and nothing else.

Ian Lucas: I am delighted that last week, the UN voted unanimously to end the no-fly zone, which has now been lifted. The new resolution is another important landmark towards Libya’s democratic future. The state has a historic opportunity to build on human rights and to ensure that freedoms are protected. We in the United

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Kingdom have a great tradition of working with developing democracies to try to establish democratic values, and I know that the Minister will support that.

Britain’s future involvement in Libya is important. The shadow Foreign Secretary, my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander), warned in September how a liberated country can quickly become a lawless and violent one. We have seen the end of armed conflict in Libya, and we are now seeing a steady transition to democratic government. The country must now embark on the delicate process of developing institutions. We know from our own history how difficult that is in the aftermath of civil war—Oliver Cromwell was not able to build enduring institutions in the UK. The problems that Libya now faces are serious, so we need to ensure—I think that the hon. Member for St Austell and Newquay (Stephen Gilbert) put this well—that the Libyan people are at the forefront of addressing them. It is important that we support their work in developing institutions.

Will the Minister make clear how he sees our role with Libya developing? Will the emphasis be on bilateral relations with Libya, or will we continue to work through NATO or the UN? What is the current format for the working relationship with the new Libyan Government, and how will that develop?

There is a great appetite in the House for developing relations with Libya. It is a matter for not only the Government, but Parliament as a whole. I am sure that there will be interest throughout Parliament in developing the nascent democracy in Libya. There is great interest in establishing working links, as well as economic links, with Libya. Companies in my constituency already export to Libya and have done so for a number of years, which, to pick up what the hon. Member for Shrewsbury and Atcham has said, is something that we need to develop. There is no shame in that. The Defence Secretary was right to say that there are business opportunities in Libya, and I am pleased to hear that Lord Green has already visited Libya and is assisting in the rebuilding of that country in a way that suggests that we can contribute as a nation. We have an opportunity in both the democratic and commercial spheres to assist with the development of Libya.

Jim Shannon: After the Kuwait war and the tremendous contribution made by British armed forces to that victory, a number of British companies in Kuwait felt that they would have an economic advantage, but it did not happen. Following other contributors to this debate, does the hon. Gentleman feel that more could be done to ensure that British companies benefit?

Ian Lucas: It is important that we grasp the opportunity to contribute commercially, which means creating jobs in our own constituencies. We, as parliamentarians, have a responsibility to be outward-looking on occasions such as this. Perhaps we should not focus purely on issues such as Europe, when big issues are happening around the world. We should look at the opportunities in Africa, China and beyond. It is important that, in these extraordinary times, we use the increasing communication with countries such as Libya for the benefit of our own constituents.

Bob Stewart: Will the hon. Gentleman give way?

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Ian Lucas: I will give way to the hon. Gentleman, who has made a number of interesting contributions to this debate.

Bob Stewart: The business infrastructure in Libya is excellent, if we consider that it is in Africa. We should waste no opportunity to get in there again. I know that a number of companies are already there and that British companies have been kind of operating throughout the troubles over the past six months. I totally endorse what the hon. Gentleman has to say.

Ian Lucas: I am grateful for the hon. Gentleman’s contribution. There are opportunities in the commercial sphere. A number of organisations have been referred to, such as the British Council and the Westminster Foundation for Democracy, and I add the BBC World Service, which can make a positive contribution to building democracy in Libya. We have a huge opportunity.

I have not visited Libya, but it is extremely important and has massive potential. It is a neighbour of countries that are becoming increasingly important, such as Egypt. Will the Minister touch on how he sees those relationships within the new Mediterranean developing as we progress? We are in extraordinary times in north Africa and the middle east, because the changes are having profound effects on our relations and on the lives of and individual possibilities for the people of Libya.

We have long-established relationships with Libya, for many of the reasons that have been referred to in this debate. We should use those opportunities to assist the people of Libya, who must lead what happens. We must be prepared to stand ready to assist whenever we are asked. We have much to give.

10.45 am

The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne): Thank you, Mr Gray, for allowing me the opportunity to conclude the debate. It is an honour for me to serve for the first time under your chairmanship and to follow the hon. Member for Wrexham (Ian Lucas). I pay tribute to my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), not only for giving us the opportunity to discuss this important and topical issue, but for his ongoing interest in Libya. I apologise on behalf of the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for North East Bedfordshire (Alistair Burt), who has specific responsibilities for north Africa and the middle east, and would, in normal circumstances, reply to this debate. He is, however, travelling, so I will respond as his colleague in the Foreign Office.

As has been made clear, events in Libya over recent months and days have offered the opportunity to change radically the United Kingdom’s relationship with Libya, to the benefit of both British and Libyan citizens. The end of the Gaddafi regime, the national transitional council’s declaration of liberation just over a week ago, and the end of the UN-mandated no-fly zone just yesterday mark the beginning of a new era in Libya’s history. After 42 years of brutal repression under Gaddafi, Libyans can now look forward to a brighter, more secure and prosperous future, and a new start in Libya’s relationship with the international community, including us in the United Kingdom.

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In responding to the many points that have been made on the nature of the new relationship, I would like to focus on two aspects. The first is the role that the United Kingdom has played to date in helping bring this opportunity about. Secondly—the hon. Member for Wrexham made this point—I want to focus on our plans for future relations, as well as dwell on the recent past.

The Government are proud of the role that Britain has played in establishing and implementing the NATO mission to protect Libyan civilians. The international community, led by the United Kingdom, stepped in because it was necessary, legal and right to do so. We could not stand by and let Gaddafi commit atrocities against his own people in order to cling to power. We are likewise proud of the role that the United Kingdom has played in building international support for the new Libya, not least through the unanimous adoption of UN Security Council resolutions 2009 and 2016 in recent weeks.

Over recent months, at the request of the national transitional council, the United Kingdom has also offered advice on stabilisation and committed more than £20 million of assistance to support the NCT’s stabilisation plans. In April, we opened a mission in Benghazi, and were among the first diplomatic missions to re-establish ourselves in Tripoli after its liberation in August. Together with the French President, my right hon. Friend the Prime Minister was the first Head of Government to visit Libya after Tripoli’s fall. My right hon. Friend the Foreign Secretary accompanied him on that visit, and also made a separate visit last month, when he was able to announce the formal reopening of the British embassy and the appointment of Sir John Jenkins as the new British ambassador to Libya.

Although the Government are proud of that role, we have also been clear throughout that it has been a Libyan-led revolution. That is as true of post-conflict stabilisation as it was during the conflict. Now that liberation has been declared, Libya has an historic opportunity to create a peaceful, democratic and prosperous state, where human rights are protected and all its people benefit from its considerable natural resources. As the Foreign Secretary said last week, that would be a fitting tribute to those who sacrificed their lives for future generations. We welcome the clear and consistent messages from council leaders cautioning against disorder and, crucially, against reprisals, as mentioned during our discussions.

Establishing the new Libya will involve building infrastructure in every aspect of life, for example: political democracy and inclusion, the rule of law, security, migration, commerce and civil society. It is for the Libyan people to decide how to govern themselves. The UK will continue to stand shoulder to shoulder with the Libyan people in that process, as they form a transitional Government within 30 days of liberation and rebuild a free and democratic country.

In a moment, I will touch on our plans for helping Libya in how it goes about that process, but, first, I will address an issue that straddles both Libya’s past and future, an important element of our relations with the new Libya and something on which we have been working with the NTC over recent months: the crimes committed by the Gaddafi regime. That has been a particular focus of the comments of my hon. Friend the

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Member for Shrewsbury and Atcham not only in this debate, but over many months and years. Our relationship with Libya has been scarred over the decades by the horrific actions of the Gaddafi regime, including the killing of WPC Yvonne Fletcher outside the Libyan embassy in London in 1984, the bombing of Pan Am flight 103 over Lockerbie in 1988 and Gaddafi’s support of IRA terrorism in Northern Ireland and here on the UK mainland.

A new Libya offers the chance to revitalise the relationship between Britain and the new Libyan authorities. Part of that process must involve resolving those outstanding so-called legacy issues. As my right hon. Friends the Prime Minister and the Foreign Secretary have made clear both to the new Libyan authorities and the House, that is an important priority for our Government. The Foreign Secretary last raised those issues with Chairman al-Jalil of the national transitional council during his visit to Tripoli on 17 October, just a fortnight ago.

The Metropolitan police and Dumfries and Galloway police will return to Libya to conclude their investigations once an interim Government are in place. We will seek restitution and reconciliation for the victims of IRA violence. Chairman al-Jalil and Prime Minister Jibril have assured us on many occasions that they will work with us on those issues but, as they have pointed out—I am sure hon. Members will think that they have done so with valid reason—they need to form a Government and have functioning Ministries to be able to deliver their side of that commitment.

Ian Lucas: As was said in the debate, we are all concerned about the circumstances of Colonel Gaddafi’s death. I am aware that the Libyan Government have set an investigation in train. Does the Minister have any indication of when that is likely to be resolved?

Mr Browne: The short answer is no. I have not had a clear indication, but I share the hon. Gentleman’s concern. If I can sum up the sentiment of the debate, I think we all feel uncomfortable about the manner of Gaddafi’s death, even if we do not lament his passing. I, and I am sure the whole House, hope that Libya’s future will be based on the rule of law, not reprisals. Although Colonel Gaddafi was the most high-profile Libyan, I hope that his death is not indicative of the state of justice and the construction of society in the new Libya that will unfold in the months and years ahead.

As well as resolving issues from Libya’s past, we will work closely with the new authorities on the issues critical to Libya’s future. Security is a key concern, even though the new authorities are making steady progress and police are returning to the streets. The national transitional council has planned for a proper police force and a national army that integrates many of the revolutionary forces. We are offering help in that process, including through the presence of a British policing adviser and with communications and logistics for the new police forces. We are helping the NTC to secure and disable man-portable air defence systems, and we are supporting mine clearance in Misrata, Benghazi and other affected areas. We will also offer technical advice to help with the destruction of remaining Libyan chemical weapons stocks under the auspices of the Organisation for the Prohibition of Chemical Weapons.

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The Government are also working with the International Criminal Court in The Hague to pursue and bring to justice the remaining indictees, Saif al-Islam Gaddafi and Abdullah al-Senussi. We want to ensure that they are held accountable for violations of human rights and international humanitarian law, and for the attacks targeting the civilian population perpetrated by them. We are encouraging all Libya’s neighbours who are ICC state parties and have a legal obligation under the Rome statute to co-operate with the ICC, including on enforcing ICC arrest warrants should those individuals enter their territory. UN Security Council resolution 1970 urges all UN member states to support the ICC investigation and implement the arrest warrants. We are making that position very clear.

The UK has played a leading role throughout in responding to Libya’s humanitarian problems. We have provided support through the International Committee of the Red Cross and supplied surgical teams and medicines to treat up to 5,000 war-wounded patients. We have also brought 50 severely wounded Libyans to the UK and are providing treatment in the UK to another 50 Libyans who have suffered amputations during the conflict. UK medical experts are also working with Libyan medical staff and are training them in the care of those who have been brought to the UK, so that they can take that knowledge back to Libya and work with others who have suffered such terrible injuries in the fighting.

Women and young people have an important role to play in rebuilding Libya. We are engaging with women across different sections of Libyan society to determine how best to provide support. That includes looking at the issues that women face as a result of the conflict and how women can participate in developing a new Libya.

Bob Stewart: I shall make only one point. I suspect that the Minister will not mention the matter of Crown Prince Mohammed, but perhaps he could write to me and my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) about what exactly the Foreign and Commonwealth Office’s attitude is towards the Crown Prince, who seems a very decent man.

Mr Browne: I am grateful for that intervention. Let me make it clear: the British Government do not have a position on the ideal constitutional arrangement for the new Libya. That is a matter for the Libyan people to determine for themselves. There will be a referendum on the constitution of Libya. On the point made by my hon. Friend the Member for Shrewsbury and Atcham, there will be an opportunity for the Libyan people to express their support for the arrangement that is put before them.

Let me finish by talking about trade and commerce, which was raised by many contributors. Getting the economy running again in Libya is crucial to achieving political progress and stability. We are committed to helping the Libyan authorities build a strong and sustainable economy. Through UK Trade and Investment and our embassy in Tripoli, we are providing advice and assistance to British businesses, so that they are ready to compete for business opportunities now and in future, when the time is right for their business.

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In late September, Lord Green, the Minister responsible for trade and investment visited Libya. He met senior leaders, who assured him that all legally obtained contracts would be honoured and new business welcomed. He discussed business prospects arising from the estimated $200 billion post-conflict reconstruction programme and, the day after his visit, Lord Green briefed more than 150 UK companies on how the Government planned to support their engagement in Libya. The Export Credits Guarantee Department has agreed to provide insurance cover for business deals up to a total of $250 million. That is an initial tranche of cover and it will be re-evaluated at regular intervals.

The Libyan people have now embarked on the transition to a pluralist and democratic society. Although we should not expect that that will always be a smooth path, the UK will continue to support Libya in that goal and in building a revitalised relationship between the United Kingdom and Libya that addresses past wrongs and lays the foundation for future progress. The NTC’s goals are ambitious, but already it has many times proved wrong those who underestimated it. We have confidence that it can continue to do so, and that a new bilateral relationship between Britain and Libya will bring greater benefits to the people of both our countries in future than at any point over the past four decades.

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Regional Growth Fund

11 am

Mr James Gray (in the Chair): We now come to a debate on UK relations with Libya. I beg your pardon; we do not. That was an extremely good debate on the UK’s relations with Libya, which I enjoyed very much. We now come to a debate on the effectiveness of the regional growth fund.

Angela Smith (Penistone and Stocksbridge) (Lab): I am mightily relieved that the topic is not Libya, Mr Gray, because my notes do not refer to it in the least. I am pleased to have secured this debate on the regional growth fund. I want to start by putting the fund in the context of the economy as a whole. There is no doubt that the British economy is in trouble. We have a growth crisis. Year-on-year growth has all but vanished, with this morning’s Office for National Statistics growth forecast for quarter 3 at 0.5%, and with construction already in negative territory. Unemployment is at levels not seen since Margaret Thatcher was Prime Minister, and is rising at an alarming rate. Worse still, the young are paying the heaviest price, with youth unemployment at almost 1 million.

Worryingly, unemployment is rising at a much faster rate in the regions than in London or the south-east, as Government cuts bite more heavily into the regions. Already, the unemployment rate in Yorkshire and the Humber is almost twice that in the south-east, according to ONS figures. Inflation is running at more than twice the Bank of England’s target rate of 2.5%, while average incomes are rising at half that rate. That means, as the Governor of the Bank of England said recently, that families are experiencing the biggest squeeze on their incomes in living memory.

The Minister, in his response to the debate, will undoubtedly claim that our growth problem is due to the eurozone crisis. No. The blame must lie at the doors of No. 11 and No. 10 Downing street. Our economic growth has faltered thanks to a reckless slashing of investment by this out-of-touch Government. Yes, in 2008 the global economy did go through the worst financial crisis, and subsequently the deepest recession, since the 1930s, and yes, the British economy was badly affected by the irresponsibility of banks over-lending, but since the Government came to power, the UK economy has stagnated, as I have pointed out. Since last autumn, only earthquake-hit Japan has grown more slowly than the UK in the G7. There is no doubt that the Government’s policies are hurting, but they are certainly not working. Today, I want to spell out that it is not just that the Government are not doing enough to help our economy grow; what they are doing, they are doing badly.

The previous Government’s key tools for regional economic development were the nine regional development agencies covering the country. Those tools for investment enjoyed significant Government support both politically and financially, with a budget of approximately £2 billion a year. I think that in the last year of the Labour Government, the budget was £1.7 billion. The Conservatives made no secret of their desire to abolish the RDAs if they won the general election—they did not win it, but

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they are in power thanks to the Liberal Democrats—but they were very light on what they thought should replace them.

Mr Marcus Jones (Nuneaton) (Con): The hon. Lady seems to be extolling the virtues of regional development agencies. Would she not acknowledge that in the west midlands private sector employment actually fell under the RDAs?

Angela Smith: This debate is not about the RDAs. The point that I will make, as the hon. Gentleman will see, relates to the level of investment made by RDAs, as compared to the regional growth fund. We now know what the Government’s alternative is—the regional growth fund. On the evidence to date, the fund represents chaos and confusion, with too little being awarded too late to make any significant contribution to promoting economic growth.

There are three aspects to the Government’s approach to regional investment. The first is local enterprise partnerships, which are unfunded apart from a small start-up fund, and have no clout. The second is enterprise zones, which are a tired blast from the past with a mixed track record when it comes to delivering jobs and growth. The third prong of the Government’s regional growth strategy is, of course, the regional growth fund, and yesterday the outcome of the second round of bids was announced.

Neil Carmichael (Stroud) (Con): There are many other prongs, but the fourth prong that I would have mentioned is the enhanced role of local authorities—their powers of competence, and their capacity to deliver planning decisions that will build businesses.

Angela Smith: I thank the hon. Gentleman for his intervention, but it has already been established this morning that the Humber is actually going backwards because of the cuts to local authorities, so I do not think that that is quite true.

We were told yesterday, in a written parliamentary statement, that 119 bids had been awarded funding. That is just a quarter of the bids submitted. Clearly, there were far more losers than winners, with more than 370 bids rejected. Bids totalling more than £6 billion have been submitted in rounds 1 and 2 of the RGF. That says something about the scale of the unmet investment needs of business, and how little the Government are delivering to meet that need.

The RGF was announced on 29 June 2010, alongside the proposals for the LEPs. A Department for Business, Innovation and Skills press release described the RGF’s purpose as being

“to help areas and communities at risk of being particularly affected by public spending cuts”.

However, current guidance from the Department goes into a little more detail:

“The objective is to stimulate private sector investment by providing support for projects that offer significant potential for long term economic growth and the creation of additional sustainable private sector jobs.”

When announced, the original fund was £1 billion, but the 2010 spending review extended the total value to £1.4 billion over three years—from 2011 to 2014. To put those figures in perspective, as I mentioned earlier, the

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annual budget for the RDAs averaged £1.7 billion in their last few years of operation. The Government’s total spending on the RGF over a three-year period will be just £1.4 billion. One does not have to be Einstein to see that the RGF represents a two-thirds cut in regional investment, which is an indication of where the Government’s priorities lie and that they are certainly not supporting the regions. The Government use a lot of warm words, but deliver very little when it comes to economic investment. There is a really good northern phrase to describe a person who appears to have everything, but who in fact has nothing much to offer: “all fur coat and no knickers”. I have to say that that seems a rather good description of the Government’s approach to regional growth.

It will take more than warm words to persuade businesses up and down the country that the Government have what it takes to kick-start growth in the economy, which has flatlined since last autumn. It is obvious that there is much demand out there for regional investment; rounds 1 and 2 of the fund were over-subscribed many times over. In the first round of bidding, 478 bids were received, with a value of £2.78 billion. Only 50 bids were successful, and only five have received any money so far—hardly the success to which the Government lay claim. Given that so few bids from the first round have progressed to the point where they have fund money in the bank, how on earth can we expect the Government to deal effectively with the 119 announced yesterday?

On top of that, it is absolutely clear that the Government’s approach to regional investment is far too centralised. In an era of so-called localism, how can the Deputy Prime Minister, Lord Heseltine or the Secretary of State for Business, Innovation and Skills justify a bidding process that is governed and determined by Whitehall, particularly given that the investment framework that it replaced was regionally based and closely attuned to the strategic needs of the regions?

Laura Sandys (South Thanet) (Con): I am very lucky, because east Kent received regional growth fund money yesterday. The structure of each of the funds is very different, depending on the local circumstances. Our regional growth fund is transferring to small businesses, and will be transferred to an organisation that will be totally locally focused, and accountable to the local businesses and the employment that we need to create. It is a tailored scheme that reflects the needs of each individual region and its specific employment profile.

Angela Smith: The fact that the decisions are made by Whitehall is not altered by anything that the hon. Lady has said. One member of the panel that assesses bids for the growth fund, Mr Moulton, is himself benefiting from the fund to the tune of £5.9 million, which is paid to a company called Redx Pharma, in which he is an investor with a stake of about 26%. Would the hon. Lady like to say anything about the fact that there is not much clarity or transparency in that process? That was not the case with the previous arrangements for distributing regeneration money.

Laura Sandys: Our fund in east Kent will be extremely transparent to the business community; it will be accountable to business by delivering jobs on the ground. It will not be something distant, based in Whitehall. In

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the south-east, the operation used to be based in Guildford; there was not very much on the ground in Margate and Ramsgate.

Angela Smith: A Government who trusted the voice of the northern regions, and their intimate knowledge of their manufacturing base, would never have cancelled the Forgemasters loan. [Interruption.] If the hon. Lady thinks that is funny, people in Sheffield and south Yorkshire do not. Yesterday we heard an acknowledgement that the Government got it wrong on Forgemasters, and they have awarded a consolation prize, but nothing takes away from the fact that the original purpose of the loan has passed, and an important strategic opportunity has passed us by, thanks to the spiteful attitude of a condemned Government hellbent on cancelling what they saw as a Labour loan.

Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab): I congratulate my hon. Friend on this timely debate, and on her work on Forgemasters last year. Is it not a serious issue that although a previous Government—including the Department for Business, Innovation and Skills and the Treasury—did up to two and a half years of due diligence on the proposed loan to Forgemasters, in the past two and a half months, no such due diligence has been done? Despite the warm welcome for the money announced yesterday for Forgemasters, the board has not even approved the detail of how the investment is to be made. Last year, the Deputy Prime Minister wrongly described the original decision as political, but we now have a most vivid example of such a decision, with the Deputy Prime Minister arriving at Forgemasters, seeking to make a political gesture out of public money.

Angela Smith: I completely agree with my right hon. Friend. The Deputy Prime Minister would have been better served yesterday had he acknowledged to the people of Sheffield that he got it wrong and they got it right. If he had shown some humility and apologised for the grave errors that his Government made more than a year ago, perhaps the political point that he was making would have carried a lot further.

One of the issues at the heart of the chaos and confusion surrounding the regional growth fund is the bureaucracy at the heart of the process. For instance, the rules for the fund state that payments will only be forthcoming on successful delivery of outputs. That means that private companies are being asked to invest up front, with the risk that, if they do not make the said outputs in two or three years, they will not receive the moneys promised. That means that the promise to Forgemasters is exactly that: only a promise. That, I am told, is not only putting off many smaller companies from applying, but is making the writing-up of contracts difficult for the successful companies due to the risks involved. In that context, the comments made to me yesterday by the Institute of Chartered Accountants are damning. The institute has been working with BIS officials to make the process simpler and more cost-effective, but it says:

“However, following discussions with our members, BIS officials and firms, we fear that a convoluted approach to the due diligence process for the RGF is resulting in delay, additional bureaucracy

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and cost for businesses and the government, and undermining the growth goals that the RGF money intends to achieve.”

Those are not my words, but those of the Institute of Chartered Accountants—a damning indictment of the Government’s approach to regional investment.

To make matters worse, the minimum bid for an application to the fund is £l million, with typical leverages of eight to nine being demanded. That means that the fund is out of reach to the average small or medium-sized enterprise—the sectors that the Government say they want to help the most. The Federation of Small Businesses said to me yesterday:

“From our point of view, the minimum amount for bids of £l million has always been far too large for the majority of small businesses. We did encourage collective bids to be made on behalf of SMEs, however this is not ideal.”

Derek Twigg (Halton) (Lab): I praise my hon. Friend for her fantastic campaign on Sheffield Forgemasters, which has resulted in at least a partial climbdown. I gather from what she is saying that we now have a system in place that not only has a lot less money, but is more bureaucratic and more difficult for firms to access. She is right that that is causing a lot of consternation in the business world and among private firms, not least in the manufacturing industry.

Angela Smith: My hon. Friend is right. The growth figures today show that we are heading for a gross domestic product growth increase of 0.5% over the past year, which is a significant slow-down from the 2.6% registered in the last year of the Labour Government. It is appalling that the Government do not seem able to resolve issues to do with releasing investment to manufacturing and businesses up and down the country, and do not seem able to ensure that the funding flows quickly to the companies that need it in order to secure our economic future.

Jason McCartney (Colne Valley) (Con): I thank the hon. Lady—my neighbour in West Yorkshire—for giving way, but I found your partisan language, your doom-mongering and your negativity quite shocking, which is a shame.

Mr James Gray (in the Chair): Order. I will have no part of doom-mongering and such language.

Jason McCartney: One minute, the hon. Member for Penistone and Stocksbridge (Angela Smith) is happy that Forgemasters is getting a loan, and the next she is unhappy—she seems unhappy with both. May I confirm that she welcomes the regional growth fund as a scheme, but for the tinkering with the details and the learning as we go on with different bids? Does she join Government Members in welcoming the scheme and the way in which it invests in businesses, as it did in David Brown’s in my constituency?

Mr James Gray (in the Chair): Order. The hon. Gentleman must be brief.

Jason McCartney: That was a £2 million investment, which will secure 80 new jobs.

Angela Smith: I would welcome recognition by the Government that we need far more than what is on offer on the table. We need proper decentralisation of the decision-making processes, more transparency, and a more efficient way of delivering funds to companies.

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The chances of such funds delivering significant economic growth are about as good as the chances of Huddersfield football club getting a promotion to the championship next year.

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): My hon. Friend is making a valid case. Opposition Members do welcome the regional growth fund, but I will welcome it even more when it actually arrives, as so far only eight businesses have received any funds. Our concerns are reiterated by the EEF, the manufacturers’ association, which is cited in The Northern Echo today. It wants to ensure that

“the funding promised flows through directly to the projects concerned as a matter of urgency.”

Is the current speed at which cash is going to businesses urgent or slow?

Angela Smith: My hon. Friend is right. It is not only slow; there is inertia at the heart of the Government’s approach to investment in our economy. That is all down to the Chancellor of the Exchequer, who said this morning, when asked by the BBC, that this is a difficult journey for the UK economy, but that we are determined to complete it, so that we have jobs and growth—only warm words, once again. He will not admit that he has got it wrong, or that he needs a plan B, and that is at the heart of the problem we are facing.

Fiona Bruce (Congleton) (Con): The hon. Lady said that small and medium-sized enterprises will not benefit. Does she not agree that the supply chain benefits are enormous? Let me cite the successful bid of Pochin’s of Middlewich in my constituency for £4.1 million, announced yesterday. That will result in the creation of 3,600 new jobs, ultimately, and safeguard a further 200 in the region. Many of those jobs will be in SMEs.

Angela Smith: I am sure that hon. Members have come here today to congratulate the companies that were promised money in yesterday’s announcement. Any investment is welcome, but I remind the hon. Lady that the Government cancelled a significant investment in the nuclear industry supply chain 18 months ago. That is what the Forgemasters loan was about, and that is why the Government are seriously damaging the economy. We are talking about a major supply chain that would have ensured that the UK and its manufacturing base were at the forefront of the building of the next generation of nuclear power stations.

How businesses access the fund is a problem, as the Minister admitted in an article in The Times:

“There have also been problems where, given the financial uncertainty from June onwards, it has proven very slow to unlock that private capital.”

So where are we with the Government’s regional growth strategy? It is quite obvious that the Government’s thinking is muddled to say the least. They have dismantled the Labour Government’s regeneration framework and replaced it with a rickety framework, fed with inadequate resources spread very thinly. Worse still, this comes at a time when help is most required by many of the regions because of the Government’s desire to cut too far and too fast.

So what should we be doing to jump-start growth? Labour’s plan to repeat the bank bonus tax, and to use the funds to build 25,000 desperately needed homes and secure jobs for 100,000 young people, would help, as

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would bringing forward long-term infrastructure projects. We got a start on this yesterday, but we need more. For the medium term, I agree with the Leader of the Opposition when he says that we need to change the very nature of our economy. We need to go back to making things, to give manufacturing a much bigger role in our economy, and we need an economy that looks at the long-term, and not just to short-term profits.

Mr Marcus Jones: I thank the hon. Lady for giving way; she is being generous in taking interventions. She tells us how important manufacturing is to rebalance our economy, yet in 13 years of Labour Government, on her party’s watch, we lost 1.7 million manufacturing jobs.

Angela Smith: I think the hon. Gentleman overlooks the fact that the Labour Government were prepared to show what is called industrial activism. They worked hard for a long period to ensure that due diligence was in place, and that we invested in key sectors of our manufacturing economy. The hon. Gentleman’s comment is a bit rich, given that the production industries have gone into negative growth in the last quarter. Mining and quarrying took the productive part of the economy into negative growth in the last quarter, so I do not think that we need any comments from Government Members on manufacturing and support for manufacturing.

Phil Wilson (Sedgefield) (Lab): I do not know whether my hon. Friend is aware of this, but the regional growth fund for north-east England will create some 8,500 jobs over three years. That is equivalent to the number of jobs lost in the north-east in the past three months.

Angela Smith: That is precisely the point. That underlines the fact that the Government are cutting too far and too fast. Their policies risk producing a double-dip recession.

Tom Blenkinsop: Another interesting statistic came out today: the purchasing managers index for manufacturing output slumped to 47.4%, below the 50% figure, which is an early indicator of a downturn in manufacturing. That is a scary statistic for us all to take on board.

Angela Smith: I completely agree with my hon. Friend. I repeat that we need an economy that looks at the long term, and not just short-term profits. We need to invest in innovation. We need a co-ordinated, well-funded regional growth strategy, not the disparate, unco-ordinated approach that represents too little, too late, from a Government who have fallen asleep at the wheel and lost their way as far as economic growth is concerned.

11.25 am

David Tredinnick (Bosworth) (Con): I congratulate the hon. Member for Penistone and Stocksbridge (Angela Smith) on securing the debate. I have listened to her complaints about Government strategy, but I will not dwell on those, because I am sure that the Minister, who was making notes, will have a few things to say about that.

I want to address the issue of the regional growth fund and explain why it has been fundamentally important to my Leicestershire constituency, which sits on the

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boundary of the east and the west midlands. The Government’s decision yesterday to grant regional growth fund second round support to the MIRA technology park will make a huge difference not just in my constituency—my hon. Friend the Member for Nuneaton (Mr Jones) nods his head—but right across the midlands, because it will impact on some of the areas with the greatest problems.

The new MIRA technology park, which desperately needed regional growth fund status, was approved by Her Majesty’s Government in August. This new technology park will attract up to £300 million—perhaps more—in private investment. It is also likely to create and be responsible for up to 5,000 sustainable jobs. We can argue about the numbers—it depends on the catchment area—but it is a massive boost to industry in the heart of England. I represent the heart of England where the Fosse way crosses Watling street. We expect 200 jobs to be in place by 2013, largely based in a 43,000 square metre state-of-the art engineering centre, and a 155,000 square metre research and development facility, which will incorporate a new technology park.

Richard Burden (Birmingham, Northfield) (Lab): I agree with the hon. Gentleman about the importance of MIRA. I congratulate it on being successful, with the promise of RGF money, as indeed Jaguar Land Rover was a little while ago. However, does he agree with my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), who said in opening the debate that the promise of money is not much use unless it is actually delivered in practice? The Government need to think about how they can deliver RGF money rather than just make promises.

David Tredinnick: I understand that the hon. Gentleman speaks on behalf of his motor manufacturing constituency. Obviously, there is demand for more regional growth fund support. Where we are now with the RGF is very helpful, and it is successful for reasons that I will develop.

Mr Marcus Jones: I am proud to have worked with my hon. Friend the Member for Bosworth (David Tredinnick) in promoting the MIRA enterprise zone and RGF bids. Does he agree that it shows the importance of cross-boundary working, with his constituency in the east midlands and my constituency just over the width of the A5 in the west midlands? The fact that the local enterprise partnership for Coventry and Warwickshire has strongly backed the MIRA development shows how the new system is starting to work and bear fruit.

David Tredinnick: I absolutely agree with my hon. Friend, who has worked tirelessly for this project. I sat with him in his council chamber—in his former chair, I think—in Nuneaton not long ago and considered these issues. We can talk about the boundaries—parish, borough, county and regional—in the areas that we represent, but the point is that the footprint of the MIRA park is enormous. It covers a very large area of the east and the west midlands—areas that desperately need help.

I will return to the subject of the debate, Mr Gray, before you call me to order. I would not want to fall foul of the Chair. There were many concerns earlier this year when MIRA did not succeed in round one of the RGF

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because the technology park really could not succeed without that support. We are talking about not an add-on, or bells and whistles on a machine, but part of the gearbox without which the project could not go ahead. There has been huge investment on this former bomber aerodrome site.

Mr Jones: I assure my hon. Friend that I will not take much more of his valuable time, but does he agree that in addition to the growth and jobs that the MIRA development will create, RGF funding will also change the physical complexion of the A5? It will therefore benefit not only the MIRA development, but the east and the west midlands, which rely heavily on the A5 corridor.

David Tredinnick: My hon. Friend is right. I do not want to detain the House for long as many colleagues wish to speak, but I shall refer him to correspondence that I have received from worried constituents and former councillors on transport issues such as not improving the roads, traffic flows that, when measured seem to be too great for the existing roads, and problems on the A444/A5 Red Gate junction, which he will know well. There are also other local issues such as Higham lane roundabout—all concerns about the national highway. With the second round of applications to the regional growth fund, we will solve those problems and all those roundabouts and junctions will be improved. Indeed, the roads must be improved because otherwise heavy vehicles cannot get in safely. As MIRA said, subsequent to the RGF2 bid submission, those improvements will go ahead.

MIRA technology park will receive £20 million from the regional growth fund. I spoke to MIRA’s chief executive yesterday and looked at other aspects of the scheme, and I understand from the Minister’s Department that one or two issues concerning the impact on traffic and traffic changes need to be resolved. I thought that the Department had already dealt with such matters, but I have received reassurances that such problems will not obstruct the bid. I hope that the Minister will address that concern in his response.

The huge knock-on effect of the bid will not be confined to businesses but will have a massive impact on education and apprenticeships. Another leap forward that the Government have made is to improve, invigorate and release more people into the apprenticeship structure. Astonishingly, the Labour Government never really cracked that issue over 13 years. They were always out of kilter; there were never enough plumbers or enough this or that. It was a command economy approach that did not work. We are now freeing up the economy and giving people more responsibility. [ Interruption. ] I love heckling, Mr Gray, and if we had the time, I could not get enough of it. Seriously, however, we are talking about important issues.

Last night representatives from further education colleges visited the House, including Marion Plant from North Warwickshire and Hinckley college. We talked about the importance of developments such as the new Hinckley campus and the studio school that will come on stream in September 2012 with design apprenticeship training, and courses in advanced engineering and health and social care. She told me that there had been 500 applications for nine places. The demand exists, and we are heading in the right direction.

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Last Friday I was contacted by Radio Leicester which asked me to do an interview about the increase in the number of apprenticeships in my constituency. I have received one or two other requests in the past, and I accepted that one immediately. There has been a phenomenal increase in apprenticeships in my constituency, which embraces Hinckley and lies adjacent to Nuneaton.

In summary, for all the complaints made by the hon. Member for Penistone and Stocksbridge—and I am sure there will be many other complaints from Opposition Members—something is stirring in the heart of England. Under this Government, there are more apprenticeships, and we are allowing institutions such as North Warwickshire and Hinckley college more say about how they run their affairs. There is less top-down government. I have just come from the Health Committee. We will not go into that issue now, but the Government are trying to give more power to doctors, which I welcome. The Government are succeeding in what they are doing, and the regional growth fund is an important part of that. I congratulate the Minister and his colleagues.

11.35 am

Phil Wilson (Sedgefield) (Lab): It is a pleasure to serve under your chairmanship today, Mr Gray, and I congratulate my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) on securing this debate.

I will be brief because other Members wish to speak and we obviously want to hear contributions from the Front-Bench spokesmen. First, I would like to congratulate those firms in my constituency that have received money from the regional growth fund—Kromek Ltd, Permoid Industries Ltd, Carlton & Co., Hydram Engineering Ltd and ThyssenKrupp Tallent Ltd. Those highly-skilled organisations will produce jobs in the future. As I pointed out, however, although the regional growth fund will create around 8,500 jobs in the north-east of England, that is about the same as the number of jobs that have been lost in the north-east over the past three months.

James Wharton (Stockton South) (Con): The hon. Gentleman is right to mention estimates that suggest that the current round of regional growth fund funding for the north-east will create 8,500 direct jobs. In addition, however, there will be 17,000 indirect jobs. The previous round of funding, in which our region did exceptionally well, is estimated to have created a further 5,200 direct jobs, and 8,400 indirect jobs. The figures are higher than one might believe if we listened only to the comments made by Opposition Members.

Phil Wilson: Those jobs will come on stream over the next few years. North-east England now has the highest unemployment in the country, and we are grateful for everything that we receive from the regional growth fund. We should not forget, however, that the fund for regional development is only one third of what it was under the previous Government. The problem with the regional growth fund is that it does not provide a strategy for the regions. A company applies for a grant, and if they get it that is fine, but if they do not, they do not. The fund is led not from the regions but from Whitehall; it should be renamed the Whitehall growth fund.

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I have one or two questions for the Minister to which I hope he will reply. They concern the delay experienced by companies in receiving the money for which they applied in the first round—hopefully, they will not have the same problems this time round. The issue seems to concern the need for due diligence. Under the previous Administration, except in complex cases, the regional development agencies would be responsible for due diligence and absorb the cost. I have asked the Library to look into the matter, but as I understand it, under the present regime, due diligence has to be secured and paid for by the applicant out of the grant. Is that a reason for the delay in companies receiving their funding? Why are we asking applicants to find someone to look into issues of due diligence, and why does money for that come out of the grant? Under the old system, that was not the case.

In conclusion, one of my concerns as a north-east MP is that although the Scottish Development Agency exists north of the border, there is no similar body in the north-east. People say that regional development agencies are a waste of money and so on, but I would defend One North East, which has been very good. If something ain’t broke, don’t fix it—it was a major mistake of the Government to abolish that RDA in the north-east, especially when one exists north of the border. In the south of England, the number of companies in distress or facing bankruptcy are in decline, while in the north-east, they have increased by 20%. There are concerns in the north about the strategy. The second round of applications to the regional growth fund has finished. What will happen between now and the next election as far as regional development and regional grants are concerned? It seems that there is no strategy on that. I am especially concerned about the issue of due diligence because that may explain why delays are occurring, and I hope that the Minister will respond on that issue.

11.39 am

Esther McVey (Wirral West) (Con): I congratulate the hon. Member for Penistone and Stocksbridge (Angela Smith) on bringing this timely debate to Westminster Hall. However, having listened to what has gone on, I think that we need to put the debate in context, so here goes. We have to look at the time when the coalition Government took office. We had the biggest deficit ever in peacetime history. We were paying £120 million in interest per day. Labour did too little, too late, and left us with a busted flush. The UK economy has grown by 0.5% in the third quarter of 2011, according to the Office for National Statistics.

Tom Blenkinsop: If, as the hon. Lady says, the economy was in such a bad situation when the coalition Government came to power, why did the Chancellor of the Exchequer predicate the deficit reduction plan on 3% growth? To date in 2011, we have growth of less than 1%, which has led to extra borrowing of £46 billion plus.

Esther McVey: No, the hon. Gentleman will find that his party left the economy in so bad a situation that we not only had to say, “You will live within your means and spend what you have,” but we had to provide a growth structure so that we could rebalance the economy.

Phil Wilson: Will the hon. Lady give way?

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Esther McVey: Not yet. Let me proceed to put the debate in context. Hon. Members talked about the regional development agencies. I will talk favourably about the Northwest Development Agency because the staff there are superb. I have worked with many of them and have a lot of time for them. However, let me give the statistics. From 1990 to 1999, annual growth was 1.7% in the north-west and 2.3% in the south-east—a gap of 0.6%. Between 2000 and 2008, average growth was 1.5% in the north-west and 2.1% in the south-east. We kept that gap of 0.6%, despite spending £3.7 billion over a decade.

Tom Blenkinsop: Will the hon. Lady give way?

Esther McVey: No, I will not. Therefore, we now have to ask how we will spend money better, how we will live within our means and how we will rebalance the economy. I talk as someone who had her own business for the last 14 years. I have set businesses up and sold them. I also set up the biggest business network for women in the north-west, involving more than 9,000 business ladies. I therefore like to see myself not only as a business woman, but as a pragmatist who knows that we can spend only what we have. That is what the coalition Government were facing.

I hope that I have set the debate in context. The regional growth fund was set up to create a fairer and more balanced economy, in which we are not so dependent on a narrow range of economic sectors and in which new business and economic opportunities are evenly shared across the regions and across industries. That is what we set out to achieve.

Angela Smith: The regional development agency Yorkshire Forward played an instrumental role in developing the UK’s first technology and innovation centre. We did not call it that. It is the advanced manufacturing research centre in Sheffield. That is now being lauded as the perfect example of where this country needs to go on investment in new technologies and design. Will the hon. Lady at least acknowledge that the RDAs had a very good and effective role in pulling together strategic investments and strategic design and innovation?

Esther McVey: I thank the hon. Lady for that intervention. As I said, I did not deal with Yorkshire Forward; I worked with the Northwest Development Agency and I congratulate the staff, who were excellent. I am saying that, despite spending £3.7 billion, what was meant to be done—rebalancing the economy—never happened. We are therefore asking how we can best deliver the money, how we can focus it and how we can ensure that it achieves its purpose.

Fiona Bruce: I, too, worked with the regional development agency in the north-west. What is particularly striking about the regional growth fund is that applications are succeeding from areas that, under the previous Government, were largely ignored when it came to business support. For years, business people in my constituency of Congleton have commented on the fact that although neighbouring areas—Staffordshire, for example—could obtain support, Cheshire was almost a desert. Now, we are seeing a difference. The Government are saying that there are areas across the country that need business support; and wherever they are, they are receiving it.

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Esther McVey: I thank my hon. Friend for that intervention.

The purpose of the regional growth fund was to stimulate growth, secure jobs and increase the number of jobs. There was a consultation with the public: what did they think it would be best for the regional growth fund to do? The replies came back that they wanted flexibility and no duplication of funds. It was thought best that at least for stage 1—things will change over the next couple of years—there should be minimum bid thresholds of £1 million. It was also felt that guidance should be published. The first round allocated £2.7 billion, creating and safeguarding jobs. It created 27,000 jobs and a further 100,000 jobs in associated supply chains.

I want to talk specifically about Merseyside. In round 1, Pilkington’s in St Helens, Ames Goldsmith UK, Echo and Stobart were successful. I got in touch with Richard Butcher, Stobart Group deputy chief executive, to ask him about the regional growth fund. He says that the regional growth fund has been

“an important factor in Stobart Group’s commitment to the Halton region and will ensure the continued investment from us that the area needs to maintain economic regeneration and growth. The investment from Stobart, Prologis and Halton Borough Council has transformed the area and created many important new jobs—the support from the Regional Growth Fund will further enhance that regeneration.”

Stobart Group has already invested £100 million to date in the development of its Mersey multi-modal gateway logistics site in Widnes, but this new private-public partnership saw the regional growth fund as an ideal opportunity to push on with the development of a further 100 acres, eventually creating more than 5,000 additional jobs and £170 million in gross value added. With the £9 million received in round 1, it is moving forward on opening up 1 million square feet of warehousing space served by rail and road.

That is a perfect example of how the RGF can bring public and private bodies together to stimulate investment and boost the economy. Stobart illustrates the private partnership success and collaboration that has emerged from the RGF. It successfully forged a business partnership between itself, a road haulage operator, infrastructure developers Prologis and Halton borough council. As we know, the sum is always bigger than its parts. That example proves the case most effectively.

I want to refer to other significant developments. The regional growth fund was set up to make key links between private-private partnerships and private-public partnerships, and we are seeing that, but this is the start of a brand-new way of thinking. It is a way of focusing money that we have not seen before, and we will learn as we go along, so instead of the negativity that we have heard today—

Phil Wilson: Will the hon. Lady give way?

Esther McVey: No, not just yet; I will in a second. When we talk in Westminster Hall about the confidence that business needs—we all know that that cannot really be defined but is necessary—it helps for all parties to give confidence to business.

Mr Edward Timpson (Crewe and Nantwich) (Con): My hon. Friend has touched on the importance of business confidence. I am sure that as a fellow north-west MP, she will be pleased to hear that Bentley Motors in my constituency, which has already invested £1 billion

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in its Crewe plant, has secured money not only in the first round but in the second round of the regional growth fund—a further £3 million to boost its research and development. The company has said that that will not only secure the current jobs, but create more jobs in the local area. For the south Cheshire area and Crewe in particular, that is vital to ensuring that business confidence remains and that businesses can continue to invest in future.

Esther McVey: That is indeed vital. When we talk in the House and our words are taken down in Hansard and when people look at it on the internet, people must not just hear doom and gloom, because in reality many positive things are happening and they are coming from private industry.

Richard Burden rose—

Phil Wilson rose—

Esther McVey: I will give way first to the hon. Member for Birmingham, Northfield (Richard Burden).

Richard Burden: The hon. Lady has said that she hopes that the Government will learn as they go along about how to deliver the RGF more effectively. Why does she believe that there have been delays? I am sure that businesses in her area are complaining about that quite a lot. There have been many delays in delivering money already promised. Why does she think that is?

Esther McVey: Let me correct that. I do not think that the RGF will be delivered more effectively, but that it will change along the way, as small and medium-sized enterprises link together and put in bids for £1 million. Everybody knows—I was slightly startled by some Members’ comments about this—that due diligence must be done and that money must be targeted at the right people. That is what people in business do—full stop. These things take some time.

Phil Wilson: Will the hon. Lady give way?

Esther McVey: I will carry on, because I have nearly finished.

Thirty-four companies and other organisations across the north-west made successful bids in round 2. My hon. Friend the Member for Crewe and Nantwich (Mr Timpson) mentioned Bentley, but there is also the university of Liverpool, Pirelli Tyres Ltd, Northwest Aerospace Alliance, Sefton council and Liverpool Vision—the list goes on and on. There are 34 companies and other organisations in total, and they have benefited from some of this £3.3 billion, which is safeguarding jobs, as well as creating 37,000 new jobs, with a further 164,000 jobs in related supply chains and local economies.

Specifically on Merseyside, there is GETRAG FORD Transmissions in Knowsley, which has won support to expand capacity for the production of transmissions at the Halewood plant. Another development I would raise with the Minister is groups of SMEs bidding for £1 million. Last week, I brought a group from the Wirral Invest Network to Westminster to speak to him about how that could best be done. So, yes, the regional

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growth fund has done a tremendous job so far, against all the odds, but I would like it to be stepped up to help SMEs.

11.51 am

Simon Danczuk (Rochdale) (Lab): The points I wish to make relate very much to the process surrounding how the regional growth fund works. The hon. Member for Wirral West (Esther McVey) talked about the need to spend money better, but the regional growth fund is spending it badly. All the evidence suggests that improvements can be made, particularly to the process. It cannot be right that only five or six firms out of 45 successful bidders have received money from the first round.

At last week’s Business, Innovation and Skills questions, the Secretary of State said that such an outcome was acceptable and that it was all part of the process, but the truth is that it is not acceptable. The lifeblood of any business is cash flow, and slowness in making awards will jeopardise the economic growth that the fund is trying to achieve. There are therefore real concerns about how the process is working and about its slowness. At the rate we are going, not all the awards will have been made to the businesses concerned by the end of this Parliament.

It cannot be right that the Department has issued nearly 30 press releases about the regional growth fund but has managed to allocate only five or six awards since the fund was set up. It also cannot be right that successful businesses have to hire consultancy firms to carry out the due diligence that is expected, as my hon. Friend the Member for Sedgefield (Phil Wilson) said. Under the previous structure of regional development agencies, that due diligence would already have been done, which would have resulted in a much quicker process.

There are questions about transparency. We are unsure how decisions are made about successful and unsuccessful bids. It has been pointed out to me that LEPs, which were the creation of this Government, are not being fully involved in the decision-making process. For example, the LEP covering Sheffield was not aware that Sheffield Forgemasters was to receive the funding that it did. As has been said, there are also reports in today’s newspapers that one of the business men who sits on the fund’s advisory panel owns shares in one of the businesses that will benefit from the second round.

My final point relates to the £1.4 billion being made available over three years, which is just a third of what the previous Government put into regional development.

Oliver Colvile (Plymouth, Sutton and Devonport) (Con): I hear what the hon. Gentleman says, and there are two issues. First, we have had a great deal of discussion about how money should be going into business in the north-east and the north-west, but the south-west is also important. Secondly, the country is incredibly short of money, and we should surely be using this money for catalyst work and to build our skills base.

Simon Danczuk: I would not disagree, but my point is that the regional growth fund is not working effectively, although it might look attractive. We may have a limited

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amount of money, but it needs to be spent well, wisely and effectively. The measure of the regional growth fund, particularly given the amount being made available, was whether it would create private sector jobs to replace the jobs lost in the public sector. All the indications are that that is not occurring; indeed, we know that for a fact because unemployment—particularly youth unemployment—is going up. As a mechanism and policy, therefore, the regional growth fund is failing.

David Mowat (Warrington South) (Con): Will the hon. Gentleman give way?

Simon Danczuk: I am going to conclude.

In conclusion, awards are being made too slowly, there is too much bureaucracy, there is a lack of transparency and the amount available is inadequate.

11.55 am

Eric Ollerenshaw (Lancaster and Fleetwood) (Con): It is nice to follow the hon. Member for Rochdale (Simon Danczuk). The regional growth fund must have got something right if there are majority of northern MPs here because the majority of the money has gone to the north, and that, in a sense, is where I want to start. First, however, I congratulate the hon. Member for Sheffield Stockbridge and Penistone (Angela Smith) on getting this debate and on the fight she has put up for her area.

I want to talk about the background of the north-south divide, which Opposition Members seem to forget. The division between the north and the south has been recognised by the Government and by Government Members from the north, but it is not clear whether the previous Government recognised it. In December 1999, former Prime Minister Tony Blair said the north-south divide was as myth and

“an over-simplistic explanation of the problems that regional economies face”.

One wonders where the problems did begin. To be fair, he told The Journal in Newcastle four months later that

“the North South divide exists, and I never said it doesn’t.”

Labour then set up regional development agencies in every region. Even at the time, some Labour Members criticised the fact that London had a regional development agency. At this point, I should declare an interest, having been a member of that RDA. I should tell the hon. Member for Stockbridge and Penistone that I never saw a great deal of transparency in the way that agency dealt with things, but perhaps that was because I was its minority Tory member.

I thought the point of RDAs was to deal with the north-south divide. However, my hon. Friend the Member for Wirral West (Esther McVey) has spoken about the relative decline of the north over the past 13 years. I want to give some figures to illustrate that. The latest figures I have for gross value added in the north—for what the north added to the national wealth—show that between 1995 and 2008, which is before the coalition Government took office, and with 100 being the average, the north-east saw a decline from 82.9 to 78.2, the north-west saw a decline from 90.2 to 86.4 and Yorkshire and the Humber saw a decline from 89 to 82.9.

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If we go beneath that to the sub-region and look at my area, we see that Lancashire had a GVA of 88.7 in 1995, but that went down to 78.7 in the figures for 2008. That is a 10 point drop. What was the RDA doing if that was happening?

Tom Blenkinsop: What are the actual or nominal figures? What is this 82% of?

Eric Ollerenshaw: I am talking about a national average of 100 from 1995 to 2008. The hon. Gentleman’s area declined even further.

David Mowat: The point my hon. Friend is making extremely powerfully is that, in the last year of the previous Government, the north-south divide reached a peak for the previous three decades. That is extraordinary; it was brought about by the boom in the south-east and London, and it is a fact.

Eric Ollerenshaw: Let me move on.

I congratulate the Government on being among those who recognised that something needs to be done. Yes, the regional growth fund is not the biggest thing, and we want more to be done.

Angela Smith: Will the hon. Gentleman give way?

Eric Ollerenshaw: May I just continue a little further before I give way?

At the moment, however, we are learning as we are doing. I was here in May when some Members complained about the first round of bids. I suggested that it was following the old methods of the RDA in the north-west, and my hon. Friend the Member for Congleton (Fiona Bruce) has mentioned that, too. The areas prescribed were Greater Manchester and Merseyside—for obvious reasons, given European rules and all the rest of it; but there was a lack of actual support for good businesses in other areas, such as my own, which had the capacity to expand and take on more people. For example, Northern Tissue Group, with 150 employees—so it was not applying for the biggest grant—was denied a grant in the first round. I am pleased that in the second round it is still in discussions, and it looks as if it may well succeed.

Angela Smith rose—

Tom Blenkinsop rose—

Eric Ollerenshaw: I shall give way first to the hon. Lady, and then to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop).

Angela Smith: My constituency is Penistone and Stocksbridge, with an “s” in it. It is being misquoted all over the place.

Eric Ollerenshaw: My apologies to Yorkshire.

Angela Smith: Is the hon. Gentleman really saying that the Government can do more for less—for two thirds less? Is he really saying that they can deliver more growth and rebalancing of the economy on a fund that is only one third of the original sum on the table?

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Eric Ollerenshaw: There are a couple of things to say. My hon. Friend the Member for Wirral West has explained the economic circumstances, and I do not need to go through that again. However, as my hon. Friend the Member for Nuneaton (Mr Jones) keeps pointing out, the bureaucratic cost of the regional development agencies was something like £300 million, before any money got to any business through any due diligence process. We got rid of that, and what I regard as the success in round 2 is the fact that the companies in question are way beyond the normal areas, in Burnley, Wigan and as far as Carlisle and Cumbria—and I hope that my own part of Lancaster is part of that. That is a recognition of where success lies, and what we have learned from the mistakes of the regional development agencies.