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Lord Hogg of Cumbernauld: My Lords, I am sure that the noble Lord has forgotten that there is European government. He is supposed to be telling us that he is against it. It would be dreadful if he forgot to do so, particularly in the run-up to an election.

Lord Dixon-Smith: My Lords, I am grateful for that reminder. That takes the number of levels of government to eight. The noble Lord, Lord Greaves, remarked that we have too much government and not enough democracy. That may well be the problem, but adding another level of government in an attempt to solve the question of democracy would present a problem in itself.

I return to the issue of devolution. That, rather than structure, is what the debate initially needs to be about. Devolution is not a stream of statutory regulations from central government of which local authorities are obliged to take note and with which they are obliged to comply. Over the years we have seen an endless succession of such regulations. I spent a long time in local government under--to my distaste--an increasingly centralist national government. It is distressing to find that trend continuing. Devolution is not about government Bills going through this wonderful Palace of Westminster telling local authorities exactly how they should structure their business for administrative purposes, dictating exactly how they should establish their administrative organisations.

Returning to the present, we need to note that devolution is not about the kinds of measures announced by the Chancellor of the Exchequer in his Budget. The Chancellor promised increased flexibility for the regional development authorities. He said that this increased flexibility would be matched by increased accountability through objectives and targets that would shortly be announced by the Deputy Prime Minister. I can already feel the steel bands of Whitehall's control closing round the RDAs.

I am afraid that man is ever restless. He always feels that things would be better if he were somewhere else, and he strives to get there; and usually, when he gets there, he is disappointed. Then he will strive for

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something else. I cannot help but feel that if we arrive at the promised land as regards the regions, we shall find that there is great dissatisfaction.

Let us consider the problems in context. It is worth noting that it is as far from Gretna Green to John o'Groats as it is from London to Land's End, or indeed from London to Newcastle--and Scotland is supposed to be one region. There is a particular history, but that specifically illustrates the problem. Considered on an international scale, the United Kingdom is smaller than California and many other states within the United States of America.

There are other types of problem which will not be tackled by structure or, indeed, by democratic representation. Again, they are perhaps best illustrated by contrasting Scotland and the North East of England. I am sorry that this is the case. I spoke on this matter during the passage of the Scotland Bill. The average GDP per head in the United Kingdom is £12,455, based on the 1998 figures, which are the latest that I could obtain from the Library. In Scotland, it is £11,902, which is 96 per cent. In the North East it is £9,819, which is 79 per cent. Despite that real disparity in worth and value for the people of Scotland, they enjoy the enormous privilege of over £1.20 per head for every pound of public expenditure in England. The people of the North East enjoy the enormous privilege of contributing, through the Barnett formula, to that privileged position. It is a matter which could and should be tackled within the Palace of Westminster, and successive governments have signally failed to do so--for reasons that have to do with politics and, dare one say, with the democratic deficit.

What is required if we are to make progress in government in this country is real devolution of authority and decision-taking to the local communities. There is no doubt that not least among the frustrations that ordinary people feel with government and the reason why there is too often a lack of interest in elections, is the feeling--which is correct--that the powers of decision-taking on matters that affect local communities are removed from them. It is no good saying that, because there is a power of decision granted by national government to the local community, matters are all right, if there is not with that power control over the money, or if control over the money remains with Whitehall.

I return to what can be put into statute. We have 150 pages of regulations relating to highways expenditure. They are so detailed and require such conformity that they empower Whitehall to have intimate control over the details of local expenditure on highways matters. That is why we feel strongly that the proper way forward is to begin with correct and proper devolution through the structure that we already have. If we can begin to get that right, then if there are subsequent failures in the system there will be justification in going for something else. But to experiment with something novel, out with the traditions of this country, when we cannot make our present system work is to take a gamble which might be rather less than fortunate.

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5.10 p.m.

Lord Whitty: My Lords, perhaps I may begin by thanking the right reverend Prelate the Bishop of Durham for raising the debate. Time was when Bishops of Durham were rather heavy representatives of top-down government, both from London and from Rome; and, indeed, on their own behalf. I am glad to see that the present incumbent is on the side of the people of the North East, and that we are here today discussing how we can bring greater democracy to that region, as well as to other British regions.

The title of the debate refers to "English regions", but obviously we have strayed somewhat wider into the settlement so far on the constitutional changes brought in by this Government--a great reforming government in relation to our constitution. Decentralisation and devolution have already been applied to Scotland, Wales, Northern Ireland and London. It is only right that we should now address the English regions. During the course of the debate we also addressed the role of Parliament, the role of Europe, and especially the role of local government.

The noble Lord, Lord Waddington, observed that it is important to retain English national identity. I do not disagree with that view. However, there is also a very important dimension of that identity; namely, regional and local identity. The North East does have an identity. Indeed, as the noble Lord, Lord Shutt, pointed out, Yorkshire has a pretty clear identity. Many of the other regions have an identity that may not be always as clear. There is a South West identity, even though it may be differentiated among the various counties and duchies of the South West. Even where that identity is not strongly felt, what is strongly felt is that decisions need to be taken closer to the people and that there is too much power centralised in London. That applies just as much in Essex and Cornwall as it does in the North East.

We have already achieved devolution to Scotland, Wales and Northern Ireland. We need to meet that sentiment in England. Indeed, as the noble Baroness, Lady Hamwee, and the noble Lord, Lord Smith of Clifton, said, the very fact that devolution to Scotland and Wales has taken place makes the regions closest to it think most acutely about it. It has a rolling effect across the rest of England. There is a problem of differential prosperity between the regions of England. We recognise that there is a North-South divide, although it is not necessarily quite as simple as that. Obviously, there are significant disparities within regions between prosperous and less-prosperous areas and, as the right reverend Prelate the Bishop of Hereford said, between rural and urban areas within regions. However, there is a regional dimension to much of this. We want all regions to share Britain's prosperity.

I should point out to noble Lords that unemployment has fallen in every British region, but it remains much higher in regions like the North East than in the South East. Within the United Kingdom as a whole, although the North East income per head has increased in recent years--a welcome increase--it has

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done so more slowly than in other regions. As regards the North East, there is still a disparity regarding the UK average of £13,000 per head and the £15,000 per head that applies to the south-east of England.

There is nothing inevitable about regional inequalities. Similarly, there is nothing sacrosanct about regional equality. But, clearly, the widening gap is not appropriate when we wish to share prosperity among all our citizens. We can achieve a better spread of prosperity both between and within regions and nations of the United Kingdom. As the noble Lord, Lord Rodgers, reminded us, many attempts were made to achieve that aim during his stint in the DEA. There were also earlier attempts, as well as subsequent attempts, to redress regional imbalances.

We have taken a very important step in the creation of the regional development agencies. In an otherwise not entirely favourable comment in relation to regional government, the noble Lord, Lord Elliott, mentioned the importance of one agency in the North East turning round the industrial infrastructure of that region. The development agencies were established in 1999, and subsequently thereafter in London, to drive forward measures to improve competitiveness, to decentralise decision making, and to bring the private sector and local government into development programmes for the regions.

As the right reverend Prelate the Bishop of Wakefield reminded us, those RDAs are working with local government and with the regional chambers; and, indeed, with the administrative devolution that we already have in Government Offices. The RDAs are only two years old. They have confounded the critics of their establishment and have succeeded. They receive enormous support from both business and the community in their regions. I regret that it seems to be the official policy of the Conservative Party to abolish both RDAs and Government Offices. That is an odd line to take for a party that I hope would wish, with us, to spread prosperity. We must have the instruments to do so.

Government Offices represent administrative devolution. There has been a substantial amount of administrative devolution over the past few years. It has been difficult, as was the case in an earlier era referred to by the noble Lord, Lord Rodgers, to ensure that all government departments participate in the Government Office structure. But an increasing number are doing so, including--most recently--MAFF, which is incorporating its regional activity into Government Offices. That is most valuable. However, we need to go further.

Our first step has been to create the regional chambers. They are voluntary organisations, which bring together local government and other bodies within the region. They provide the main link between the RDA and regional representatives. With the increased flexibility and resources that we are giving to the RDAs, the role of these chambers has become more crucial than ever. That was why the Chancellor of the Exchequer recently announced an additional £5 million for those chambers to provide for the

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expanding scrutiny role that the new flexibility of the RDAs requires. They also have an important role in planning, development and transport plans for the regional level.

The regional chambers are, perhaps, not dramatically different from what the noble Lord, Lord Renton, referred to as arising from the Kilbrandon report of 30 years ago, in terms of his own viewpoint. The noble Lord said that nothing much has changed, but I do not believe that to be the case. We are all grateful that the noble Lord has not changed. However, the whole constitutional framework within which local government and regional development is operating has changed, both in relation to Scotland and Wales and in relation to the role of local government. That applies also to the number of decisions that we are now taking administratively in conjunction with local government at the regional level. I give way.

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