Finance Bill

As my hon. Friend says, part of the answer is skills, but another part is cultural. For example, firms in the software industry locate in the Thames valley because other software firms are there. People in the software industry know each other, they probably play tennis together and their kids go to the same schools. They create a community, so it is difficult for a small business in the software industry to locate anywhere else if it wants to be part of that cluster. That is an important factor. The key is to create clusters that are competitive in other parts of the country. Edinburgh is pretty competitive in the financial industry and there is a cluster there, although they all play golf and not tennis. There is a community of people who know each other and who can link up to help their firms to grow. In the north-east, there are cultural links between design companies in the engineering and oil industries. Companies that have been located in the area for many generations have upskilled themselves and exported their services around the world, and that is good for the area. The trick in regional policy is to create more of those clusters. Teesside believes that firms in the pharmaceutical industry could become a cluster that would be of advantage to the area, and each area has to consider how it can build such opportunities. In Newcastle, we have high hopes that, based on biosciences, we can develop a cluster of embryonic industries that can then employ the graduates who go to universities in Newcastle. By the way, we play football in Newcastle, but creating such a cluster would help to address many of our economic problems. Development agencies in many parts of the country have to rethink how they approach these issues. I know that they have been thinking of how they can help to upgrade the skills that will give the regional economies a stronger base in the future.