My Lords, the Government are anxious to reduce regional inequality and to promote greater equality, but it is difficult to understand how that it is going to happen without the economy seeing some relocation. The Government’s plans today involve taking money away from the home counties and transferring it to the north of England. That puts them in a political quandary, because if they do not deliver material results in the red wall seats and they have also alienated their blue wall seats, they may find themselves losing on both fronts. That is a problem for them, but from the country’s point of view we want to see those inequalities being reduced. My question to the Government is how they think this can be achieved if any suggestion of relocation is prevented.
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I think I mentioned to the Committee on Monday that I moved to the north-east of Scotland in the early 1970s specifically to be engaged in economic development promotion, at a time when the population of the area was falling and was projected to fall further. Of course we had the unexpected benefit of the discovery of oil and gas in the North Sea, which transformed the economy. Nevertheless, two things happened. First, there were discrepancies between what was happening in the growth areas of Aberdeen and in the rural hinterland, which aggravated some of the rural problems. Secondly, we are now in transition away from oil and gas, and the area needs to change its economic mix. Therefore, there are a couple of questions that I would be interested to test the Minister on.
I go back to the problems of rural areas in the 1970s and 1980s. When I was a relatively new Member of the other House, the Government had a youth training scheme. A rural community in the west of my
then constituency, Huntly, found it impossible to get trainees placed until the local rotary club asked if it could set itself up as a YTS-promoting authority. I had to engage at first hand with Mr Eric Forth, who was then the responsible Minister, and he gave a dispensation because rotary clubs were not perceived to be the natural means of delivering the scheme. But it was agreed, and the rotary club’s simple answer was, “We will ask our members if they are willing to provide placements in their local businesses for local youngsters from the schools.” It was a huge success and ran for many years. Indeed, when it was closed down, it had a profit that it was able to hand back to the continuing agency.
That perhaps reinforces my point that local people, locally engaged and in partnership with the public and the private sector, are best placed to deliver development, not central agencies being delivered from Edinburgh, London or somewhere else. The local authorities have been savagely squeezed, so their capacity to fund such things has been inhibited. I say to the Government: give the local authorities some of the resources rather than holding them centrally, and let them work to decide on this.
That brings me to my final transitional point. As we face the inevitable decline of activity in the North Sea and the eventual transition to net zero—that still implies oil and gas production, even until 2050, but on a declining basis—the industry is diversifying. It is using its cash flow and expertise to invest. We have an excellent partnership called Energetica, which is trying to promote an energy and business corridor between the northern suburbs of Aberdeen and Peterhead along the Aberdeenshire corridor and involves the private sector, Scottish Enterprise and the local councils. It envisages being a powerhouse for transition. Will it have the resources and be able to do that? What constitutes relocation? If it is confused or unclear, that could be a problem.
We also have an entirely private sector operation called Opportunity North East, which is looking at all the diversifications away from oil and gas to which we could contribute. It is chaired by Sir Ian Wood. He is now retired but the Wood Group, as was, is a FTSE 100 company that employs about 40,000 people worldwide. Interestingly, it has diversified substantially away from oil and gas to the point where only 40% of its turnover now comes from fossil fuels. It still needs that fossil fuel revenue to continue the process of transition.
My question to the Minister is very practical. These are schemes in hand with real ambition to achieve change in an area that is facing real challenges. They require a regime that will enable them at least to do what they are doing, but preferably to get access to funds that enable them to do it more effectively and in ways where they will not be challenged. If a company decides to invest in a situation like that, which might involve some reorganisation of their operation, it is very difficult to determine whether they are relocating or just reprioritising some of their locations. It would be counterproductive if they were stopped in that scenario.
I repeat that if we are trying to redistribute some of the wealth, the growth and the economy, surely relocation is part of that. After all, in principle the Government
are keen to redistribute civil servants, who presumably could fall foul of the Bill if they are directed and provided with incentives to move out of London, Edinburgh or wherever. It is important that we get some clarity on how this will work, and a recognition that local partnerships, local authorities and the private sector are better placed than central government to deliver that. It should not be left to short-term political decisions to meet the threat of electoral reversals, but should be based on a proper, transparent strategy which is about showing that everywhere that has the will and capacity to change has the backing and the resources to do so.