Mr. Andrew George (St. Ives): I am delighted to have secured this morning's debate on regional economic development, as it is important to my constituency and to many regions throughout the United Kingdom. It is disappointing that so few of them are represented here this morning. The debate provides a good opportunity to review the success of objective 1 in Cornwall--particularly from the perspective of my constituents in St. Ives, west Cornwall and the Isles of Scilly--and the progress being made by the regional development agency. It is approaching its second birthday, so this is an appropriate time to review progress.
Credit must be given to many people for the significant progress that is being made. The Government should be credited for the progress being made on objective 1, for having the right idea, which was to establish more regionally based and devolved decision making on economic development, and for the establishment of regional development agencies. However, as I shall explain later, perhaps that was not appropriately executed.
Many people were falling over themselves to claim credit for securing objective 1 status for Cornwall--and, I believe, for the other three objective 1 regions in the UK--including the regional development agency, although it came along rather late in the day. I recollect that the regional chamber claimed credit for having achieved objective 1 status for Cornwall, when in fact it simply promised at a rather late stage not to get in the way. The political process was important, but at the end of the day the credit should go to the people of Cornwall and the Isles of Scilly, because they put up with an economy in need of regeneration for many years. The popular campaign mounted by local people raised the temperature of and the pressure on the political process and was key to securing objective 1 status.
It is clear that there has been significant progress since objective 1 started formally in July last year. I strongly congratulate the local community, local partnerships and the local objective 1 office. Last week, in its first year review, it showed that 36 projects had been approved so far, 88 others were advancing through the process and £30 million of objective 1 funding had been allocated so far. There is, therefore, no question of the Cornish level failing to support local initiatives. It is working well, despite obstacles. The purpose of this debate is not for me to say that everything is tickety-boo, as that would be a waste of time, but to draw attention to some of the significant obstacles that affect local people and local businesses. Many of those obstacles are not new--and are not to be placed at the door of the present Government--but have been affecting access to European structural funds for many years.
The first difficulty relates to the complexity that European structural funds inevitably involve, in the case of objective 1 and objective 2 areas and before Cornwall secured objective 1 status it related to objective 5b. Basically, there are at least three Government programmes--the European regional development fund, European agricultural guidance on the guarantee funds and the European social fund--all with different rules, different approaches and different application forms.
In order to draw down the money, one has to secure matched public funds and the responsible Government Department has to identify a range of Government and public sector funds, all with different application forms, deadlines, criteria and rules. That makes the process extremely complex. In addition, the rule on how and when a successful applicant can draw down the money makes the process even more complex and difficult.
Mr. Paul Tyler (North Cornwall): I wonder whether my hon. Friend recalls that when we and our colleagues went to Dublin to try and gain from the Dublin Government's experience of administering objective 1 funding, it was apparent that they had found a way through the complexity to which he refers. It became equally apparent that the complexity has nothing to do with the rules set out by the European Commission in Brussels, but has been caused by member states' application of those rules.
Mr. George : My hon. Friend is absolutely right. It is interesting that both Ireland and France have established systems involving a single point of entry and a single application form. Their purpose in that is to take the weight of complexity and red tape and bureaucracy off the shoulders of local partnerships and businesses and to work out those issues out internally, rather than to weigh down projects with the burden of what is unquestionably a bureaucratic system, bound in red tape. That often applies to matched funding, which can have forests of strings attached. Many projects are weighed down by bureaucracy, red tape and guidance.
The second obstacle involves the appropriateness of Government intervention. In my constituency, that difficulty has been overcome by the development of integrated area plans based on a number of parishes working together on projects, with the support of the Government offices. In the Lizard and Helston area, for example, they had worked for months, if not years, on plans and had established a committee. The project was bringing the community together and those working on it were largely ahead of the game compared with other parts of Cornwall. They had worked well and achieved unanimity as to how they might progress their plans and programmes for the area to kick-start objective 1 and develop appropriate projects.
However, very late in the day, having discussed the issue with the RDA and the Government Office for the South West, the Government office insisted that they change their area, so the whole process had to begin again. That is not an edifying way to help a local community that has been enthused by the opportunities made available by the success of having achieved objective 1 status.
Thirdly, many businesses have expressed concern to me, and I am sure to other hon. Members, about the fact that their approaches to the objective 1 process are met in a complex and confused way, and they are not given the help that they need.
A significant project is the combined universities in Cornwall, on which there is unanimity that the project must be properly and effectively established within the seven-year period. I would welcome any encouragement that the Minister may wish to give local people that the project will go ahead and that the Government office will take a flexible view when considering the various strands and stages in its development.
Another important project in Cornwall, in which we will invest much effort, is building on Cornwall's distinctiveness. Cornwall does not have a lot going for it, but at least people know where it is. Some like it and some do not, but generally people have a positive view of Cornwall as a distinctive place with a distinct culture and a strong environment. Moreover, Cornwall produces a range of unique products and it wants to develop a unique and distinctive brand image. It does not want Government offices and regional development agencies preventing that.
Cornwall has a number of distinctive features and opportunities. Its maritime potential has been ignored for far too long. It has the busiest shipping lane in the world within three miles of the largest natural harbour in Europe. In the past, the sea has been something to be paddled in or gazed at, but it could be a great economic
Hayle harbour is another important project in Cornwall. It is important to develop communities where the economy has failed and Hayle harbour is one such example. The project, which has strong local support, involves a multi-million pound development of the harbour and it wants Government backing. I understand that the recent planning application that has been approved by the district is now with the Government. Hopefully, it will not be delayed unnecessarily. Although the use of taxpayer's money should be properly scrutinised, I hope that the plans that are being considered by the Government Office for the South West will move forward swiftly.
The local Federation of Small Businesses has expressed concern about objective 1. It has 2,500 members in Cornwall, but not one has yet succeeded in getting objective 1 money. It makes the rather amusing comment that it is concerned about the
Recently, the Western Morning News carried out a poll of business leaders in Cornwall and Devon, most of whom had a frequent or occasional contact with the RDA and, according to the newspaper, represented "the cream of business leaders" in Cornwall and Devon. In answer to the question:
Mr. George : I am interested by the hon. Lady's intervention because, as I am sure she will recollect, the RDA was set up by an Act of Parliament and its board members are appointed by the Government and not by business, so it is a Government-led quango. It is important to reflect on that when one examines the success of the RDA, because at present it is insufficiently business led. The hon. Lady might like to take up her other criticisms with the newspaper. I am simply reporting what it said.
Mr. Tyler : Perhaps I could add a point. In addition to being accountable only to central Government and not the local community, despite the presence of the chambers, are not all the RDAs experiencing the same crisis of confidence in their ability to represent not just business interests but regional interests? The Minister may be able to tell us whether the Government feel that RDAs are becoming more accountable throughout the country or whether the south-west is unique in that respect.
Mr. George : As far as I am aware, the Western Morning News has not disclosed the identities of the 45 businesses that took part. It consulted a wide range of businesses in the area, but whether they were representative is a matter to which the RDA will no doubt address itself. However, to question the validity of the poll is not an appropriate response for responsible politicians in Cornwall and Devon. The hon. Lady will understand that the survey findings ring true with the experiences of businesses in my constituency. One chief executive said:
"We continue to believe that tin mining is incompatible with progress to prosperity." But turning Cornwall into a replica of everywhere else by covering that site with conference centres, shops and offices closes off opportunities for the future. It is not the appropriate way to respond to a commercial organisation--a private sector body--that is trying to bring forward proposals despite the interference of what is effectively a public sector body.
There is also the issue of unfulfilled promises on a number of projects. The Hypatia Trust in Penzance is an internationally renowned charity. It intends to establish an important project geared at promoting the understanding of women. The project would be based in Penzance, and would offer the prospect of bringing hundreds of thousands of pounds in investment to the town centre. For many months, the trust was convinced of the RDA's intention to support that project, but shortly before Christmas it received a letter saying that the RDA had changed its mind. That has thrown the whole project into serious jeopardy.
The RDA should be playing a strategic role. The south-west continues to go through tremendous turmoil. It is appropriate that we should have an organisation dealing with strategic issues such as transport. To travel to my constituency--which is a five-and-a-half-hour rail journey from London--one has to get off the train at Tiverton or Exeter and take the bus, adding a further hour to the journey, as well as the inconvenience. There has not been a squeak from the RDA on issues such as transport, on which it is appropriate to have a body with a wide-ranging remit. The RDA should be taking the lead on issues such as transport, instead of interfering--as it has been doing--and telling Cornwall that it should not have its own brand image.
Cornwall has a strong brand image. Frankly, the south-west as a region exists only in the minds of people who work on the basis of bureaucratic convenience; it has no brand value whatever. The RDA should not be getting in the way of Cornwall's brand value; it should offer support and allow Cornwall to build on its strengths.
The RDA has the right idea in respect of devolving decision-making power and allowing the Government to let go and enable people in the regions to take decisions that affect them. The problem is that the idea has been wrongly executed. The Government preside over 30 or more regional quangos, and they all take their lead from Westminster or Whitehall--not from the business community. Their members are all Government appointees and are answerable to Ministers and not to local people.
We need a distinctive approach. The Government must let go a little, and give control freakery a holiday. They must marry decision making in Cornwall to the objective 1 region and let distinctiveness flourish. They
Mrs. Linda Gilroy (Plymouth, Sutton): I congratulate the hon. Member for St. Ives (Mr. George) on obtaining a debate on a key issue affecting all parts of the country, and I share his disappointment that other regions are not represented here today.
I want to reflect on the size of the challenges represented by the legacy of the previous Conservative Government to the present Government in 1997. It is ironic that Devon and Cornwall--the part of the country that all hon. Members present in the Chamber today represent--suffered most under the policies of the previous Conservative Government, yet only four of its 16 Members of Parliament are Government Members. Let us hope that the forthcoming general election will change that; it will be detrimental if it does not.
Cornwall qualified for objective 1 status, which demonstrates how seriously it suffered. My constituency contains the poorest ward in England. In common with all regions, our region's economic performance was below the European average. I look forward to hearing the Minister remind us of the importance of regional development agencies to the achievement of growth in all regions.
Mr. Tyler : The hon. Lady referred to the previous Conservative Government. Does she also recall that successive Conservative Ministers failed to recognise that Devon and Cornwall's circumstances were special and refused to apply for NUTS2 status, which would have brought a local dimension to solving economic problems? Only when that obstruction was overcome did Cornwall manage to gain objective 1 status, and parts of Devon objective 2 status.
Many of the groups mentioned by the hon. Member for St. Ives lobbied to ensure that the voice of Cornwall was strongly sounded. Without the energy of my hon. Friend the Member for Falmouth and Camborne and the assistance of my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson), the ear of the Prime Minister would not have been obtained. Without the Prime Minister's attention, I doubt whether the representations from Cornwall--however strongly made--would have been pressed at the right time and in the right place.
I am sure that the hon. Member for St. Ives would agree that the previous Government left a dire legacy: the role of the regional development agency has probably been more significant than he allowed. I was pleased to hear the hon. Gentleman speak a little more positively than usual about progress made under objective 1. He referred to the annual report. In a news statement, the leader of Cornwall county council, Pippa Englefield, said:
The hon. Gentleman referred to the difficulty and complexity of working with the many different funding streams, and that is echoed by my own experience. I, too, was fortunate enough to secure an Adjournment debate about this time last week when I drew the Minister's attention to the complexities that my constituents often bring to me, and looked to her for some observations on the role of the local strategic partnerships. I am not sure whether hon. Members know that Plymouth aims to be one of the first local strategic partnerships; the 2020 partnership is a well-established private, voluntary and public sector partnership organisation that is laying the final plans to be in that position, hopefully within the next few months.
The RDA in Plymouth is working closely with local partners and the community and has investment commitments of some £18 to £20 million, including the Tamar science park, the Plymouth international business park on the former Seaton barracks site and, at long last, the Royal William yard. The Phoenix trust project, which is headed by the Prince of Wales, is at planning application stage. I went to meet members of the local community in the area surrounding the Royal William yard, who are delighted to see the progress that is being made, for which they have waited for many a long year. That progress is in part a tribute to the way in which the RDA has taken up that difficult site in the middle of my constituency, which is of not just regional but national significance.
The hon. Gentleman mentioned the Western Morning News survey. I looked long and hard for a named business person in my constituency to whom I could speak about the issues that it raised. The survey seemed to reproduce the same anonymous voices that predicted cataclysmic consequences if we dared to introduce a minimum wage when that was being discussed before the last election, telling us that unemployment would escalate and get completely out of hand. The figures that I have quoted speak for themselves and I shall not repeat them. Time is short and I want to let the Minister reply.
I was particularly surprised by the criticism of the Language Energy Centre--criticism which is not borne out by my experience. It may surprise the hon. Gentleman to know that I was not among its original enthusiastic supporters as I had grave reservations on environmental grounds. However, when businesses approached me, I decided to find out what the regional development agency thought about the issue, and received a positive response. The successful outcome of that contact was announced by my right hon. Friend the Member for Airdrie and Shotts (Mrs. Liddell) shortly before she became Secretary of State for Scotland. I was accompanied by Sir Michael Lickiss and business partners throughout the region in lobbying for the BAE consortium backing for Airbus. That important investment affects people throughout the country, especially in the south-west, where the supply chain is extremely important to the defence sector in my constituency and in parts of Cornwall.
The sea surrounds the entire peninsula, from Poole to Penzance, from Avonmouth to St. Ives, and the hon. Member for St. Ives mentioned the maritime sector, on which the RDA has a task force. It is a good example of why a bigger, wider RDA has advantages and synergies for the region. I hope that the Minister will remind us how important regional growth and development is for the country's well- being.
In conclusion, I want to say something that may not suit the hon. Gentleman's agenda. The RDA has the unfortunate tendency of topslicing bits of Plymouth's budgets for the single regeneration budget and objective 2 funds for rural areas, but urban areas are the engine houses of the regional economy. I hope that the Minister will keep her eye on any such tendency in future. Plymouth needs a thriving rural area, but the rural areas
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes) : I congratulate the hon. Member for St. Ives (Mr. George) on securing the debate on an issue of great importance to the economic well-being of the country, not just to one region. I thank him for his courtesy in letting me know in advance the issues that he intended to raise, which helped me to improve my response to the debate.
This is the second occasion on which I have debated economic development issues in the south-west with the hon. Gentleman. I spent a considerable time discussing the subject in two recent Adjournment debates secured by my hon. Friends the Members for Plymouth, Sutton (Mrs. Gilroy) and for Falmouth and Camborne (Ms Atherton). I do not complain about that because the matter is important.
I welcome the hon. Gentleman's acknowledgement of the Government's initiatives in tackling economic development in the English regions and their part in the process of securing objective 1 status for the area, which my hon. Friend the Member for Plymouth, Sutton mentioned, and which was long overdue. It was an important milestone in the economic development of the south-west. Despite the content of much of his speech, the hon. Gentleman ended by supporting the principle of devolving decision making on economic matters to the English regions, and I welcome his support.
The crux of the hon. Gentleman's speech was the performance of the South West of England regional development agency. The report in last week's Western Morning News highlighted criticisms of that body by some members of the business community in the region, stating that most of the respondents believed that the agency had neglected Devon and Cornwall. I take that report seriously, as does the RDA. RDAs were set up to tackle economic imbalances between regions and, just as significantly, within regions. The particular diversity of the south-west gives rise to some significant sub-regional differences in GDP, as the hon. Gentleman will know. The RDA must take that into account in implementing its programmes.
I do not want to back away from the findings in the survey. They are disappointing, but the picture is not all gloom, as the Western Morning News has emphasised fairly. Apart from the fact that there were also positive comments from some of those business people in the article about the RDA, we need to bear it in mind that the point of RDAs was to take regional views into account. The RDA needs to take account of the survey and to act upon it. It has responded by saying that it will do just that.
On a more general point, RDAs represent a long-term investment in our regions. It is still less than two years since they came into existence. The picture will vary between regions, but, overall, RDAs have been an undoubted success in England. The 35,000 jobs that they have created or saved in their first year of operation is one indicator of that.
The RDAs are providing leadership and taking a proactive response to issues affecting regional economies. My right hon. Friend the Minister for Local Government and the Regions and I have detailed discussions every six weeks with the chairs of the RDAs about what is going on. All the chairs and board members, including those from the south-west, are committed to the task that they have in hand and want to bring a lot of energy and expertise to that task, as well as to achieve success--not alone, but with other people.
The point cannot be emphasised too strongly that the RDAs are evolving bodies. It has always been accepted that they will develop expertise and build on their achievements over time. We in Government are trying to play our part in assisting them to do that.
From 2002, the RDAs, including the South West of England RDA, will have significantly increased resources and greater freedom to direct those resources to meet regional priorities. The hon. Gentleman must understand that those additional resources and that increased flexibility is a measure of our increasing confidence in the RDAs and their potential role in delivering improved economic prosperity in the regions.
Mr. Andrew George : Interestingly, the Minister has pointed out that she meets the chairs of RDAs regularly, which contrasts with the idea that they might be business-led. They are clearly accountable to Government. I welcome the announcement of additional resources for RDAs, but does she accept that one of the problems--the theme of my opening remarks--is the level of control that the RDA has over local decision making, which in Cornwall is significant and can undermine initiative? After all, the RDA has taxpayers' money and can give advice. Other than its other strategic roles, which I outlined earlier, handing that down to local people is surely the most significant task. The RDA should be delivering that.
Ms Hughes : The hon. Gentleman misunderstands--I put it no more strongly than that--the point of the meetings with the RDA chairs. The fact that we meet them does not mean that they are not autonomous bodies that are business-led. The fact that we have a dialogue does not mean that there is Government control. If he were a fly on the wall at those meetings, he would see that clearly. The fact that we meet does not detract from the point that my hon. Friend the Member for Plymouth, Sutton rightly made, which is that these are business-led organisations. That was a deliberate decision. The people who are running the organisations come from the business community in their region. That point must not be lost.
On the hon. Gentleman's second point, the RDAs have money, resources and some powers, but they cannot achieve what they need to in their regions unless they gain legitimacy among other important stakeholders, including the community, local authority and business and voluntary sectors, and work by consent and with consensus. They are trying to do that. It is not a question of a powerful body coming in and laying down the law. If we are to create sustainable change in our regions, the RDAs understand that they
The South West of England RDA certainly needs to take on board what was said by the albeit small sample of business people in the south-west. It needs to listen to the survey's verdict and to strive even harder to ensure at the very least that what it does is well known and that it is accessible to the business community. However, without wishing in any way to distance myself from or to disparage the survey, I note that the business sample is small and we do not know who the people are.
The hon. Gentleman cited a number of contentions, which I do not doubt, about what business people have said, but he did not provide any evidence or raise the matters with me previously. He has not written to my Department about any of those concerns. If he can do so now, I invite him to provide me with the detail of some of those stories, and I shall be happy to investigate them. I am not trying to set the survey aside. I am simply saying that, whatever role newspapers want to play in raising issues in the way that they do, we as Members have a role to play. We must ensure that our claims are fair and that we are not allowing an organisation to paint a picture that may not be fair. We simply do not know the extent to which the views of the 45 companies represent those of the business community in Cornwall as a whole.
Mr. George : I called for the debate before I knew about any report in the Western Morning News. The Minister is wrong. She must accept that I wrote to her only recently with regard to the case of South Crofty to point out that the RDA's intervention was not helpful. Will the Minister reassure me on the matter?
Ms Hughes : I am happy to confirm that the hon. Gentleman wrote to me last week about South Crofty, but I was referring to the core of his speech, which was a claim that the business community in the south-west had lost confidence in the RDA. That claim arose partly as a result of a newspaper story and partly from one or two of his experiences with people who made claims or statements to him. First, we do not know how far the views of the 45 companies represent those of all the companies in the south-west. Secondly, if the hon. Gentleman has specific instances of business people's experiences that I can investigate, I will be happy to do so. So far, however, he has not given me the details.
Ms Hughes : I, and others, would be interested to know who replied to the survey, but my basic point relates to the number involved and how far their views are representative. I make no bones about the fact that
The hon. Member for St. Ives has written to me about his concerns that the RDA has not given a fair hearing to the Baseresult company's proposals to re-open tin mining at South Crofty. I will reply in detail to his letter, which I received at the end of last week. He may be aware that Baseresult has now accepted the RDA's offer to present its proposals to the Camborne, Poole and Redruth partnership board, which also includes the local authorities and the Prince's Foundation. The partnership is working to plan strategically the future regeneration of that area, which is the RDA's first priority area in Cornwall. So there is dialogue about that.
Mrs. Gilroy : Does the Minister agree that that is an important development? My hon. Friend the Member for Falmouth and Camborne made the point that it is the people of Cornwall who should have a say in what happens to the mine.
Ms Hughes : I agree with my hon. Friend, who has anticipated my next point. That is why that is an important development, and without making any comment on the merits of the proposals, it is right that the views of local people on the alternative possibilities for the area are fully canvassed and should form part of the final decision as to what happens at South Crofty.
The hon. Member for St. Ives also talked substantially about objective 1, which was long overdue in Cornwall. The fact that Cornwall now has objective 1 status is testimony to the commitment of many groups and individuals mentioned by both the hon. Gentleman and my hon. Friend the Member for Plymouth, Sutton. However, as my hon. Friend said, it is also testimony to the legacy that Cornwall has inherited and the serious economic and associated issues that need to be addressed.
The progress that has been made in committing money is more than reasonable in Cornwall. The Cornwall and Scilly programmes made a good start. A total of £29 million in grant has been approved since the programme started in August 2000, and programmes to a grant value of £36 million are under appraisal. Together, that represents more than 20 per cent. of the programme's total allocation in its seven-year programme. That is a fairly rapid implementation, compared with other areas of the country that have benefited from EU funding.
The hon. Member for St. Ives is right to say that we need to cut unnecessary bureaucracy to an absolute minimum. However, we need to strike a balance between probity and value for money, and ensuring that the money gets spent and drawn down.
The hon. Member for St. Ives cited some specific examples of problems. If he writes to me with the details, we will certainly investigate whether they raise more general issues about where we could improve the process. I agree with a point that the hon. Gentleman made later in his speech, which to some extent cut across some of his other contentions. The proof of the pudding is not in the spending of the money or how quickly we spend it, but in getting the spending of the money right and being committed to programmes that will create sustainable change. Given that we are not much more than six months into a seven-year programme, I am not concerned at the moment that the process is far too slow.