Examination of Witness (Questions 112-152)
Q112 Chair: May
I apologise for the delay? We will be interrupted in a few minutes.
We will have to vote and we will have a 15-minute suspension
then, so I do apologise. That is the way this place works, but
thank you very much for joining us this afternoon. If I can just
get to the right page, I notice from reading your submission that
you are not in favour of an enterprise zone being created for
Northern Ireland.
Professor Lloyd:
No.
Q113 Chair: I
wonder if perhaps you could just give us the reason why in summary.
Professor Lloyd:
First, may I thank the Committee for the kind invitation to come
across?
Q114 Chair: You
are very welcome.
Professor Lloyd:
Thank you for considering my comments. Really, there are three
planks to my argument, the first of which is thatas Lord
Heseltine very eloquently describedenterprise zones were
an instrument of the 1980s and they were born of a particular
context, they were built up upon certain value judgments, particular
types of economic thinking, and they were used in particular ways.
It was very interesting, for example, that Lord Heseltine referred
a lot to the London Isle of Dogs. Enterprise zones were designated
in Belfast, for example, on two small sites. In one city in Scotlandin
Dundeethe enterprise zone, so-called, comprised seven small
unrelated, unconnected sites. They were very different. They
were in completely different local contexts, and they had a different
property market, labour market and skill-sets, if you like, associated
with them.
Rather more importantly, the research evidenceand
there was a lot of itconducted both by the Department of
the Environment throughout the 1980s, and also by academic economists
and so on, was not unambiguous. The enterprise zones had differentiated
impacts at different times, in different places, for perhaps myriad
reasons, and they were not all the same.
So, my first point is that what was going on then
is not appropriate to what is going now. I will take Clydebank
in Scotland as an example. The Singer sewing-machine factory
closed, a cause célèbre in Scotland, and an enterprise
zone was put in place. It took an old industrial plant and factoryso
big indeed, it had its own railway stationbroke it down
and built new property. That new property then accommodated new,
mainly spill-over industry and activities coming out of Glasgow,
including a local radio station. So, I think we have got to be
very careful about how we deal with this particular concept.
The research evidence showed that, in the main, there may have
been some successes in certain places, but, by and large, they
were not sustainable. Indeed, the 10-year periodin business
and industry, 10 years is nothingwas not a substantially
significant period. That is my first point.
My second point is that Northern Ireland is
undergoing a vast change in its governance arrangements. You
will be aware of the Review of Public Administration, which is
looking at the review of local government; you will be aware of
the modernisation of the statutory land-use planning system, which
is currently in front of the Environment Committee in Stormont;
and you will be aware of the refreshed Regional Development Strategy,
which is out for consultation. You may also be aware that, in
Northern Ireland, just yesterday, the Dublin and Belfast Governments
published a joint paper on looking at how they can manage their
planning ideas across the island of Ireland, because the island
of Ireland is a very small place and there are clear economic
benefits to be gained from integratingI do not knowwater,
sewerage, energy and so on and so forth. That is a technocratic
issue; it is not political.
The third point is that we have moved on considerably,
and I think an enterprise zone is essentially a property-market
device to encourage new-build occupation. That is essentially
what it is about and I think it would be very retrogressive at
this stage, when Northern Ireland is trying to re-democratise
its planning system, when it is trying to create a planning system
which can actually provide the vision and can actually integrate
11 Departments of State, to get them talking from the same hymn
sheet, and actually to have a strategy, to actually understand
what is going on in Northern Ireland within the wider island of
Ireland and within the greater Great British context. So, I have
three major points of dissension, chair.
Q115 Chair: I
think we will come back to the planning issue a little later,
so not necessarily dwelling on that, but yes, things have moved
on since 1980 in Northern Ireland, the main reason being because
of the terrorist situation. There are still, as you will be aware,
very many people in poverty in Northern Ireland. Economically,
it underperforms, so, in some ways, it has not moved on. Politically,
it has, and that is very welcome, but in some ways it has not
really moved on. It had a very bad unemployment rate in 1980,
and it has a relatively bad rate now, so have things changed that
much?
Professor Lloyd:
Not really. If we look at the United Kingdom context, it is still
a relatively underperforming region/devolved region-state within
that context. It has marked divisions; those marked divisions
sometimes have particular lines to them. I was privileged to
serve as an independent commissioner on Lord Best's commission
looking at sustainable housing in Northern Ireland's future, and
one of the big issues for us was grappling with the problems of
affordable housing. It is quite interesting in Northern Ireland
at the moment that we have a slightly destabilised land and property
sector because, on the one hand, we have oversupply of residential
property; on the other, we have undersupply of affordable housing.
How we reconcile that is a major issue. As you rightly say,
behind that there are marked economic differentials that we need
to address. It is a small place of 1.8 million people in a small
patch of land, and we have to look very carefully at what the
structure of Northern Ireland's industry is and the way that we
can actually understand what is happening and we can begin to
develop it. We cannot do that simply by throwing an enterprise
zone at it, the effects of which would be very anarchic in my
view.
Q116 Lady Hermon:
Two questions: one that appears on my paper and the other one
that has just floated into my head following what you have just
said. You speak very passionately in opposition to an enterprise
zone in Northern Ireland at the present time and you feel it is
very outdated, so how did you respond when you heard the present
Secretary of State for Northern Ireland, Owen Paterson, speaking
in such strong support of having an enterprise zone in Northern
Ireland? Were you surprised, or how did you respond?
Professor Lloyd:
I am not a politician, so speaking as an objective academic I
am shockedI will be quite frank. I was absolutely shocked.
The reasons were this: Northern Ireland is undergoing, as I said,
the Review of Public Administration, the modernisation of planning
and is considering its Regional Development Strategy. The Planning
Bill, which is currently before the Assembly, is the largest piece
of legislation being pushed through. It has about 258 clauses.
One of the clauses just happens to mention an enterprise zone,
and I have argued very strongly against it. There is no substantive
argument for it. It equally suggests provision for simplified
planning zones; I would argue against those, unless they were
managed very, very carefully.
But it struck me as being rather odd that, if Northern
Ireland is trying to resurrect, refresh, bring about an appropriate
and democratic land-use planning systemone that is much
more akin to what is going on in Wales, Scotland and Englandto
suddenly impose a region-wide simplification of planning would
not help matters at all. It is not that that is needed; what
we need is a strong strategic understanding of what the Northern
Ireland economy is going through and how we can actually prepare,
provide the infrastructure and start locking in the skills, the
labour market and all the other dimensions. We cannot go at this
in a very simplistic, lateral way.
Q117 Lady Hermon:
May I just follow up on that? Do you actually make a very deliberate
and conscious decision to write to the Assembly when proposals
come out for consultation and legislation is out for consultation?
Are you one of the very good contributors to give the contrary
view?
Chair: Sorry, there is
a division now in the Commons. We will reconvene at 16.30. If
there is a second vote, we will reconvene at 16.45. I do apologise.
Sitting suspended for a Division in the House.
On resuming
Chair: Back in sessionsorry
about that. Sylvia?
Q118 Lady Hermon:
Thank you very much indeed, Chairman. Just to recap where we
were before the break for the vote, Professor Lloyd, you have
mentioned with great passion that you are not enthusiastic about
an enterprise zone in Northern Ireland in 2011. You feel that
it is outdated. And I had asked you if, in fact, you are a regular
contributor to the Northern Ireland Assembly when proposals come
forward, as you have mentioned, about planning and the words "enterprise
zone" appear. Do you then formally write to them? Are you
very good about drawing their attention to the fact that it is
an outdated concept? I am not checking on what you do. This
is just such a refreshing viewpoint for us in the Committee, and
it always gives us a balance. In fact, we have just heard from
someone who is very much in favour of an enterprise zone, a very
distinguished witness in Lord Heseltine, but it is very interesting
to hear a completely opposing view. So, I just want to make sure
that your opinion has gone on the record within the Assembly.
Professor Lloyd:
Thank you very much indeed. As an academic, I am fortunate enough
to be involved in planning, development, regeneration, housingthese
types of issuesand, at this present point in time, particularly
in Northern Ireland, there are a lot of changes in those domains.
I think I have got six consultation papers somewhere on my desk
that I will have to respond to. I saw this one rather late on,
I have to say, just before Christmas, so it did spoil my Christmas
because I had to reflect on it and respond.
Q119 Lady Hermon:
But you did respond.
Professor Lloyd:
I think it is important and I do believe very strongly in a town
and gown relationship; I do believe strongly that academics have
a role to play in putting forward a voice, because it is just
another perspective. But in this case I felt it was important
do so.
Q120 Lady Hermon:
Thank you. I am very encouraged to hear that. In your evidence,
too, a phrase that you used struck me particularly forcefully,
and that was that you believe that an enterprise zone "strikes
at the very idea of devolution in Northern Ireland".
Professor Lloyd:
Yes.
Q121 Lady Hermon:
Would you kindly elaborate upon that? It is a very striking phrase
to use.
Professor Lloyd:
It is just that, in 1999, when devolution took place, I was actually
then living and working in Scotland, and I was quite involved,
not politically, in advising and being part of the discussions
about the modernisation of land-use planning in Scotland, and
it struck me that it was very important that, for the first time,
the devolved states could actually begin to consider what their
particular circumstances required. It was important to have a
debate about that and, again, in Scotland, the modernisation of
planning has taken since 2001 to 2012 and it is still coming through
and the benefits are just being seen, in my mind.
When I then found myself in Northern Ireland
and the peculiar characteristics of Northern Ireland's governancethe
relationship between central Government Departments or the Assembly
Departments and local government; the way communities and so on
operateit struck me that Northern Ireland has embarked
on a journey in which it is finding its feet, if I can put it
that way. It is trying to find a set of bodies that can best
reflect the needs of the community, bring that community together
and have a discussion about things. It is very different from
what prevails in England, Wales and Scotland, and that process
is well advanced, actually, and it is growing arms and legs.
To suddenly have an enterprise zone, if you like, layered on top
of it, I thought would be a retrospective step and would effectively
go against the spirit of devolution as I understand it.
Lady Hermon: Yes. Thank
you. Very interesting.
Q122 Chair: But
surely, for some thingsfor example, corporation taxthe
decision could be devolved to the Assembly for them to take.
Professor Lloyd:
Yes. Once we begin to look at the powers that the devolved Administrations
have, if it is deemed appropriate, of course. But to my mindand
this would apply equally to Wales; it would apply equally to Scotlandwhat
each devolved Administration needs is a strong and robust understanding
of what is happening in their jurisdiction. Enterprise zones
sometimes are predicated on a one size fits all; it makes certain
assumptions about the designation; it makes certain assumptions
about the way property markets and conditions are; about the skill
markets and how they relate; and so on and so forth. The conversation
earlier with Lord Heseltine, I thought, was lovely, because he
was demonstrating how complex and holistic this is. The answer
is a very simple one: can we please drill back to a concrete understanding
and then devise a strategy from that? I think, if we throw everything
up in the air and we just hope for happenstance, it all lands
in the same place.
Q123 Oliver Colvile:
One of the problems is, isn't it, that you need to get Government
Departments actually working together and thinking across the
board? We saw that when we had a discussion about the skills
base and infrastructure and things like that. Do you think that
could be a problem in Northern Ireland?
Professor Lloyd:
It is a major problemthere can be no doubt about thatfor
very, very particular reasons. But if we look elsewherefor
example, if we look to Scotland, we find that, under its planning
modernisation, it introduced this wonderful concept of a National
Planning Framework, and when that was being deliberated and scrutinised
by the Finance Committee and the Environment Committee in Scotland,
they said quite unequivocally, "This has to be given statutory
force", because it provides consistency and certainty for
decision makers, both public and private. It came into legislation
in 2006; it is now bedded in. The second version is out. It
is debated in the Scottish Parliament. The lovely thing about
it is that it is actually promoting a better understanding of
public and private relations. So, in other words, we are now
beginning to talk and understand each other's viewpoint, rather
than what Professor Sir Donald MacKay notably said in a paper
a number of years ago, "Simply shout it at one another and
shout it very loudly". I'm sorry: it's 2012; I think we've
got to move on.
So, yes, I do believe that it is a devolved matter,
but you still need that strategic framework within which to operate.
Northern Ireland has started that. It has a Regional Development
Strategy under consultation, but that is free-floating, free-flying,
away from the land-use planning system, which is the responsibility
of a different Department. So, you have the Department for Regional
Development and the Department of Environment, and they are not
talking. It is a problem.
Q124 Naomi Long:
Thank you, Professor Lloyd, it has been very helpful, but from
listening to what you have said so far, I am slightly concerned
that we are using the phrase, "enterprise zone", to
mean what it meant in the 1980s, in which case I think your hypothesis
is correct. I am not actually sureand I think it is important
that we drill into thisthat the definition of enterprise
zone, as used by the Secretary of State, is necessarily the same
thing. Part of the difficulty that we have, I think, as a Committee
is that we don't actually know what the definition of an enterprise
zone, as it has been put forward by the Northern Ireland Office,
actually is in terms of detail. We know some of the ingredients
that would go into making it from their perspective, because they
have mentioned corporation tax, planning, and a few other things.
Do you think it is possible that you are right that the enterprise
zone from the 1980s isn't the right answer for Northern Ireland,
but that there are other measures that could be taken, a different
definition, that would actually mean that you could take some
strategic action, combining what happens in Northern Ireland with
what happens here at Westminster, that would make Northern Ireland
more competitive?
Professor Lloyd:
I think the definition that is currently understood by the Secretary
of State is the same as that used in the 1980s. It's got all
the same ingredientsthat is my problem. The momentum behind
the proposal to have an enterprise zone across all of Northern
Ireland was contained in the Bow Group's report and deliberationsa
very substantive report, I may say, with a foreword by Lord Trimble.
It advocated the way forward. The thinking behind that, the logic
behind that, is identical to that expounded in the 1980s. My
argument simply is: we are now 30 years on, we have different
contexts, we have different circumstances, we have different changes
going on in Northern Ireland, and what we actually need is greater
certainty rather than less certainty. So, I think we have to
look for an alternative. Northern Ireland does need support and
it does need nurturing.
I was fortunate enough, at the end of last year,
to attend a lecture by President Clinton, for example, in Magee
College, University of Ulster. President Clinton said that Northern
Ireland had to look to its strengths, and he cited the green economy,
the green environment, renewable energy, tourism, food, and he
was quite adamant. He said, "We are faced with food-price
inflation, food security; let's nurture our land." An enterprise
zone may not necessarily nurture the land; it might introduce
much freer arrangements, which would worry me slightly.
Q125 Lady Hermon:
Could I just clarify one little point? Have I understood you
correctly, Professor Lloydplease correct me if I haven'tthat,
in fact, it was Lord TrimbleDavid Trimblewho may
have inspired the current thinking of the present Secretary of
State?
Professor Lloyd:
No, I would not go as far as that. I would not know the background
to it.
Q126 Lady Hermon:
So, the date of Lord Trimble's publication then, is this a recent
Professor Lloyd:
No, he wrote the foreword to the publication by the Bow Group,
which articulated the ideas and the thinking around the enterprise
zone. But, to my mind, it was a reprise of the 1980s.
Chair: We don't yet know,
though, do we?
Q127 David Simpson:
No, we don't. That is one point I wanted to come to, Chairman.
I know I have a question later on, but just to follow up on what
Naomi was saying, whilst we haven't got the detail of what the
Secretary of State means by it, my understanding, for whatever
that is worth, is that the enterprise zone would use the whole
of Northern Ireland as a marketing tool, as PR, "Northern
Ireland is open for business", but within that there would
be the cocktail measures of probably lower corporation tax, help
with research and development with companies, and such similar
things. My understanding isand I stand to be correctedthat
it is not of the old 1980s and 1990s, and I remember that period
and it was good for its day. If that was the caseif it
was a marketing tool, enterprise zone, for all of Northern Ireland,
but part of a cocktail of measureswould you agree with
that?
Professor Lloyd:
No.
Q128 David Simpson:
You don't want to think about?
Professor Lloyd:
I have thought about it, actually, and that is a very challenging
question, I must say, Mr Simpson, and thank you. But I also have
to say that, if you look at the planning world in Northern Ireland,
it is beset with a number of problems. We know about PPS14, for
example, looking at housing in the countryside, and we know that
the Planning Appeals Commission has been overwhelmed in the past;
we know that the Planning Service staff are being redeployed and
it is being weakened, just at a time when we should actually be,
in my view, strengthening it to be able to link planning reform
to the transfer of those responsibilities to local government,
if that is the way we are going.
The thing is Northern Ireland needs more certainty,
more understanding at the moment, against which we can then put
in place the appropriate development and, more importantly, to
my mind, actually have the right infrastructure, because, at the
moment, infrastructure is always an afterthought. We always plan
backwards; we never plan forward. We can go to lots of countries
in the worldNew Zealand, for example, or Canadawhere
they do not have planning; they have Ministries and Departments
of infrastructure. They talk about infrastructure and then the
regulation of the development to make sure it fits with what the
community wants. Because, at the end of the day, planning and
development is a highly political process and it takes place in
very, very tight communities, and I think we need to recognise
that.
Q129 Oliver Colvile:
I will go on to my question in a second, but as you know, I have
done, as I mentioned earlier, quite a large amount of work in
this regeneration stuff, and I am just curious to know if you
have any idea at all: when developers actually submit planning
applications and try to take them through that process, if they
are not successful, what they then do is go for judicial review.
Is it the case that judicial review of planning applications
is quite high in Northern Ireland, because there's a real sense
of frustration amongst developers that they cannot actually get
their way forward?
Professor Lloyd:
Yes, that is quite a complex position, because if a developer
puts in a planning application and it is refused by the Planning
Serviceand we need to remember, of course, in Northern
Ireland that local authorities are not the planning authority;
there is simply a statutory consultation, so there is a mismatch
with the community and the elected membersdevelopers then
can appeal that on planning grounds or opt for judicial review
on procedural grounds. There is an anecdotal sense that there
has been a tendency to go to judicial review rather more compared
with England, Wales and Scotlandthat is correct. But that
would simply be related to process, not the details of the planningthe
actual planning arguments.
Q130 Oliver Colvile:
You wrote in your paper that you supported the Independent Review
of Economic Policy, and you have also suggested that you are not
very happy with the idea of an enterprise zone as well, but don't
you think the two could actually work much more closely together?
Professor Lloyd:
Oh, dear, no. I am sorry.
Oliver Colvile: That's
alright.
Professor Lloyd:
The Independent Review of Economic Policy in Northern Ireland
was conducted by Professor Richard Barnett, who is Vice-Chancellor
of the University of Ulster, and his view was that the way in
which the Northern Ireland economy can stabilise and grow is by
improving innovation and productivitythat was the key essenceand
it had to be highly qualitative. This was a marked change. So,
we had to look for sectors that would allow us to demonstrate
the returns there, and I think that requires a very sophisticated
economic strategy. It is not enough, for example, simply to say
it is about rebalancing between public and private. Yes, that
may be important, but we don't actually then, in saying that,
understand perhaps how much the private sector is actually dependent
on public expenditure. So, rather than simply saying, 'We will
reduce the public and the private will step up', if the private
is totally dependent on the public, it too will come down.
I think we need a much more sophisticated understanding
of what is happening in Northern Ireland, how responsive the types
of sectors that are ready to grow, innovate and diversify would
be to tax changes. Enterprise zones might simplify planning and
actually might stop certain investments at that high-quality end,
because, if you can build a lovely property, you don't know what
is coming next door, and that could actually diminish your investment,
so we have to be careful. To my mind, rather than that, I would
much prefer a much more nuanced industrial understanding and economic
understanding, and we could then put in place the appropriate
regulations and organisations.
Q131 Naomi Long:
I suppose the question really that I wanted to pursue with you
is specifically about the aims, if you like, behind the enterprise
zone. From what we have heard from the Secretary of State, which
has been quite free-formI think that is the polite way
of putting itit has been about stimulating entrepreneurial
culture. This feeds into the point which you have made about
rebalancing the economy. Part of the difficulty in Northern Ireland
is that so much of the private sector employment is actually being
now hit by public sector cuts, because it is essentially public
sector funded underneath. The Government have been saying that
they want the enterprise zone to try to stimulate entrepreneurial
activity and culture, to encourage new business start-ups and
boost economic activity. If you do not use the enterprise zone
nomenclature for this, what would you suggest as an alternative
means to try to stimulate the private sector in Northern Ireland?
Professor Lloyd:
Again, it's a tricky one. It goes back to the definition of what
the enterprise zone is. When the enterprise zones were first
designated and put into place, they were seen as a way in which
the land and property sector could kick-start a particular area.
It was a land and property sector-driven thing. In certain instances,
there clearly was an undersupply of appropriate premises for new
investment, and in those certain instances it may have worked.
It is very different today in Northern Ireland: we actually have
an oversupply of top-quality office space and other types of buildings,
so that isn't our issue.
What we need to do is to take up on what the independent
Barnett review said and begin to look at what the needs of industry
are in terms of nurturing innovation, of matching those issues
to what is happening within the labour market, and linking it
to the educational sectors, because Northern Ireland has got two
very large universities and it's got further education colleges,
which could nest together. We must try to integrate these particular
issues, because we cannot allow them to simply fly in close formationthey
have to be brought together. So, my view is that the enterprise
zone may have been fit for purpose in 1980, when it was introduced,
but I don't consider it to be so today, because we need to find
alternative ways of encouraging industry.
Q132 Naomi Long:
Just on that point, in the last few weeksin fact, in the
last few daysthere have been a number of significant investments
in my own constituency: either contracts that have been won competitively
or foreign direct investment. One of the features of that has
been based around a clustering effect. So, for example, with
Harland and Wolff, and with the two universities, there has been
work done on, for example, tidal power and wind power, and there
has been a certain clustering effect, where we now have foreign
direct investment linked around that, where companies want to
come to work in that general area. More recently, there has been
some software and technology clustering, where there have been
a number of job announcementsin the last 24 hours, actually.
Do you see that that model of identifying areas of existing growth,
albeit small-scale growth, and then trying to invest further in
that as a driver for change, is a more sustainable model than,
for example, something like a corporation-tax cut across the board
or the enterprise zone concept, which is a more general approach
to economic regeneration?
Professor Lloyd:
Yes, I do, because if you accept that an enterprise zone would
involve the simplification of planning regulations and so on,
by actually having a much more proactive, positive planning system,
you can encourage those clusters. It is actually the raison d'être
of the planning system. The planning is there not only to regulate
inappropriate development and to protect property values; it is
actually there to promote appropriate developmentclusteringto
realise agglomeration economies of scale. So, if you could bring
together three or four companies in the same sort of sector, the
next thing you know a bank might move in to support those four
or five firms, or maybe a small technology would go in to offer
them the support they need. So, suddenly, instead of four companies,
you could end up with eight. That is good planning, and that
is the type of planning we need, where planning is actually saying
to these companies, "You come in here. This is the type
of infrastructure and support that we would be looking to provide".
In other words, we are nurturing them and celebrating them.
That is the side of planning that does not often get a fair crack
of the whip and is often not recognised by many people.
Q133 Dr McDonnell:
I just wanted to touch on that. You heard Lord Heseltine say that
he was very excited about Urban Development Corporations and felt
that they were a more appropriate answer. What do you feel about
that?
Professor Lloyd:
That is a very interesting alternative, because when they were
introduced in the 1980s, the enterprise zones were separate, although
they were closely aligned in terms of their political thinking.
The Urban Development Corporations were very innovative in many
ways: they allowed for this positive development; they allowed
for compulsory acquisition of land, and land assembly; they allowed
for positive planning, infrastructure; they were champions, and
we don't have that, in many instances. They were actually champions
of going out and saying, "Please come in to Cardiff Bay,
come in to Laganside, come in to the Isle of Dogs", and so
on and so forth, but they were not democratic. They were actually
imposed: they were selected; they were not elected; and there
were problems in each of those places in terms of the relationship
with the local community. If we could overcome that, if we can
actually make a development agency or a corporation act responsibly
and be accountable to the local community, wonderful. I think
that would actually go a long way in providing the technical support.
Q134 Dr McDonnell:
I want to follow that because, when you say they were not democratic,
that is interesting. But are you implying that they need to be
democratic, or are you implying that they work better by being
undemocratic?
Professor Lloyd:
Gosh, I can see a PhD thesis in there.
Q135 Dr McDonnell:
Go easy, because I was the local representative on Laganside,
so I want to think that they were democraticnearly democratic.
Professor Lloyd:
I think they were democratic in certain instances, for example
to the political system. I don't think they were necessarily
democratic to the local communities, and that is worrying. There
is a lot of documented evidence, for example, about what was going
on in places such as the Isle of Dogs or Cardiff Bay, where decisions
were taken which the local community felt either they had not
been privy to those discussions or there was no way they could
contest it if that was the case. But the Urban Development Corporations
provided the technocratic delivery of positive planning. They
had a vision, they had a master plan, they pulled in the finance,
they could exercise executive power on land acquisition and land
assemblythey could do all that, wonderful, but if only
they had brought along a wider constituency, they would have been
accepted; otherwise, we are back into the politics of resistance,
and I don't think we want to go there, frankly.
Q136 Oliver Colvile:
There were most certainly a number of schemes that I was involved
in where we actually got the local authorityit was here
in Englandto produce a master plan for the whole site.
It went out for public consultation. The public consultation
then went in. The local authorityobviously, the politiciansended
up by adopting it after there had been a significant amount of
consultation, so people had actually had a say in that. That
way, when then the planning application went in, it fulfilled
all the criteria that had been discussed within the master plan,
and that then didn't touch the sides at all, and that seemed to
be a very effective way of doing it. Do you believe that actually
taking that kind of approach in Northern Ireland would be quite
a helpful way of doing it?
Professor Lloyd:
It would be exceedingly helpful, but there is a long journey to
go before we can actually get there, because ever since the early
1970s, when planning was centralised in the Department of the
Environment, ever since local authorities were removed from the
direct planning decision-making process, that centralisation has
engendered a suspicion among most people about what planning is
about. It has engendered, in some instances, an apathy, where
people simply say, "Well, you are not going to pay any attention
to me anyway". We need to engender that culture change,
as it is quite often called.
Again, if I may just refer to Scotland as an exemplar:
in Scotland it has taken 10 years of planning reform to bring
about a better sense of understanding that planning is not there
simply to stop; it is there to promote the better type of development
schemes, but it involves rights and responsibilities. In other
words, people have to be able to participate and engage. It is
incumbent upon Government and the planning authority to go out
to bring the public in, but it is equally incumbent on us to encourage
that conversation with the public.
There is a lovely breakthrough, for example, that
has taken place in Edinburgh, where, as part of this culture change,
the local authoritythe City of Edinburgh Council, which
is the planning authoritytogether with the local property
sector, have come together and they have agreed what is called
an Edinburgh Concordat. Thinking ahead, this has set out, in
very simple language, exactly when the developer comes in, so
they know exactly what they have to do, and the planning authority
has got milestones by which they respond. The anecdotal evidence,
because it is just evolving, is that it is working very well.
In other words, there is a lot of talk going on and a lot of
conversation in Northern Ireland because the communities have
not been actively involved in planning, unless they have been
just objecting. We need a long time of nurturing to get that
culture change going.
Q137 Oliver Colvile:
Do Planning for Real weekends take place?
Professor Lloyd:
In Northern Ireland?
Oliver Colvile: Yes.
Professor Lloyd:
Not that I am aware of, I have to say. Compared with, say, Scotland
or England and Wales, there is probably not that support mechanism
yet. I think that has to come.
Q138 Dr McDonnell:
I just want to go back more to the enterprise zone. Assuming
all of Northern Ireland was designated as an enterprise zoneand
this becomes a bit difficult with your analogy to it being a land-development
operationwhat effect would this have on land and property
development generally, or what would you guess or perceive might
happen?
Professor Lloyd:
We would be starting from where we are, and that is a fairly confused
land and property-development sector at the moment, because of
the effects of the property boom in the last number of years,
because of the cutbacks, because of the uncertainty, perhaps,
of the NAMA from Dublin. There are also now different decision-making
actors coming in through the banks and so on and so forth. My
fear would be that an enterprise zone would destabilise that position
rather morethat would be my considered opinion.
Q139 Dr McDonnell:
What do you think about designating the whole area rather than
isolated parts? Isolated parts, I think, would probably imbalance
the property side, but taking the whole of Northern Ireland, would
that create any sense of stability? Stability is the argument
that is used for wrapping the whole thing up together.
Professor Lloyd:
Yes. Again, my opinion would be that the whole of Northern Ireland
being an enterprise zone would be very destabilising, because
the land and property-development sectors have different local
conditions in Belfast, in the different towns and cities, the
villages and so on and so forth. That would really concern me.
I should point out also that the Planning Bill of 2010, currently
before the Assembly Government, does include in it reference to
being able to designate an enterprise zone, which I take to be
smaller ones, which may be appropriate, but I have pointed to
the Northern Ireland Assembly Environment Committee that, if we
go down that route, you do require specialist skills in master-planning,
you need to know exactly where the boundaries are going in and
you need to know exactly what the relationship to the local property
market is, because if you start destabilising land and property
prices further, you don't know where we are going to end up.
We also have to have a template that we know that we are working
to. I do despair of just simply saying, "Let's have an enterprise
zone'. Why? For what? What are we actually aiming towards?
That does frighten me a little bit.
Q140 Dr McDonnell:
Let me take you on to another aim. What do you feel an enterprise
zone would do for the construction industry? Would it just siphon
whatever little bit of activity we have sideways?
Professor Lloyd:
Probably. If we look at the construction sector in Northern Ireland,
there has been huge unemployment. I dread to think how the supply-chain
relationships have been disrupted. There has been a skill shortagethere
is no doubt about that. There is a great deal of uncertainty
across Northern Ireland in different little towns and what have
you. It is affecting different-sized companies in different ways.
Small, family-sized building firms, for example, are perhaps
suffering rather more. All I think it would do is simply divert
whatever is happening at the moment into different places, in
a very ill-considered and non-strategic way. I would be very
concerned about that, because I think, again, whereas in the 1980s
there was an undersupply of quality accommodation, today there
is probably an oversupply. But we have a rapidly changing labour
market. There are new investments taking place. The economy
does not sit still and there are changes, but for the many investments
going in, there may be disinvestment in other parts. We don't
know enough yet.
Q141 Naomi Long:
You have touched, I suppose, on one of my hobby-horses, and that
is that, with the Northern Ireland planning system, for all its
faults, the focus has been very much on development control, and
that element of the planning system actually works relatively
well. The difficult is that the other end of the planning systemthe
forward-planning, land-use planning elementdoes not function
well, which makes development control extremely difficult, because
they are not working off a template. I raise the issue, for example,
of the expiry of the Belfast Area Plan and how long it has taken
to get the Belfast Metropolitan Area Plan to replace it, and it
still has not happened, yet it expires in 2015. Therefore you
have this huge lag and we do not engage, I do not think, communities
enough in that part of the development-control system; we only
ever do it in response to applications.
You mentioned in your evidence that there were important
changes taking place with respect to local government, and obviously
one of those important changes as part of the Review of Public
Administration was that that land-use planningnot the development-control
elementwould actually be devolved down to local councils,
so they would be able to drive that forward. That is now not
going to happen. The Assembly have announced that the Review
of Public Administration is not going forward, so are there other
plans that you see on the horizon? You have mentioned the Planning
Bill, I know, but are there other plans of change that you see
on the horizon that would change the context in Northern Ireland
in a constructive way to allow that better planning to take place
in order that business and enterprise could then flourish?
Professor Lloyd: There
are different layers and aspects to this. To my mind, the Regional
Development Strategy, which has just been issued, is a very important
document. It is equivalent but very different to the National
Planning Framework in Scotland, and it should actually have a
very clear statement of how the Northern Ireland economy can change
over time. My main criticism, or observation, of it at this moment
in time is that it is not sufficiently land-use-based.
So, for example, whilst it is looking across the
piece and saying, "This is where economic activity could
go" and so on, does it pay attention to floodplains, does
it pay attention to coastal erosion, does it pay attention to
where we might be allocating fields and land for biomass for renewable
energy? There is a lot in there for which we need to redraw the
map of Northern Ireland in terms of its development potential,
and that needs then to be married to the available infrastructure
and then coupled to an understandinga strategic understandingof
how the Northern Ireland economy is changing. So, that regional
strategy has to be a very sophisticated document. Then it should
be linked to the development plans, but, under the Planning Bill,
the proposal is that they will be changed. My hope would be that,
instead of being something like BMAPthe Belfast Metropolitan
Area Plan, which I believe has taken 11 years and counting -
Naomi Long: Yes.
Professor Lloyd:
Which, frankly, is a disgrace
Naomi Long: Yes.
Professor Lloyd:
Because we have lost a generation somewhere in that process
Q142 Naomi Long:
I am sorry to interrupt but it has also led to an increase in
the number of speculative applications, because it has no weight.
The previous plan had less and less weight. When developers
had money, it was a developer's dream, because there was a complete
absence of policy.
Professor Lloyd:
I think the intention is that the plans will become very much
more strategic and then very much more action-focused. Going
along with that, of courseand I am excited about this in
the Planning Billis that the development-control system
is going to be replaced by something called development-management.
That is not just nomenclature; that is actually an attitude.
There will be very much more pre-application discussions; developers
will be talking; planners will be talking back, saying, "This
is what you need to submit", to keep the developers on line,
and I think that is important.
There is, to my mind, a potentially new awakening
here. Planning is an important part of Northern Ireland's wellbeing.
It is about the control of land in the wider public interest,
whichever way you cut it, but we have to find those arrangements.
But we also have to link it to the strategic development of the
Northern Ireland economy, because, as people have observed, we
do have unemployment, we do have affordable-housing issues, we
do have communities that need to be brought on to a more sustainable
footing, and we also need to anticipate change, because Northern
Ireland is not exempt from ageing. It is not exempt from perhaps
younger people coming forward facing unemployment for a long time.
These are major issues that we've got to look after.
Q143 David Simpson:
We have concentrated very much on the enterprise zones. If enterprise
zones were taken off the table, and they do not exist anymore
and the proposal was taken off the table, would you have a difficulty
with lowering the corporation tax to 10% to make us competitive
right across Europe and with our near neighbour in the Republic
of Ireland?
Professor Lloyd:
I think that would be a separate thesis, because I think we are
then talking about the responsiveness of different sectors, different
scales of activity, to tax and fiscal reliefs. There has been
a lot of work done, largely based on American experience, of how
different places and companies and institutions respond to different
types of taxes, and there are different models that are floating
around; tax incremental financing, for example, is one that has
been mooted rather more recently.
I heard Lord Heseltine say very clearly that, in
a sense, Wales is as disadvantaged as Northern Ireland with respect
to the corporation tax, because we are actually working with highly
mobile, global capital and financial capital. Frankly, it will
take some time for me to be convinced that a potential inward
investor perhaps located in Florida, at random, sees Dublin or
sees Belfast and will make a distinction on that corporation tax.
I think there will be lots of other things coming in to the decision,
like skills, networks, other centres of excellence. It is too
complicated. Having said that, we all know that people do respond
to a tax relief, probably very positively, but how we disentangle
all that and try to separate it out is very important.
Q144 David Simpson:
But it certainly could be part of the strings to the bow in relation
to another cocktail of measures.
Professor Lloyd:
Certainly, and, in economic terms, as long as the returns from
the fall in whatever tax revenues were coming in were outweighed.
Q145 David Simpson:
Very briefly, when we look again just at the whole enterprise
zones issue, broadly speaking what did work well within them and
what did not? In particular, could you mention Belfast or Londonderry?
In your opinion, what did work well and what did not?
Professor Lloyd:
The research evidence that was undertaken by the Department of
the Environment at the timethere were a series of annual
reports, and then there were a series of academic studies conducted
in different localities and so onto my mind remains ambiguous.
I am not absolutely convinced that they worked conclusively.
I think, in some instances, yes, the local economy benefitted
from the provision of some new buildings. I think, in other areas,
they worked possibly well by, as you mentioned, marketing and
identity-raising. Suddenly, the Clydebank Enterprise Zone became
a motif or whatever. But in terms of trying to disentangle the
dead-weightthe relocation from outside the zone and into
it to get the hold of the tax incentivesI think it is too
close to call. Certainly, it is highly questionable whether they
made a sustainable contribution. Again, some of them may have
generated some buildings that are still there. I noticed the
hotel in the Dundee enterprise zone is still standing, long after,
although it has changed hands, I believe, twice. I am not convinced
the policy was effective.
David Simpson: That is
interesting.
Oliver Colvile: We have
talked quite a bit about planning, taxation issues and a bit about
labour. If I were a developer or an investor and I wanted to
invest in Northern Ireland, there are certain things I would want
to consider: first of all, I would want to make sure that I've
got a highly skilled workforce who actually will work for me;
secondly, I would want to make sure that they are going to be
productive, and I would be interested to know what the productivity
levels are like in Northern Ireland; and thirdly, I would be quite
keen to know that a policy of employment deregulation was in place,
so that I would not be subject to constraint. I would have thought
those issues could be incorporated in the whole concept of an
enterprise zone. We have had a long debate during the course
of the last six months about Hong Kong, and how it is that they
have been able to cut
Chair: Well, you have
had that debate.
Q146 Oliver Colvile: They
have cut tax, and we have debated how all that worked. What is
the USP that would encourage someone to actually come and invest
into Northern Ireland, and what are the barriers that are actually
stopping that, apart from the planning system?
Professor Lloyd:
If I can give a personal example: in 2008 I was invited by Minister
Arlene Foster to become her independent ministerial adviser on
planning reform. I was then based in Liverpool, as it happened,
at the University of Liverpool. I liked the planning system so
much I moved to Northern Ireland in 2008. I say that jestingly;
there were, obviously, other reasons. Northern Ireland has got
so much going for it. It is a highly accessible regional economy.
It is a highly mobile regional economy, to be quite frank. Mobility
and accessibility is not a problem in Northern Irelandpeople
will drive vast distances every day, if need be. It is a region
of incredible industrial heritage and skills, and this is what
worries me about the contraction of the construction industry:
we are leeching; we are losing those skills. If you look at the
demography of that labour force, we are going to lose them forever,
because there isn't succession-planning coming through. That
frightens me.
Northern Ireland is a stunning place to locate in
terms of quality of life and in terms of accessibility. I frequently
fly back and forth from George Best Airport to John Lennon Airport.
I think it is 25 to 30 minutes on the plane. I had to go to
Glasgow the other evening to talk, and it took me 40 minutes on
the plane. I am far closer than many other places to London.
But I would go back to this point that we need a strategic understanding
of what the Northern Ireland economy has got, what is its potential
now, and I happen to believe it is at the high-value end, it is
in the sorts of investments we were just talking aboutrenewable
energy, tidal power and so on. There is a whole skill-set that
can be developed there, especially when you think about all the
educational institutions that are in place.
The lovely thing about Northern Ireland is it reminds
me very much of Scotland. Political scientists used to describe
Scotland as being a very small communitya policy village;
people knew one anotherand that is the same in Northern
Ireland. At 1.8 million people, it is probably smaller than some
of the London boroughs, and that gives us something to work with.
Q147 Lady Hermon:
Professor Lloyd, you have referred a number of times to the Planning
Bill. You are obviously very familiar with its passage as it
makes its way through the Northern Ireland Assembly. Could you
just give us your prediction: will it make it onto the statute
book before the Assembly is prorogued in March?
Professor Lloyd:
I could not possibly tell, because it is the largest legislative
proposal, I think, in Northern Ireland's history.
Q148 Lady Hermon:
If you were a gambling man?
Professor Lloyd:
I am Welsh; I was brought up not to gamble. Sorry, I am sitting
on the fence here.
Q149 Lady Hermon:
Would you be sorry if it did not make it?
Professor Lloyd:
I would, but I think, equally, I would not want it to be rushed.
I think there are issues that we need to tease out and test,
one of them being that we cannot simply assume that the culture
change will take place. We need to look at that very carefully.
We need to explore possible ways of contractualising relations
between communities, developers and planners. There are lots
of lovely things we can look at. We should not rush it. On the
other hand, there is an urgency about it as well. I am sitting
on the fenceI do beg your pardon.
Lady Hermon: No, that
is very wise advice.
Q150 Oliver Colvile:
You talked in your evidence about planning zones and how you saw
that operating, similar to the ones in the 1980s, which were not
particularly well defined, so how would you define those planning
zones? How would it be helpful?
Professor Lloyd:
The simplified planning zone?
Oliver Colvile: Yes.
Professor Lloyd:
Historically, these came out of the enterprise zone experiment.
When the enterprise zone experiment was first introduced, it
did come at a time when Government thinking and the initiatives
to deal mainly with inner-city problems had gone stalethere
were no two ways about thatand there was a lot of inertia
on the ground. The new Conservative Government in 1979 then brought
forward the 1980 legislation, Lord Heseltine being heavily involved,
with enterprise zones. As that grew in momentumI think
there were three tranches over time and the numbers increasedmore
and more local authorities were saying, "We would like to
be part of this". It got caught in the zeitgeist, effectively.
However, enterprise zones are competitive instruments. You cannot
have them everywhere, so the Government then introduced the idea
of just stripping out the simplified planning bit, so there was
no tax incentive, and allowing local authorities to allocate them.
That is what that idea came from.
Again, I am not absolutely sure that there was
an official evaluation of that experimentI would have to
go back and checkbut certainly anecdotal and academic evidence
showed that they, again, were very variable. Some worked; some
did not. Again, to my mind, I think it was because what we did
was we imposed rather than understood what was happening, and
came up with a strategic agenda for them.
Q151 Mr Benton:
That is a very appropriate point to come in. My original question
was going to be about planning and, in particular, reformsGovernment
reforms in Northern Irelandbut I think you have dealt with
that. I was about to pose another question. Your remarks just
now referred to evaluating the success of these. It is quite
clear that you are against enterprise zones per se, but I am not
quite sure about whether it is the old mode that you are against
or whether you would tolerate, if that is the right word, an enterprise
zone modified to some standard that you think appropriate. This
is what I want to come down to, because you referredas
did Lord Heseltineto the principle of state intervention.
Forget there were enterprise zones and everything else, what
we had was a deliberate initiative to apply Government intervention
in an attempt to enhance an area. I remember it all very distinctly.
If one agrees with the principle of Government interventionand
everybody certainly around this Committee wants to do the best
they can for Northern Irelandwe have, taking it from your
point of view now, a damper on enterprise zones. Any initiative
that you would consider appropriate has to be taken against a
background of internal reform in Northern Ireland in terms of
government, planning reforms, and so on. It is clear that the
Government are concernedrightly soand want to do
something, whether that means reducing corporation tax, the creation
of an enterprise zone or some other initiative. Seeing as you
are against enterprise zones, my simple question is: what would
you suggest to Government if you had the power? What would you
say? What would be the way to go about it?
Professor Lloyd:
The first thing is that the Westminster Government has the reserve
power on tax, so the decision rests here. In Northern Ireland,
the devolved powers allow for it to undertake planning, development,
regeneration and so on. I think what Northern Ireland needs is
the support and the ability to build its own internal and appropriate
local and regional government system. We need to be able to integrate
the regional with the local. We need to have conversations around
infrastructure, for example. In England, the National Infrastructure
Plan is a very bold statement of intent. That, again, I think,
should be replicated at the Northern Ireland level. There is
a green infrastructure initiative; I would like to see that writ
much larger. We need to be able to allow Northern Ireland to
create its own sense of purpose and design things that are appropriate
to its local circumstancesand highly differentiated local
circumstancesacross the piece. My only fear with an imposed
enterprise zone across the whole of the territory is that it is
too blunt, it is too brutal, it is too reductionist and it is
not sensitive to the needs of Northern Ireland and where Northern
Ireland wants to go. There is a job of work in there. Those
are not just words: there is a job of work in building up that.
Q152 David Simpson:
You said in your evidence earlier on, Professor, that, when Arlene
Foster was the Minister, you were taken on as a consultant or
-
Professor Lloyd:
Adviser.
David Simpson: Adviser.
Did they listen to you?
Professor Lloyd:
They did, surely. I was very impressed, actually, I have to say.
It is very rare that I get listened to. They were receptive,
absolutely.
David Simpson: It was
taken on board.
Professor Lloyd:
Totally.
Dr McDonnell: He is trying
to tell you, Chair, that the DUP does not listen to anybody.
Chair: I am not quite
sure if that was the point. Professor Lloyd, thank you very much
for coming today. You have put an alternative point of view forward,
which is very welcome, and there is much food for thought, so
thank you very much indeed.
Professor Lloyd:
Thank you very much indeed.
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