Regional Development Agencies

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Mrs. Ellman: Is the hon. Gentleman aware that the reason the CBI gave for its action was that it did not consider that the individuals who then ran the assembly properly listened to what it said? Since the CBI's decision, it has stated in writing that it supports regional devolution. Does the hon. Gentleman join me

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in hoping that there are ways in which it can be involved with the assembly? Does he agree that if we had directly elected assemblies, accountability would be clearer and the private sector's role could be incorporated more effectively?

Mr. Waterson: I agree to the extent that if the Government are determined to blunder on with the policy, it is important to find mechanisms that keep the business community involved, happy and enthusiastic. The example that I quoted shows that that has not worked so far.

I have made this point with several different emphases: there is an inherent potential tension between people with a business background and people with a local authority background. It is all too true that fewer and fewer people in local government have a business background.

On the make-up of RDAs, House of Commons Library research concludes that the Government have packed RDA boards with Labour supporters. Almost three quarters of members with a known political affiliation had links to either the Labour party or trade unions. There are almost five times as many Labour members of RDAs as Conservatives. That is wholly out of kilter with the relative strengths of local government—even more so since the Conservative party stormed ahead to make widespread gains in the local government elections. [Laughter.] Labour Members may laugh, but that is the truth. The Conservatives are well on their way to becoming the first party of local government again.

In his response, I hope that the Minister will try to allay fears about the political background of people on RDAs—those who are there because of a political connection—and the underlying tension between local authority-appointed people and those with a business background. There are real questions about the future relationship between the RDAs and the new regional structures that we will shortly hear about, and it is clear that bodies such as the CBI have major reservations. There will be massive implications, especially for businesses, because it is proposed that the planning system be up-ended so that local people have less of a say than they have at present.

We are clear in our policy. We oppose regional chambers and assemblies, which will impose an extra layer of government, expense and bureaucracy between the existing ones of local and central Government. We shall follow closely the White Paper and the Government's future proposals for carrying forward RDAs, and review their roles and functions in a root-and-branch way under the next Conservative Government.

Alan Johnson: Is the hon. Gentleman's party opposed to RDAs?

Mr. Waterson: The Minister has already said what was in our last manifesto, and it will be a long time before we prepare our next one. Our hostility to any form of regional structure, including RDAs, is well known. Beyond that, I can go no further today—the Minister would be surprised if I could.

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3.22 pm

Mrs. Ellman: I welcome this opportunity to debate the work of regional development agencies. We should recognise that they are new organisations—they have operated for less than three years—and that they work in innovative ways. The Government should be praised for setting them up. In doing so, they recognised the need to find new ways to tackle regional disparities and ensure that the needs of all regions are met in a way that satisfied the people in those regions—different answers for different places.

I am glad that the recommendations of the Millan commission were followed, and should register an interest in that I was a member of that commission. The points that it made have been well taken by the Government and I am pleased that they set up the RDAs. It is true that, because the RDAs are the creatures of the Government, set up by and accountable to the Government, they are not always seen to be accountable to the regions in which they work. However, because of Government guidance, the RDAs must consult with the regional assemblies and chambers—an important requirement. The North West Development Agency has consulted with the regional assembly and established an ongoing dialogue. It would be better if the regional assembly were directly elected—it would become more focused and accountable itself—but in the absence of that, the guidance given to the RDA to consult and liaise with the assembly is appropriate and welcome.

Before we examine the effectiveness of the RDAs, we should look at the context in which they operate. I praise the Government for giving RDAs more flexibility in funding and in their ability to spend in accordance with the priorities of their regions in the past three years. We now have a single pot. That is helpful, and I hope that the Minister can say that the Government will give RDAs more flexibility in future, so that they can work appropriately in their regions.

It is also important to recognise that although RDAs have welcome and necessary Government backing, it is not always clear what impact the needs of the regions, as expressed through the RDAs, have on other spending Departments. The Minister explained that RDAs' budgets were—I think that I recall—some £1.5 billion. That money is a great advance on what they had before, but if we compare it with what is spent in public service Departments, and indeed in the major research councils, it does not appear as large as it did initially. It is important to ensure that the requirements of the regions identified by the RDAs are met by the actions of central Government, be it through their spending Departments, their investment decisions, or what is happening in the important research councils.

The fact that the RDAs were asked to draw up regional economic strategies is of great importance. It was the first time that some regions had drawn up such strategies, but not the north-west. In the early 1990s, the leaders of major local authorities came together to form the North-West Regional Association. Following that, they worked with the private and voluntary sectors under the North-West Partnership to draw up a regional strategy. Much of the work taking place in

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the north-west is drawn from what was set up in the early 1990s.

The circumstances are different in other regions; for them, the requirement for a regional economic strategy came about with the advent of the RDAs. Whatever strategies are drawn up, the effectiveness of an RDA must be judged by its actions. Strategies matter, but actions are most important. We should make a distinction between how effective RDAs are as partners in activities that may have begun earlier—for example, developing the single regeneration budgets—and what innovative action they are taking on truly regional issues, such as the setting up of regional venture capital funds. That is extremely important, and can only be done effectively regionally, because the size of the fund is important in making it effective.

It is important that investment through venture capital is linked to the giving of proper advice. I am aware that venture capital funds have been set up quite effectively in smaller areas. I shall draw on my involvement in Lancashire in the early 1990s. Lancashire Enterprises set up the rosebud fund to invest in very small businesses and give support to people who had few resources. By working with investment institutions, that developed into the setting-up of a broader regional fund to invest in business. I foresee that those developing regional venture capital funds will draw on the experiences of Lancashire and elsewhere. West Yorkshire enterprise board was involved in similar activities.

I mention venture capital funds as an example of a new initiative that has an impact across a region. I recognise the contribution that the North West Development Agency has made to the north-west by showing that, although some initiatives are truly regional, part of a regional perspective is highlighting the contribution that different parts of the region can make to the whole.

I particularly applaud the activities of the North West Development Agency in setting up and running the regeneration company Liverpool Vision—which, again, was instigated by the Government—to develop Liverpool's city centre as an engine of growth for not only Liverpool, but the whole of Merseyside. The NWDA works well as a very active partner in Liverpool Vision, which will, however, be judged by its results. I hope that in the near future we will be able to see in practical terms some of the development and planning work that it has been doing.

I should like to focus on two areas of particular significance to the north-west in general and to Liverpool in particular in which the role of the North West Development Agency is extremely important. I disagree with the comments made by the hon. Member for Eastbourne, who felt that the work of RDAs was not exciting. The two areas to which I will refer are extremely important, if not exciting.

The north-west is a centre of excellence in manufacturing and as a skills base, but it is under threat because of problems in its industrial sector. I am referring to the future of Marconi, which is important

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for the north-west in general and vital to Liverpool and Merseyside in particular. Marconi is known as a company that has produced excellent products and developed excellent technology. The telecommunications sector in this country, and indeed internationally, is, however, facing considerable difficulties. As a result of those difficulties, the 2,200-strong work force who were at Marconi in Liverpool one year ago find that their number is about to be halved by the series of job reductions that have taken place over the past year. Indeed, it was about one year ago that the trade unions involved alerted Members of Parliament to those difficulties when they came to the House of Commons and expressed their concerns and their wish to work with the company, Members of Parliament and others to retain whatever was possible in Liverpool. Since that time, Marconi has taken its decisions as a company, and the work force in Liverpool are about to be halved in number.

The NWDA was brought into Liverpool and asked to consider what it would do to support telecommunications, and Marconi in particular. When the repercussion of a major international decision was the announcement of more redundancies in Liverpool, it discussed the matter with local universities to look at how many new products could be developed and how skills could be retained. At the moment, it is working with Marconi, in co-operation with the trade unions and indeed the Government, in considering the possibility of developing broadband as a new interactive network of vital importance to our economy, our businesses and our public services. It is examining how quicker and more effective development of broadband could go ahead, which would bring more manufacturing and employment opportunities to Marconi in Liverpool.

The Government have set their targets for broadband, stating that the United Kingdom should become

    ''the most extensive and competitive market for broadband in the G7 by 2005''.

The current position is a 1 per cent. take-up of broadband. We have a long way to go and I hope that the Government will act. At the moment, the NWDA is talking to Marconi and working with local industries and universities to see how take-up can be improved. It is able to do that because the Government have allocated it about £2.5 million of funds for that purpose. The agency is also working with the company and universities to consider how European Union funding can be accessed in order to further development.

I recognise the work of the NWDA; it is vital to manufacturing and telecommunications on Merseyside and in the north-west. Can the Minister offer more support to the development of broadband? In helping our economy to become more competitive, he should consider the regional dimension and the impact of manufacturing and telecommunications on the north-west, and on Liverpool in particular.

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The second area is very exciting, and has been identified in the NWDA strategy. It is building on the region's excellence in universities and companies to develop particularly our science base for the benefit of the economy and business, and to allow skills to remain in, and be attracted to, the region.

When Daresbury lost Diamond Synchrotron's massive investment to Oxfordshire in the south-east, the shock galvanised the north-west into action in which the NWDA was an active participant. The loss of that major scientific investment through a national decision happened at a time at which 20 times as much Government research and development money was being invested in the south-east as in the north-west. The plain fact is that the north-west needs £1 billion a year more investment in research and development to achieve parity with the south-east.

At any one of the higher education institutions in London—for example, at University College London or Imperial College—and at Oxford or Cambridge, investment in research and development is more than that at all higher education institutions in the north-west put together. If that is not an indication of a north-south divide, I do not know what is. Against that background, the loss of the Diamond Synchrotron investment came as a massive blow, but one that galvanised the north-west to become more aware of the disparity of investment in a vital area.

I have asked myself whether the situation would have got to the point at which calamity struck had we had an elected assembly. One consequence of what happened is that the north-west is now working together as a region to bring more investment into our science base and build on excellence. Universities, businesses, Members of Parliament, local authorities, and the voluntary and health sectors have been brought together largely through the work of the development agency.

Two key projects are in prospect to ensure that the north-west takes its proper national position as a centre of excellence for science, and to use our science base to develop jobs and a sound economy for the whole region. The first relates to developments in accelerator science. In the next few days, major decisions will be taken by one of the major research councils on the future of the proposed CASIM—the Centre for Accelerator Science, Imaging and Medicine—project. It is proposed to be located at the Daresbury laboratory, and to be linked with the excellent work being done at Liverpool university and elsewhere. That work consists of several parts, including development of a fourth-generation light source, Sirius, medical imaging and essential work on diagnosis and prevention of cancer.

The peer review of the CASIM project undertaken by 200 national and international scientists produced an excellent report, from which I shall quote one comment. An international scientist stated:

    ''This is an outstanding scientific proposal, of the type that arises every decade or so. It has significant potential to enhance Britain's international standing in this broad area of work.''

That is one example from the peer review of the project and I understand that a report will go to the

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appropriate research council on 28 March, which is very soon. The role of the North West Development Agency as a champion of the scheme and following it through is important.

The other major initiative in the north-west is development of the area and Liverpool university in particular as a centre of excellence for e-science. Liverpool university is already highly rated for its science and has received two major national awards during the past year as a centre of excellence. It is now developing a proposal to become a national e-science centre and is working with the North West Development Agency and the Government to achieve that. The ideas in the proposal are breathtaking. They include working with business to improve productivity and competitiveness, and a link between the World Health Organisation and the world-renowned Liverpool school of tropical medicine to develop a major initiative on disease control. The initiatives spring from local knowledge and enthusiasm, but they need a regional champion to bring them together and to ensure that they succeed. The North West Development Agency is playing a much needed role in that.

In assessing the work of the RDAs, three years is too short a period in which to judge whether they will be permanently successful, but it is sufficient to see the impact of their role. Every region will assess its own regional development agency. I applaud the support that the North West Development Agency has given to business with more investment. I applaud the way in which it has linked different parts of the region so that they develop their own excellence as part of a regional whole. I applaud the way in which it acts as a regional champion. I am disappointed that so little is known outside the confines of the RDA about its work. RDAs would be more effective if they were seen to belong to their regions and to be accountable to an elected body. More people would know what they are doing and could champion their work to make the public aware of what is happening, and they would have the necessary legitimacy when they go to the Government, the European Union and wherever else they are required to make representations in pursuance of excellence.

I pay tribute to Lord Thomas of Macclesfield for his work over three years in chairing the North West Development Agency. He has been an excellent exponent for regional development and showing how the public and private sectors can work together. I am sure that Brian Grey will be an admirable successor and I hope that he will follow in the footsteps of Lord Thomas.

The regional development agencies deserve support. They were set up by the Government, and I hope that the Minister will continue to support them and that not only his Department but other Departments link in with what the regional development agencies are saying, respond to their requests and work together to give all regions a fair deal.

3.45 pm

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