Public Bodies Bill [HL]

My Lords, I very much endorse what my noble friend Lord Campbell-Savours said. I remind him that Marx stated that history repeats itself the first time as tragedy and the second time as farce. I am not sure whether if it repeats itself in this Bill it will be tragedy or farce. It certainly poses considerable threat to the regions of this country. On the day that the Chancellor of the Exchequer announces what he describes as a Budget for growth, it is paradoxical that we should be debating the abolition of business-led regional development agencies that have played a significant part in both safeguarding and creating jobs. It is true, as my noble friend Lady Royall reminded us, that in reflecting different regional economies and needs their performance has necessarily been somewhat variable. However, as the BIS Committee pointed out, there was strong support for RDAs and regional structures from the private sector, and especially, and significantly, the Engineering Employers’ Federation, particularly in the West Midlands and the north. There are significant worries, expressed by the committee, about the loss of local knowledge and the risks of a ““disorderly competitive scramble”” within regions, as well as serious questions about the disposal of RDA assets which, in its view, are, "““potentially of massive importance to the success or failure of Local Enterprise Partnerships””—" the LEPs, which the Government apparently see as successor bodies to RDAs. Yet these LEPs will have neither power nor resources, nor a role in inward investment, innovation or access to finance, nor the European funds, including in particular the ERDF. These are arguments of general application, like those over the severely truncated funding reflected in the Regional Growth Fund, just about one-third of which was invested annually via RDAs. However, I want particularly to concentrate on the north-east, the very region singled out by Vince Cable last year, before his halo slipped a little, as the one with the strongest case for retaining a regional agency. One North East has invested £2.7 billion across the region, from the Tweed to the Tees, over the past 11 years, attracting or helping to create 19,000 companies and creating or saving 160,000 jobs. It has led the way in developing the green economy, from support for Nissan and its electric vehicles, to wind turbine production and offshore wind power and, in the past year, a £60 million investment in a low-carbon initiative in the Tees Valley, and much else besides. It has promoted engineering apprenticeships; established a £125 million fund, Finance for Business North East; and attracted £100 million from the European Investment Bank and £300 million from the ERDF for the period 2007-13. In the past year alone, it attracted 55 foreign and five UK companies to the region, creating 2,000 new jobs and safeguarding 5,000 more. Its record on tourism has been remarkable. Tourism is worth about £4 billion to the regional economy, and the north-east has had the biggest growth in tourism of anywhere in the country outside London. Yet all this is now at risk due to an unusual and unhealthy combination of fragmentation of the agencies and centralisation of some of the functions. Today the Government have announced the creation of more enterprise zones, despite the doubts expressed about the previous round of such zones by, among others, the Work Foundation; Centre for Cities; again, and significantly, the Engineering Employers’ Federation; and, despite the less-than-glowing experience within the north-east region itself, Middlesbrough and Hartlepool. Too often, as at Canary Wharf, the Metro Centre in Gateshead and other out-of-town developments, zones created in the 1980s produced retail and office developments with little in the way of the manufacturing industry now recognised on all sides as essential to the future prosperity of the nation. What, one might ask, will be different this time, especially in the absence of strong, strategic bodies with the skill and resources to secure the kind of development and workforce skills so desperately needed? It is interesting to note, too, that today the Chancellor announced the welcome investment of £100 million in four new science facilities—at Cambridge, Norwich, Harwell and Daresbury—but I contrast that with a cut of £8 million which should have gone to the Newcastle Science City development, started by the previous Government, which the RDA had pledged but which it is not now able to provide. This brings me to the question of assets, which I raised in Committee and which my noble friends Lady Royall and Lord Campbell-Savours referred to. I received no satisfactory answer to those questions—perhaps, in fairness to the Minister, because, as so often proves to be the case, decisions are made these days long before any consideration is given to, let alone any conclusions reached about, their financial consequences. I understand that the North East Economic Partnership—an unofficial grouping, as yet, of local authorities and business leaders in the region—has submitted a bid in relation to the retention of the RDA’s assets for the benefit of the region. However, it seems that there is little likelihood of this bid succeeding, so the assets will not be transferred, thus denying the region a much needed resource. This week the Newcastle Journal—a newspaper not, in the wonderful phrase of the Secretary of State for Communities and Local Government, a ““town hall Pravda””—writes: "““The Journal has been told the message coming out of Government is that the assets will not be passed on. Vince Cable’s Department for Business is currently considering the future of the assets. If they are handed to the Partnership””—" that is, the North East Economic Partnership— "““it will fund their work in trying to bring in major new firms and lobby on behalf of the region in Whitehall. Also up for grabs is £62.5m worth of loan repayments handed out in public funding over the last decade. The North East Economic Partnership has told the Government it is vital this money is kept in the region, so as to be used for further job creation””." That is the united voice of business and local government of all political colours in the north-east. I ask the Minister to tell us the current position. What meetings have Ministers held with north-east councils and business leaders about the issue of assets? What criteria will be applied in coming to a decision, and when will such a decision be made? Will he give an assurance that there will not be, in the phrase that has been much used tonight, a fire sale of assets in what is, after all, a languishing market, to be applied to national deficit reduction? Finally, I turn to the question of the actual decision about abolition. Most of us have taken it as read that since the Government announced the abolition of RDAs last year and included them in the Bill, this was settled government policy. I was therefore surprised to read in the letter to my noble friend Lady Royall—which has already been referred to; and signed, of course, by the Minister—that not only have the Government, "““not so far undertaken a formal consultation on the abolition of the RDAs””," but that they would, "““consult before laying any order””." Will he therefore assure the House that such a consultation will take place in every region and, most importantly, on the basis that the Government will be open to persuasion by business, local government and their social partners strictly on the merits of each individual case, such that they will not be in the position of either abolishing all RDAs or none? We on this side recognise, as I am sure other noble Lords will, that that there are relatively stronger and relatively weaker cases for retention. Will the Minister give us an assurance that each will be considered on its merits on a case-by-case basis, assuming, as I fervently hope to be the case, that the amendment moved by my noble friend is not lost?