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Lord Bowness: My Lords, would the noble Lord give way? I do not want to take up the time of the House, but our position is quite clear. Of course we support the objective of regional prosperity, but we do not believe that the structures in this Bill are an appropriate way of achieving it. We believe its proposals to be centrally controlled, centrally focused and damaging to local government.

Lord Dormand of Easington: My Lords, when the noble Lord says "the methods" is he or his party in favour of a regional development agency? He has not clarified that point. Perhaps I could press him.

Lord Bowness: My Lords, my party is not in favour of the regional development agencies as set out in this Bill. No doubt we could bring forward all kinds of policies, were we sitting on that side of the House, to enhance regional development; but the issue is what is before the House today.

Lord Dormand of Easington: My Lords, I am grateful for that clarification. I have particular pleasure in welcoming it because the Northern Group of Labour MPs, of which I have been an active member since I entered another place, has advocated a northern regional development agency for a number of years. Here we are at long last with a document in front of us--an actual document, which is a Bill setting out the objectives and how to achieve them, which some of us in the north have been shouting about (I do mean shouting) for a considerable time.

However, we must realise that this is only a start. There are no RDAs and so there will be much to learn. The Minister of State recognised that in saying that development of the agencies will evolve--that is the word he used--and I certainly support that view. Of course there are some bodies from which inevitably we can and should learn lessons; indeed my noble friend on the Front Bench mentioned that in passing. There is, not least, the very successful Northern Development Company, which is unique to the country. It consists of representatives of employers, businessmen, trade unions and local government, and is a highly successful partnership. It has been very effective in the four or five years since it was established.

Lessons can and should be learned from the urban development corporations and the new town corporations. Perhaps I might be permitted to say that when I was in another place I had quite a finger in the pie in helping the development of a new town in my constituency and, more recently, I have been deputy chairman of an urban development corporation and remain there until next month. I am very sad that that is soon to come to an end. All of us who have been members of those bodies have learned from the very valuable experience which we have gained over a number of years.

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In this respect the Government proposals in giving the functions of English Partnerships and the Rural Development Commission to the RDAs is wise and sensible, I believe. There has long been the need to integrate urban and rural policies and this Bill provides for the first time the opportunity to achieve that objective. I am very interested to hear that those matters--the integration of urban and rural policies--have already been mentioned several times although we have only had four or five speakers so far.

It is important to realise that RDAs are not only about inward investment, crucial though that is. The northern region, if I can quote it again, has a success story to tell. Some of the nation's biggest and best companies have come to the region, although we must not let that success disguise the fact that hundreds of smaller firms have established themselves and brought thousands of jobs to the north. That must continue, and the RDAs are better placed to do it than were the previous bodies, however successful they have been. My point in mentioning the matter is that the improvement and regeneration of a region's indigenous industry and commerce are at least as important. Much can be done, and RDAs provide the machinery for it.

A crucial part of the internal drive within a region must come from its education and training provision. The whole range of education must make its contribution: further education; adult education; universities; and training and enterprise councils--although some of us feel that an examination of TECs is overdue. Co-ordination between all the branches of education is essential, and RDAs can be a catalyst for promoting it.

As has been mentioned, there will need to be clarification in a number of areas. I give two examples. The first is tourism. In some regions it can be crucial to their well-being. The regional tourist boards will remain but their role in relation to the RDA will have to be spelt out clearly, not least to avoid possible duplication and bureaucracy.

The second example is ad hoc proposals--it is my own phrase. I choose the warmly welcomed decision of the Government to undertake the rehabilitation of the former coalmining areas. I assume that where there are former coalmining areas in RDA areas, the RDAs will make some contribution in that vital work. However, as I have said previously in this House, I hope that the finance to be provided will be ring-fenced. There is obviously a danger that the resources, or part of them, will be subsumed in the larger budget of the RDA. In those circumstances, the finance may lose its effectiveness.

I have given two examples of matters which involve RDAs. But the co-ordination of such areas of activity is fundamental to the work and success of RDAs. That is one of the RDA's principles. It is virtually certain that there will be conflicts involving regional planning and economic development. We are all pleased to see the Government proving once again to be flexible in dealing with regional planning matters. I suggest to the Minister that the resolution of those conflicts is a matter of urgency if the RDAs are to begin effectively.

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Even more important may be the move towards a regional chamber which, as noble Lords know, is a consultative body for the agency. Such consultation will ensure that account is taken not only of different regions but of different local circumstances within a region; it will provide the distinctive nature of RDAs.

I hope that there will be no hesitation in pressing on from the assemblies to elected regional councils where they are shown to be wanted. I stress that because Members of the Opposition are opposed in principle to them. The Labour Government have to make it absolutely clear that that is their objective: that that will be done wherever there is a demand for it. The evidence is there for such a change in the north, the south west and the north west. There will be opposition from the Conservative Party, but I fail to see why it should disagree when the change is to be made gradually and only with the consent of the people in the region. It is a two-stage method.

The financing of the RDAs is of great importance. As time goes on, it may be necessary to change the system. I hope that the block financial allocations made to the Scottish and Welsh development agencies will apply to the English RDAs. There has been criticism for a long time, not least from the northern region, of the advantages that they have given to Scotland, Wales and Northern Ireland. I need hardly say--my noble friend touched on it--that clarification on the distribution of European funds will have to be undertaken as soon as possible.

Before I conclude, I have to make one critical point. The Government are aware of it; it has been made already by some of us in the northern region. I refer to the proposal to make one RDA for the north west which includes Merseyside. That means that Cumbria will not be part of the northern region. I and my northern Labour colleagues are at a loss to know why the Government take that view. While I hesitate to say that it is complete, there is overwhelming support that Cumbria should remain in the northern region. The regional view must surely be paramount in such a decision. I hope that the Government will think again about the proposal. Cumbria has been part of the English standard planning region known as the northern region for the past 25 years--all the time that I have been concerned with regional matters. The new north west region has almost 8 million people. In great contrast, the exclusion of Cumbria from the northern region results in a population figure of just over 2 million. That does not conform with Ministers' statements that the average size of a region should be about 5 million. That calls for an explanation from the Government. I look forward to hearing my noble friend's comments.

Although not of major importance, there was an interesting occurrence recently. The BBC decided to change its well-known regional programme called "Look North" to exclude Cumbria. There were massive protests. They were so strong that the BBC changed its mind about the proposal. That is strong evidence! The concept of a northern region without Cumbria has never

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crossed the mind of northerners, nor perhaps some southerners. The Government must produce some hard evidence for such a change.

I see two principles at the heart of the Bill: first, integration; and, equally important, decentralisation. I believe that the politics and economics of the modern world require both those principles if we are to improve society. I strongly support the Bill.

4.47 p.m.

Lord Wade of Chorlton: My Lords, first, I apologise to the House for being unable to stay until the Minister winds up the debate. I particularly apologise to the noble Lord, Lord Sefton, because I may not be able to listen to the whole of his speech. Tomorrow I lead a delegation of 16 companies to an exhibition in Budapest in Hungary. I almost said Cumbria. The noble Lord, Lord Dormand, reminded me of Cumbria; I shall return to that subject in a moment. I have to fly out this evening. I hope that the House will forgive me.

The Bill is in two parts. First, it seeks to establish a development agency in all the regions of Britain with the purpose of driving forward the economies, creating more economic opportunities and developing growth. Secondly, it seeks to give wide powers to the Secretary of State to mould those agencies as he thinks fit. I support the concept of establishing regional development agencies, and welcome an organisation in each region focused upon the economic needs of the region and the need for growth. Perhaps I may use this opportunity to suggest some issues of which the Secretary of State might take heed in order to help him mould those organisations so that they are most effective in creating their objectives.

My experience and knowledge are based on my activities in the north of England. I support some of the comments made by the noble Lord, Lord Dormand, on the importance of the north of England economy. I have always seen Cumbria as part of the north-west, and have no objections to the Government's proposals. Since I shall refer to my experience in the north-west, I ought to declare some interests. I am chairman of NIMTECH, an organisation focused on developing the economy through the use of technology; chairman of Campus Ventures, an incubation unit for high-tech companies based at Manchester University; and president of the Federation of Economic Development Authorities. FEDA has 100 members of authorities throughout the UK, and is on the whole in favour of the Bill. I am also president of the Cheshire Economic Partnership, to which I shall refer later.

I have always believed that the key issue in achieving all the environmental factors referred to and supplying the right facilities for everybody is economic growth. Jobs, the development of businesses and the creation of wealth are the key elements in achieving anything. This type of organisation brings focus, especially in a region such as the north-west of England--where, as in other regions, there are very varied bodies which sometimes do not work together; their approach to such issues is often disorganised and the timing is different.

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Therefore, I hope that this organisation will provide, as a top priority, a co-ordinated approach to the need for growth throughout the region. Co-ordination is needed in urban and rural policy; the areas have to be seen as one economic entity. The concept of a separate approach to rural areas which seeks to preserve the activities of rural communities is not the key. The key issue in rural communities is the establishment of their economic viability and economic variability, the ability to widen their opportunities and at the same time understand the equal needs of those who want to use rural areas and have the facilities and services that are available in urban areas. The key in creating understanding between rural and urban areas is rural development. It will be an important issue in the future, and I shall refer to it again.

Technology is another key matter which needs to be grasped by any regional development agency. There needs to be far more proactive agreement between the requirements of business and what is provided by universities and technology centres. The gap is still too wide. There is a fear on the part of the small businessman of the intellectual power of the universities, and a complete lack of understanding on the part of many academics of what the businessman needs in order to develop his business and the pressures that he is often under. The establishment of a regional body, particularly in relation to the north-west, provides the means for a better understanding between the needs of business and what universities can provide. We can establish in universities the incubation units that have been of such great benefit at Manchester University. From a very small beginning, businesses can be nurtured through the stages of crisis which they continually hit until they become major, secure organisations. That is a role that we can certainly play.

Later today, this House will debate the report of the EC Committee on Agenda 2000 and how it affects the environment and rural development. In future years we shall see a continuing decline in agriculture as an economic driving force in rural areas. It will remain important, but less so. We have to develop policies for the creation of alternative and viable business units within rural areas to employ those no longer involved in agriculture. During the course of our deliberations in Sub-Committee D, an interesting issue arose in relation to the situation in Germany, where there is a long tradition of part-time farmers having other paid jobs when they are not engaged in farming activities. As agencies develop over the coming years, and as we have closer contact with the policies of Europe, particularly in relation to theses changes, we shall see projects and proposals for programmes--rather like the Objective 1 and Objective 2 programmes made use of in urban areas--to assist the movement in rural areas from present types of economic activity to new and revised types of activity. I see the rural development agencies as the key in creating effective policies to make the best use of money and, most importantly, to create other economic opportunities in rural areas.

I wish to refer briefly to sub-regional groups. In Cheshire, we have established the Cheshire Economic Partnership. That group is in balance with what has happened in Lancashire, Manchester, Merseyside and

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Cumbria. I hope that during our debates on the Bill a better understanding will emerge as to how the Government see the sub-regional groups playing a part in the development of regional policy. They can, and need to, play an important part.

There has been comment on the planning powers of regional development agencies, and the fact that the Government have changed their mind on the degree of planning power that they are to be given. I was very attracted by the original proposals. I have never been happy with existing planning arrangements; they are definitely in favour of minorities and rarely to the benefit of the majority. I hope that the new arrangements will at least bring planning on a regional basis for the main projects for growth, jobs and opportunity and the creation of inward investment, which seem impossible when planning is reduced to a small entity where everybody is against any proposal. You cannot, in the future of a country, a society or community, give more and more to those who want it, unless growth is achieved and is accepted.

I hope that the RDA will become an enabling body, using other organisations for delivery. In that regard I do not understand the need for acquisitions. I do not see why the RDA has to own property or do things. It needs to make sure that other people are encouraged and enabled to do things. That is the best way to use its resources within its region, and to use those bodies which most effectively deliver what the RDA requires.

I have already referred to the use of EU funding. Clearly, that will be a key element. The EU funding that we have received in Greater Manchester and Merseyside has been of enormous benefit. However, I am aware, as are many people in the north-west--as no doubt are the Government--of the enormous difficulty in achieving a uniform approach to how that money should be spent, with the inevitable battles between all the factions that want to draw a portion of it. Again, I hope that the RDA can be much more effective in ensuring that funding is used for its prime purposes and directed far more efficiently than it has been in the past.

I referred to the need for incubation units, and I emphasise that need again. One of the great successes in the United States has been the ability to encourage the setting up of new companies and to treat failure, rather than with contempt, as a means of gaining experience.

If we are to continue to move our economies forward and give people the same level of growth into the next century as they have had in this one, we must continue to see the development of new businesses which will be highly important in creating the kind of products to enable us to compete in the world. One of the main requirements to make all this possible is to have the resources at the right stage to put into companies to make them move forward. I should like to see within a north-west RDA the encouragement of a financial fund to make moneys available on a venture capital basis to small companies. There are many very successful venture capital companies throughout Britain, but they have tended in recent years to look for the easy options, the very large investments, and possibly, like banks, to

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give their money to those who can manage without it. I look for a fund which can be more sympathetic and understanding to the needs of small, start-up businesses, particularly in the high-tech areas which will be so important. We need to encourage the development of new ideas and innovative enthusiasms and look not backward to how things were but forward to how wonderful things will be in the future. I see these agencies as bodies that can help us to do that.

5.1 p.m.

Lord Sefton of Garston: My Lords, I apologise to my noble friend the Minister for the fact that I was not present to hear her opening speech, having been unavoidably detained on personal matters.

I am not very interested in the organisation of RDAs; I am more interested in the net result of our efforts to deal with the problems not just of the regions but of this country. The noble Baroness, Lady Hamwee, and other Members of the House have moved me from my original decision to spend only three minutes speaking in this debate by reminding me of things that have happened in the past.

If I were a Frenchman, I would be able to use a French phrase, but I will say, "Never mind French phrases, I have heard it all before". Twenty years ago I made a speech in this Chamber about whether we would be successful in Europe. I said that, unless we did something about our own country and its economic affairs and began to use all the nation's resources, we would not do very well in Europe. I said that on that day the Financial Times carried a story that it was about to start printing in Frankfurt. No one thought at that stage that there was a threat to the Bank of England's position at the centre of European affairs. But where is it now? Is it not true that the centre of our financial affairs is in Frankfurt? Why is that? I have said before, and will continue to say until I am no longer in this Chamber, that if we look at the national picture we see the highly congested belt in the south east which appears to provide a dam to any developments.

I should like to go back to the time when we did have regional development areas and an organisation. That was referred to by the noble Baroness, Lady Hamwee, in the context of the leader of her party the noble Lord, Lord Rodgers. We had regional economic planning councils, which produced strategies. There is a difference between the regional economic planning councils and the kind of regional development agency proposed in the Bill. The least one can say is that the Bill does not provide a strengthening of the democratic element in our society. My own feelings must be expressed. I am extremely disappointed that the Bill does not go further in strengthening that democratic element. I know we have been promised that in the future things will get better and that there will be a new organisation of a more democratic nature. I am sorry, I have been too long in politics to take the promise of jam tomorrow; I want it now.

The difference between the RDAs proposed in the Bill and the old economic planning councils is that the economic planning councils were part of the Department

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of Economic Affairs, a department established by a government in the teeth of hostility from the Treasury, which wanted to abide by the old rules and which ultimately won the battle to abolish the DEA. That is the fundamental lesson to learn from what is happening to our regions. If one looks at the strategy of those economic planning councils, one sees in them an essence for the re-establishment of unity in our economic affairs. The Opposition Front Bench spokesman said that the Opposition was opposed to the idea of divisiveness on a regional basis. I agree with him; we should not divide the nation on a regional basis. But the nation will divide itself on a regional basis, whether we like it or not. One has only to look at how people are attracted to the south-east.

The North West Economic Planning Council drew up a strategy, which was notified to the DEA in the usual way. The government of the day took note of it, and that is all they did. They drew attention to the necessity of preserving the rural areas and concentrating industrial development in the Mersey belt. I am not talking here just of Liverpool; the Mersey belt started at the River Mersey by Liverpool and went through two towns and into Manchester. The strategy was that that was where development should take place and that proper consideration should be given to the preservation of the rural hinterland on both sides of the belt--a very valuable hinterland in the case of Cheshire.

There was a strategy on transport. The North West Economic Planning Council said that it was wrong, for two reasons, to concentrate our international airport facilities in the south-east. First, it debarred people in the north from taking part in the development of that international traffic and, secondly, it was loading the south-east with inescapable burdens. Nobody took any notice. Let us look at what has happened. For three years people have been battling to demonstrate that there should not be a fifth terminal at Heathrow. Yet there is a possibility at Stansted. We said that, if there were to be a third international airport, it should not be in the south-east but should be further north, perhaps near Birmingham. On balance, the planning council thought that the development should take place at Stansted. Are we happy with what is now going to happen in London? There is no doubt in my mind that, even with a Labour Government, we shall have that fifth terminal at Heathrow.

Let us take another strategy. This is an ironic example. We thought that there should be decentralisation of central government activity. We were not the only planning council or local authority to say that we needed decentralisation of government activity from the south-east and to spread it throughout the country where it could operate efficiently on the basis of modern technology. To give an example, we had a conference with the DEA. We decided to circularise all the businesses in the north-west. The DEA would produce a leaflet and we would produce a leaflet in Manchester. Our leaflet went out in three days; it took the DEA two weeks to publish the same leaflet.

The business of concentrating all the civil servants in the south-east is stupid. Has it changed? Let me give another example. One of the major problems facing

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Members of this House is getting here. It is a terrible journey sometimes. If we come by car, we must not come before nine o'clock.

And what has happened in this very spot? There used to be a car park at the end of Vauxhall Bridge; a nice little wide open space. Then a new phrase crept into our language: "business-led people operate themselves". It was decided to build a new building on the end of Vauxhall Bridge. I went to a seminar given by London Transport and my question to the planners was: "Do you know anything about this building they are going to erect on the car park at the end of Vauxhall Bridge?". They answered, "No. What is that?". I said, "I thought that if you were responsible for the transport undertakings in London, you would know what it is. It is going to affect you because you will have to move people in and out of the building".

The planners knew nothing about it. It is a place that could have been used for business other than generating jobs. Let me give a tip to the new Government. They should look at how MI6 came to be at Vauxhall Bridge Road. As I read it, that site was developed in a purely speculative fashion. The slump occurred and it could not be let. Then, miraculously, MI6--that secret organisation about which nobody is supposed to know--started to adorn the building with Christmas trees to let everybody know what it was.

That is not the important point. The important point is that, if the Government and the Audit Commission look at the situation carefully, they will find that it cost more to alter that building and make it fit for the government department than it cost to buy it. It would have been much better to have gone out of London, but the situation is controlled by the south-east mafia.

That brings me to my closing peroration (as it is called in the best circles); that is, what is the fundamental question at which we should be looking? We have heard a great deal about regional planning bodies and what they should and should not do. I am sure that we received an excellent explanation of the Bill--I shall read it with interest--with all the details given by the Minister. Again, I apologise for not being present to hear it. All that was discussed, but at the end of the day we must decide what we want to do with our regions. We must look at them as part and parcel of our economic, social and national life. It is important that we look at them in the context of the nation.

Let me give one further small example. When will we know the outcome of the development in London Docklands, Canary Wharf and the extension of the tube which robbed other parts of the underground of much needed improvement? When will we learn the real lesson of the cost of those developments? When will we learn the real lesson of Liverpool's Docklands? If we compare the two, they will stand as a condemnation of the way that the people responsible--I do not care whether they are Labour or Conservative and, in the real sense, they are probably civil servants--conducted the whole scheme.

The whole thing is ironic when we see the damage, the congestion and the bad standards of living that exist in London and the south-east and consider the effect in

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Europe. God knows what will happen because we are not going into Europe and the pressures will get worse. They will not be borne in the south-east; they will be borne in the north. It is the north that will suffer the most and we must ask ourselves what we should do.

A man named Heseltine came to Liverpool. He thought he would not have anything to do with economics. But there were riots in Liverpool--I often wonder why those riots are not still ongoing. We have pockets of unemployment where 50 per cent. of the people do not have jobs; they have nothing to do. The economic planning council decided that we should concentrate on Liverpool's unemployment position at the cost of elsewhere. That was agreed. The government said that they would send 3,500 civil servants to the north-west--3,000 to Liverpool Docklands and 500 to Blackpool. We all thought it was a wonderful idea.

We then removed the economic planning councils. I do not know how that came about. It was the end of a battle between the Treasury and the Department of Economic Affairs. The man who announced it was proud to call himself "Mr. Liverpool". If those 3,000 civil servants had been put inside Docklands before the riots, the riots would never have occurred. However, the riots did occur and Mr. Heseltine took the matter away and later boasted about the fact that it was he who established Liverpool Docklands, after Liverpool City Council had been fighting for the establishment of an organisation to look at that development. They knew what was coming in relation to unemployment because of the international trade moving away from Liverpool. It was resisted in the south, and it was ironic that the man who did it was the man who caused the riots to take place in Liverpool in the first place.

5.18 p.m.

The Earl of Arran: My Lords, while it is always a pleasure to listen to the eloquence of those from the north, some noble Lords may agree that they have had their say in this matter for the time being. I should like to bring a west-country business perspective to our debate on the Bill this afternoon and some Members may draw similar conclusions from the areas that they know best.

In the west country, South West Enterprise Limited, known as SWEL--a private sector, joint venture whose purpose is to capitalise economic development--agrees with many aspects of the Bill. SWEL combines the local interests of the Federation of Small Businesses, the Forum of Private Business, the Chambers of Commerce, the National Farmers' Union and the CBI. It has the single purpose of helping a business to help itself in turning around the economy of Devon and Cornwall. I must declare an interest in that I am a director of South West Enterprise Limited, and proud to be so.

Since 1992 the business community in Devon and Cornwall has energetically supported the creation of a development agency to lead and co-ordinate a turn-around in the economy of the west country. Understandably, in Devon and Cornwall, we would have preferred to have our own agency, but then probably so

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would every other part of England. If the Government, in creating nine RDAs in England, are saying that they are seeking nine bodies rather than 19 or 20 which will report and be accountable to the Government, that makes good management sense.

As with the other five counties, business in Devon and Cornwall will play its role in the development of the south-west region. Unfortunately, however, under the Government's present proposals, I consider it improbable that much of the business community will be able to play as strong a role as it should from the outset, when the RDAs are formed in April of next year, despite the RDAs being business led. I shall, if I may, explain why.

Business Links, of which I am sure your Lordships are well aware, is a national brand assuring the quality of business services which are delivered locally. It is managed nationally by the DTI and guided locally by business-led boards. Business Links, which was created by Michael Heseltine under the previous government, plays a vital and increasing role in the development of businesses, especially small and medium businesses, known as SMEs. Business Links forms the only body which currently has potentially almost daily contact with all the SMEs. It is my contention that, if the Government were to include Business Links, ab initio, within the RDAs, they would then meet the functional requirements and the geographic coverage needed for sustainable economic development. I am fairly surprised that not more prominence was given to Business Links during the passage of the Bill through another place.

First, I shall tackle the functional view. An examination of international best practice has shown that sustainable economic and community development requires the development of the indigenous business community alongside the other core functions of regional development. Regeneration and inward investment must be co-ordinated with the development of small and medium enterprises and their investment in the community. As Ministers will know, inward investment presents many media opportunities, from the first announcement, through the turf cutting and the foundation stone laying, to the opening ceremony with multinational business figures. It is both exciting and enticing.

However, the evidence is that more jobs, and more sustainable businesses, are created through the development of a region's indigenous businesses than through inward investment. For example, Cornwall, being peripheral to European markets, has not been successful in attracting much inward investment, and there the regeneration of the local economy is urgently required. However, recent employment figures have shown that, if the loss of employment due to the demise of tin mining and the demise of china clay is taken out of the data, there was a net gain in new jobs created in Cornwall last year. These new jobs are coming from small and medium enterprises in Cornwall--in industry, commerce and tourism. They are perhaps the new shoots of prosperity emerging amid the fallen boughs of Cornwall's industrial past.

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The "In Pursuit of Excellence" project, whose work has been endorsed by this Government and by the previous government, has drawn attention to the high quality of many local businesses and the great potential which exists in Cornwall. IPE, as it is known, is a very well supported partnership between the public and the private sectors and, crucially, it has successfully engaged the business community in the development of its own future. It is imperative that the development of these businesses, their growth and the investment in them, be closely associated with the RDA's regeneration and inward investment activities.

This is true, I suggest, not only of Cornwall but of all business communities, both rural and urban, in every English region. It is not just a matter of business; it is also a matter of social inclusion. Small businesses are an integral part of the local community. Community regeneration requires civic pride and pride requires self-sufficiency. Business development is easier in urban areas than in rural areas, and the south west is predominantly rural. Regeneration, inward investment and business development must be closely co-ordinated in rural areas if we are to overcome the decline of rural communities and protect the landscape which is the basis of our tourism and agriculture industries. As the Minister said, our countryside must be both living and working.

However, there is more to regional development than addressing the problems of economic blackspots, whether they are visible in Camborne, Plymouth or Bristol, or hidden in rural areas. In business it is often said that, "You are only as good as your last sale". The strong need to be supported as much as the weak strengthened, albeit in different ways. Under the current proposals, the RDAs, when they are launched in April next year, will be focused much more on overcoming economic weakness and much less on promoting economic strength. But improving competitiveness is as much about sustaining today's winners as training tomorrow's. After all, small and medium enterprises currently account for nearly 50 per cent. of employment outside the public sector and for around 38 per cent. of the United Kingdom's gross national product, and SMEs are expected to be the main source of future economic growth.

I now turn to the geographic view. The parts of a region outside its blackspot areas may see little value for them from an RDA. This is particularly so in the south-west region, which is the largest region in terms of land area and coastline. The distance from Land's End to the Gloucestershire border is the same as the distance from Gloucestershire to the Scottish border; and the distance from Bristol to London is the same as the distance from Plymouth to Bristol. The south west is the most diverse of the English regions and it has the greatest economic disparities of any English region. Although, on a range of 24 economic indicators, the south west ranks between third and fourth among the 12 UK regions, in Swindon the economy is overheating while in Cornwall it is emerging from a period of permafrost, economically speaking. Economically, it is also fairly chilly in Poole and in the Forest of Dean.

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Scenically and climatically, the south west is a wonderful place to visit and we have some superb businesses.

The functions currently to be included in the south west RDA are primarily focused on the relatively much weaker far south west of the region. As a result, Swindon in particular, but also parts of Gloucestershire, Wiltshire, Somerset and Dorset, seem to expect little benefit from the creation of an RDA. If Business Links became part of the RDAs from the outset, the RDAs would be truly regional.

The Government have admitted that the Bill allows for Business Links to be included in the RDAs at a later date, if it were appropriate, without recourse to primary legislation. The Government's present policy is that the RDAs will provide the strategic context for the services offered by Business Links at the local level, and that Business Links will wish to draw upon the priorities identified in these strategies as they develop their detailed services. In contrast, I believe that the RDAs will need to be operationally, as well as strategically, involved in running Business Links from the beginning.

The Government have an opportunity they should not miss. If Business Links were to be included as part of the RDAs from their formation, the RDAs would immediately be able to offer the portfolio of development services needed to overcome economic weakness and, at the same time, promote economic strength. They would be able to promote regional cohesion and economic convergence by virtue of their activities covering, in some form, all parts of their region, rural and urban. They would be able to engage the region's business community in its own development and investment in the region.

The national chairman of the Federation of Small Businesses has said,


    "that the value added to our members' businesses by Business Links will be enhanced by the inclusion of Business Links within the responsibilities of the RDAs. Logically, therefore, the sooner this occurs, the better".

Indeed, I should make it clear that the Federation of Small Businesses would wish to go further and include the training and enterprise councils ab initio as well.

The FSB's national chairman and I are calling for nothing which the Government have not already accepted, other than the timing for the inclusion of Business Links. The regional Business Links' budgets are relatively small. Incidentally, in the south-west region the total Business Links budget of £8.5 million was equivalent to around 10 per cent. of the funds spent on regeneration and the promotion of inward investment in 1996-97. Further, it may also be easier to include Business Links within the RDAs now rather than later. If Business Links were to be included after April 1999, the internal and external relationship of the established RDAs may need to be reconfigured to accommodate them and there would probably be cost penalties and delays to programmes during the period of assimilation.

18 May 1998 : Column 1320

The National Head of Policy of the Forum of Private Businesses said that,


    "leaving the RDAs to run with only a strategic remit for Business Links, risks confusion in the minds of many small businesses. Private business needs to be assured that the services of Business Links are properly co-ordinated with the other main instruments of economic development".

I have an open mind as to whether the Government support my proposal for all the English regions or adopt it for the south-west region alone, given its special characteristics. The thrust of my case is that my proposal should be adopted for all nine English regions and for the tenth in London in due course. But if the Government are resistant to that, I suggest that the south-west region be used as an ab initio pilot for this proposal.

I am sorry but I may be unable to be here for the Minister's summing up. As regards what the Minister says in response, I may seek leave to table an amendment to the Bill in Committee. In conclusion, the success of the RDAs and the degree to which they achieve the Government's purposes, will depend to a large extent on the degree to which they are able to engage their business communities in achieving the objectives of the RDAs from the very outset. I submit that this can be achieved only along the lines that I have suggested.

5.30 p.m.

Lord Beaumont of Whitley: My Lords, it gives me great pleasure to intervene in this debate after the speeches of the noble Earl, Lord Arran, and the noble Lord, Lord Sefton of Garston. I believe that the noble Earl pointed, absolutely rightly, to the fact that if the scheme is to succeed and if this Bill is to be a step along the right lines, it is probably seen best as an encourager of what can be done in the regions themselves. From what the noble Earl said about the south-west and from my knowledge of all the links of my party in that area, I know how much can and is being done there.

The noble Lord, Lord Sefton of Garston, put his finger on a large number of very valid points.


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