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Lord Graham of Edmonton: My Lords, he always does!

Lord Beaumont of Whitley: My Lords, maybe the noble Lord always does, but this was a very conspicuous occasion. I remember in the 1960s arguing in the Liberal Party of those days about the necessity for regional authorities in a climate which did not then encourage them very much, particularly with my then colleague, Lord Evans of Claughton, who was, I believe, a sparring partner of the noble Lord, Lord Sefton, for some considerable time.

In those days we believed, and I still believe, that we ought to have regional government which is known for its accountability, democracy and openness; that we have democratic regional assemblies with tax-raising powers. That is a very important aim. The Government pay considerable lip service to these aims. But I have a cynicism, drawn from long experience of governments of all kinds and through sitting in your Lordships' House with different people on the Government Front Bench, as to whether anything which should be democratic, open

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and accountable will come from the rather nice intentions which are suggested by the Government Front Bench. My noble friend Lady Hamwee is rather more trusting than I am in these matters. She probably has a nicer temperament than I have. She believes that these things may well happen. I hope that they will.

I am speaking on this Bill for two reasons. One is to see that the needs of rural areas are not swamped and, secondly, to make certain that the whole question of sustainable development is also firmly endorsed on the face of the Bill. The noble Baroness, Lady Hamwee, dealt principally with that last issue. She dealt with the rural areas in a way with which I am not entirely sympathetic. I do not believe in an urban, powerful and centralised capitalistic state that rural areas will be looked after, whatever the intention, unless it is spelt out on the face of legislation. Therefore, I would like to see that happen.

Rural areas have their own special needs. They have special requirements. The firms operating in them are often small; employment is fragile at times and seasonal. Transport is a very great problem for people living in rural areas, and the cost of housing must be considered. The social life of rural areas has become fairly low grade. We have often discussed these matters and we shall be discussing them again this evening when we come to the common agricultural policy. As this Bill goes through we must make certain that it does not just produce a regional machinery for attracting investment from outside, but regional machinery which taps the loyalty of local people and local enterprises and produces a step towards the kind of regional government that we on these Benches certainly wish to see in the near future.

5.36 p.m.

Lord Elliott of Morpeth: My Lords, I have taken part in many debates on the well-being of the north-east of England, principally in the other place. The north-east is now listed as one of the proposed nine areas to be included among those having a regional development agency. I wish to concentrate on the need or otherwise for this Bill in the north-east. Debates on the northern region were fairly regular occurrences in another place due to the enormous requirement for reconstruction because of the post-war decline of our basic industry--coal, steel and shipbuilding.

I recall the very last debate in the other place in which I took part. I stated that we had known in the post-war period 17½ years of Labour Government and precisely the same number of Conservative years.

I now come to a point which answers a request made by the noble Lord, Lord Dormand of Easington, who, unfortunately, is not in his place. I said in that speech that in my opinion both major parties in their period of office had done their utmost to support the redevelopment of regions like the north-east. That is so true. The methods may have varied, but our aim was the same. Both major parties wished to bring back economic well-being to a region which knew enormous difficulties just after the war.

For instance, I remember when Labour won in 1964. The Minister with responsibility for the regions was the enormously energetic late Lord George-Brown. He said

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in a speech at the beginning of his period of office that we had not thought "big enough", as he put it, with regard to development in the region. He contended that we were wrong to have established development districts to which we encouraged new industry. The entire region became a development district at that time. We went back later--but not much later--to local districts. The point I wish to make is that it was the desire of all concerned in both parties to get the right answers.

Regionally, we have had a series of bodies which have known government encouragement and support. The first I was associated with was the North East Development Association. That was a smaller body than those we have known since. In its membership it had leading industrialists, businessmen, trade unionists and regional MPs. Then we had, a little later, the North East Development Council which was more broadly based and involved local government. That body knew for a long period the distinguished chairmanship of the noble Lord, Lord Glenamara.

For the past 11 years we have had the Northern Development Company, which the noble Lord, Lord Dormand, mentioned. All three of these bodies have done a great deal to revitalise the region. And we are now, it seems, to have a regional development agency.

I should like to refer to Clause 4 of the Bill before us which states the purposes of the new agency: to further economic development and regeneration; to promote business efficiency and investment; to promote employment; and to promote skills. So what is new? We have had these aims for years. The bodies which we have had, with both parties' encouragement, have achieved an enormous amount. The region has been transformed. New industry has been established and places like Sunderland and Consett are thriving today.

In mentioning Consett I should like to refer to the Derwent Development Agency as being one body whose future I am somewhat concerned about under the proposal of this Bill. Consett steelworks were closed down in September 1980. At that time we had very high regional unemployment, much higher than the 7.4 per cent. that we have today. I was asked by a colleague in another place a simple question, "Can you see unemployment in the north-east of England?" I answered him by saying, "Not really, not in the centre of Newcastle. You just can't see it". But I visited Consett in the Christmas Recess following the closure of the steelworks. My goodness, unemployment was very visible then. The empty steelworks were still there and rusting. There were able-bodied people standing on street corners. But, thanks in no small measure to the Derwent Development Association, which I visited soon after my private visit, Consett is transformed. A year later I visited the Consett number one development area and saw there, in very new factories, ex-steelworkers and ex-miners practising new skills--a very good illustration of the adaptability of our northern workforce.

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Today Consett has unemployed people numbering 1,028. In other words, it has almost full employment. I mention this on the debate on this Bill because the Derwent Development Agency did such a good job. But what will happen to it?

On regeneration, we have one of the best road networks in this country, again thanks to the efforts of both major parties in the period of their office. Because of the Tyne and Wear Development Corporation, 30 miles of derelict land on the banks of the Tyne and Wear have been renewed and revitalised and are a much more pleasant sight than they used to be. So what is now to happen with regard to the Tyne and Wear Development Agency? Actually, it closed down at the end of March.

But my main question is this. Do we need this new agency? It has been suggested that there is enormous support for it in the north-east of England. Certainly there is some. There is general support for a type of new agency. There has been considerable concern expressed as well in the region. The Local Government Association fears that the new body,

    "an appointed quango, will take powers away from democratically elected local authorities".

The regional newspaper The Journal, in a leader, feared the creation of a Whitehall controlled quango which may be responsible to a locally elected and representative body at some vague time in the future.

The chief executive of Newcastle City Council has expressed concern on accountability, as has the North Durham Labour Party. The CBI fears that in some places the Bill appears to preclude development which may be desirable. The city council of Sunderland has said:

    "The City Council of Sunderland would like to point out, that when in opposition, the Labour Party attacked the democratic deficit proposed by the creation of quangos at regional and local levels, which were not accountable to local democratically elected local authorities".

The Institute of Directors was very much to the point, saying that the new body would be another layer which risks bringing more confusion, more bureaucracy and more expense. So I can assure your Lordships that there is opposition to this new body in its present proposed form in the north-east of England.

There is, of course, for the north-east a heavy potential competitiveness just over the border because of the proposed new Scottish parliament. In another speech in another place in a debate on devolution, with which I still disagree, I expressed my views on the unfair advantage that a Scottish parliament with civil servants and lobby correspondents would have in attracting new industry. That concern is still there, but the north-east has known enormous success in attracting new industry.

Despite our disadvantages, geographical and otherwise, it has known success in recent years which other development areas might well have as an aim. I should like to pay particular tribute, as did the noble Lord, Lord Dormand of Easington, to the Northern Development Company which according to a recent

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survey has succeeded in the 11 years of its existence in creating 520 investment projects, 75,000 new jobs and £9 billion of capital investment in the region.

Finally, my suggestion is simply this. The proposed regional agencies can be justified only if they can add to existing arrangements for regional attractiveness and management. Much depends on the relationship which they establish with other bodies and local government and the speed with which they become democratically accountable.

5.48 p.m.

Lord Grantchester: My Lords, I start by declaring an interest in that I put my name forward to serve on the board of the north-west region.

This Bill plans to create nine new development agencies in the English regions. They will be business-led but will include all regional interests to integrate social and physical regeneration and economic development. The development agencies will form a vital part of the process of decentralisation--moving the planning process nearer to the people--and co-ordination of government programmes in transport, tourism, regeneration and social inclusion.

The regional development agencies will have five core areas of responsibility: economic development and regeneration; competitiveness, business support and investment; skills; employment; and sustainable development. Sustainability is a little like "motherhood and apple pie". We all sign up to it but it is a complete turn off for the private sector. There needs perhaps to be a clearer definition, by which we mean reconciling social, economic and environmental factors. The RDAs will need an achievable strategy and framework, building on existing regional competitiveness, thus bringing greater coherence to the work of regional bodies. There is no purpose in any large-scale re-engineering, nor in reinventing the wheel. The RDAs have to build on what is already there, thus providing continuity.

Each RDA will have as a core function the social, physical and economic regeneration of its area to gain maximum benefits and to spread the benefits of economic development and investment. They will take on the regional regeneration work of English Partnerships and the Rural Development Commission, which will bring about their budgets, including the Single Regeneration Budget Challenge Fund, and take a leading role in securing European Union structural funds.

Regional development agencies must address at an early stage the economic development and regeneration of rural areas. That is especially important, as Agenda 2000 and the reform of the common agricultural policy will challenge agriculture to respond to competitive pressures and to the transfer of resources from support to investment in rural enterprises.

Tensions between rural and urban areas must be addressed early, allaying the distrust about the intentions of the RDAs, with specific structures to reflect rural needs and to halt economic decline.

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Instrumental to regional regeneration will be improvements to the skills base linked to the community, not just to specific companies. There also needs to be a skills audit, assessing the contribution of the training and enterprise councils in achieving regional objectives. The TECs and Business Links were not included as part of the RDAs' functions, but perhaps in Committee we can examine whether TECs can be brought into the process to determine the skills requirements of each region and the best ways of providing those skills. Priorities include dealing with skills shortages.

Each RDA will play a major role in facilitating investment, involving projects as part of the public-private partnerships and bridging the gap between cost and value. They will take a leadership role in inward investments of strategic significance, in the marketing of a region as a business location in conjunction with the Invest in Britain Bureau and other regional partners, and in promoting technology, including maximising the benefits of the work of educational institutions.

Each RDA must face up to the challenge of strategic long-term regeneration through funding plans of five to 10-years' duration to replace the short-term focus of annual budget funding. However, this must be coupled to short-term milestones where the emphasis is on outcomes, not on outputs.

It is entirely sensible to co-ordinate regional economic and regeneration activity in association with established regional structures, local partners and government offices. However, there is anxiety within the rural sector that RDAs will become urban-oriented and discriminate against rural communities. The fact that MAFF has different boundaries from those of the government offices necessarily means that communication between them will not be as effective, efficient or influential as it could be and that that will result in a less powerful rural voice and a smaller share of resources. Perhaps in Committee we can examine whether it is sufficient to have one rural representative on a board of 12 and whether there should be a minimum of two.

Furthermore, financial resources may move from MAFF to the RDAs if, under CAP reforms, subsidy expenditure decreases in favour of enhancing environmental schemes. Will the budget of £200 million be enough to achieve all that is envisaged when each region of MAFF runs on a budget of almost half that figure? What is the extent or availability of any new income? To what extent will funding be affected by changes in EU structural funds under Agenda 2000 proposals? At present, aid is available to rural areas under Objectives 5a and 5b, with urban areas coming under Objective 2. Under the Agenda 2000 proposals, a new single measure (a new Objective 2) will encompass both urban and rural aid. Each RDA must ensure that rural issues will have sufficient prominence and that the integration of town and country is embraced through an equitable balance of funding.

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It is also sound that each RDA is promoted as an independent organisation setting regional priorities. However, we must examine the control mechanisms in detail and whether accountability is adequate. The RDAs must consult widely and must seek to work effectively with regional chambers.

I look forward to the opportunities presented by this Bill. The establishment of regional development agencies creates a unique opportunity for a new, sustainable future for the regions through integrating development. Policies on transport, tourism, education, employment, housing and community development can now be brought together into a coherent framework for the next millennium. I commend the Bill to the House.

5.55 p.m.

Baroness Cumberlege: My Lords, like many of your Lordships, my roots have been in local and regional government. At one time, I served concurrently on a county council, a district council and a parish council. I was a glutton for local government. My family said that I was an addict. I simply loved it. Then I got distracted into the NHS.

When I was invited to join the last government, I was appointed first as Minister responsible for the task force in Plymouth and later as the sponsor Minister for Plymouth, with a much wider remit. It felt like going home. I really enjoyed working closely with the city council, the development agencies, the private sector and, above all, with the local communities.

Many of your Lordships will know the city of Plymouth even better than I do, and especially the part that it played in the Second World War. It is a remarkable city. Visiting the war memorial, I read name after name of the men and women who gave their lives for me and my generation, and I found it deeply humbling. The names covered not only those who had served in the Armed Forces, but civilians also. I was told that the city had been so heavily bombed and that the bombing had generated so much heat that gold and silver melted in the jewellers' shops and molten metal ran out from under their doors into the city's streets. The people of Plymouth showed their courage and their defiance, and they danced night after night on Plymouth Hoe.

With its naval and army bases, the city's destiny has always been closely linked with defence. Successive governments have been by far the largest employers, so although we must all rejoice in the peace dividend, it has been anything other than a dividend from the point of view of the city's employment prospects. The task force was set up to address some of those problems, to help to regenerate the city, to improve skills and to instill confidence in the most deprived wards in the city.

I mention that in the context of this Bill because it was the first time that I had witnessed, at first hand, effective central government investment producing results to a very tight timescale. The task force had a life of only five years, with a clear exit strategy, so nobody could become dependent on it. It had £1 million to spend every year, over five years. Its activities were

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targeted on the most deprived wards. Its accountability was to me, and since I was a very junior Minister, I was accountable to a Minister of State at the DoE.

The task force had a very clear action plan, agreed by Ministers, and closely monitored. It had a small staff--of fewer than half a dozen at its peak. It had no baggage in terms of bureaucracy--no committees, no sub-committees and no working groups. It had no in-built delays to satisfy a complex bureaucratic structure. So, it was flexible and accountable but, above all, it was fleet of foot. It achieved some remarkable things in terms of job creation, reductions in the crime level, and enhancing self-esteem in individuals and confidence in previously run-down and miserable estates. It was a lesson to me--because I had always worked through a labyrinth of committees in both local government and the health service.

Knowing now a little about regeneration and the challenges of inward investment, I have serious misgivings about this Bill. Like my noble friends Lord Bowness and Lord Elliott of Morpeth, I worry about introducing another layer of bureaucracy into what must be an entrepreneurial area which, by its very nature, requires the freedom to act quickly and decisively and to be fleet of foot.

However, I am a realist and, despite my misgivings and those of other organisations as well as many of your Lordships, I have no doubt that the Bill will be passed--and by a large majority in another place. As a revising Chamber, we have a responsibility to try to make it as workable as possible. I therefore ask the Government that, when setting up RDAs, they promote the concept and philosophy of a holding company. Like a holding company, RDAs should ensure that they get a return on the public investment made, but that does not mean they cannot have a light touch, freeing-up and delegating to their subsidiaries. If businesses are to benefit from European money or inward investment they have to be able to reach decisions quickly and have enough authority to act. Potential investors are not prepared to hang around so that an RDA, and in future possibly a regional assembly, can comply with a self-indulgent and lengthy bureaucratic system.

The second point I draw out from my experience with the task force is that economic regeneration does not depend solely on financial investment, or even investment in education, retraining and employment skills, but it does require "social" investment. A community that takes a pride in itself is much more likely to produce entrepreneurs and high quality employees. I hope the RDAs will understand and promote some of these softer, quality of life issues which have a direct bearing on regional prosperity. As my noble friend Lord Arran has said, community regeneration requires civic pride, and prosperity is not just a matter of business--it is also a matter of social inclusion. My noble friend also drew attention to the need for RDAs to be involved not in the detail of running businesses but in co-ordinating the development of new businesses, especially small or medium-sized ones. I agree with him on this. At the invitation of South West Enterprise Limited he and I led a trade mission from Devon and Cornwall to the southern states of the

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USA. Our purpose was to promote west country exports, but we also took the opportunity to study the inward investment and regeneration initiatives taken by the two highly successful southern states that we visited. At the time I was the sponsor Minister for Plymouth and it seemed appropriate to visit Charleston where the naval base was contracting and faced the same issues as Plymouth.

Two aspects of that visit left a lasting impression on me: first, the enormous size of the mosquitoes; and, secondly, the tightly focused programmes to develop indigenous businesses to regenerate the local economy. In South Carolina not only was it patently obvious that business development was closely co-ordinated with regeneration and inward investment, but that the development of local businesses was seen as the key to success. The point was reinforced when we visited the state of Georgia and met senior politicians, businessmen and women and those responsible for economic development. The state of Georgia is similar to the south-west region of England, in that its economy is very strong in the north, especially in Atlanta. In the south it is rural and faces the same challenges of structural adjustment as in our south west. The big difference is their success in economic development. We wanted to find out why.

First, there was no doubt or ambivalence that economic development was top of the state's agenda--way above any other programme. Despite the huge investment and energy put into hosting the Olympic Games, which sadly we missed--they had finished a few months before we arrived--the state was not distracted from its mission. As in South Carolina, its mission was to develop home-grown businesses and to co-ordinate their development with inward investment and regeneration at state and county levels. In our travels throughout Georgia we identified one other strong theme, and one that should be of great interest to the Minister and her colleagues in government: the concept of total community development. This phrase haunted us wherever we went. These three words were like a creed and encapsulated an inclusive approach to the creation of competitive businesses, competitive people and competitive communities. It was the clear basis for achieving sustainable development both locally and regionally. As the noble Lord, Lord Dormond of Easington, has said, businesses, especially small ones, are an integral part of every local community. If the RDAs in England are to be able to improve the competitiveness of their regions they must encompass and nurture the development of these small enterprises, not just within cities but also in rural areas. They must have power to co-ordinate business development with regeneration and inward investment, and that cannot be achieved through a purely strategic role.

Small businesses cannot afford the luxury of long-term strategies. Their horizons are much shorter than those of development agencies or larger businesses. If RDAs are to be responsive in co-ordinating activities, they will need some degree of operational oversight, but they will also need fast communications and detailed intelligence as to what is happening locally.

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As my noble friend Lord Arran has said, Business Links is the Government's service that supports the development of commercial enterprise on the ground. It has almost daily contact with potentially the vast majority of businesses. I agree with him that within this Bill there is an opportunity to strengthen its activities and to make them more effective by co-ordinating them regionally through RDAs.

The chief executive of the Cornwall Chamber of Commerce and Industry has said:

    "Bearing in mind our County's economic performance and its urgent need to improve this situation, it is vital that the business development functions of what is, after all, the Government's chosen delivery arm, should be brought within the RDA's control at the earliest possible time, that is to say from the outset".

The Royal Institution of Chartered Surveyors' national policy officer has said:

    "The RDAs should take the lead in co-ordinating the integration of bidding processes, timescales and decision making, and in brokering contracts with mainstream government budgets to prioritise areas of local need. We therefore support the proposals that Business Links should become part of the RDAs from the Agencies' formation in April 1999 rather than later, as the Government have indicated should happen. We would also see the wisdom, if this proposal was not accepted on a national basis, for a pilot to be considered, possibly in the South West region."

Learning from my experiences as the sponsor Minister for Plymouth and my appreciation of the relationship between Plymouth and the rest of the south-west region, including working very closely with the government office for the south west, I agree with both of these knowledgeable men.

It is suggested by some organisations that the training and enterprise councils should also be included from the outset. I believe that there is much merit in that. I am not sure whether I heard the Minister say that Business Links would be co-ordinated in some way and monitored by RDAs. I see the Minister nodding. I hope that that is the case. Although I know that Business Links can vary enormously in scope and delivery, it has huge strengths.

Finally, when RDAs are formed they will be expected to draw upon international best practice. I suggest that if they are to be successful their very formation will need to take account of the practice and experience of other countries, perhaps particularly the USA. I very much look forward to the Committee stage of the Bill when, with other noble Lords, I shall have the opportunity to explore some of the issues that have been raised this afternoon.

6.10 p.m.

Baroness Young of Old Scone: My Lords, these are exciting times in which we live. We shall perhaps look back at the next few months as a period in which there has been a number of bold decentralising measures reshaping government in this country. More and more processes and more and more funding streams are settling at regional level. The noble Lord, Lord Grantchester, talked about the new Objective 2 but there are many examples of both policies and funding streams.

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Regional development agencies and the associated regional chambers are part of that process and they offer major opportunities to promote prosperity in the regions. But it must be sustainable prosperity achieved through sustainable development which takes account not only of economic objectives but of environmental and social objectives too.

I welcome very much the fact that the Minister made special mention of sustainable development in her introduction because it is no secret that there has been a lot of arm-wrestling in another place over the exact terms of the sustainable development purposes of the regional development agencies in the Bill. The White Paper, Building Partnerships for Prosperity, very much stressed that RDAs should have sustainable development at the heart of their programmes. However, I should be unwise to say anything other than that the Bill itself is still rather vague on that issue.

I do not wish to argue here today about the exact terms of the sustainable development purposes. It is rather like arguing about how many angels can dance on the head of a pin. However, the fact that many people have been arguing about it at length is because it is an important issue for RDAs.

Perhaps I may digress. Over the past three or four years, on numerous occasions we have seen that kind of skirmishing over the terms of a sustainable development duty for various statutory bodies. We have seen it in the Environment Act with the setting up of the Environment Agency, we saw it in a minor way during the progress of the lottery Bill and we have seen it again as regards the Government of Wales Bill. Therefore, there is a lesson that we need a standard definition of the sustainable development role of public bodies which have an impact on the environment and on sustainability so that we can simply drop that into successive pieces of legislation and cease to spend large amounts of time on rearguing the case on every Bill.

The Minister also mentioned the importance of the right kind of members of RDAs and gave assurances about specific rural interests. Although RDAs are clearly very important to sustainable development, no environmental expertise has been specified. I should welcome the Minister's assurances on how she can make sure that RDAs have access to sufficient environment expertise to ensure that the environmental objectives of the sustainable development purpose can be fulfilled.

I welcome very much the provision in the Bill on government guidance to the agencies and a commitment from the Government at previous stages of the Bill to giving guidance on how RDAs will interpret and implement the sustainable development purpose in practice. The guidance must have a number of parameters to it in sustainability terms. It must ensure that RDAs take account of national environmental and sustainable development priorities, including whatever emerges from the national sustainable development strategy and the requirements of the current UK biodiversity action plan.

The guidance should ensure that the RDAs adopt environmental appraisals of strategies, policies and programmes. I do not believe that it is too much to ask

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for a simple requirement that RDAs should have a basic tenet of not funding activities which damage major environmental assets, including important wildlife habitats.

The Government's intention to decentralise decision-making is very welcome, but it means that we are seeing a plethora of different bodies and strategies at regional level with the potential for strategies not quite to match with each other or, indeed, to come into conflict. Two issues need to be brought forward in that regard. First, we need to see overarching sustainable development strategies for the regions, perhaps prepared by regional chambers in association with RDAs and government offices for the regions and other regional stakeholders, not least local authorities. Such an overarching strategy is not unique. It has already been presaged in the White Paper on London. RDAs could then prepare their regional economic strategies within the parameters of the sustainability strategy. I believe that a mention on the face of the Bill of the relationship of sustainable development strategies and regional economic strategies would be welcome.

Secondly, regional economic strategies must be set firmly within the context of general planning guidance. We have heard of the disquiet that there was about the planning role of the RDAs. The role of regional planning guidance will be very important. Indeed, the Minister has stated already that regional economic strategies and planning guidance must be compatible and consistent. Perhaps I may press the Minister on how the Government will issue strong guidance to ensure that regional economic strategies are not only consistent with but also help to deliver regional planning guidance. The whole process of preparation of regional planning guidance also needs to be strengthened and regional planning conferences adequately resourced to play a strong part in that. I welcome parallel proposals on regional planning which are currently out for consultation.

There is one further point which needs to be made in the light of some of the arm-wrestling which has taken place in relation to the sustainable development duty of the RDAs. The discussions sometimes seemed to imply that economic development is an alternative to the environment; that you can have one but not both. I believe firmly that RDAs must pursue both for three reasons.

First, natural environmental assets are often the greatest assets possessed by remoter regions and, in particular, remoter rural regions. Sustainable exploitation of those assets and sustainable development of those assets are often the only way in which to create viable, sustainable jobs in areas where it is incredibly difficult otherwise to create jobs. The noble Lord, Lord Wade of Chorlton, talked about the decline in agriculture employment that we shall see. We must find innovative ways of creating alternative employment in rural areas. The environment is a great job generator. Conservation alone accounts for 10,000 jobs in this country and for every direct conservation management job there are another five in infrastructure, green tourism and the industries which support such activities.

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Secondly, environment industries are a growing part of the economic sector. We have done insufficient in this country to promote the growth of environment industries. I hope that RDAs will play a strong role in ensuring that we are world leaders, through our regions, in the promotion of environmental technologies.

Thirdly, the environment, the quality of the environment and the quality of life are incredibly important in terms of attracting inward investment. It is at our peril that we ignore the environmental aspects of attraction for investment, particularly foreign investment.

I believe that we are seeing a vital reshaping of the way in which this country is managed. RDAs have an immense potential, provided that the regional development that they promote is sustainable regional development. I ask the Minister to indicate the practical measures that are to be put in place to ensure that that happens.

6.17 p.m.

The Viscount of Oxfuird: My Lords, our debate this afternoon deals with a most important constitutional issue. Like a number of noble Lords, I shall make only a very short intervention. I confess that I am not totally convinced by some of the arguments which have been put forward today to support the creation of regional development agencies. However, I acknowledge, as did my noble friend Lady Cumberlege, that with the majority which the Government command in another place, their creation is inevitable.

Therefore, I suggest that we should strive to ensure that the country gains the greatest benefit from this initiative. One important task for the regional development agencies to tackle is the provision of adequate training for our workforces. It is my belief that the regional development agencies must take into account regional strategic training needs in a national context.

A good example of that is demonstrated by the existing practices in Scotland and Wales. By taking a strategic regional overview, the training needs of Wales and Scotland have been enhanced very considerably in the past 10 years or so. In that context, I should like to raise the important issue of the current system of funding for vocational education and training in this country. Here, I believe that the RDAs have a vital role to play within the overall national guidelines.

We all recognise that national budgets are tight, but what I am suggesting is that the Government and RDAs give consideration to a new approach to the distribution of current resources, to reflect both the differential costs of vocational education and training and, also, national priorities in terms of increased support for the wealth-creating sectors.

Perhaps I may offer your Lordships an example of how that might work in practice. The training of young people in engineering is one of the most expensive to deliver. Research figures given to me by the Engineering and Marine Training Authority indicate that it costs a minimum of £27,000 to educate and train an engineer to National Vocational Qualification Level 3

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through a modern apprenticeship, compared with an average of £8,000 for a business administration candidate educated to the same level.

A difficulty lies in the different approaches of the various training and enterprise councils. Although some TECs are able to fund engineering at a higher level than other sectors, many do not. The result is that there is a very large financial burden on engineering employers and training providers, to the detriment of recruitment of young people into engineering. The lack of any national, or regional strategy means that the amount of funding that is spent on engineering training is dependent on the attitude of the local TEC.

I hope that the Minister might consider placing a responsibility upon the new regional development agencies so that, in the provision of engineering training, their regional strategies also take account of national needs. Indeed, there may even be a case for asking the new RDAs to identify priority sectors to meet both regional and national economic needs. Training and enterprise councils should be targeted to achieve a minimum level of training in the priority areas, which should be funded at higher levels. Indeed, my noble friend Lord Arran mentioned that fact in his speech.

I have one final point to make and here I must declare an interest as a trustee of the Understanding Industry charity, a responsibility which I share with a number of other noble Lords from all sides of our House. We try to promote the cause of industry nationally. How much easier the job would be if we could break it down into "bite size chunks" of a reasonable, but manageable size and devolve our activities into a defined regional infrastructure.

I know that the issues which arise in Hampshire, where I live, are very different from the issues that I see when I frequently visit, say, Cornwall or Glasgow. From this variety lies the logic for a sensible creation of RDAs. But let us ensure that true national issues continue to be considered at a national level, and that this legislation gives due weight to the importance of preserving our United Kingdom.

Let us have regional development agencies to maximize and harmonize local issues, but never let us forget that we gain great strength by standing together as a nation.

6.23 p.m.

Lord Graham of Edmonton: My Lords, I should like to express my very warm welcome for the Bill. I have heard almost every speech that has been made this afternoon. However, I believe that the opening speaker from the Opposition damned the concept with faint praise and was very selective in his memory of what had gone before. I plead my credentials in the following way. I was leader of a London borough. I am now the Vice-President of the Local Government Association, as well as being president of a body called the United Kingdom Co-operative Council, which appears in the register of interests under Category 3.

I can go back to the time of metropolitan councils, one of which was the GLC. However, there were six others. They all did a great job. The big difference

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between our concept of such work and that of the Opposition was mentioned by my noble friend Lord Dormand; namely, democracy. I do not for a moment deride any of the efforts that have been made. I listened to the speech of the noble Lord, Lord Elliott, with a great deal of affection, as I am wearing my Newcastle United tie. I should point out to the House that the marks on it are stains; but they are tear stains. I see that my noble friend the Minister is chuckling with great care. Indeed, I can see red and white stripes all over the place.

I should now like to set the scene. This Government have been in office for literally one year, while the previous government had 18 years in office. We should pay tribute to the Government, the Ministers, the manifesto and the mood for the view that, whatever has been done well, it could be done better. They may be right or they may be wrong. We shall see the result in practice.

The noble Lord, Lord Elliott, poured cold water on the remarks made by my noble friend Lord Dormand who said that there was a welcome for the Bill in the north-east. The noble Lord, Lord Elliott, said that he was not so sure about that and quoted sources for that view. I believe that we shall have either mild enthusiasm or no enthusiasm at all, until the whole concept starts to work. I am absolutely confident that there is a place for the concept of RDAs.

We know that in every region there are many of what I call "good people" and "good bodies". Some of them are professional while others work on a voluntary basis. They all have the same aim at heart; they want to see the economy of their region lifted. I listened most carefully to what the noble Baroness, Lady Cumberlege, said, in what I thought was a most helpful speech. She accepted the fact that, because of parliamentary arithmetic, this must happen. The noble Baroness made a plea for the RDAs to be aware, among other things, of the social dimension; in other words, their social responsibilities. Indeed, I very much warm to that view.

The Government have done a remarkable job in putting the Bill before us in their first parliamentary year. We always say, in many other contexts, that it is much better to get it right than to get it done quickly. If there is a criticism it is the fact that we need to be exceedingly careful about a number of loose ends which have appeared. When my noble friend the Minister replies, I shall be interested to know how there will be a synthesising between the various bodies with responsibility in a region. If the answer is that the RDA will in effect impose what we might call a "Whitehall view" on the region, that will not work at all.

There must be sufficient flexibility and opportunity for all those concerned to get together and iron out the difficulties. If the chairman and the members of the RDA are merely seen to be the voice of Whitehall in the regions, the whole concept will not work. The RDA must be a genuine, regional institution and authority, rather than the other way round. That may not be what the Government have in mind. I hope that my noble friend the Minister will assure me that the Government are more concerned to create a concept of regionalism than simply taking Whitehall into nine other parts of the country. We have a strategy here that we can develop.

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As non-departmental public bodies RDAs must, in the absence of regional assemblies, be ultimately accountable to Parliament and Ministers. How soon will we achieve the reality of democracy in the regions? The noble Baroness, Lady Cumberlege, spoke warmly of her time as a local councillor. She wanted to be involved in the community and in politics. My background is no different. There are thousands of people who have experience which can be harnessed in the new bodies. Clearly the right mix will not arise overnight as a result of an edict from Whitehall; it must evolve.

I hope that we shall not create a climate in which there is a power battle between the chambers and the RDAs. We do not wish to see a battle in each region between what one might term the "old hands"; namely, the councillors and the chambers of trade, and the new bodies. We want to see a genuine partnership. I hope the Minister can tell us a little more about the four councillor representatives. As I understand it, a councillor who ceases to be a member of a council on retirement or through losing his seat can continue to be a member of an RDA. Someone may cease to be a councillor after two-and-a-half years' service. I believe that person should then resign from an RDA. Some have argued that such a requirement would not be appropriate as RDA board members are not delegates. However, I believe there is a slackness in this regard which the Government would be sensible to consider.

Reference has been made to the clash between urban and rural interests. On 1st May, the political complexion of the country changed. Millions of people live in the countryside and work in the town. Millions of people live in the town and work in the countryside. The division which has undoubtedly existed between town and country is disappearing. The RDAs must accept that one cannot ignore any element in the community. One cannot favour those who live in towns as that would disadvantage those who live in the countryside, and vice versa. I believe that RDAs will ensure that both those who live in towns and those who live in the countryside get a fair crack of the whip. I refer to greenfield and brownfield sites. The best way to preserve undeveloped sites is to ensure that derelict and unused sites are reclaimed and put back into productive use. That is not a new concept. The sparsity of rural populations can create as many problems as the density of urban populations. However, over the past 10 years those who live in the countryside have suffered deprivation, for example in terms of a lack of public transport, the closure of shops and the absence of a dentist. I live in Loughton in Essex and from my window I can see Epping Forest. Therefore, I consider that I live in the countryside. The interests of town dwellers and of countryside dwellers are the same.

I mentioned my interest in the co-operative movement. That movement looks forward to the regeneration of the economy in many areas where co-operative societies have flourished. The philosophy of the co-operative movement is participation and democracy. The movement also recognises that the Bill is designed to decentralise power and authority from the centre to the regions. The movement considers that will be a good thing if it works. Reference has been made to

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quangos. They have been spoken of in a derisory manner as an additional layer of bureaucracy. However, there were more quangos at the end of the previous government's term of office than at the beginning of it. That just proves that, "It ain't what you do, it's the way that you do it".

Many co-operative societies are employee owned. I should like to see the concept of common ownership being established and encouraged. I believe in finding local solutions to local problems. The co-operative society is economically fairly strong, but in a democratic sense it is weaker than has previously been the case. The co-operative movement proposes that RDAs should be provided with ring-fenced funds for co-operative development. We believe that the experience of the co-operative movement will be valuable to RDAs. I hope that my noble friends on the Front Bench will tell their ministerial colleagues that the concept we are discussing is well understood and has been well received, but that it will not be endorsed until it has been put into practice. I hope that when it is put into practice we shall be pleased with the result.

6.38 p.m.

Baroness Anelay of St. Johns: My Lords, like others of my noble friends who have spoken today I, too, am concerned that we are having yet more bureaucracy thrust upon us. Despite the calming words of the noble Lord, Lord Graham of Edmonton, I believe that bureaucracy will undoubtedly flow from this Bill. However, like my noble friend Lady Cumberlege, I hope that I take a pragmatic view; namely, that if we must have this Bill at least let us make the bureaucracy work as effectively and as equitably as possible.

The success of the RDAs will of course depend on how much value they can add to existing arrangements and spending. But I am concerned about the operation of RDAs with regard to the needs of rural interests. I assure the noble Lord, Lord Graham of Edmonton, that I do not intend to go overboard, as he put it, on this matter. I would just like the Bill to dip its toes into the water--fresh water of course--of the rural areas.

I believe it is vital that the creation of RDAs should not lead to the marginalisation of rural areas in decision making on economic support, housing, transport and services. I feel that there is a very real danger that, as a result of this Bill, the particular needs of rural areas could be unappreciated and could go unmet.

Earlier today my noble friend Lord Wade of Chorlton referred to the fact that we would at some late hour tonight be discussing the European Select Committee Report on Agenda 2000--The transition to competition: measures for rural development and the rural environment. That report demonstrates graphically the danger that Agenda 2000 itself may fail to deal with rural development and rural policy as an integrated policy. It could prove to be a significant disappointment in the development of the rural economy of EU member states into the next century. At present it represents a failure to understand how the rural economy and rural society work. I believe it is vital that we do not make the same mistake in the development of RDAs.

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The White Paper makes several references to rural communities and their problems. During the passage of this Bill through another place, the Government made soothing comments about their devotion to the countryside and its prosperity but I believe they gave little, if any, proof of the reality of that. Now is their opportunity in this Chamber to show understanding and real commitment. In another place my honourable friend Peter Luff asked the Government:

    "If we make positive suggestions for improving the rural dimension of the regional development agencies, will the Minister consider them sympathetically?".

The Minister replied:

    "The answer is obviously yes."--[Official Report, Commons, 14/1/98; col. 374.]

It may have been the obvious answer, but any evidence that the Government responded to my honourable friend's concerns by amending the Bill to respond to rural worries is far from obvious when one looks through the minutes of the Standing Committee of another place.

Several omissions in the Bill must be rectified if the interests of rural communities and businesses are to be fully protected. The White Paper states that the RDA boards will have 12 members, although the Bill provides for a minimum of eight and a maximum of 15. The White Paper also says:

    "each RDA board will include at least one member who can contribute a strong rural perspective".

That could be considered quite an extraordinary insight into the Government's attitude towards the countryside. Twenty per cent. of the population lives there; 80 per cent. of the land area is rural; but so far we are told that just one member will represent the rural interest. As my noble friend Lord Bowness said earlier, what is even more extraordinary is that at present on the face of the Bill there is no guarantee that one of the members will be appointed from among those who can contribute to a strong rural perspective. That is a serious omission which I sincerely hope the Government will agree to put right during the passage of the Bill through this House. It is important that the Bill should guarantee rural representation on the RDA boards. Not all of those who live in rural areas are dependent upon their self-sustaining economic viability. Some of course do travel into the urban areas to work. The boards need to include those who do depend upon the sustainability of the rural areas.

I note that the response to the consultation paper by the Consortium of Rural TECs stated:

    "There are concerns that the Regional Development Agency model may increase the focus on inner cities and fail to address the needs of the communities in rural areas."

There are widespread fears that the RDAs will be urban-based bodies and will focus upon urban issues. Earlier, a noble Lord from the Government Benches stated the fact that the Country Landowners' Association welcomed this Bill. In large measure it did, but it also pointed out the dangers inherent in the Bill of neglecting rural interests. I appreciate that the noble Baroness the Minister stated earlier that the board

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members are not to be delegates. I understand that. The Government have argued that members should represent every part of their area, as indeed Members of Parliament are expected to do in another place. I would hope that board members would take that approach, but I feel that rural areas would benefit from the appointment of at least one member to champion their cause and to ensure that their interests are properly taken into account.

That is not the only omission from the Bill with regard to the rural interest. The White Paper gave the RDAs an explicit remit to promote the interests of rural areas, and a similar provision is surely needed in the Bill itself. I would also argue that rural representation within the regional chamber is vital (as in the case with boards) if the interests of rural areas are to be protected, and the Bill should guarantee such representation.

As the Minister said earlier, in March the Government announced that they would merge the Countryside Commission and the Rural Development Commission. If the Government do pursue this approach, the national research and advisory functions of the RDC will be of great importance. The RDC has been the only organisation providing detailed national information on what is going on in rural areas. Without that research and advice, national government and RDAs will not be in a position to make informed decisions on issues that affect rural areas. The Bill makes it possible for the Government to preserve these services, but at present it does not guarantee their future. I would hope that the Government would agree to the Bill being amended to provide an assurance that these services are continued on a national basis and are not allowed to become fragmented.

It is vital that the RDAs prove themselves to be committed to an integrated policy in rural areas, and one which truly understands and represents the needs of those who live and work in those areas. At present I believe there are a number of defects in the Bill which should be remedied, to make sure that the RDAs are as responsive to the needs of rural areas as to urban areas. I look forward to the opportunity to introduce those remedies at Committee stage.

6.48 p.m.

Lord Burlison: My Lords, I thank your Lordships for allowing me to make a short contribution to this debate. As one of a small group who met to form a body which later became the Northern Development Company (which I understand at some stage will be subsumed by a regional development agency) I would simply like to point out where, in my experience, a future regional development agency will need to give consideration. As the noble Baroness, Lady Hamwee, said, we have the experience of the Northern Planning Council in the north-east of England. We have had other bodies, as has been pointed out by other speakers, but we set out in the north to formulate a sharp but small executive body which could act as a one-stop shop, bringing together all the elements which were necessary to attract inward investment to the region. This took place in the early 1980s, before the establishment of the Northern Development Company.

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The background to these discussions was such that they were held in a predominantly Labour area during the time of the Conservative government. Although these circumstances meant that all the participants had pressure put on them to come up with a compromise, there was a genuine desire by all the elements to find a solution which would give the region a greater opportunity to sell itself to potential investors. The region at that time, as my noble friend Lord Dormand explained, included Cumbria, which of course is not included in the boundaries of the northern region RDA.

At the outset, I sat on the embryonic body as chairman of the Northern Regional TUC. At this stage, I did not have its agreement, although it was aware that I was pursuing an objective to create a regional industrial executive. However, I must add that it was the first organisation to endorse this document and had it not been for its positive stance at that time the Northern Development Company would not have come about. All political parties in the region were against such a regional body being formed. If the Northern Development Company had not been formed the region would clearly have been the loser. Although the Northern Development Company achieved excellent results in the field of inward investment, as some noble Lords have said, its success could have been greater if its strategy had been more widely embracing and its resources greater.

The Northern Development Company, like the regional development agencies, at its outset had to subsume some of the existing regional bodies. Although individuals were fairly treated, the takeovers had to be aggressively resolved. Because there had been common agreement on the composition of the NDC and the involvement of strong regional patriotism, those issues were easily resolved.

My message to the Minister, therefore, drawn from my long experience of dealing with all elements of the northern region, is this. Ensure that representation is fairly selected to reflect both sides of industry. It does not surprise me that some politicians oppose the Bill. They opposed the Northern Development Company at the outset. We have got rid of tribalism in the north. Make it a partnership of people, and it will work. I can assure this House that those involved in inward investment in the north welcome the Bill.

6.51 p.m.

Baroness Thomas of Walliswood: My Lords, during this interesting debate, a large number of technical questions have been asked. There has been reference to the relationship between the regional development agencies and the regional chambers; and to the danger of downgrading rural needs among the RDAs' other priorities. There has also been discussion on the sustainability issue. I propose to speak on those four main points.

On technical matters, my noble friend Lady Hamwee raised the important issue of public information and public access to meetings of the RDA. I am sure that Ministers are fully aware that in another place our friends put down amendments on that issue.

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As regards regional boundaries, I hardly dare mention the south east after the comments of the noble Lord, Lord Sefton, about the south-east mafia. However, I agree with everything said on the unsuitability of some of the regions. I find it difficult to understand the consistency of interest. All of us are interested in what happens in London, but that does not amount to creating a region out of those counties. I suspect that discussions on regional boundaries in that part of England will continue for some time.

I refer to the relationship of the new RDAs with existing local authorities, the role those authorities have played in promoting economic well being, and how and when the TECs and Business Links will be absorbed by the RDAs. From these Benches we agree with those who said that the TECs and Business Links should become part of the RDAs from their inception. I support noble Lords on all sides of the House who asked for further information on these and a large number of technical issues. In particular I seek an answer to my noble friend's point about freedom of information and public access. An excellent example of government flexibility in that respect is their modifications to the hunt Bill. We look forward to a response of that kind in relation to this Bill.

I am aware that there are at least two strands of thought on the relationship between the RDAs and regional chambers. One is that the regional chambers should not restrict the dynamic impetus of business. I believe that that comes from a well known quarrel, of which I have had experience in the past, between "business" and "planners". Among some business people, there is a conception that planners take a deliberate delight in preventing them from doing what they wish to do. I believe that that impression is misplaced, but in recent years local authorities have begun to take a more sympathetic, holistic (to use the word of my noble friend) attitude as to how business may be allowed to flourish within their communities.

The chambers bring together a wide range of interests within the regional community. They should not be treated simply as sounding boards for whatever the regional development agencies wish to do. The Minister said that the regional development agencies and the regional development chambers were set up in the absence of an elected regional tier. My noble friend Lord Beaumont intervened to say that we had looked forward for some time to a moment when we would have real regional government. He shared some of the cynicism of the noble Lord, Lord Sefton of Garston, that this initiative will lead to that desired end. He believed that the attitude of my noble friend Lady Hamwee to the Bill was more accepting--the fruit, he maintained, of a nicer personality. It cannot be wise for me to intervene in such a discussion. However, the noble Lord, Lord Graham of Edmonton, asked a pertinent question about whether the RDAs were to be the voice of national government at regional level, or the voice of the region. That is one of the most important questions that has to be answered in the course of this debate.

The Minister sought to head off criticism about the potential downgrading of rural issues within the priorities of the regional development agencies.

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Criticism has been vocal in another place and outside Parliament too. As noble Lords know, many of your Lordships have considerable rural interests and are always vocal on this matter. The noble Baroness made a number of suggestions indicating that we need not worry about these matters. In responding to the Minister, my noble friend Lady Hamwee said, in effect, "Methinks the lady doth protest too much". However she made a valid point which I support. It is that urban and rural issues are two sides of one coin. For example, if London does not work as a capital city, if it is not a pleasant place in which to live and work, if the smog is so bad that one needs a bandage over one's mouth when leaving the Chamber in the evening, the remainder of the south east will be unable to function. It will be overwhelmed by those in London spreading outwards in order to escape intolerable conditions in the centre of London. Those matters very much form two sides to the same coin.

Sustainability is a difficult issue. It was given impetus by the unfortunate wording of the subsection dealing with the fifth purpose of the RDA; namely, to contribute to sustainable development,

    "where it is relevant to their area to do so".

There cannot be an area in the entire country in which sustainability is not a relevant aspiration. All those who have said that sustainability should be an overarching issue within which the RDAs conduct their business have the right end of this particular stick. In responding, perhaps the noble Baroness, Lady Farrington of Ribbleton, will be able to reassure the House on that point. If not, the matter will continue to spin itself out during our debates in Committee.

I have briefly expressed some of the concerns raised by my honourable friends and others. That is inevitable at Second Reading, when Members of this House are seeking clarification on government intentions. I hope that clarification will be forthcoming. However, on these Benches we generally welcome this initiative--in clear distinction from the official Opposition, who said that they did not support RDAs as a solution to regional difficulties; at least, that is what I understood the noble Lord, Lord Bowness, to say in answer to an intervention.

Intriguingly, the noble Lord added that if his party were in power they would no doubt be able to propose alternative solutions. I am bound to ask why, if that is the case, his party were not able to turn to this problem during 18 years in government. We offer a general, though not entirely uncritical, welcome to the Bill.

7.2 p.m.

Baroness Miller of Hendon: My Lords, if the road to hell is paved with good intentions, then this present Bill must be regarded as the legislative equivalent of the M.25. The good intentions are of introducing economic advantages to England. I make no apology for referring to "England", and not treating it as though it were some minor constituent of the United Kingdom. I do not say that out of any sense of chauvinism or feelings of xenophobia in relation to the other three countries. On the contrary, I am proud to be a citizen of the United Kingdom, along with the citizens of all four countries.

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In Scotland, Wales and shortly in Northern Ireland, residents have been allowed a referendum on the future of their country. The English have not. Never mind the general election and Labour's much-vaunted manifesto. They promised to,

    "establish one stop regional development agencies to co-ordinate regional development".

But even among all the fine print--microscopic print in fact--and all the ambiguous phrases, the Labour Party did not say, "We will divide England into nine regions". Yet those are the words with which Clause 1 begins.

Even under Julius Caesar, all Gaul was divided into only three parts, as many of us who struggled with Latin at school will recall. Germany, a far bigger country than England, has only 16 regions, compared with the 12 that are proposed for the United Kingdom. That includes one, Bremen, with a population of 700,000--less than the population of Leeds. So why nine regions? Why not eight, 10, or even 12 compatible regions, not the hodgepodge of disparate areas with which we are presented in Schedule 1?

In fairness to the Government--and the Minister will know that I always want to be fair to the Government--I realise and accept, as the Minister did, that in order to avoid delay in their legislative programme they have used existing regional boundaries rather than go through the procedure of a Boundary Commission inquiry, public inquiries and so on which would be needed to create new ones. But boundaries that are appropriate for whatever administrative reasons the Schedule 1 boundaries were created--Government statistics, book-keeping and other bureaucratic purposes, and the new form of election of MEPs--have absolutely no relevance to economic and industrial affairs. Why are the Home Counties north and south not treated as separate regions? Their economies certainly demand it. Instead, look at the proposed south-east region into which they are lumped--

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