§ The Secretary of State for the Environment, Transport and the Regions (Mr. John Prescott)
With permission, Madam Speaker, I should like to make a statement on the English regions.
On 1 May, the British people gave the Government an overwhelming mandate to modernise Britain—to decentralise decision making, to promote a modern and efficient economy, to raise standards in education and training, and to fight against deprivation and the causes of economic and social decline.
We are committed to promoting policies that pursue jobs, growth, competitiveness and social progress, within a sustainable environment. Our aim is to achieve sustainable growth and to bridge the economic and democratic deficit that bedevils all the English regions. The decision to create the Department of the Environment, Transport and the Regions underlined the Government's more integrated approach to policy making, which will be just as important at the regional level.
The White Paper "Building Partnerships for Prosperity", which I have published today, states the Government's proposals for new structures and new opportunities in the regions. The new regional development agencies will bring fresh vitality to the task of economic and social regeneration in the regions.
For far too long, the English regions have been disadvantaged by the denial of development agencies, which helps to explain why English regions have lagged behind other regions in Europe. For far too long, the English regions have been neglected; it is our intention to change that.
Since 1945, successive Governments have introduced many programmes aimed at achieving economic and social objectives, but those have often lacked coherence, particularly at the English regional level. Now, more than ever, the English regions are demanding a strategic lead—for greater focus on wealth creation and jobs, for effective policy integration, and for co-ordination of central and local effort. Those goals have been achieved, to great effect, in the development agencies in Scotland, Wales and Northern Ireland.
Our election manifesto undertook to establish regional development agencies. In June, we launched a major consultation process. My hon. Friend the Minister for the Regions, Regeneration and Planning visited all the English regions and opened a dialogue with regional and national bodies. We received more than 1,500 responses to our consultation paper, which revealed overwhelming support for our proposals.
I will therefore shortly be introducing a Bill to establish nine new regional development agencies, based on the areas of the present Government offices for the regions. These "agencies for change" will be modelled on those in Scotland, Wales and Northern Ireland. One of their key functions will be to develop and implement regional economic strategies. They will do that in partnership with regional interests such as local authorities, training and enterprise councils, industry, business and voluntary groups, as well as with the Government.
358 Regional development agencies will be business-led, but board members will include representatives not only of industry but of local authorities, further and higher education, the voluntary sector, rural interests and tourism. The agencies will bring greater coherence and a regional perspective to national Government programmes and national policy making in areas such as transport and land use planning.
My intention is that regional development agencies will adopt the best elements of the Scottish, Welsh and Northern Ireland development agencies, which have played a key role in improving the economic prospects of their countries, but we will not impose a single blueprint on the regional development agencies. The English regions have different and distinct characteristics. Our Bill will provide a broad framework of powers for RDAs, to give them flexibility to reflect the particular needs of the regions that they represent.
Regional development agencies will bring together a wide range of functions that are presently carried out by many separate agencies. Those activities fall into three broad areas. First, RDAs will produce and implement economic strategies that reflect regional priorities and needs, in consultation with their partners.
The strategies will cover economic development, social and physical regeneration, competitiveness and innovation. They will also contribute to work on transport and land use planning. That will all be done in a context that protects the environment and promotes sustainable development.
The strategic plans will specifically cover business support and training. Business links and training and enterprise councils will continue to provide services locally, with RDAs monitoring and providing a strategic regional focus for their work.
Secondly, RDAs will take the lead on inward investment in their regions, working with partners to market the region as a business location. They will develop integrated packages for investors and advise Ministers on applications for regional selective assistance.
Thirdly, RDAs will be responsible for specific regeneration programmes. They will lead on the European structural funds and manage the single regeneration budget challenge fund. They will also take full responsibility for the regional regeneration programmes of English Partnerships and the Rural Development Commission.
As a Government, we are strongly committed to the countryside, recognising the particular needs of people who live and work in rural areas—many of them now represented by Labour Members. Our proposals will put urban and rural regeneration on the same footing. That will ensure that rural interests will be given their full weight. Indeed, they will be strengthened by our proposals.
We are also committed to ensuring an effective focus at national level for expertise, advice and information on rural matters. We are therefore accelerating the part of the Government's comprehensive spending review that is examining how to strengthen the institutional arrangements for delivering rural policy. We will involve the relevant agencies in that work.
The Greater London Authority (Referendum) Bill, which is before Parliament, is the first step in providing a new strategic framework for London, which will also have 359 its own development agency. The arrangements for that agency will be set out in the White Paper on London government which is to be published next year. It will make clear its democratic accountability to the Greater London assembly and the mayor.
Regional development agencies will, of course, be accountable to Ministers and to Parliament, but they will also need to be accountable to their regions. Organisations representing local interests, and, above all, elected local authorities, have a right to influence the work of RDAs. That will be recognised in our board appointments.
We intend to take further steps. As we made clear in our manifesto, we are committed to moving, with the consent of local people, to directly elected regional government in England. That complements devolution in Scotland and Wales and the creation of a Greater London assembly. Demand for directly elected regional government varies across England, and it would be wrong to envisage a uniform approach at this stage. Local authorities and their regional partners are already creating voluntary chambers. We welcome that development and intend to build on it as a mechanism through which regional development agencies will have greater regional accountability.
Only two of the nine English regions match the European average for GDP per head. That is unacceptable. The Government are committed to reversing that decline in Britain's economic performance. Our proposals will do that, with the regions to the fore.
Modernisation of the structures in the English regions is part of the wider reform of the governance of the United Kingdom, spearheaded by the devolution of powers to Scotland and Wales. Our aim is for the English regions to grow and prosper within the United Kingdom and within the European Union. Our proposals for regional development agencies are fundamental to achieving that. They will ensure that the potential of each English region can be unlocked.
That is our vision, shared with the hundreds of individuals, groups and local partners who have responded to our consultation with overwhelming support and enthusiasm. Together, we can ensure that the regions will fulfil their aspirations.
I have been associated with the cause of regional development and decentralisation for more than 20 years. I was appointed as Opposition spokesman on regional affairs back in the early 1980s and produced our alternative regional strategy. As deputy leader of the Labour party, I established the regional policy commission under Bruce Milian, the former European Commissioner and Labour Secretary of State for Scotland. The Millan commission prepared the ground for the White Paper in a detailed and excellent way. I pay tribute to it for that work.
This is a cause very dear to my heart, with widespread support in the country and, I am sure, in the House. It is therefore with great pride and pleasure that I commend the White Paper to the House.
§ Sir Norman Fowler (Sutton Coldfield)
The fundamental issue is not the goal of regional development, which we all want, but how it is to be achieved. We have serious doubts and concerns about the new development agencies that the Secretary of State is proposing. Will he 360 confirm that the agencies will be not elected, but appointed entirely by Ministers? They are the creatures of Whitehall and will be unaccountable to the public. Will he also confirm that there is no prospect of those appointed agencies being changed during this Parliament, which is the only period for which the Government can pledge
How will the agencies attract more inward investment to England? Has not inward investment been running at record levels for the past 10 years and more? Is there not a danger that the Secretary of State's plan will set one region against another, with no overall benefit to Britain?
Is the Secretary of State aware that the chairman of the Rural Development Commission has just resigned in protest—[Horn. MEMBERS: "Good, about time."] Labour Members say, "Good." That shows their concern for country areas. He has resigned in protest at the Government's decision to transfer the commission's rural regeneration work to the proposed RDAs. The chairman has said:The break-up of the Rural Development Commission sends a negative message to rural England and is a devastating blow for the commission.Does the Secretary of State agree with that?
We know that Whitehall has been noticeably reluctant to give up its powers, so both regional selective assistance and training will stay with Government Departments. Can the right hon. Gentleman explain the position on planning? The consultation paper, such as it was, suggested that agencies would have the powers to acquire land and prepare it for industrial development. Does not that open up the prospect of more industrial development in green belt land, which many people fear is already under threat?
The Secretary of State talks about the next step being regional assemblies. Is he aware that at the weekend his Minister of State gave an on-the-record interview to The Scotsman? The paper reported that the Minister signalled that, if Labour were to win the next election, it could pursue a federal structure for England. He left open the prospect of regional assemblies having law-making and tax- raising powers. What is the Government's constitutional agenda? Does it involve step-by-step progress to a federal structure?
As a west midlands Member, I want to see regional development and, as a party, we want to see regional development, but the Government's proposals amount to only more bureaucracy, less accountability, and duplication of effort, without any benefit for the regions.
§ Mr. Prescott
I took the opportunity to read the report of the debate on 20 June 1975 when the proposals for the Scottish Development Agency were brought before the House. Everything that the right hon. Gentleman has just said was said in that debate by the Opposition.
Indeed, the right hon. Gentleman voted against the SDA, so I assume that his arguments about bureaucracy mean that he will vote against the new regional development agencies. I remind him that in the election after Labour implemented the agencies, in 1979, his Government swore to abolish the Scottish Development Agency but changed their mind. They changed their mind because the development agencies in Scotland and Wales had done a good job and had attracted inward investment to improve their economies. That is 361 precisely what I want to see for the English regions. It is because those agencies have been so successful that we have attempted to model, as best we can, the English development agencies' powers and resources on the Scottish Development Agency and the Welsh Development Agency.
We believe that the new agencies will be an important force in developing the English regions and their economies. The proposals are important for regional economic development and will play their part in attracting inward investment. It is noticeable that the Scottish economy and the Welsh economy have been much more effective at attracting inward investment, in total, than the English regions. That is largely because Scotland and Wales have had active regional development agencies representing their interests in this country and abroad, as every hon. Member has learnt when travelling abroad. That is why we propose to set up development agencies in England.
I hear what the right hon. Gentleman said about the resignation of Lord Shuttleworth. I have just received his resignation note. He was to retire in March. He was appointed as a Tory by a Tory Government, and he knew that I had no intention of reappointing him as the chairman of that development agency. He is a bit demob happy and he has gone. So be it. The proposals have nothing to do with Lord Shuttleworth: they are about the development of the rural economy. I shall take no lectures from Tories on that subject. A Labour Government set up the rural development bodies and my proposals today mean that a Labour Government will introduce better arrangements for the rural economies.
Yes, Lord Shuttleworth opposes the Government's policy. That is hardly a surprise, but the judgment to be made is whether our proposals will be better for the rural communities than what he would prefer. I call in aid those who are supporting our proposals for the rural areas, including the National Farmers Union, the Council for the Protection of Rural England, the local authorities in those areas and the environmental groups. We have to judge the interests of those groups against what Lord Shuttleworth has said. Still, he has gone; happy retirement to him. Frankly, I think that the rural areas will be better off without him. [HON. MEMBERS: "Disgraceful."] All planning matters will go through the normal planning procedures. [Interruption.] I do not think that it is disgraceful. If Lord Shuttleworth levels charges against us that we do not accept, we are entitled to handle them in the most robust manner. We intend to ensure that rural areas are put on an equal footing with urban areas, to give them the importance that they deserve. We will be judged on that when we have implemented our policies. That is a proper response to such a report.
§ Mr. Andrew F. Bennett (Denton and Reddish)
I very much welcome my right hon. Friend's proposals, but I hope that he will press on with the second stage, which is to have elected assemblies in the English regions. In the meantime, will he examine the ways in which the regional bodies will be accountable to the House and consider setting up regional Select Committees to scrutinise them effectively?
§ Mr. Prescott
The direct answer is that it is a matter for the House whether we establish such Committees, but, 362 of course, the bodies will be accountable to Ministers, to Parliament and to the National Audit Office, because they will be statutory bodies set up by the House itself. Make no mistake about it: we have agreed to introduce the development agencies to deal with the economic applications, but we will indeed want to subject them to democratic accountability.
I have always believed in regional government, and I hope to see it brought about. The timetable in the first five years is not easy, but it is possible to work with voluntary groups to establish some form of democratic accountability, and we will discuss with various bodies how we can achieve that.
§ Mr. Nick Harvey (North Devon)
I welcome the creation of regional development agencies and the extensive process of consultation that took place beforehand, but does the Secretary of State recognise the disappointment and frustration in the English regions at the fact that no new funds will be available to enable those bodies to compete on a level basis with the development agencies in Wales, Scotland and Northern Ireland, in both attracting inward investment and levering funds out of Europe? If we are simply to have new bodies to churn existing funds, is not that falling into the same trap into which the previous Government fell?
Will the Secretary of State explain the anomaly of the new regional development agencies monitoring the work of the training and enterprise councils and advising Ministers on regional selective assistance, yet taking on the functions of the Rural Development Commission, which is the one body that could and should separately have made the case for the rural areas? Is it because Lord Shuttleworth was a softer target than the Secretaries of State for Trade and Industry and for Education and Employment?
I welcome this first step towards regional government, but can the Secretary of State assure us that, as we move on to further steps, the boundaries will be considered? The boundaries on which the agencies are to be set up are matters of statistical convenience and in many parts of the country bear no relation to real communities.
§ Mr. Prescott
The boundaries will be determined when we consider the democratic accountability of the agencies and will be the legitimate concern of whatever structures are then in place. The proposed boundaries are those of the Government offices, set up by the previous Administration, and we have been happy to accept them. It is easier and quicker to work on those boundaries in setting up the agencies.
On resources, the Scottish Development Agency was set up with funds of £150 million. The present programme, drawing the various strands together, as set out in the White Paper, gives us £750 million, and more than £1 billion of investment in public-private partnerships. We believe that that is a good start, and that the agencies can play a major role in bringing more and more resources to the regions, exactly as the Scottish and Welsh development agencies did. I am satisfied that we can make a start in that way.
TECs are an important consideration in regional development and in boundary issues, as some TECs fit local rather than regional boundaries, and no regional strategy has been developed in the areas of education and 363 skills training. We are currently discussing with the relevant Departments the way in which we might be able to co-ordinate that. We need to give those aspects a regional dimension, which is as important to planning and transport as it is to education and skills training.
§ Mrs. Louise Ellman (Liverpool, Riverside)
Does the Deputy Prime Minister agree that his historic announcement this afternoon is a major breakthrough for all those who are concerned about employment, training and regeneration in the English regions? Is he aware that in the north-west region his proposals will be met with great support and great acclaim? Can he explain the attitude of Conservative Members, given that those in private sector, including the business leadership team, the CBI and chambers of trade and commerce, are among the strongest supporters of regional development agencies as a means of boosting business and employment?
§ Mr. Prescott
The points made by my hon. Friend are absolutely right. In the White Paper we quoted various organisations that normally ally with the Tory party, but which find themselves yet again at odds with it on a fundamental issue of policy. I note that the Opposition spokesman did not say that they would abolish those agencies if we set them up. It is for them to make that decision in the future—now they are the Opposition and we are the Government, and there is a heck of a difference.
My hon. Friend the Minister for the Regions, Regeneration and Planning toured the country and spoke to people in all the regions and to representatives of national business and trade bodies. They all supported the idea of the establishment of regional development agencies. We found that support to be as strong in the south-west as it was in the north-west, and in all the English regions. We are delighted to present a policy which has been universally accepted by those regions.
§ Mr. John MacGregor (South Norfolk)
Given that Scotland will now have its own Parliament and Wales will have its own Assembly, does the right hon. Gentleman recognise that one of the greatest concerns for the English regions, and cause of great unfairness to them, is the Barnett formula? Its application means that there is much higher public expenditure per head in Scotland and Wales than is now justified by the facts. Lord Barnett believes that that formula should be reformed. What does the right hon. Gentleman intend to do about that?
On inward investment, what will the right hon. Gentleman do about the fact that the Scottish and Welsh development agencies can outbid the English regions because of their access to much greater amounts of public expenditure than those available to England?
§ Mr. Prescott
The Barnett formula was devised for the fair distribution of resources between England, Scotland, Wales and Northern Ireland. I accept that there have been complaints about it, but we have made it clear in the White Paper, particularly in relation to devolution in Scotland, that we have no intention of changing it. It could be subject to a review at any stage by the newly elected Parliament for Scotland, the Welsh Assembly, and English regions to discuss any perceived unfairness. At this stage, however, we have made it clear that we have no intention of conducting such a review.
364 On inward investment, I am sure that all Members would agree that the current situation is not a happy one because the Government have wasted a lot of money when parts of the country have been played off against each other. [Interruption.] We have been left with that totally unsatisfactory situation. The President of the Board of Trade is considering how it could be improved. We are working out a concordat to ensure that the use of British taxpayers' money is seen to be fair by all parties and that Britain is not played off against other countries, nor the different regions of the United Kingdom played off against each other, by inward investors. That practice is unacceptable and expensive, and we intend to change it.
§ Mr. John Gunnell (Morley and Rothwell)
I congratulate my right hon. Friend on his statement. I heard him talk about regional development in 1977, and many times since. I congratulate him and the Minister for the regions on their work over the years on behalf of regional government and regional development agencies.
Will my right hon. Friend assure me that, despite the difference in structure, there will be a level playing field between the regions, including Scotland, Wales and Northern Ireland, on inward investment? I represent and have worked on behalf of people in Yorkshire and Humberside, and they are concerned that we may still not have the necessary structure to create the level playing field that they desire to attract inward investment.
§ Mr. Prescott
I am grateful to my hon. Friend for his kind remarks. To have a level playing field is our intention—we need to bring that about. I believe that the regional development agencies will mean that the English regions will be able to play a much more effective part in attracting inward investment than they could play without them.
§ Mr. David Curry (Skipton and Ripon)
I hope that Lord Shuttleworth will be around to celebrate the right hon. Gentleman's resignation in the same terms as he has just celebrated Lord Shuttleworth's resignation.
Does the right hon. Gentleman accept that there will be a real problem of competitive subsidy between regional development agencies? What will he do to make sure that that does not happen, bearing in mind the relative costs of getting LG and Siemens to the United Kingdom? Does he agree that what England lacks is a unified agency to attract investment, rather than scattered agencies? Does he understand that we in North Yorkshire will be suspicious that our interests will not be looked after by the municipal tyros of Doncaster, Bradford and Hull?
§ Mr. Prescott
That was quite an intelligent contribution until the last remark. There is a real issue in respect of competition for subsidies—there is no doubt that it is a real problem. The Government of which the right hon. Gentleman was a member were unable to do anything about it and, as he rightly acknowledges, they did not do anything about it. We believe that we have to do something. With the number of English agencies that will be set up, we rightly say that we want a level playing field and fair treatment. We have to have greater transparency about the amount of resources available to all those regions for attracting inward investment. It is our intention to achieve that.
365 As for the right hon. Gentleman's remarks about local authorities, they have an important part to play in the development of democratic accountability. I know that he is a strong supporter of local government in that sense, and I envisage local authorities playing that important role. However, we have made it clear that we need to be business-led in certain matters, and such considerations will play a major part in the regional development agencies.
§ Mr. Ken Purchase (Wolverhampton, North-East)
May I give the warmest possible welcome to the plans of the Secretary of State and his team for regional development agencies? They will help to reinvigorate and re-identify the personalities of our regions across the nation on an equal footing, one with another, with proper consideration for economic welfare within each region. We in the west midlands—an area which has experienced great devastation as a result of over-centralised policy making here in Westminster—will be given the opportunity to reinvigorate ourselves with the help of sensible planning and a proper framework of regional assemblies and regional development agencies.
May I give a special welcome to the part of the White Paper that deals with co-operative development throughout the British Isles? May I recommend to my right hon. Friend that he gives as great a push as possible to the redevelopment of worker co-operatives, credit unions, housing co-operatives and so on, which will give ordinary people a better grip and understanding of the business process that will create wealth in this country within the framework of the regional agencies?
§ Madam Speaker
Order. That was a very nice accolade for the Secretary of State, but there was no question in it—it was just a long comment. If this goes on, I shall have to stop the statement, because we must have questions, not long statements of congratultion.
§ Madam Speaker
There was no question. I listened carefully for a question and the hon. Gentleman will find that there was not one. I am sure that the Secretary of State will want to comment on the hon. Gentleman's statement and it is his duty to do so, but it is Back Benchers' duty to ask questions.
§ Mr. Prescott
I take your point on board, Madam Speaker. The matter of co-operatives is an important one. If we look for differences to explain why European regions have done far better than the English regions, we see that their advantage lies not only in their development agencies, but in their development of a far more comprehensive co-operative system, especially in France.
§ Mr. David Trimble (Upper Bann)
One welcomes in principle any proposals that will move power out of Whitehall and into the regions, although these proposals have not yet done so. The really important issue is dealing with competition between regions—between the new agencies and existing agencies in Scotland, Wales and 366 Northern Ireland. That matter has not been addressed by the White Paper and I would suggest to the Secretary of State that is foolish to proceed without clearly dealing with the central problem. It is all very well to talk about level playing fields, but there has to be some mechanism for dealing with dispute and competition, and that has to be based on a genuinely national strategy—a United Kingdom-wide strategy—that, in turn, has to reflect different needs.
People talk about the Barnett formulas, but it must be recognised that those are based on needs. Please will the Secretary of State make it clear what sort of arrangement is proposed to deal with the competitive needs of all the regions of the United Kingdom and not only the English regions?
§ Mr. Prescott
I have made it clear to the House that we recognise the problem of competition between the different areas, but, in establishing the English regions, we are not declaring for a federal United Kingdom. The English regions constitute England, and there is Northern Ireland, Wales and Scotland. There will be a certain amount of competition between the bodies and we want a level playing field. However, in the early stages of the development—perhaps towards regional government, if that is the evolutionary change towards which we are moving—each body will be represented in the Cabinet by the Secretaries of State for Scotland, Wales and Northern Ireland, and I am happy to represent the English regions.
§ Mr. Barry Sheerman (Huddersfield)
I congratulate my right hon. Friend. I remember his passion for regional government when I worked for him many years ago and I know that the report is based on good homework. But can the emphasis in the regional development agencies be on growth from within, not just the panacea of attracting industry from without? If we have the right focus, we can develop our regions, with all their talents and skills, from within. Yorkshire and Humberside, the region which I and my right hon. Friend share, is in the front.
Can we seriously reconsider having regional Select Committees, because that would add to the power of the House and the regional development agencies? Can we also consider the prime role which could be played by regional investment banks, which would not cost a lot of money?
§ Mr. Prescott
I shall pass on my hon. Friend's comments about the regional Select Committees to the appropriate authorities, but that is a matter for the House.
I have always strongly believed in the development of the indigenous economies. In the alternative regional strategy document produced in the 1980s, I was highly critical of regional policy, which was largely about attracting inward investment instead of developing the potential of the local and regional economies. The regional development agencies will do precisely that. They will look at the differences within the regions and exploit their assets and potential by bringing together the various partners. I hope and believe that one of the essential roles of the development agencies will be to consider how to develop the local and regional economies and investment within those areas.
§ Mrs. Ann Winterton (Congleton)
Will the right hon. Gentleman accept that the success of the Scottish, 367 Welsh and Northern Ireland development agencies was due mainly to the fact that the UK taxpayer subsidised them, to great effect?
The new agencies will not receive the blessing from the Treasury that the others did. Does the right hon. Gentleman accept that, as a result, instead of creating a level playing field he will be doing exactly the opposite and the regions will compete one against the other? Furthermore, is the right hon. Gentleman aware that in my constituency informal and voluntary partnerships are working together successfully, and the interests of Congleton in Cheshire are not the interests of Lancashire?
§ Mr. Prescott
There is no doubt that there are sub-regional parts of an economy that cannot be centralised in a region and one cannot assume that there is one pattern for all the regions. Anyone who knows our English regions, with their industrial and rural make-up, knows that they vary from one end to the other. Therefore, we must be flexible and adjust to that. That is why we want a regional body rather than a Whitehall organisation.
The subsidies given to Scotland and Wales reflected the high levels of unemployment when the agencies were established. The agencies were one way of responding to that. But after 18 years of a Tory Government, all regions of the United Kingdom have mass unemployment. [Interruption.] They had the record of creating more than 1 million unemployed in the south. Some of my northern colleagues found it hard to believe that there was mass unemployment in the south. But that is why we needed a national solution rather than a regional one. Therefore, the subsidies reflected the higher levels of unemployment in those areas. Now we must consider how to develop all the English regions and ensure that we provide subsidies and support where necessary on a level playing field, and we intend to do that.
§ Mr. Roger Stott (Wigan)
My right hon. Friend has been involved with this issue for a substantial number of years and I congratulate him on his statement. I make one small plea. If he has any influence regarding the location of the headquarters of the regional development agencies, I remind him that we have a wonderful place called Wigan, which he and the Minister for the regions have visited several times, and I would offer him an office at the end of the pier if he would consider it.
§ Mr. Prescott
I remember that I enjoyed the visit to Wigan pier and to the school that is on it, but I cannot give my hon. Friend any assurances about the location of the regional headquarters. Indeed, it would be wrong for a central Government official or a Minister to take what is essentially a decision to be taken in the regions.
§ Mr. Tony Baldry (Banbury)
The Deputy Prime Minister said that part of the reason for making these changes was to decentralise decision making, but in so far as those bodies will take any decisions, they will be undemocratic decisions because those bodies are unelected, unaccountable quangos.
Does the Deputy Prime Minister accept that the proposals lack coherence and will fracture the United Kingdom, in that a town such as Banbury will be lumped in with counties such as Kent and Sussex, notwithstanding the fact that the west midlands is only a few miles up the 368 road to the north and the east midlands a few miles to the east? That will mean that, on every map throughout the country, towns such as Banbury will be marginalised. I must tell the Deputy Prime Minister that Banbury will refuse to be marginalised in that way.
§ Mr. Prescott
One envisages UDI for Banbury. We shall wait and see whether the people of Banbury agree with that.
The main argument, about democratic accountability, comes ill from a Government who abolished more democratically accountable bodies, established more quangos than anyone else and abolished the Greater London authority—the Greater London council—which we are now reintroducing because it is necessary for democratic accountability.
It is inevitable that the development agencies are part of an evolutionary movement towards democratic accountability, but we do not want to wait for legislation to be passed, which would take a long time. We believe that the English regions need the economic instruments, such as the development agencies, to get on with the job now. Each development agency would be accountable to authorities in the area—admittedly, indirectly, but that is better than nothing, which is what the regions had under 18 years of Tory Governments.
§ Mr. Gerry Steinberg (City of Durham)
As a Member from the northern region, hon. Members from which have been among the main instigators of regional government for the past 20 years, I congratulate my right hon. Friend the Deputy Prime Minister on his statement. We deeply approve of it and strongly support him. Regional assemblies are a wonderful thing as a first step, but will my right hon. Friend give us an idea of when the Government will move towards democratically elected regional assemblies, which is our ultimate aim in the northern region of England?
§ Mr. Prescott
I certainly understand my hon. Friend's point regarding regional assemblies as an alternative to democratically elected bodies. I have a preference—I think all parliamentarians would—for democratically elected bodies.
There are arguments about whether all regions want regional government, but I believe that they eventually will if they do not at present. If we decide that we want to achieve any form of regional government, we need only consider the structure of local government to realise how many questions arise. If one wants to make the change to regional government, with unitary authorities, it begs the question of the role and structure of local government. Will there be unitary authorities? Will there be county councils? Will there be regional government?
Anyone with experience of entering into such issues knows that the discussion process takes one or two years, quite apart from what is usually a controversial progress through the legislative process. That is why we have said that it would be difficult to envisage achieving that structure in the remainder of this Parliament. That is not to say that we shall not give active encouragement, especially in the northern areas, where there are well-developed bodies of accountability, which may be 369 able to provide a model for us until we achieve the final objective, which I believe should be a form of regional government.
§ Mr. John Wilkinson (Ruislip-Northwood)
May I remind the right hon. Gentleman that he is proposing an extraordinary duplication of functions for London? He said that the London development agency will be responsible for inward investment, transport and planning, all of which, according to the Minister for London during the passage of the Greater London Authority (Referendum) Bill, are functions which will be undertaken by the Greater London Authority.
Who will pay for the Greater London development agency? Will it be paid for through a surcharge on the uniform business rate? Will it be a precept on the boroughs? Does the right hon. Gentleman not realise that the CBI's London region and the London chamber of commerce put as a priority for London what he has singularly failed to deliver—investment in, and a way forward for, London Underground?
§ Mr. Prescott
The last point about investment in London Underground comes a bit ill, given the disinvestment in London transport during the past 18 years. London Transport wants some £7 billion to modernise its infrastructure. A Greater London Authority will be able to deal with that much more effectively than a central Government. The previous Government took over that function from the GLC, which was doing much better at it than they did.
The hon. Gentleman must not make the mistake of comparing the English regions with our proposals in the London Bill, which introduces accountability and establishes an elected authority. There will be a separate transport body, accountable to the London authority, and the development agency will also be accountable. I am told by London business—they have said so publicly—that a development agency would not need subsidies or moneys. They believe that it could be used effectively in public-private partnerships, along with whatever other resources are made available, to develop the London economy. We look forward to seeing that being done.
§ Mr. Jim Cousins (Newcastle upon Tyne, Central)
I hope that you will forgive me, Madam Speaker—I am not entering myself for Creep of the Week award; nor would I attempt to make my right hon. Friend blush, because the task is impossible. However, I congratulate him on 20 years of principle and persistence that have brought him to his statement in the House today. We in the north-east thoroughly support him on it.
I congratulate my right hon. Friend on what he just said about regional assemblies. However, will he take due note of the fact that, while we accept that, within the financial limitations with which this great enterprise is beginning, his comments about budgets must be acceptable to us and we shall work within them, we want a proper regional needs assessment for the English regions in the lifetime of this Parliament?
§ Mr. Prescott
I thank my hon. Friend for his comments. I accept his argument. In earlier publications 370 on the regions in which I was involved, I pointed out that regional needs assessment had been achieved in my hon. Friend's area. I think that it was the only region in which such an exercise was carried out. It is necessary to make sure that we have a level playing field, and we certainly have that in mind.
§ Mr. Alasdair Morgan (Galloway and Upper Nithsdale)
In relation to the proposed concordat on inward investment and the waste of money to which the Minister referred, can he give some specific examples of where money has been wasted under the existing arrangements?
§ Mr. Prescott
One of the problems with regard to how much grant has been given to inward investment in the past is the fact that the previous Government constantly claimed that it was commercially sensitive information, and the information was not made available. We have seen some information, though not enough to arrive at that conclusion.
§ Ms Candy Atherton (Falmouth and Camborne)
May I also congratulate my right hon. Friend on his statement? He will know that in Cornwall the development agency is a burning issue. Will he outline for my constituents the benefits that they can look forward to through a development agency?
§ Mr. Prescott
I remember one of my first visits to the south-west. I listened to people in Devon strongly disagreeing with people in Cornwall, and they both hated the city of Bristol. It taught me an important lesson: do not make the mistake of thinking that when one talks of a region, one is talking for the whole region; there are strong and competing interests in sub-regional economies.
That is why we have left sufficient flexibility in the development agencies. They are statutorily based and can assist all other forms of voluntary agencies, such as those in Cornwall and Devon. The RDAs will work with voluntary agencies to develop their region's potential, to make sure that the resources and the packaging are available, to bring together the assets necessary to persuade inward investors and, more important, to help to develop the local and regional economies. We will give them the tools to get on the job. I have no doubt that people in Cornwall, Devon and the south-west will want to get on with it, provided that we supply the tools, which we intend to do.
§ Mr. Richard Allan (Sheffield, Hallam)
Can the right hon. Gentleman assure the House that when he makes appointments to the regional development agency boards from among the locally elected representatives, he will pay due regard to the political balance in each region, and will not just look to the majority parties, so that we do not end up with all-Labour representatives in Yorkshire and Humberside, or all-Liberal Democrats in the south-west?
§ Mr. Prescott
Clearly, we would wish to achieve a balance, but one that reflects the regional priorities. In most of these public appointments, the Nolan committee rules will apply.
§ Mr. Ian Pearson (Dudley, South)
May I warmly welcome my right hon. Friend's statement as an important 371 step towards developing effective regional economic development strategies aimed at competitiveness? May I tell my right hon. Friend not to listen to the Opposition spokesman, the right hon. Member for Sutton Coldfield (Sir N. Fowler), who is a west midlands business man, but just about the only business man in the west midlands who is against an RDA? The proposal has the overwhelming backing of the west midlands regional Confederation of British Industry and the west midlands chambers of commerce.
How do my right hon. Friend's proposals fit in with the assets and liabilities of urban development corporations and of the Commission for the New Towns? Furthermore, what freedom will RDAs have to take an axe to the red tape that currently surrounds the single regeneration budget?
§ Mr. Prescott
That is an important point. We are looking at the urban development corporations—there are about eight of them, which we will wind up—and the Commission for the New Towns. We intend to put them into one body, which will share a common chairman with the Commission for the New Towns and English Partnerships, performing some of the national functions and roles of those bodies, as we outline in the White Paper.
§ Sir Michael Spicer (West Worcestershire)
Does the right hon. Gentleman accept that the income differences that were used in the past to justify vast differentials in subsidies between England and Wales no longer exist?
§ Mr. Prescott
Regional grants and assistance are under review in Europe, as the hon. Gentleman knows, and the boundaries are being considered. We must await that review in order to make a proper assessment