Regional Development Agencies Bill

HL Deb 18 May 1998 vol 589 cc1290-354

3.32 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman)

My Lords, I beg to move that this Bill be now read a second time.

Just over a year ago, this Government were elected with a clear mandate to take forward a large number of substantial and far-reaching reforms, including many which will revitalise the way we run our country and its institutions. The electorate agreed with us that it was time to take a fresh look at the way government business is done and at how we involve people in that business and to put matters on a footing more appropriate to the 21st century.

In Scotland and in Wales we have, as promised in our manifesto, embarked upon devolution of powers to a Scottish parliament and a Welsh assembly, responding to demands from the Scottish and Welsh people. In London we are proceeding with our plans for a Greater London assembly and mayor, following the "Yes" vote secured in the London referendum. And in the English regions we are taking a first important step towards decentralising decision taking.

The needs and the interests of England's regions have for many years been neglected, particularly during the 18 years of the previous administration. I should, however, acknowledge one positive step. The previous government established the government offices for the regions, so bringing together for the first time four departments of state in a single regional office. In Opposition we very much welcomed that development. It was a relatively small step towards better organisation of government representation at the regional level, but it has provided us with a foundation on which to build when in government.

Generally, the English regions have not in recent years commanded the attention they so obviously deserve. This Bill is intended as a first step to redressing that balance and giving people in the regions the opportunity to influence their own future in a way that has not previously been possible.

This Bill will provide for regional development agencies (RDAs) to be established in each region of England. Its primary purpose is to give our regions the opportunity to bridge the economic deficit which has afflicted them for far too long. RDAs will provide the mechanism to ensure that efforts in the regions to boost skills, promote business excellence and attract new investment will be delivered in a co-ordinated and effective manner, with all interested parties working to agreed and common goals. The Bill fulfils a manifesto commitment which promised that each region would have a development agency of its own to match those that have worked so successfully in Scotland and in Wales since the mid-1970s.

The economic case for RDAs is overwhelming. Most of our regions are performing well below the European average. Indeed, the most recently published statistics from Eurostat—the European Commission's statistical agency—for 1995 show a decline in GDP per capita in every region in England since 1993 compared to the European average. There is now only one region in the whole of the UK which is performing above the EU average. By contrast, in Italy six out of 11 do so; in Germany 11 out of 16.

Much work has already been done in our regions—by local authorities, regional partners and the government offices—to improve regional performance. The problem is that there are often too many disparate organisations delivering economic development in the regions. That leads to confusion, fruitless competition and sometimes duplication of effort. Where people are following a common agenda, this has often been more by good luck than by good judgment. The Government's objective with this Bill is to put in place a framework which builds on the partnership and co-operation which already exist but gives them a clear direction developed through consensus. That is the added value that RDAs will bring.

One striking feature of the past 12 months has been the degree of enthusiasm our proposals have met with in the regions. Our consultation paper, for example, received over 1,500 responses. Throughout England people see in RDAs a real opportunity to improve the fortunes of their regions and recognise the advantages RDAs will bring. The whole process has created its own momentum for regional co-operation and regional partnership, even in regions where traditionally there has been no strong identity. I saw this myself at first-hand when I joined the Eastern region's local government conference earlier this year in Chelmsford which started the process of establishing a voluntary chamber for the Eastern region.

Turning to the Bill itself, the Government's White Paper Building Partnerships for Prosperity published last December set out our proposed agenda for RDAs. The Bill will give them the powers they need to deliver that agenda.

The Government recognise that different regions have different needs. The Bill therefore contains a framework of enabling powers which will allow each RDA to develop its own approach to its unique and individual regional problems and needs.

Clause 1 of the Bill provides for the establishment of an RDA in each of England's nine regions. The areas of the RDAs will correspond to those of the government offices for the regions. The administrative boundaries of the government office areas are well established for economic purposes, and we think it makes sense to base the RDAs on them. We decided early on, for reasons of economy of scale, that the north-west would be best served by one RDA.

I know that boundaries have been an issue of concern for some Members of the House. But I am absolutely certain that my right honourable friend the Deputy Prime Minister was right to decide at the outset that we should not be diverted from the main task in hand by disputes endlessly about boundaries. That would serve only to fuel disagreement and rivalries within regions. Our objective is to get people to work together and sometimes they will need to work together, across regional boundaries as well as within them so as to make our regions and our country more competitive.

Clause 2 of the Bill deals with the constitution of RDAs. It provides for between eight and 15 members to be appointed to the boards of the agencies. The Government envisage appointing 12 members to each board. We are looking for high calibre candidates with experience relevant to the RDAs' purposes to serve on boards which will be business-led and which will reflect the broadest possible range of regional interests. In making appointments, we do not propose to stick rigidly to a set composition of sectoral interests on the board; board members will not act as delegates. We are looking for candidates who can bring a range of experience to the board, including with experience and expertise from local government, further and higher education, trade unions and the voluntary sector. As many of your Lordships will be aware, we have made a firm undertaking that at least one member of each RDA board outside London will be someone with rural knowledge and expertise. We have sought nominations from all interested parties in preparing for making these appointments.

Clause 4 sets out the five key purposes of the RDAs: furthering economic development and regeneration; promoting business efficiency, investment and competitiveness; promoting employment; promoting the development and application of skills; and promoting sustainable development. Clause 4 also provides, for the avoidance of doubt, that the purposes of RDAs apply as much in relation to the rural parts of their area as to the non-rural parts.

Clause 5 enables RDAs, with certain restrictions, to do anything which they consider expedient to their purposes.

The Government intend that the functions of RDAs should be wide-ranging. We want RDAs to have a degree of influence and authority in their regions which will enable them to make a real difference to regional economies and regional competitiveness.

The White Paper Building Partnerships for Prosperity set out in detail the functions we propose for RDAs. It is, as I shall briefly outline, a challenging and influential package: RDAs will be responsible, for example, for the development of a strategic framework for the provision of skills training. We want RDAs, working with TECs and other regional partners, to ensure that the workforce has the capability to meet the needs of business in the regions. To reinforce this, they will play a part in scrutinising the work of TECs and Business Links with a view to advising government how to improve their performance.

Regional development agencies will be responsible for co-ordinating inward investment in their regions. Government funding for inward investment work will in future be channelled through RDAs. They will advise Ministers on regional selective assistance applications.

Regional development agencies will also become the major bodies responsible for regeneration in the regions. They will inherit the regeneration role of English Partnerships, which has, under the skilful chairmanship of the noble Lord, Lord Walker of Worcester, secured a wide and well deserved reputation for innovative and successful regeneration work, and this will provide RDAs with a firm foundation on which to build. They will also inherit the rural regeneration work of the Rural Development Commission, which I know already is highly valued in our rural areas.

Under Clause 6, which enables Ministers to delegate functions to RDAs, RDAs will be given responsibility for administering the Single Regeneration Budget Challenge Fund.

By bringing together within a single body the separate regeneration programmes of the RDC, English Partnerships and the government offices for the regions, RDAs will be able to provide a better co-ordinated approach to meeting the needs of their regions. They will continue to work with local partnerships, as their predecessor organisations have done.

Clause 7 requires RDAs to formulate and keep under review a regional strategy in relation to their purposes and to have regard to the strategy in exercising their functions. For the first time there will be, in each region, a body responsible for setting a strategic framework for economic decision-taking at the regional level. The strategy will be the first, and most important, task for RDAs.

Much of the remainder of the Bill establishes the legislative framework for governing the activities of RDAs, replicating for the most part the statutory powers and duties of the Urban Regeneration Agency—that is, English Partnerships—in order that RDAs can take on the regeneration role of EP. There are, in addition, provisions for transferring property, rights and liabilities to the regional development agencies in connection with the functions they are to inherit; for example, from EP and from the RDC and the government offices.

Regional development agencies are to be set up in the form of the conventional non-departmental public bodies. They will for the most part be financed from public funds and, in the absence at present of a legitimate, directly elected regional tier of government, they will be accountable to Ministers and to Parliament for their actions in the normal way. But it is important, as we take this first step towards greater regional autonomy, that we make proper provision for RDAs to be responsive to views from within their regions. We have, therefore, made provision in the Bill for scrutiny by regional interests of the work of RDAs. The Bill, in Clauses 8 and 18, provides a mechanism for building on the informal structures that local authorities and their regional partners have already taken, or are taking, steps to set up.

Clause 8 enables the Secretary of States to designate a regional chamber as the focus for regional consultation about the work of an RDA; and Clause 18 allows him to direct RDAs to give an account of themselves to regional chambers. Chambers will therefore have a substantial role to play in the work of RDAs and in ensuring that their work reflects the needs and views of the whole region. We are delighted that local authorities in the regions are actively participating in developing chambers.

This is perhaps an appropriate moment to mention a concern that was raised by a number of noble Lords in the context of the Statement on our White Paper last December—that is, the question of planning powers for RDAs. Noble Lords may be aware that the Government, responding to concerns expressed, in particular by local government, announced at the Report stage of the Bill in another place that we would not proceed with our proposal to give RDAs reserve planning powers. It was suggested that these powers were inconsistent with the partnership approach which is at the heart of RDAs. On reflection, the Government agreed with this.

There are one or two specific matters on which I should like to spend a few moments, since I know concerns have been expressed about them. The first is sustainability and the role of the RDAs in achieving it. I have spoken at some length about the need for our regions to be competitive and for the regional partners to improve the economic prospects of their region through attracting more inward investment, through improving business performance and through economic and social regeneration. But we intend that this will be done in a sustainable way.

The Bill provides for sustainable development to be at the heart of the regional development agencies' work. Indeed, we are striking out on a new pathway in this Bill because, for the first time, the purposes of a development agency will require the agency to treat economic, social and environmental considerations with equal regard. An RDA will be required—for example, when it is acting to further the economic development and regeneration of its area—to do so in a way which contributes to the achievement of sustainable development in the United Kingdom.

This is not, I must stress, an optional extra. The effect of the Bill is to require sustainable development to be a factor in all the decisions an RDA makes. The RDAs will promote jobs, growth and competitiveness in our regions—that is their raison d'être—but they must do so in a way which is compatible with safeguarding the environment, and with social progress.

The guidance we intend to give the agencies will be important in making it very clear what we expect of RDAs in this respect. It will be vital that RDAs are clear about how they should go about fulfilling their sustainable development purpose. The Bill provides for us to issue guidance on how they might do this.

I also want to say a few words about the impact of the Bill on rural areas. The Government believe firmly in opportunity, fairness and prosperity for all, whether they live in the city or the countryside. Rural areas are a key part of the national economy where many people live and work. Our countryside must be both living and working, and we are committed to addressing its own range of problems as much as those of anywhere else.

Regional development agencies will be region-wide bodies, with extensive responsibilities for the development and regeneration of their regions and for promoting the economic well-being of their regions. This means the whole region. They will add value precisely because they will be required to take a coherent and integrated approach to the needs of their regions. This, in the Government's view, can only bring benefits to rural areas and will avoid the risk of rural interests being marginalised in any way.

There are, of course, often very different pressures on our rural areas from those on our urban areas. Indeed, different rural areas face very different pressures. We have said that the guidance we give to RDAs will deal specifically with rural needs and the determination of priorities for rural areas. Government support for rural areas will continue to be reflected in the RDAs' funding. As I have already mentioned, at least one member of each RDA board will be someone with rural knowledge and expertise.

Although RDAs will take over the rural regeneration programmes of the RDC, the Government are committed to retaining a national body for expertise, advice and information on rural matters. On 27th March my right honourable friend the Deputy Prime Minister announced the merger of the Countryside Commission and the Rural Development Commission to form a new champion for rural England and its countryside. It is intended that this merger will be effected under powers in Part II of this Bill. The new body is expected to begin operation in April 1999. Taken together, our proposals for RDAs and a new countryside body will ensure that we understand the particular needs of rural areas, while addressing them within the overall framework for a region as a whole.

I should also like to say a brief word about London. The Government's proposal for a new London development agency was announced in the White Paper on London government. The LDA will have broadly the same powers and functions as the other RDAs. The people of London have voted an overwhelming "Yes" to having their own mayor and assembly. The LDA will be directly accountable to the mayor and will implement the mayor's economic development and regeneration strategy for the capital. As an arm of the Greater London Authority, the LDA will not be established until the mayor and assembly are in place. The LDA's board will be business-led, as with the other RDAs, but it will be appointed by the mayor. In addition, government funds for regeneration, the promotion of inward investment, English partnerships and tourism will be channelled through the mayor.

This Bill has not captured the overwhelming attention of the editors and sub-editors of our national dailies. This is not surprising. Perhaps it is a reflection of the neglect of regional interests to which I referred earlier. But I can assure your Lordships that it is a very different story in the regions themselves, where this first but significant step in our regional agenda has been widely and enthusiastically welcomed. Anyone who visits the regions and meets those who have regional interests at heart will know that people welcome the opportunity to shape their own future which RDAs and this Bill will give them. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Baroness Hayman.)

3.50 p.m.

Lord Bowness

My Lords, I thank the Minister for her usual clear explanation of the Bill and its provisions. She will understand that, while we on these Benches share her enthusiasm for prosperity in the regions, we do not necessarily share her enthusiasm for the methods outlined in the Bill to try to achieve it. Our concerns are about whether there is a need for this additional layer of bureaucracy, the effect on local government, the power of the Secretary of State, the rural dimension and how the proposals fit with the Government's intention towards the regions and their proposals for regional government.

Had the Government not climbed down over the planning powers which were originally to be given to regional development agencies, we should have been concentrating on those. Suffice it to say that the withdrawal is welcome, although the fact that an administration committed to open government, the extension and strengthening of local government and the rolling back of the "tide of quangos"—the Prime Minister's words, not mine—should have contemplated giving wide planning powers to centrally appointed, non-elected and locally unaccountable bodies is, to say the least, extraordinary.

Therefore, while we shall not be voting against the Bill, there are nevertheless significant matters of detail upon which it is legitimate for this House to express a view. Is there a need for this additional bureaucracy? A number of questions must be answered. First, will the existence of these bodies attract more investment into England? What is it that leads Ministers to believe that these structures, with the accompanying staffing and administrative costs, will do better at attracting investment into England than in the past?

The Government try to have it both ways. On the one hand, as the Minister has said this afternoon, it says that the measures are necessary because of the state of the regions and their economy. On the other hand, the Government say in the White Paper: The cumulative value of foreign direct investment … into the UK has risen from $28 billion in 1975 to over $344 billion in 1996. The UK receives the largest share of [foreign direct investment] in the European Union, including about 40 per cent. of US and Japanese overseas investment. In manufacturing [foreign direct investment], accounts for 18 per cent. of employment, 32 per cent. of capital expenditure and 40 per cent. of UK exports. Over the last decade, FDI has not only created over 600,000 jobs but has helped to develop and modernise the industrial base". The question must be asked: will not the proliferation of agencies lead to different and competing voices being heard for England? If competition is no bad thing, then why not leave it to the existing local authorities either individually or by ensuring that they have the means to work together to continue the excellent work that many of them are doing irrespective of their political complexion?

If the regions proposed had a clear identity obvious to the people of England—never mind the foreign investor—I would be less worried as it would then be possible for each region to speak with a united voice in the same way as to a great extent it is possible to speak with one voice for Scotland or Wales. As it is, there will be inevitable confusion for foreign investors as they are faced with competing demands for their business from different parts of what to them is the same country. What protection will the Government provide against an auction of benefits between the regions? If the answer is that this is one of the many aspects which is to remain in the hands of the Secretary of State, why set up the structures in the first place?

The Government represent this Bill as a decentralising measure but, while the agencies may be based in the regions, accountability is to be to the Secretary of State and, through him, to Parliament. He is able to control all aspects of the RDA including from the beginning the central selection of the membership. It is not good enough to answer this by the requirements to consult. The RDAs will be central government bodies created, appointed, guided, reporting to and funded by central government grant and consent. From where will the necessary funds come? How much is to be taken from existing programmes and how much from local government under the pretext that certain matters are now being dealt with regionally?

Local government of all political colours has made enormous efforts in the field of economic development. Partnership deals have been struck, new investment has been attracted and regeneration has taken place. What is local government's reward for this? It is to see the primary responsibility taken away and given to a government-appointed quango operating at least in some cases over an area to which some authorities will feel no loyalty. I have no confidence in government denials that this will not be the case. Among the primary objectives of the RDAs are the furtherance of economic development, employment and business investment.

If there is to be a regional view about all this, then clearly the plans for some parts of the region are to be preferred to the plans of another part. The objectives for the area may not be compatible with individual authorities' own plans. Ministers may well believe that this is right but they should not pretend that the proposal does not impinge on local government. It will be said that the RDA is to work in partnership with the local authorities in its area but the decisions will rest with the appointed regional development agency responsible to the Secretary of State. But it is true that all the objectives of the RDAs are matters of legitimate concern to local government.

The rural dimension to which the Minister has referred—or rather the lack of a clear recognition of it in the Bill—is of great importance. Although it is referred to in the White Paper, the Bill needs to be strengthened to protect the rural dimension. The decision to scrap the Rural Development Commission has already caused a great deal of concern. The RDC has a proven track record in rural affairs and the decision to remove most of its functions and hand them over to the new RDAs, which will be largely urban-based, adds to the crisis of confidence in rural England. We shall want to pursue a number of these matters in Committee including a guarantee on the face of the Bill of rural representation on the RDA boards and an explicit responsibility for RDAs to promote the interests of rural areas.

The Labour Party manifesto said: The Conservatives have created a tier of regional government in England through quangoes and government regional offices. Meanwhile local authorities have come together to create a more co-ordinated regional voice. Labour will build upon these developments through the establishment of regional chambers to co-ordinate transport planning, economic development, bids for European funding and land use planning". Later, in the same section it reads: In time we will introduce legislation to allow the people, region by region, to decide in a referendum whether they want directly elected regional government". The Government are certainly building on the quango and regional office with this Bill. The agencies will be major organisations, answerable to the Secretary of State, with very considerable powers, including the compulsory acquisition of land. In another place, it was suggested that that should not be the subject of criticism because they merely replicated the powers given to the ultimately-to-be-abolished English Partnerships. But its role was limited in scope compared with RDA's which will together cover the whole of England and therefore be capable of exercising those functions over the whole of the country in the area of every local authority.

We should look at the scope of the RDAs as published in the White Paper, a list which is rather more extensive than in the party's manifesto—leadership in developing regional economic strategies, social, physical and economic regeneration, regeneration of rural areas (a reference in the White Paper, not on the face of the Bill), taking a leading role on European Union structural funds, co-ordinating inward investment, providing advice to Ministers on regional selective assistance support, reclamation and preparation of sites facilitating investments, marketing, technology transfer promotion and improvement of the skills of the region. But interestingly enough, the TECs are not to come within the scope of the control of the RDAs. Added as a footnote to the list in the White Paper it states: RDAs will also contribute to policies and programmes on Transport; Land use; The environment and sustainable development; Further and Higher education; Crime prevention; Public health; Housing; Tourism; and Culture and sports infrastructure projects". If I were a local government leader, I should not understand why the Secretary of State's White Paper, Local Democracy and Community Leadership, bothers to have a chapter on councils leading their communities, given that in virtually every field of local endeavour, they will be second-guessed by the regional quango which will often be based miles from their community.

I return to that part of the manifesto which spoke of regional chambers and regional government. Your Lordships will know that my party does not favour the division of England into separate regions. But this afternoon we are not discussing my party's policy. We are discussing a major government proposal to establish powerful regional bodies, centrally controlled, exercising important functions, and we are entitled to ask how that proposal fits with other government commitments in their manifesto.

If we do not ask that question, we are enabling the Government to proceed with significant changes to the way in which the regions are governed without being told the whole story. Do the Government believe that the regions, as set out in the schedule, represent the true regions of England? Do they have popular acceptance? The truth is surely that they are based, with one exception—and that is an amalgamation of two government office areas—on the arbitrary boundaries of the Government's own regional offices. It was legitimate to establish those boundaries for the operation of the government offices, but it is not legitimate when trying to create a region which has a genuine community of interest across its whole area. Surely before proceeding, steps should have been taken to try to establish—and I have no doubt it would be difficult—what areas enjoyed a broad consensus that they belonged together.

Certainly if the Government believe that regional identities comparable with those to be found in other parts of the European Union, will spring from the areas specified in the schedule, I fear that they are seriously mistaken. I have no doubt that some of those issues will he raised in Committee, just as they were in another place.

The White Paper speaks of the establishment of voluntary chambers and requires the RDA to "take account of" those views. Presumably at some time in the future, the Government, unless they have changed their mind, will envisage those structures being transferred into statutory chambers and ultimately, regional assemblies.

It is fair to examine the place of local democracy in relation to those proposals. The White Paper expects to draw members of RDAs from a broad range of interests including business, local authorities, the voluntary sector and wider business and employee perspectives. It also speaks of regional chambers being created to provide a regional voice which includes, as well as local councillors, all regional stakeholders. Would a regional assembly retain those unelected elements? If the RDA becomes accountable to an elected assembly, I presume that there would be no role left for the regional chamber. Where, then, is the voice of local government to be heard?

At present, however, not all the areas have voluntary chambers and certainly, when the White Paper was published, where they did exist, they did not necessarily coincide with the proposed regions. Perhaps the Minister will advise the House as to the up-to-date position.

However, it indicates that to start that process without first deciding what are the right areas for the regions is the wrong way to proceed. The Secretary of State has among his considerable armoury of powers the right to change areas. I fear that a great deal of initial energy may be spent by some parties seeking to make changes at an early stage. That is inevitable and, I submit, right since communities must feel included and joined with their natural neighbours, otherwise, within the area of an RDA, there is a great danger of divisiveness and alienation, and possible accusations of unfair treatment will abound.

As for the proposal for elected assemblies, the timetable, if it still exists, seems to be somewhat uncertain. But if it does exist, there seems to be a danger that by this Bill, which will establish the RDAs, which will presumably become accountable first to chambers and then to any assembly which is created, the areas of the regions will have been pre-empted.

The Financial Times this morning reported that: Ministers intend to recall the Commons regional affairs committee. It could be renamed the English grand committee and may, over time, acquire limited law-making powers. The committee will be the exclusive preserve of English MPs … The recall of the committee will take place in the next session of parliament, and its first meetings are expected to focus on the planned regional development agencies for England … The cabinet is divided on whether to pursue Labour's commitment to elected assemblies in the English regions. Those who oppose assemblies because there is limited demand for them believe that the regional affairs committee could be an effective alternative". If that is what is being said, reported and spun out of government offices, the House should be told what is the position when we are debating this important Bill on the establishment of those powerful bodies.

Lastly, the RDA for London is to be a special case. It is to be created by this Bill, but, according to the White Paper on London, the RDA will be appointed by and answerable to the mayor of London. I ask the Minister, as I have before, whether that means that the Greater London Authority is to be the regional assembly for London or whether that is something which comes later. The Bill does not appear to deal with the London position. The White Paper speaks of transitional arrangements. There are none in this Bill. If I have missed them, I apologise. But it appears that we shall be setting up the London agency through this Bill and then need to amend the proposals in relation to it when we have the legislation on the mayor and authority for London.

There are reflected in the responses, which the Government claim to be overwhelmingly in support of their proposals, a number of reservations and comments of concern. Those concerns, the apparent inconsistencies, the unanswered questions and, indeed, the important points of principle are matters which we need to expose, discuss and, if necessary, amend in Committee.

4.8 p.m.

Baroness Hamwee

My Lords, I follow the noble Lord, Lord Bowness, in thanking the Minister for her introduction. That is not the full extent to which I support what he says, and I hope that my tone, as well as my words, will be rather more supportive.

The Liberal Democrats broadly welcome the Bill. We welcome it in part because of the centralisation which we have seen over the past two decades, particularly in the 1980s. I have seen that referred to as the fragmentation of the public realm arising from privatisation, the establishment of arm's length agencies and "marketisation"—a terrible word—of public services. Those things are not necessarily bad but they have highlighted the need to improve management at regional level. We also welcome the Bill because, quite simply, we have been losing out in a Europe which organises many of its affairs regionally. We welcome the holistic approach to regional affairs. The jargon term may make this sound no more than a matter of fashion, but there is much criticism of every government when they fail to use the imagination necessary to cross departmental boundaries.

Whether, in practice, the RDAs will meet the tests of devolution and decentralisation, and of common sense breaking through bureaucratic structures, remains to be seen. We would have wished them to have had greater responsibility; for example, for the work of the TECs and Business Links. We are disappointed that the Bill represents only a small step on the road to regional government. The degree of decentralisation may not be as great as has been claimed for the agencies. I use the term "decentralisation" deliberately because I want—indeed, as all of us on these Benches want—to see decentralisation, devolution from central government, not detracting from local government.

I recall how the government offices for the regions were packaged as some form of regional government when they were introduced by the previous government. They were not. Even though we welcomed them, we welcomed them for what they were. They were not a form of regional government. In that period, we were concerned about the remaining central control. I must confess to a degree of concern that central control, or at any rate the scope for central control, can be read into very much of this Bill.

Local government is all too familiar with financial regimes which involve government grants, the Secretary of State's approval of borrowing, with low aggregate limits, and the Secretary of State's determination of financial duties. All these appear in the Bill. That is perhaps fair enough. The RDAs are to be the creatures of central government. As they are not directly democratically accountable, I accept that there is a logic to that type of control. But that control is there and must been seen to be there, as well as being accepted as such.

The other side of the coin is the scope for—perhaps the need for given the retention of central powers—secondary legislation and directions. Again, that is perhaps fair enough, if it is not the RDAs or the regional chambers which are democratically accountable and responsible. However, that degree of central control—the scope for further legislation and directions—reminds us of their true constitutional position. That is pointed up especially in the geographical areas which will make up the RDAs. Both the noble Lord, Lord Bowness, and the Minister referred to them.

The anomalies of the government-designated regions, and in some cases their lack of regional identity, have been much discussed. I do not necessarily argue that the boundaries of the regions should be revised now. I well understand the point that the Minister made; namely, that to concentrate on the boundaries would probably destroy any prospect of establishing the agencies for some considerable time. However, any review can only tinker at the margins. It appears that the boundaries can be revised, but not the number of regions. I wonder whether it should need primary legislation to alter the number of RDAs. If there is a review of the regions, then the numbers must be an issue as well as the fine detail of where the boundaries begin and end. It is possible that the European elections, which will be based on the same regions, will give us an opportunity to see whether they truly represent communities. In my view, especially in the south-east, they do not.

I have mentioned some of the financial constraints on RDAs. In some ways their powers are very wide but in others they are very much constrained. For example, unless I have misread the provision, it is beyond my powers of comprehension to understand why the agencies can only report on what the Secretary of State directs them to report on. Coming from a local government background, I must confess to an envy of each agency's ability to do anything which it considers to be "expedient for its purposes". In other words, it will be the agency's view not, I am happy to say, that of the Secretary of State; nor, more interestingly, an objective view. Nevertheless, I look forward with interest to the probability of conflict between the RDAs and the Secretary of State. The latter may consider that the actions of the RDAs are threatening his position. He may say that what they want to do is not "expedient". In any event, it will be their decision. Indeed, this will be a battle worth observing.

I am puzzled by what the Government anticipate. The RDAs can do what they believe to be "expedient" but, specifically, they cannot provide housing. I admit to a certain amount of confusion in that respect. We all know the links between employment—an objective of the Bill and of the agencies—and affordable housing. To exclude this topic, as the Bill does, is a matter that we may like to revisit.

I particularly welcome the Government's acceptance that to have given planning powers to the RDAs would have been quite inappropriate. However, I still wonder whether the regional planning frameworks will be robust enough to deal with the demands which will come from, the RDAs. On Report in another place, the Minister, rightly in my view, spoke of regional planning guidance and the RDAs' strategies being compatible and consistent. She said that the strategies of the RDAs will have to have due regard to regional planning guidance. However, she went on to say that neither would predominate. But surely there is a hierarchy. Is it not the case that regional planning guidance should be informed by, and take account of, the objectives of the RDAs and then do the job of reconciling the competing interests?

One of those interests is sustainability. It is no surprise to me that both previous speakers referred to it. Indeed, I am sure that that will be a topic which features in much of this afternoon's debate. I admit to being baffled by the wording in the Bill which requires each RDA to contribute to the achievement of sustainable development, where it is relevant to its area to do so". The Minister said that sustainability will be at the heart of the work of the RDAs and that it is not an optional extra. But that is not what the Bill suggests, or at any rate what it suggests to me. I do not know what possessed the Government to put in that limit or to believe that sustainability would ever not be relevant. Similarly, I do not understand why they think it right to retain that limit against the barrage of attack that we have witnessed. Perhaps the difference is in the interpretation of what is meant by the term "sustainable development". Do the Government envisage that sustainable development is somehow a separate category of development? I would prefer to be assured that all that the RDAs do will be sustainable. By that I mean that it will be sustainable environmentally and socially and that it will not necessarily involve "development" as that word is often understood.

References to rural areas also make me wonder whether the Government are perhaps protesting a little too much. Surely it is axiomatic that the RDAs' purposes apply to rural, as to urban and as to suburban, areas; and, indeed, as the Minister said, to the very varied rural areas. I understand that the politics of the day may have led to an attempt to reassure in this slightly odd fashion. I also understand why a number of rurally focused organisations have concentrated on this clause. To include it almost suggests that what is stated may not be entirely what is meant. I think that, logically, rural areas should not have been referred to because rural concerns are so fundamental. To say that there will be an application to rural areas suggests there may have been doubt that the RDAs would address rural concerns.

Baroness Hayman

My Lords, I thank the noble Baroness for giving way. I follow the tenor of her argument. However, when that doubt has been expressed—as it was when the establishment of the RDAs was announced—it is sometimes necessary to rebut it. I agree it is axiomatic that RDAs must look after the needs of all parts of their regions.

Baroness Hamwee

My Lords, I understand that point. I am perhaps making a philosophical point which concerns more than just this Bill. One wants to see the wording in legislation stand the test of time and not constitute too much of a knee-jerk reaction to current concerns. Further, in addition to rural concerns there are urban concerns. These constitute two sides of the same issue. I have never believed that it is practicable to deal with rural issues without at the same time attending to urban issues and vice-versa.

I think I have made clear my concern that the references to rural matters and to sustainable development are perhaps—it is harsh to say this—understandably regarded as a bit of window dressing. If they were truly thought to be central to the Bill, they would not have had to be superimposed. However, the Government will not win with their words but with their deeds. We shall see how the RDAs perform. No doubt these points will be addressed in amendments at later stages of the Bill, together with a number of technical matters relating to property, rights of way and other matters.

One technical but important area concerns the way in which RDAs and regional chambers interrelate and how each operates. Matters of accountability and openness were raised by my honourable friends in another place. On the Hunt Bill I raised similar concerns. I was pleased then that officials referred to forthcoming legislation on freedom of information, even though it had not been enacted. The noble Baroness, Lady Farrington, was much involved with that matter. I hope that freedom of information, openness of meetings and other such matters will be referred to, as they were on that ill-fated Private Member's Bill. I also look forward to gaining a better understanding—perhaps by means of a probing amendment—of how the performance of the RDAs will be assessed. Is the Audit Commission to have a role? Are they to meet performance indicators? What will be published? We would welcome further information on those points.

The Minister referred to London. Like the noble Lord, Lord Bowness, I, too, think that we must expect some further legislation on London. London is a region within the first schedule to the Bill. There will be a Bill in the autumn to deal with London which will immediately amend this legislation. I should be grateful if the Minister could confirm that that will be the case.

I have another question to ask on behalf of my noble friend Lord Rodgers of Quarry Bank. He wonders what the Government have learnt from the experience of the economic planning councils which were established more than 30 years ago. They were formed at about the same stage in the Wilson government as this Government have now reached. I am sure we shall he told that much was learnt and has been incorporated in this measure.

I have mentioned a number of concerns. We hope that in practice these agencies will be truly representative of their time and will reconcile the competing interests of sustainability, development, environmental concerns and social concerns with their important task of economic promotion and regeneration. We wish them well.

4.24 p.m.

The Earl of Lytton

My Lords, I must first declare an interest as a chartered surveyor and landowner. I am president of the Sussex Association of Local Councils. I have put my name forward for membership of the board of the south east regional development agency. I commented in response to the White Paper. However, my views are fundamentally my own. I welcome the Bill.

When I wrote to the Minister in December last, one of the points I raised concerned accountability. This followed previous points I had raised on such matters as national park authority membership. In the Minister's kind response, for which I am grateful, I was given what I shall describe as part of the answer that I was looking for. But neither accountability of the RDA via the Minister nor an obligation towards a regional chamber—I am not quite sure of its composition—seem anything other than a rather indirect approach to the matter. However, I realise that that tends to be the way things are done these days. My late father's favourite Swahili term—"desturi bwana" or "standard practice, sir"—comes immediately to mind.

The measure has fuelled much comment from local authorities who could perhaps be forgiven for wanting to see their local democratic base represented in force both at agency and regional chamber levels. There has also been comment from rural interests who fear their position will not be adequately represented as they are inherently in a demographic minority. Representation and accountability inevitably colour the deployment of resources whether one likes it or not. Although I take some comfort from Clause 4(2) which deals with the rural and non-rural balance, commitment to the RDAs' work will to some extent depend on how it is perceived that they maintain that balance. I feel that further guidance ought to be given. A guarantee of one rural RDA seat in each region—if that results in one seat alone—may not be terribly helpful. I am always concerned about guarantees of that kind.

If rural and non-rural areas are to be treated equitably—as indeed they must—for RDA purposes, it will nonetheless be a matter of practicality as to how that works out depending on the prevailing pressures in the region concerned. I foresee difficulties as regards attracting that difficult-to-achieve mix of impartial expertise among the membership that covers urban, rural and indeed suburban facets mentioned by the noble Baroness, Lady Hamwee. That will be a hard mix of disciplines to achieve in an integrated way. But if the mix is not right, the choice of priorities—whether urban, suburban or rural—will not command confidence outside the RDAs even if there is unanimity within them. How is that expertise to knit and to co-operate with the normal diversity of opinion common in local politics? Certain local authorities aspire to some of the economic functions—indeed some carry them out—to be exercised in future by the RDAs. That issue must be addressed.

However, I welcome the clear remit for economic development and the intention to forge partnerships across the urban/rural spectrum. I shall say more about development later. I have crossed out the word "divide" in favour of "spectrum" which I feel is more neutral. I have long thought that there are too many administrative bodies, particularly as regards countryside matters. At the risk of offending some, I hope that there will be a further rendering down of functions performed by a number of different agencies.

For too long local authorities, in terms of their development plans, have implicitly or explicitly maintained that economic factors are not primarily their responsibility. I hope that we now have a clear indication that these economic factors will have to be relevant to planning in the future. If not, I have concerns that local planning authorities will go on claiming that it is none of their business because there is a new, distinct and formal structure for dealing with it as opposed to a rather diffused approach previously. Rural planning guidance and planning policy guidance, as referred to by the noble Baroness, Lady Hamwee, will need to be looked at in that context, and I say that not for the same reasons as those of the noble Baroness when she raised the point. Development is an unfortunate word.

It denotes building work and substantial physical change. When dealing with rural matters that is by no means what is always wanted. It is, I believe, behind some of the non-development-in-rural-areas mentality that has grown up, but sustainability and Agenda 21 considerations, already referred to, involve reliance on equity at home as well as abroad and, critically, on social and economic as well as environmentally sustainable practices. Deprivation never gave a good economic out-turn, or indeed a good environmental out-turn.

I am not sure that I understand how regional chambers are being brought into being; nor what the RDAs' relationship with them should be in practice, particularly in the light of possible hard decisions having to be made. The chamber, we learn, will be composed of those who have "an interest" in the work of the RDA. It is obviously a very wide definition of potentially qualifying persons, possibly too wide. However, on the whole, I think that the Bill and the proposals to create RDAs should be welcomed. I am concerned that another template of administration may not always fit neatly over current practicalities and it would be disastrous if alienation from economic development initiatives pursued by some very able local authorities in the past was to take place.

I feel passionately that an alternative rural economic strategy is needed beyond what I can only describe as the pious hope of the CAP: more of that later in our last debate today. I will not dwell on that subject now. However, it is all the more important when dealing with severely less favoured rural areas, where environmental policies hold sway, that there is increasingly a severe economic deficit in what supports land use management. If genuine efficiency is to be gained by the new RDAs I would welcome and encourage the Bill and the agencies it sets up. I do not mind what shape or size that efficiency comes in or whether indeed it comes in a uniform-sized package.

The noble Baroness, Lady Hamwee, made a point which struck a chord with me. Economic issues do not stop at the city gates; nor indeed, it should be said, at the village shop. We are inevitably all in this together. If the rural development agencies successfully address that point without having the divisions, or fostering the divisions, of the past it will be a major step forward, and if there is created a long-term strategy in the place of short termism then I give the Bill three cheers.

4.33 p.m.

Lord Dormand of Easington

My Lords, there can be few Bills which have had such a widespread welcome as this one. To receive support from the CBI, from the Country Landowners' Association, the Local Government Association, trade unions and other bodies, while perhaps not unique, is certainly unusual and the Government are to be congratulated on introducing such a valuable and, if I may say so, comprehensive measure.

I was not sure when the noble Lord, Lord Bowness, spoke for his party, whether the Conservative Party agrees in principle with the regional development agencies. It would be nice to know. The noble Lord did say that while he agreed with the objectives he would have something to say about the methods of achieving those objectives. Perhaps it is revealing that at this stage we do not have a real clarification of his party's position—

Lord Bowness

My Lords, would the noble Lord give way? I do not want to take up the time of the House, but our position is quite clear. Of course we support the objective of regional prosperity, but we do not believe that the structures in this Bill are an appropriate way of achieving it. We believe its proposals to be centrally controlled, centrally focused and damaging to local government.

Lord Dormand of Easington

My Lords, when the noble Lord says "the methods" is he or his party in favour of a regional development agency? He has not clarified that point. Perhaps I could press him.

Lord Bowness

My Lords, my party is not in favour of the regional development agencies as set out in this Bill. No doubt we could bring forward all kinds of policies, were we sitting on that side of the House, to enhance regional development; but the issue is what is before the House today.

Lord Dormand of Easington

My Lords, I am grateful for that clarification. I have particular pleasure in welcoming it because the Northern Group of Labour MPs, of which I have been an active member since I entered another place, has advocated a northern regional development agency for a number of years. Here we are at long last with a document in front of us—an actual document, which is a Bill setting out the objectives and how to achieve them, which some of us in the north have been shouting about (I do mean shouting) for a considerable time.

However, we must realise that this is only a start. There are no RDAs and so there will be much to learn. The Minister of State recognised that in saying that development of the agencies will evolve—that is the word he used—and I certainly support that view. Of course there are some bodies from which inevitably we can and should learn lessons; indeed my noble friend on the Front Bench mentioned that in passing. There is, not least, the very successful Northern Development Company, which is unique to the country. It consists of representatives of employers, businessmen, trade unions and local government, and is a highly successful partnership. It has been very effective in the four or five years since it was established.

Lessons can and should be learned from the urban development corporations and the new town corporations. Perhaps I might be permitted to say that when I was in another place I had quite a finger in the pie in helping the development of a new town in my constituency and, more recently, I have been deputy chairman of an urban development corporation and remain there until next month. I am very sad that that is soon to come to an end. All of us who have been members of those bodies have learned from the very valuable experience which we have gained over a number of years.

In this respect the Government proposals in giving the functions of English Partnerships and the Rural Development Commission to the RDAs is wise and sensible, I believe. There has long been the need to integrate urban and rural policies and this Bill provides for the first time the opportunity to achieve that objective. I am very interested to hear that those matters—the integration of urban and rural policies—have already been mentioned several times although we have only had four or five speakers so far.

It is important to realise that RDAs are not only about inward investment, crucial though that is. The northern region, if I can quote it again, has a success story to tell. Some of the nation's biggest and best companies have come to the region, although we must not let that success disguise the fact that hundreds of smaller firms have established themselves and brought thousands of jobs to the north. That must continue, and the RDAs are better placed to do it than were the previous bodies, however successful they have been. My point in mentioning the matter is that the improvement and regeneration of a region's indigenous industry and commerce are at least as important. Much can be done, and RDAs provide the machinery for it.

A crucial part of the internal drive within a region must come from its education and training provision. The whole range of education must make its contribution: further education; adult education; universities; and training and enterprise councils—although some of us feel that an examination of TECs is overdue. Co-ordination between all the branches of education is essential, and RDAs can be a catalyst for promoting it.

As has been mentioned, there will need to be clarification in a number of areas. I give two examples. The first is tourism. In some regions it can be crucial to their well-being. The regional tourist boards will remain but their role in relation to the RDA will have to be spelt out clearly, not least to avoid possible duplication and bureaucracy.

The second example is ad hoc proposals—it is my own phrase. I choose the warmly welcomed decision of the Government to undertake the rehabilitation of the former coalmining areas. I assume that where there are former coalmining areas in RDA areas, the RDAs will make some contribution in that vital work. However, as I have said previously in this House, I hope that the finance to be provided will be ring-fenced. There is obviously a danger that the resources, or part of them, will be subsumed in the larger budget of the RDA. In those circumstances, the finance may lose its effectiveness.

I have given two examples of matters which involve RDAs. But the co-ordination of such areas of activity is fundamental to the work and success of RDAs. That is one of the RDA's principles. It is virtually certain that there will be conflicts involving regional planning and economic development. We are all pleased to see the Government proving once again to be flexible in dealing with regional planning matters. I suggest to the Minister that the resolution of those conflicts is a matter of urgency if the RDAs are to begin effectively.

Even more important may be the move towards a regional chamber which, as noble Lords know, is a consultative body for the agency. Such consultation will ensure that account is taken not only of different regions but of different local circumstances within a region; it will provide the distinctive nature of RDAs.

I hope that there will be no hesitation in pressing on from the assemblies to elected regional councils where they are shown to be wanted. I stress that because Members of the Opposition are opposed in principle to them. The Labour Government have to make it absolutely clear that that is their objective: that that will be done wherever there is a demand for it. The evidence is there for such a change in the north, the south west and the north west. There will be opposition from the Conservative Party, but I fail to see why it should disagree when the change is to be made gradually and only with the consent of the people in the region. It is a two-stage method.

The financing of the RDAs is of great importance. As time goes on, it may be necessary to change the system. I hope that the block financial allocations made to the Scottish and Welsh development agencies will apply to the English RDAs. There has been criticism for a long time, not least from the northern region, of the advantages that they have given to Scotland, Wales and Northern Ireland. I need hardly say—my noble friend touched on it—that clarification on the distribution of European funds will have to be undertaken as soon as possible.

Before I conclude, I have to make one critical point. The Government are aware of it; it has been made already by some of us in the northern region. I refer to the proposal to make one RDA for the north west which includes Merseyside. That means that Cumbria will not be part of the northern region. I and my northern Labour colleagues are at a loss to know why the Government take that view. While I hesitate to say that it is complete, there is overwhelming support that Cumbria should remain in the northern region. The regional view must surely be paramount in such a decision. I hope that the Government will think again about the proposal. Cumbria has been part of the English standard planning region known as the northern region for the past 25 years—all the time that I have been concerned with regional matters. The new north west region has almost 8 million people. In great contrast, the exclusion of Cumbria from the northern region results in a population figure of just over 2 million. That does not conform with Ministers' statements that the average size of a region should be about 5 million. That calls for an explanation from the Government. I look forward to hearing my noble friend's comments.

Although not of major importance, there was an interesting occurrence recently. The BBC decided to change its well-known regional programme called "Look North" to exclude Cumbria. There were massive protests. They were so strong that the BBC changed its mind about the proposal. That is strong evidence! The concept of a northern region without Cumbria has never crossed the mind of northerners, nor perhaps some southerners. The Government must produce some hard evidence for such a change.

I see two principles at the heart of the Bill: first, integration; and, equally important, decentralisation. I believe that the politics and economics of the modern world require both those principles if we are to improve society. I strongly support the Bill.

4.47 p.m.

Lord Wade of Chorlton

My Lords, first, I apologise to the House for being unable to stay until the Minister winds up the debate. I particularly apologise to the noble Lord, Lord Sefton, because I may not be able to listen to the whole of his speech. Tomorrow I lead a delegation of 16 companies to an exhibition in Budapest in Hungary. I almost said Cumbria. The noble Lord, Lord Dormand, reminded me of Cumbria; I shall return to that subject in a moment. I have to fly out this evening. I hope that the House will forgive me.

The Bill is in two parts. First, it seeks to establish a development agency in all the regions of Britain with the purpose of driving forward the economies, creating more economic opportunities and developing growth. Secondly, it seeks to give wide powers to the Secretary of State to mould those agencies as he thinks fit. I support the concept of establishing regional development agencies, and welcome an organisation in each region focused upon the economic needs of the region and the need for growth. Perhaps I may use this opportunity to suggest some issues of which the Secretary of State might take heed in order to help him mould those organisations so that they are most effective in creating their objectives.

My experience and knowledge are based on my activities in the north of England. I support some of the comments made by the noble Lord, Lord Dormand, on the importance of the north of England economy. I have always seen Cumbria as part of the north-west, and have no objections to the Government's proposals. Since I shall refer to my experience in the north-west, I ought to declare some interests. I am chairman of NIMTECH, an organisation focused on developing the economy through the use of technology; chairman of Campus Ventures, an incubation unit for high-tech companies based at Manchester University; and president of the Federation of Economic Development Authorities. FEDA has 100 members of authorities throughout the UK, and is on the whole in favour of the Bill. I am also president of the Cheshire Economic Partnership, to which I shall refer later.

I have always believed that the key issue in achieving all the environmental factors referred to and supplying the right facilities for everybody is economic growth. Jobs, the development of businesses and the creation of wealth are the key elements in achieving anything. This type of organisation brings focus, especially in a region such as the north-west of England—where, as in other regions, there are very varied bodies which sometimes do not work together; their approach to such issues is often disorganised and the timing is different.

Therefore, I hope that this organisation will provide, as a top priority, a co-ordinated approach to the need for growth throughout the region. Co-ordination is needed in urban and rural policy; the areas have to be seen as one economic entity. The concept of a separate approach to rural areas which seeks to preserve the activities of rural communities is not the key. The key issue in rural communities is the establishment of their economic viability and economic variability, the ability to widen their opportunities and at the same time understand the equal needs of those who want to use rural areas and have the facilities and services that are available in urban areas. The key in creating understanding between rural and urban areas is rural development. It will be an important issue in the future, and I shall refer to it again.

Technology is another key matter which needs to be grasped by any regional development agency. There needs to be far more proactive agreement between the requirements of business and what is provided by universities and technology centres. The gap is still too wide. There is a fear on the part of the small businessman of the intellectual power of the universities, and a complete lack of understanding on the part of many academics of what the businessman needs in order to develop his business and the pressures that he is often under. The establishment of a regional body, particularly in relation to the north-west, provides the means for a better understanding between the needs of business and what universities can provide. We can establish in universities the incubation units that have been of such great benefit at Manchester University. From a very small beginning, businesses can be nurtured through the stages of crisis which they continually hit until they become major, secure organisations. That is a role that we can certainly play.

Later today, this House will debate the report of the EC Committee on Agenda 2000 and how it affects the environment and rural development. In future years we shall see a continuing decline in agriculture as an economic driving force in rural areas. It will remain important, but less so. We have to develop policies for the creation of alternative and viable business units within rural areas to employ those no longer involved in agriculture. During the course of our deliberations in Sub-Committee D, an interesting issue arose in relation to the situation in Germany, where there is a long tradition of part-time farmers having other paid jobs when they are not engaged in farming activities. As agencies develop over the coming years, and as we have closer contact with the policies of Europe, particularly in relation to theses changes, we shall see projects and proposals for programmes—rather like the Objective 1 and Objective 2 programmes made use of in urban areas—to assist the movement in rural areas from present types of economic activity to new and revised types of activity. I see the rural development agencies as the key in creating effective policies to make the best use of money and, most importantly, to create other economic opportunities in rural areas.

I wish to refer briefly to sub-regional groups. In Cheshire, we have established the Cheshire Economic Partnership. That group is in balance with what has happened in Lancashire, Manchester, Merseyside and Cumbria. I hope that during our debates on the Bill a better understanding will emerge as to how the Government see the sub-regional groups playing a part in the development of regional policy. They can, and need to, play an important part.

There has been comment on the planning powers of regional development agencies, and the fact that the Government have changed their mind on the degree of planning power that they are to be given. I was very attracted by the original proposals. I have never been happy with existing planning arrangements; they are definitely in favour of minorities and rarely to the benefit of the majority. I hope that the new arrangements will at least bring planning on a regional basis for the main projects for growth, jobs and opportunity and the creation of inward investment, which seem impossible when planning is reduced to a small entity where everybody is against any proposal. You cannot, in the future of a country, a society or community, give more and more to those who want it, unless growth is achieved and is accepted.

I hope that the RDA will become an enabling body, using other organisations for delivery. In that regard I do not understand the need for acquisitions. I do not see why the RDA has to own property or do things. It needs to make sure that other people are encouraged and enabled to do things. That is the best way to use its resources within its region, and to use those bodies which most effectively deliver what the RDA requires.

I have already referred to the use of EU funding. Clearly, that will be a key element. The EU funding that we have received in Greater Manchester and Merseyside has been of enormous benefit. However, I am aware, as are many people in the north-west—as no doubt are the Government—of the enormous difficulty in achieving a uniform approach to how that money should be spent, with the inevitable battles between all the factions that want to draw a portion of it. Again, I hope that the RDA can be much more effective in ensuring that funding is used for its prime purposes and directed far more efficiently than it has been in the past.

I referred to the need for incubation units, and I emphasise that need again. One of the great successes in the United States has been the ability to encourage the setting up of new companies and to treat failure, rather than with contempt, as a means of gaining experience.

If we are to continue to move our economies forward and give people the same level of growth into the next century as they have had in this one, we must continue to see the development of new businesses which will be highly important in creating the kind of products to enable us to compete in the world. One of the main requirements to make all this possible is to have the resources at the right stage to put into companies to make them move forward. I should like to see within a north-west RDA the encouragement of a financial fund to make moneys available on a venture capital basis to small companies. There are many very successful venture capital companies throughout Britain, but they have tended in recent years to look for the easy options, the very large investments, and possibly, like banks, to give their money to those who can manage without it. I look for a fund which can be more sympathetic and understanding to the needs of small, start-up businesses, particularly in the high-tech areas which will be so important. We need to encourage the development of new ideas and innovative enthusiasms and look not backward to how things were but forward to how wonderful things will be in the future. I see these agencies as bodies that can help us to do that.

5.1 p.m.

Lord Sefton of Garston

My Lords, I apologise to my noble friend the Minister for the fact that I was not present to hear her opening speech, having been unavoidably detained on personal matters.

I am not very interested in the organisation of RDAs; I am more interested in the net result of our efforts to deal with the problems not just of the regions but of this country. The noble Baroness, Lady Hamwee, and other Members of the House have moved me from my original decision to spend only three minutes speaking in this debate by reminding me of things that have happened in the past.

If I were a Frenchman, I would be able to use a French phrase, but I will say, "Never mind French phrases, I have heard it all before". Twenty years ago I made a speech in this Chamber about whether we would be successful in Europe. I said that, unless we did something about our own country and its economic affairs and began to use all the nation's resources, we would not do very well in Europe. I said that on that day the Financial Times carried a story that it was about to start printing in Frankfurt. No one thought at that stage that there was a threat to the Bank of England's position at the centre of European affairs. But where is it now? Is it not true that the centre of our financial affairs is in Frankfurt? Why is that? I have said before, and will continue to say until I am no longer in this Chamber, that if we look at the national picture we see the highly congested belt in the south east which appears to provide a dam to any developments.

I should like to go back to the time when we did have regional development areas and an organisation. That was referred to by the noble Baroness, Lady Hamwee, in the context of the leader of her party the noble Lord, Lord Rodgers. We had regional economic planning councils, which produced strategies. There is a difference between the regional economic planning councils and the kind of regional development agency proposed in the Bill. The least one can say is that the Bill does not provide a strengthening of the democratic element in our society. My own feelings must be expressed. I am extremely disappointed that the Bill does not go further in strengthening that democratic element. I know we have been promised that in the future things will get better and that there will be a new organisation of a more democratic nature. I am sorry, I have been too long in politics to take the promise of jam tomorrow; I want it now.

The difference between the RDAs proposed in the Bill and the old economic planning councils is that the economic planning councils were part of the Department of Economic Affairs, a department established by a government in the teeth of hostility from the Treasury, which wanted to abide by the old rules and which ultimately won the battle to abolish the DEA. That is the fundamental lesson to learn from what is happening to our regions. If one looks at the strategy of those economic planning councils, one sees in them an essence for the re-establishment of unity in our economic affairs. The Opposition Front Bench spokesman said that the Opposition was opposed to the idea of divisiveness on a regional basis. I agree with him; we should not divide the nation on a regional basis. But the nation will divide itself on a regional basis, whether we like it or not. One has only to look at how people are attracted to the south-east.

The North West Economic Planning Council drew up a strategy, which was notified to the DEA in the usual way. The government of the day took note of it, and that is all they did. They drew attention to the necessity of preserving the rural areas and concentrating industrial development in the Mersey belt. I am not talking here just of Liverpool; the Mersey belt started at the River Mersey by Liverpool and went through two towns and into Manchester. The strategy was that that was where development should take place and that proper consideration should be given to the preservation of the rural hinterland on both sides of the belt—a very valuable hinterland in the case of Cheshire.

There was a strategy on transport. The North West Economic Planning Council said that it was wrong, for two reasons, to concentrate our international airport facilities in the south-east. First, it debarred people in the north from taking part in the development of that international traffic and, secondly, it was loading the south-east with inescapable burdens. Nobody took any notice. Let us look at what has happened. For three years people have been battling to demonstrate that there should not be a fifth terminal at Heathrow. Yet there is a possibility at Stansted. We said that, if there were to be a third international airport, it should not be in the south-east but should be further north, perhaps near Birmingham. On balance, the planning council thought that the development should take place at Stansted. Are we happy with what is now going to happen in London? There is no doubt in my mind that, even with a Labour Government, we shall have that fifth terminal at Heathrow.

Let us take another strategy. This is an ironic example. We thought that there should be decentralisation of central government activity. We were not the only planning council or local authority to say that we needed decentralisation of government activity from the south-east and to spread it throughout the country where it could operate efficiently on the basis of modern technology. To give an example, we had a conference with the DEA. We decided to circularise all the businesses in the north-west. The DEA would produce a leaflet and we would produce a leaflet in Manchester. Our leaflet went out in three days; it took the DEA two weeks to publish the same leaflet.

The business of concentrating all the civil servants in the south-east is stupid. Has it changed? Let me give another example. One of the major problems facing Members of this House is getting here. It is a terrible journey sometimes. If we come by car, we must not come before nine o'clock.

And what has happened in this very spot? There used to be a car park at the end of Vauxhall Bridge; a nice little wide open space. Then a new phrase crept into our language: "business-led people operate themselves". It was decided to build a new building on the end of Vauxhall Bridge. I went to a seminar given by London Transport and my question to the planners was: "Do you know anything about this building they are going to erect on the car park at the end of Vauxhall Bridge?". They answered, "No. What is that?". I said, "I thought that if you were responsible for the transport undertakings in London, you would know what it is. It is going to affect you because you will have to move people in and out of the building".

The planners knew nothing about it. It is a place that could have been used for business other than generating jobs. Let me give a tip to the new Government. They should look at how MI6 came to be at Vauxhall Bridge Road. As I read it, that site was developed in a purely speculative fashion. The slump occurred and it could not be let. Then, miraculously, MI6—that secret organisation about which nobody is supposed to know—started to adorn the building with Christmas trees to let everybody know what it was.

That is not the important point. The important point is that, if the Government and the Audit Commission look at the situation carefully, they will find that it cost more to alter that building and make it fit for the government department than it cost to buy it. It would have been much better to have gone out of London, but the situation is controlled by the south-east mafia.

That brings me to my closing peroration (as it is called in the best circles); that is, what is the fundamental question at which we should be looking? We have heard a great deal about regional planning bodies and what they should and should not do. I am sure that we received an excellent explanation of the Bill—I shall read it with interest—with all the details given by the Minister. Again, I apologise for not being present to hear it. All that was discussed, but at the end of the day we must decide what we want to do with our regions. We must look at them as part and parcel of our economic, social and national life. It is important that we look at them in the context of the nation.

Let me give one further small example. When will we know the outcome of the development in London Docklands, Canary Wharf and the extension of the tube which robbed other parts of the underground of much needed improvement? When will we learn the real lesson of the cost of those developments? When will we learn the real lesson of Liverpool's Docklands? If we compare the two, they will stand as a condemnation of the way that the people responsible—I do not care whether they are Labour or Conservative and, in the real sense, they are probably civil servants—conducted the whole scheme.

The whole thing is ironic when we see the damage, the congestion and the bad standards of living that exist in London and the south-east and consider the effect in Europe. God knows what will happen because we are not going into Europe and the pressures will get worse. They will not be borne in the south-east; they will be borne in the north. It is the north that will suffer the most and we must ask ourselves what we should do.

A man named Heseltine came to Liverpool. He thought he would not have anything to do with economics. But there were riots in Liverpool—I often wonder why those riots are not still ongoing. We have pockets of unemployment where 50 per cent. of the people do not have jobs; they have nothing to do. The economic planning council decided that we should concentrate on Liverpool's unemployment position at the cost of elsewhere. That was agreed. The government said that they would send 3,500 civil servants to the north-west—3,000 to Liverpool Docklands and 500 to Blackpool. We all thought it was a wonderful idea.

We then removed the economic planning councils. I do not know how that came about. It was the end of a battle between the Treasury and the Department of Economic Affairs. The man who announced it was proud to call himself "Mr. Liverpool". If those 3,000 civil servants had been put inside Docklands before the riots, the riots would never have occurred. However, the riots did occur and Mr. Heseltine took the matter away and later boasted about the fact that it was he who established Liverpool Docklands, after Liverpool City Council had been fighting for the establishment of an organisation to look at that development. They knew what was coming in relation to unemployment because of the international trade moving away from Liverpool. It was resisted in the south, and it was ironic that the man who did it was the man who caused the riots to take place in Liverpool in the first place.

5.18 p.m.

The Earl of Arran

My Lords, while it is always a pleasure to listen to the eloquence of those from the north, some noble Lords may agree that they have had their say in this matter for the time being. I should like to bring a west-country business perspective to our debate on the Bill this afternoon and some Members may draw similar conclusions from the areas that they know best.

In the west country, South West Enterprise Limited, known as SWEL—a private sector, joint venture whose purpose is to capitalise economic development—agrees with many aspects of the Bill. SWEL combines the local interests of the Federation of Small Businesses, the Forum of Private Business, the Chambers of Commerce, the National Farmers' Union and the CBI. It has the single purpose of helping a business to help itself in turning around the economy of Devon and Cornwall. I must declare an interest in that I am a director of South West Enterprise Limited, and proud to be so.

Since 1992 the business community in Devon and Cornwall has energetically supported the creation of a development agency to lead and co-ordinate a turn-around in the economy of the west country. Understandably, in Devon and Cornwall, we would have preferred to have our own agency, but then probably so would every other part of England. If the Government, in creating nine RDAs in England, are saying that they are seeking nine bodies rather than 19 or 20 which will report and be accountable to the Government, that makes good management sense.

As with the other five counties, business in Devon and Cornwall will play its role in the development of the south-west region. Unfortunately, however, under the Government's present proposals, I consider it improbable that much of the business community will be able to play as strong a role as it should from the outset, when the RDAs are formed in April of next year, despite the RDAs being business led. I shall, if I may, explain why.

Business Links, of which I am sure your Lordships are well aware, is a national brand assuring the quality of business services which are delivered locally. It is managed nationally by the DTI and guided locally by business-led boards. Business Links, which was created by Michael Heseltine under the previous government, plays a vital and increasing role in the development of businesses, especially small and medium businesses, known as SMEs. Business Links forms the only body which currently has potentially almost daily contact with all the SMEs. It is my contention that, if the Government were to include Business Links, ab initio, within the RDAs, they would then meet the functional requirements and the geographic coverage needed for sustainable economic development. I am fairly surprised that not more prominence was given to Business Links during the passage of the Bill through another place.

First, I shall tackle the functional view. An examination of international best practice has shown that sustainable economic and community development requires the development of the indigenous business community alongside the other core functions of regional development. Regeneration and inward investment must be co-ordinated with the development of small and medium enterprises and their investment in the community. As Ministers will know, inward investment presents many media opportunities, from the first announcement, through the turf cutting and the foundation stone laying, to the opening ceremony with multinational business figures. It is both exciting and enticing.

However, the evidence is that more jobs, and more sustainable businesses, are created through the development of a region's indigenous businesses than through inward investment. For example, Cornwall, being peripheral to European markets, has not been successful in attracting much inward investment, and there the regeneration of the local economy is urgently required. However, recent employment figures have shown that, if the loss of employment due to the demise of tin mining and the demise of china clay is taken out of the data, there was a net gain in new jobs created in Cornwall last year. These new jobs are coming from small and medium enterprises in Cornwall—in industry, commerce and tourism. They are perhaps the new shoots of prosperity emerging amid the fallen boughs of Cornwall's industrial past.

The "In Pursuit of Excellence" project, whose work has been endorsed by this Government and by the previous government, has drawn attention to the high quality of many local businesses and the great potential which exists in Cornwall. IPE, as it is known, is a very well supported partnership between the public and the private sectors and, crucially, it has successfully engaged the business community in the development of its own future. It is imperative that the development of these businesses, their growth and the investment in them, be closely associated with the RDA's regeneration and inward investment activities.

This is true, I suggest, not only of Cornwall but of all business communities, both rural and urban, in every English region. It is not just a matter of business; it is also a matter of social inclusion. Small businesses are an integral part of the local community. Community regeneration requires civic pride and pride requires self-sufficiency. Business development is easier in urban areas than in rural areas, and the south west is predominantly rural. Regeneration, inward investment and business development must be closely co-ordinated in rural areas if we are to overcome the decline of rural communities and protect the landscape which is the basis of our tourism and agriculture industries. As the Minister said, our countryside must be both living and working.

However, there is more to regional development than addressing the problems of economic blackspots, whether they are visible in Camborne, Plymouth or Bristol, or hidden in rural areas. In business it is often said that, "You are only as good as your last sale". The strong need to be supported as much as the weak strengthened, albeit in different ways. Under the current proposals, the RDAs, when they are launched in April next year, will be focused much more on overcoming economic weakness and much less on promoting economic strength. But improving competitiveness is as much about sustaining today's winners as training tomorrow's. After all, small and medium enterprises currently account for nearly 50 per cent. of employment outside the public sector and for around 38 per cent. of the United Kingdom's gross national product, and SMEs are expected to be the main source of future economic growth.

I now turn to the geographic view. The parts of a region outside its blackspot areas may see little value for them from an RDA. This is particularly so in the south-west region, which is the largest region in terms of land area and coastline. The distance from Land's End to the Gloucestershire border is the same as the distance from Gloucestershire to the Scottish border; and the distance from Bristol to London is the same as the distance from Plymouth to Bristol. The south west is the most diverse of the English regions and it has the greatest economic disparities of any English region. Although, on a range of 24 economic indicators, the south west ranks between third and fourth among the 12 UK regions, in Swindon the economy is overheating while in Cornwall it is emerging from a period of permafrost, economically speaking. Economically, it is also fairly chilly in Poole and in the Forest of Dean. Scenically and climatically, the south west is a wonderful place to visit and we have some superb businesses.

The functions currently to be included in the south west RDA are primarily focused on the relatively much weaker far south west of the region. As a result, Swindon in particular, but also parts of Gloucestershire, Wiltshire, Somerset and Dorset, seem to expect little benefit from the creation of an RDA. If Business Links became part of the RDAs from the outset, the RDAs would be truly regional.

The Government have admitted that the Bill allows for Business Links to be included in the RDAs at a later date, if it were appropriate, without recourse to primary legislation. The Government's present policy is that the RDAs will provide the strategic context for the services offered by Business Links at the local level, and that Business Links will wish to draw upon the priorities identified in these strategies as they develop their detailed services. In contrast, I believe that the RDAs will need to be operationally, as well as strategically, involved in running Business Links from the beginning.

The Government have an opportunity they should not miss. If Business Links were to be included as part of the RDAs from their formation, the RDAs would immediately be able to offer the portfolio of development services needed to overcome economic weakness and, at the same time, promote economic strength. They would be able to promote regional cohesion and economic convergence by virtue of their activities covering, in some form, all parts of their region, rural and urban. They would be able to engage the region's business community in its own development and investment in the region.

The national chairman of the Federation of Small Businesses has said, that the value added to our members' businesses by Business Links will be enhanced by the inclusion of Business Links within the responsibilities of the RDAs. Logically, therefore, the sooner this occurs, the better". Indeed, I should make it clear that the Federation of Small Businesses would wish to go further and include the training and enterprise councils ab initio as well.

The FSB's national chairman and I are calling for nothing which the Government have not already accepted, other than the timing for the inclusion of Business Links. The regional Business Links' budgets are relatively small. Incidentally, in the south-west region the total Business Links budget of £8.5 million was equivalent to around 10 per cent. of the funds spent on regeneration and the promotion of inward investment in 1996–97. Further, it may also be easier to include Business Links within the RDAs now rather than later. If Business Links were to be included after April 1999, the internal and external relationship of the established RDAs may need to be reconfigured to accommodate them and there would probably be cost penalties and delays to programmes during the period of assimilation.

The National Head of Policy of the Forum of Private Businesses said that, leaving the RDAs to run with only a strategic remit for Business Links, risks confusion in the minds of many small businesses. Private business needs to be assured that the services of Business Links are properly co-ordinated with the other main instruments of economic development". I have an open mind as to whether the Government support my proposal for all the English regions or adopt it for the south-west region alone, given its special characteristics. The thrust of my case is that my proposal should be adopted for all nine English regions and for the tenth in London in due course. But if the Government are resistant to that, I suggest that the south-west region be used as an ab initio pilot for this proposal.

I am sorry but I may be unable to be here for the Minister's summing up. As regards what the Minister says in response, I may seek leave to table an amendment to the Bill in Committee. In conclusion, the success of the RDAs and the degree to which they achieve the Government's purposes, will depend to a large extent on the degree to which they are able to engage their business communities in achieving the objectives of the RDAs from the very outset. I submit that this can be achieved only along the lines that I have suggested.

5.30 p.m.

Lord Beaumont of Whitley

My Lords, it gives me great pleasure to intervene in this debate after the speeches of the noble Earl, Lord Arran, and the noble Lord, Lord Sefton of Garston. I believe that the noble Earl pointed, absolutely rightly, to the fact that if the scheme is to succeed and if this Bill is to be a step along the right lines, it is probably seen best as an encourager of what can be done in the regions themselves. From what the noble Earl said about the south-west and from my knowledge of all the links of my party in that area, I know how much can and is being done there.

The noble Lord, Lord Sefton of Garston, put his finger on a large number of very valid points.

Lord Graham of Edmonton

My Lords, he always does!

Lord Beaumont of Whitley

My Lords, maybe the noble Lord always does, but this was a very conspicuous occasion. I remember in the 1960s arguing in the Liberal Party of those days about the necessity for regional authorities in a climate which did not then encourage them very much, particularly with my then colleague, Lord Evans of Claughton, who was, I believe, a sparring partner of the noble Lord, Lord Sefton, for some considerable time.

In those days we believed, and I still believe, that we ought to have regional government which is known for its accountability, democracy and openness; that we have democratic regional assemblies with tax-raising powers. That is a very important aim. The Government pay considerable lip service to these aims. But I have a cynicism, drawn from long experience of governments of all kinds and through sitting in your Lordships' House with different people on the Government Front Bench, as to whether anything which should be democratic, open and accountable will come from the rather nice intentions which are suggested by the Government Front Bench. My noble friend Lady Hamwee is rather more trusting than I am in these matters. She probably has a nicer temperament than I have. She believes that these things may well happen. I hope that they will.

I am speaking on this Bill for two reasons. One is to see that the needs of rural areas are not swamped and, secondly, to make certain that the whole question of sustainable development is also firmly endorsed on the face of the Bill. The noble Baroness, Lady Hamwee, dealt principally with that last issue. She dealt with the rural areas in a way with which I am not entirely sympathetic. I do not believe in an urban, powerful and centralised capitalistic state that rural areas will be looked after, whatever the intention, unless it is spelt out on the face of legislation. Therefore, I would like to see that happen.

Rural areas have their own special needs. They have special requirements. The firms operating in them are often small; employment is fragile at times and seasonal. Transport is a very great problem for people living in rural areas, and the cost of housing must be considered. The social life of rural areas has become fairly low grade. We have often discussed these matters and we shall be discussing them again this evening when we come to the common agricultural policy. As this Bill goes through we must make certain that it does not just produce a regional machinery for attracting investment from outside, but regional machinery which taps the loyalty of local people and local enterprises and produces a step towards the kind of regional government that we on these Benches certainly wish to see in the near future.

5.36 p.m.

Lord Elliott of Morpeth

My Lords, I have taken part in many debates on the well-being of the north-east of England, principally in the other place. The north-east is now listed as one of the proposed nine areas to be included among those having a regional development agency. I wish to concentrate on the need or otherwise for this Bill in the north-east. Debates on the northern region were fairly regular occurrences in another place due to the enormous requirement for reconstruction because of the post-war decline of our basic industry—coal, steel and shipbuilding.

I recall the very last debate in the other place in which I took part. I stated that we had known in the post-war period 17½ years of Labour Government and precisely the same number of Conservative years.

I now come to a point which answers a request made by the noble Lord, Lord Dormand of Easington, who, unfortunately, is not in his place. I said in that speech that in my opinion both major parties in their period of office had done their utmost to support the redevelopment of regions like the north-east. That is so true. The methods may have varied, but our aim was the same. Both major parties wished to bring back economic well-being to a region which knew enormous difficulties just after the war.

For instance, I remember when Labour won in 1964. The Minister with responsibility for the regions was the enormously energetic late Lord George-Brown. He said in a speech at the beginning of his period of office that we had not thought "big enough", as he put it, with regard to development in the region. He contended that we were wrong to have established development districts to which we encouraged new industry. The entire region became a development district at that time. We went back later—but not much later—to local districts. The point I wish to make is that it was the desire of all concerned in both parties to get the right answers.

Regionally, we have had a series of bodies which have known government encouragement and support. The first I was associated with was the North East Development Association. That was a smaller body than those we have known since. In its membership it had leading industrialists, businessmen, trade unionists and regional MPs. Then we had, a little later, the North East Development Council which was more broadly based and involved local government. That body knew for a long period the distinguished chairmanship of the noble Lord, Lord Glenamara.

For the past 11 years we have had the Northern Development Company, which the noble Lord, Lord Dormand, mentioned. All three of these bodies have done a great deal to revitalise the region. And we are now, it seems, to have a regional development agency.

I should like to refer to Clause 4 of the Bill before us which states the purposes of the new agency: to further economic development and regeneration; to promote business efficiency and investment; to promote employment; and to promote skills. So what is new? We have had these aims for years. The bodies which we have had, with both parties' encouragement, have achieved an enormous amount. The region has been transformed. New industry has been established and places like Sunderland and Consett are thriving today.

In mentioning Consett I should like to refer to the Derwent Development Agency as being one body whose future I am somewhat concerned about under the proposal of this Bill. Consett steelworks were closed down in September 1980. At that time we had very high regional unemployment, much higher than the 7.4 per cent. that we have today. I was asked by a colleague in another place a simple question, "Can you see unemployment in the north-east of England?" I answered him by saying, "Not really, not in the centre of Newcastle. You just can't see it". But I visited Consett in the Christmas Recess following the closure of the steelworks. My goodness, unemployment was very visible then. The empty steelworks were still there and rusting. There were able-bodied people standing on street corners. But, thanks in no small measure to the Derwent Development Association, which I visited soon after my private visit, Consett is transformed. A year later I visited the Consett number one development area and saw there, in very new factories, ex-steelworkers and ex-miners practising new skills—a very good illustration of the adaptability of our northern workforce.

Today Consett has unemployed people numbering 1,028. In other words, it has almost full employment. I mention this on the debate on this Bill because the Derwent Development Agency did such a good job. But what will happen to it?

On regeneration, we have one of the best road networks in this country, again thanks to the efforts of both major parties in the period of their office. Because of the Tyne and Wear Development Corporation, 30 miles of derelict land on the banks of the Tyne and Wear have been renewed and revitalised and are a much more pleasant sight than they used to be. So what is now to happen with regard to the Tyne and Wear Development Agency? Actually, it closed down at the end of March.

But my main question is this. Do we need this new agency? It has been suggested that there is enormous support for it in the north-east of England. Certainly there is some. There is general support for a type of new agency. There has been considerable concern expressed as well in the region. The Local Government Association fears that the new body, an appointed quango, will take powers away from democratically elected local authorities". The regional newspaper The Journal, in a leader, feared the creation of a Whitehall controlled quango which may be responsible to a locally elected and representative body at some vague time in the future.

The chief executive of Newcastle City Council has expressed concern on accountability, as has the North Durham Labour Party. The CBI fears that in some places the Bill appears to preclude development which may be desirable. The city council of Sunderland has said: The City Council of Sunderland would like to point out, that when in opposition, the Labour Party attacked the democratic deficit proposed by the creation of quangos at regional and local levels, which were not accountable to local democratically elected local authorities". The Institute of Directors was very much to the point, saying that the new body would be another layer which risks bringing more confusion, more bureaucracy and more expense. So I can assure your Lordships that there is opposition to this new body in its present proposed form in the north-east of England.

There is, of course, for the north-east a heavy potential competitiveness just over the border because of the proposed new Scottish parliament. In another speech in another place in a debate on devolution, with which I still disagree, I expressed my views on the unfair advantage that a Scottish parliament with civil servants and lobby correspondents would have in attracting new industry. That concern is still there, but the north-east has known enormous success in attracting new industry.

Despite our disadvantages, geographical and otherwise, it has known success in recent years which other development areas might well have as an aim. I should like to pay particular tribute, as did the noble Lord, Lord Dormand of Easington, to the Northern Development Company which according to a recent survey has succeeded in the 11 years of its existence in creating 520 investment projects, 75,000 new jobs and £9 billion of capital investment in the region.

Finally, my suggestion is simply this. The proposed regional agencies can be justified only if they can add to existing arrangements for regional attractiveness and management. Much depends on the relationship which they establish with other bodies and local government and the speed with which they become democratically accountable.

5.48 p.m.

Lord Grantchester

My Lords, I start by declaring an interest in that I put my name forward to serve on the board of the north-west region.

This Bill plans to create nine new development agencies in the English regions. They will be business-led but will include all regional interests to integrate social and physical regeneration and economic development. The development agencies will form a vital part of the process of decentralisation—moving the planning process nearer to the people—and co-ordination of government programmes in transport, tourism, regeneration and social inclusion.

The regional development agencies will have five core areas of responsibility: economic development and regeneration; competitiveness, business support and investment; skills; employment; and sustainable development. Sustainability is a little like "motherhood and apple pie". We all sign up to it but it is a complete turn off for the private sector. There needs perhaps to be a clearer definition, by which we mean reconciling social, economic and environmental factors. The RDAs will need an achievable strategy and framework, building on existing regional competitiveness, thus bringing greater coherence to the work of regional bodies. There is no purpose in any large-scale re-engineering, nor in reinventing the wheel. The RDAs have to build on what is already there, thus providing continuity.

Each RDA will have as a core function the social, physical and economic regeneration of its area to gain maximum benefits and to spread the benefits of economic development and investment. They will take on the regional regeneration work of English Partnerships and the Rural Development Commission, which will bring about their budgets, including the Single Regeneration Budget Challenge Fund, and take a leading role in securing European Union structural funds.

Regional development agencies must address at an early stage the economic development and regeneration of rural areas. That is especially important, as Agenda 2000 and the reform of the common agricultural policy will challenge agriculture to respond to competitive pressures and to the transfer of resources from support to investment in rural enterprises.

Tensions between rural and urban areas must be addressed early, allaying the distrust about the intentions of the RDAs, with specific structures to reflect rural needs and to halt economic decline.

Instrumental to regional regeneration will be improvements to the skills base linked to the community, not just to specific companies. There also needs to be a skills audit, assessing the contribution of the training and enterprise councils in achieving regional objectives. The TECs and Business Links were not included as part of the RDAs' functions, but perhaps in Committee we can examine whether TECs can be brought into the process to determine the skills requirements of each region and the best ways of providing those skills. Priorities include dealing with skills shortages.

Each RDA will play a major role in facilitating investment, involving projects as part of the public-private partnerships and bridging the gap between cost and value. They will take a leadership role in inward investments of strategic significance, in the marketing of a region as a business location in conjunction with the Invest in Britain Bureau and other regional partners, and in promoting technology, including maximising the benefits of the work of educational institutions.

Each RDA must face up to the challenge of strategic long-term regeneration through funding plans of five to 10-years' duration to replace the short-term focus of annual budget funding. However, this must be coupled to short-term milestones where the emphasis is on outcomes, not on outputs.

It is entirely sensible to co-ordinate regional economic and regeneration activity in association with established regional structures, local partners and government offices. However, there is anxiety within the rural sector that RDAs will become urban-oriented and discriminate against rural communities. The fact that MAFF has different boundaries from those of the government offices necessarily means that communication between them will not be as effective, efficient or influential as it could be and that that will result in a less powerful rural voice and a smaller share of resources. Perhaps in Committee we can examine whether it is sufficient to have one rural representative on a board of 12 and whether there should be a minimum of two.

Furthermore, financial resources may move from MAFF to the RDAs if, under CAP reforms, subsidy expenditure decreases in favour of enhancing environmental schemes. Will the budget of £200 million be enough to achieve all that is envisaged when each region of MAFF runs on a budget of almost half that figure? What is the extent or availability of any new income? To what extent will funding be affected by changes in EU structural funds under Agenda 2000 proposals? At present, aid is available to rural areas under Objectives 5a and 5b, with urban areas coming under Objective 2. Under the Agenda 2000 proposals, a new single measure (a new Objective 2) will encompass both urban and rural aid. Each RDA must ensure that rural issues will have sufficient prominence and that the integration of town and country is embraced through an equitable balance of funding.

It is also sound that each RDA is promoted as an independent organisation setting regional priorities. However, we must examine the control mechanisms in detail and whether accountability is adequate. The RDAs must consult widely and must seek to work effectively with regional chambers.

I look forward to the opportunities presented by this Bill. The establishment of regional development agencies creates a unique opportunity for a new, sustainable future for the regions through integrating development. Policies on transport, tourism, education, employment, housing and community development can now be brought together into a coherent framework for the next millennium. I commend the Bill to the House.

5.55 p.m.

Baroness Cumberlege

My Lords, like many of your Lordships, my roots have been in local and regional government. At one time, I served concurrently on a county council, a district council and a parish council. I was a glutton for local government. My family said that I was an addict. I simply loved it. Then I got distracted into the NHS.

When I was invited to join the last government, I was appointed first as Minister responsible for the task force in Plymouth and later as the sponsor Minister for Plymouth, with a much wider remit. It felt like going home. I really enjoyed working closely with the city council, the development agencies, the private sector and, above all, with the local communities.

Many of your Lordships will know the city of Plymouth even better than I do, and especially the part that it played in the Second World War. It is a remarkable city. Visiting the war memorial, I read name after name of the men and women who gave their lives for me and my generation, and I found it deeply humbling. The names covered not only those who had served in the Armed Forces, but civilians also. I was told that the city had been so heavily bombed and that the bombing had generated so much heat that gold and silver melted in the jewellers' shops and molten metal ran out from under their doors into the city's streets. The people of Plymouth showed their courage and their defiance, and they danced night after night on Plymouth Hoe.

With its naval and army bases, the city's destiny has always been closely linked with defence. Successive governments have been by far the largest employers, so although we must all rejoice in the peace dividend, it has been anything other than a dividend from the point of view of the city's employment prospects. The task force was set up to address some of those problems, to help to regenerate the city, to improve skills and to instill confidence in the most deprived wards in the city.

I mention that in the context of this Bill because it was the first time that I had witnessed, at first hand, effective central government investment producing results to a very tight timescale. The task force had a life of only five years, with a clear exit strategy, so nobody could become dependent on it. It had £1 million to spend every year, over five years. Its activities were targeted on the most deprived wards. Its accountability was to me, and since I was a very junior Minister, I was accountable to a Minister of State at the DoE.

The task force had a very clear action plan, agreed by Ministers, and closely monitored. It had a small staff—of fewer than half a dozen at its peak. It had no baggage in terms of bureaucracy—no committees, no sub-committees and no working groups. It had no in-built delays to satisfy a complex bureaucratic structure. So, it was flexible and accountable but, above all, it was fleet of foot. It achieved some remarkable things in terms of job creation, reductions in the crime level, and enhancing self-esteem in individuals and confidence in previously run-down and miserable estates. It was a lesson to me—because I had always worked through a labyrinth of committees in both local government and the health service.

Knowing now a little about regeneration and the challenges of inward investment, I have serious misgivings about this Bill. Like my noble friends Lord Bowness and Lord Elliott of Morpeth, I worry about introducing another layer of bureaucracy into what must be an entrepreneurial area which, by its very nature, requires the freedom to act quickly and decisively and to be fleet of foot.

However, I am a realist and, despite my misgivings and those of other organisations as well as many of your Lordships, I have no doubt that the Bill will be passed—and by a large majority in another place. As a revising Chamber, we have a responsibility to try to make it as workable as possible. I therefore ask the Government that, when setting up RDAs, they promote the concept and philosophy of a holding company. Like a holding company, RDAs should ensure that they get a return on the public investment made, but that does not mean they cannot have a light touch, freeing-up and delegating to their subsidiaries. If businesses are to benefit from European money or inward investment they have to be able to reach decisions quickly and have enough authority to act. Potential investors are not prepared to hang around so that an RDA, and in future possibly a regional assembly, can comply with a self-indulgent and lengthy bureaucratic system.

The second point I draw out from my experience with the task force is that economic regeneration does not depend solely on financial investment, or even investment in education, retraining and employment skills, but it does require "social" investment. A community that takes a pride in itself is much more likely to produce entrepreneurs and high quality employees. I hope the RDAs will understand and promote some of these softer, quality of life issues which have a direct bearing on regional prosperity. As my noble friend Lord Arran has said, community regeneration requires civic pride, and prosperity is not just a matter of business—it is also a matter of social inclusion. My noble friend also drew attention to the need for RDAs to be involved not in the detail of running businesses but in co-ordinating the development of new businesses, especially small or medium-sized ones. I agree with him on this. At the invitation of South West Enterprise Limited he and I led a trade mission from Devon and Cornwall to the southern states of the USA. Our purpose was to promote west country exports, but we also took the opportunity to study the inward investment and regeneration initiatives taken by the two highly successful southern states that we visited. At the time I was the sponsor Minister for Plymouth and it seemed appropriate to visit Charleston where the naval base was contracting and faced the same issues as Plymouth.

Two aspects of that visit left a lasting impression on me: first, the enormous size of the mosquitoes; and, secondly, the tightly focused programmes to develop indigenous businesses to regenerate the local economy. In South Carolina not only was it patently obvious that business development was closely co-ordinated with regeneration and inward investment, but that the development of local businesses was seen as the key to success. The point was reinforced when we visited the state of Georgia and met senior politicians, businessmen and women and those responsible for economic development. The state of Georgia is similar to the south-west region of England, in that its economy is very strong in the north, especially in Atlanta. In the south it is rural and faces the same challenges of structural adjustment as in our south west. The big difference is their success in economic development. We wanted to find out why.

First, there was no doubt or ambivalence that economic development was top of the state's agenda—way above any other programme. Despite the huge investment and energy put into hosting the Olympic Games, which sadly we missed—they had finished a few months before we arrived—the state was not distracted from its mission. As in South Carolina, its mission was to develop home-grown businesses and to co-ordinate their development with inward investment and regeneration at state and county levels. In our travels throughout Georgia we identified one other strong theme, and one that should be of great interest to the Minister and her colleagues in government: the concept of total community development. This phrase haunted us wherever we went. These three words were like a creed and encapsulated an inclusive approach to the creation of competitive businesses, competitive people and competitive communities. It was the clear basis for achieving sustainable development both locally and regionally. As the noble Lord, Lord Dormond of Easington, has said, businesses, especially small ones, are an integral part of every local community. If the RDAs in England are to be able to improve the competitiveness of their regions they must encompass and nurture the development of these small enterprises, not just within cities but also in rural areas. They must have power to co-ordinate business development with regeneration and inward investment, and that cannot be achieved through a purely strategic role.

Small businesses cannot afford the luxury of long-term strategies. Their horizons are much shorter than those of development agencies or larger businesses. If RDAs are to be responsive in co-ordinating activities, they will need some degree of operational oversight, but they will also need fast communications and detailed intelligence as to what is happening locally.

As my noble friend Lord Arran has said, Business Links is the Government's service that supports the development of commercial enterprise on the ground. It has almost daily contact with potentially the vast majority of businesses. I agree with him that within this Bill there is an opportunity to strengthen its activities and to make them more effective by co-ordinating them regionally through RDAs.

The chief executive of the Cornwall Chamber of Commerce and Industry has said: Bearing in mind our County's economic performance and its urgent need to improve this situation, it is vital that the business development functions of what is, after all, the Government's chosen delivery arm, should be brought within the RDA's control at the earliest possible time, that is to say from the outset". The Royal Institution of Chartered Surveyors' national policy officer has said: The RDAs should take the lead in co-ordinating the integration of bidding processes, timescales and decision making, and in brokering contracts with mainstream government budgets to prioritise areas of local need. We therefore support the proposals that Business Links should become part of the RDAs from the Agencies' formation in April 1999 rather than later, as the Government have indicated should happen. We would also see the wisdom, if this proposal was not accepted on a national basis, for a pilot to be considered, possibly in the South West region. Learning from my experiences as the sponsor Minister for Plymouth and my appreciation of the relationship between Plymouth and the rest of the south-west region, including working very closely with the government office for the south west, I agree with both of these knowledgeable men.

It is suggested by some organisations that the training and enterprise councils should also be included from the outset. I believe that there is much merit in that. I am not sure whether I heard the Minister say that Business Links would be co-ordinated in some way and monitored by RDAs. I see the Minister nodding. I hope that that is the case. Although I know that Business Links can vary enormously in scope and delivery, it has huge strengths.

Finally, when RDAs are formed they will be expected to draw upon international best practice. I suggest that if they are to be successful their very formation will need to take account of the practice and experience of other countries, perhaps particularly the USA. I very much look forward to the Committee stage of the Bill when, with other noble Lords, I shall have the opportunity to explore some of the issues that have been raised this afternoon.

6.10 p.m.

Baroness Young of Old Scone

My Lords, these are exciting times in which we live. We shall perhaps look back at the next few months as a period in which there has been a number of bold decentralising measures reshaping government in this country. More and more processes and more and more funding streams are settling at regional level. The noble Lord, Lord Grantchester, talked about the new Objective 2 but there are many examples of both policies and funding streams.

Regional development agencies and the associated regional chambers are part of that process and they offer major opportunities to promote prosperity in the regions. But it must be sustainable prosperity achieved through sustainable development which takes account not only of economic objectives but of environmental and social objectives too.

I welcome very much the fact that the Minister made special mention of sustainable development in her introduction because it is no secret that there has been a lot of arm-wrestling in another place over the exact terms of the sustainable development purposes of the regional development agencies in the Bill. The White Paper, Building Partnerships for Prosperity, very much stressed that RDAs should have sustainable development at the heart of their programmes. However, I should be unwise to say anything other than that the Bill itself is still rather vague on that issue.

I do not wish to argue here today about the exact terms of the sustainable development purposes. It is rather like arguing about how many angels can dance on the head of a pin. However, the fact that many people have been arguing about it at length is because it is an important issue for RDAs.

Perhaps I may digress. Over the past three or four years, on numerous occasions we have seen that kind of skirmishing over the terms of a sustainable development duty for various statutory bodies. We have seen it in the Environment Act with the setting up of the Environment Agency, we saw it in a minor way during the progress of the lottery Bill and we have seen it again as regards the Government of Wales Bill. Therefore, there is a lesson that we need a standard definition of the sustainable development role of public bodies which have an impact on the environment and on sustainability so that we can simply drop that into successive pieces of legislation and cease to spend large amounts of time on rearguing the case on every Bill.

The Minister also mentioned the importance of the right kind of members of RDAs and gave assurances about specific rural interests. Although RDAs are clearly very important to sustainable development, no environmental expertise has been specified. I should welcome the Minister's assurances on how she can make sure that RDAs have access to sufficient environment expertise to ensure that the environmental objectives of the sustainable development purpose can be fulfilled.

I welcome very much the provision in the Bill on government guidance to the agencies and a commitment from the Government at previous stages of the Bill to giving guidance on how RDAs will interpret and implement the sustainable development purpose in practice. The guidance must have a number of parameters to it in sustainability terms. It must ensure that RDAs take account of national environmental and sustainable development priorities, including whatever emerges from the national sustainable development strategy and the requirements of the current UK biodiversity action plan.

The guidance should ensure that the RDAs adopt environmental appraisals of strategies, policies and programmes. I do not believe that it is too much to ask for a simple requirement that RDAs should have a basic tenet of not funding activities which damage major environmental assets, including important wildlife habitats.

The Government's intention to decentralise decision-making is very welcome, but it means that we are seeing a plethora of different bodies and strategies at regional level with the potential for strategies not quite to match with each other or, indeed, to come into conflict. Two issues need to be brought forward in that regard. First, we need to see overarching sustainable development strategies for the regions, perhaps prepared by regional chambers in association with RDAs and government offices for the regions and other regional stakeholders, not least local authorities. Such an overarching strategy is not unique. It has already been presaged in the White Paper on London. RDAs could then prepare their regional economic strategies within the parameters of the sustainability strategy. I believe that a mention on the face of the Bill of the relationship of sustainable development strategies and regional economic strategies would be welcome.

Secondly, regional economic strategies must be set firmly within the context of general planning guidance. We have heard of the disquiet that there was about the planning role of the RDAs. The role of regional planning guidance will be very important. Indeed, the Minister has stated already that regional economic strategies and planning guidance must be compatible and consistent. Perhaps I may press the Minister on how the Government will issue strong guidance to ensure that regional economic strategies are not only consistent with but also help to deliver regional planning guidance. The whole process of preparation of regional planning guidance also needs to be strengthened and regional planning conferences adequately resourced to play a strong part in that. I welcome parallel proposals on regional planning which are currently out for consultation.

There is one further point which needs to be made in the light of some of the arm-wrestling which has taken place in relation to the sustainable development duty of the RDAs. The discussions sometimes seemed to imply that economic development is an alternative to the environment; that you can have one but not both. I believe firmly that RDAs must pursue both for three reasons.

First, natural environmental assets are often the greatest assets possessed by remoter regions and, in particular, remoter rural regions. Sustainable exploitation of those assets and sustainable development of those assets are often the only way in which to create viable, sustainable jobs in areas where it is incredibly difficult otherwise to create jobs. The noble Lord, Lord Wade of Chorlton, talked about the decline in agriculture employment that we shall see. We must find innovative ways of creating alternative employment in rural areas. The environment is a great job generator. Conservation alone accounts for 10,000 jobs in this country and for every direct conservation management job there are another five in infrastructure, green tourism and the industries which support such activities.

Secondly, environment industries are a growing part of the economic sector. We have done insufficient in this country to promote the growth of environment industries. I hope that RDAs will play a strong role in ensuring that we are world leaders, through our regions, in the promotion of environmental technologies.

Thirdly, the environment, the quality of the environment and the quality of life are incredibly important in terms of attracting inward investment. It is at our peril that we ignore the environmental aspects of attraction for investment, particularly foreign investment.

I believe that we are seeing a vital reshaping of the way in which this country is managed. RDAs have an immense potential, provided that the regional development that they promote is sustainable regional development. I ask the Minister to indicate the practical measures that are to be put in place to ensure that that happens.

6.17 p.m.

The Viscount of Oxfuird

My Lords, our debate this afternoon deals with a most important constitutional issue. Like a number of noble Lords, I shall make only a very short intervention. I confess that I am not totally convinced by some of the arguments which have been put forward today to support the creation of regional development agencies. However, I acknowledge, as did my noble friend Lady Cumberlege, that with the majority which the Government command in another place, their creation is inevitable.

Therefore, I suggest that we should strive to ensure that the country gains the greatest benefit from this initiative. One important task for the regional development agencies to tackle is the provision of adequate training for our workforces. It is my belief that the regional development agencies must take into account regional strategic training needs in a national context.

A good example of that is demonstrated by the existing practices in Scotland and Wales. By taking a strategic regional overview, the training needs of Wales and Scotland have been enhanced very considerably in the past 10 years or so. In that context, I should like to raise the important issue of the current system of funding for vocational education and training in this country. Here, I believe that the RDAs have a vital role to play within the overall national guidelines.

We all recognise that national budgets are tight, but what I am suggesting is that the Government and RDAs give consideration to a new approach to the distribution of current resources, to reflect both the differential costs of vocational education and training and, also, national priorities in terms of increased support for the wealth-creating sectors.

Perhaps I may offer your Lordships an example of how that might work in practice. The training of young people in engineering is one of the most expensive to deliver. Research figures given to me by the Engineering and Marine Training Authority indicate that it costs a minimum of £27,000 to educate and train an engineer to National Vocational Qualification Level 3 through a modern apprenticeship, compared with an average of £8,000 for a business administration candidate educated to the same level.

A difficulty lies in the different approaches of the various training and enterprise councils. Although some TECs are able to fund engineering at a higher level than other sectors, many do not. The result is that there is a very large financial burden on engineering employers and training providers, to the detriment of recruitment of young people into engineering. The lack of any national, or regional strategy means that the amount of funding that is spent on engineering training is dependent on the attitude of the local TEC.

I hope that the Minister might consider placing a responsibility upon the new regional development agencies so that, in the provision of engineering training, their regional strategies also take account of national needs. Indeed, there may even be a case for asking the new RDAs to identify priority sectors to meet both regional and national economic needs. Training and enterprise councils should be targeted to achieve a minimum level of training in the priority areas, which should be funded at higher levels. Indeed, my noble friend Lord Arran mentioned that fact in his speech.

I have one final point to make and here I must declare an interest as a trustee of the Understanding Industry charity, a responsibility which I share with a number of other noble Lords from all sides of our House. We try to promote the cause of industry nationally. How much easier the job would be if we could break it down into "bite size chunks" of a reasonable, but manageable size and devolve our activities into a defined regional infrastructure.

I know that the issues which arise in Hampshire, where I live, are very different from the issues that I see when I frequently visit, say, Cornwall or Glasgow. From this variety lies the logic for a sensible creation of RDAs. But let us ensure that true national issues continue to be considered at a national level, and that this legislation gives due weight to the importance of preserving our United Kingdom.

Let us have regional development agencies to maximize and harmonize local issues, but never let us forget that we gain great strength by standing together as a nation.

6.23 p.m.

Lord Graham of Edmonton

My Lords, I should like to express my very warm welcome for the Bill. I have heard almost every speech that has been made this afternoon. However, I believe that the opening speaker from the Opposition damned the concept with faint praise and was very selective in his memory of what had gone before. I plead my credentials in the following way. I was leader of a London borough. I am now the Vice-President of the Local Government Association, as well as being president of a body called the United Kingdom Co-operative Council, which appears in the register of interests under Category 3.

I can go back to the time of metropolitan councils, one of which was the GLC. However, there were six others. They all did a great job. The big difference between our concept of such work and that of the Opposition was mentioned by my noble friend Lord Dormand; namely, democracy. I do not for a moment deride any of the efforts that have been made. I listened to the speech of the noble Lord, Lord Elliott, with a great deal of affection, as I am wearing my Newcastle United tie. I should point out to the House that the marks on it are stains; but they are tear stains. I see that my noble friend the Minister is chuckling with great care. Indeed, I can see red and white stripes all over the place.

I should now like to set the scene. This Government have been in office for literally one year, while the previous government had 18 years in office. We should pay tribute to the Government, the Ministers, the manifesto and the mood for the view that, whatever has been done well, it could be done better. They may be right or they may be wrong. We shall see the result in practice.

The noble Lord, Lord Elliott, poured cold water on the remarks made by my noble friend Lord Dormand who said that there was a welcome for the Bill in the north-east. The noble Lord, Lord Elliott, said that he was not so sure about that and quoted sources for that view. I believe that we shall have either mild enthusiasm or no enthusiasm at all, until the whole concept starts to work. I am absolutely confident that there is a place for the concept of RDAs.

We know that in every region there are many of what I call "good people" and "good bodies". Some of them are professional while others work on a voluntary basis. They all have the same aim at heart: they want to see the economy of their region lifted. I listened most carefully to what the noble Baroness, Lady Cumberlege, said, in what I thought was a most helpful speech. She accepted the fact that, because of parliamentary arithmetic, this must happen. The noble Baroness made a plea for the RDAs to be aware, among other things, of the social dimension; in other words, their social responsibilities. Indeed, I very much warm to that view.

The Government have done a remarkable job in putting the Bill before us in their first parliamentary year. We always say, in many other contexts, that it is much better to get it right than to get it done quickly. If there is a criticism it is the fact that we need to be exceedingly careful about a number of loose ends which have appeared. When my noble friend the Minister replies, I shall be interested to know how there will be a synthesising between the various bodies with responsibility in a region. If the answer is that the RDA will in effect impose what we might call a "Whitehall view" on the region, that will not work at all.

There must be sufficient flexibility and opportunity for all those concerned to get together and iron out the difficulties. If the chairman and the members of the RDA are merely seen to be the voice of Whitehall in the regions, the whole concept will not work. The RDA must be a genuine, regional institution and authority, rather than the other way round. That may not be what the Government have in mind. I hope that my noble friend the Minister will assure me that the Government are more concerned to create a concept of regionalism than simply taking Whitehall into nine other parts of the country. We have a strategy here that we can develop.

As non-departmental public bodies RDAs must, in the absence of regional assemblies, be ultimately accountable to Parliament and Ministers. How soon will we achieve the reality of democracy in the regions? The noble Baroness, Lady Cumberlege, spoke warmly of her time as a local councillor. She wanted to be involved in the community and in politics. My background is no different. There are thousands of people who have experience which can be harnessed in the new bodies. Clearly the right mix will not arise overnight as a result of an edict from Whitehall; it must evolve.

I hope that we shall not create a climate in which there is a power battle between the chambers and the RDAs. We do not wish to see a battle in each region between what one might term the "old hands"; namely, the councillors and the chambers of trade, and the new bodies. We want to see a genuine partnership. I hope the Minister can tell us a little more about the four councillor representatives. As I understand it, a councillor who ceases to be a member of a council on retirement or through losing his seat can continue to be a member of an RDA. Someone may cease to be a councillor after two-and-a-half years' service. I believe that person should then resign from an RDA. Some have argued that such a requirement would not be appropriate as RDA board members are not delegates. However, I believe there is a slackness in this regard which the Government would be sensible to consider.

Reference has been made to the clash between urban and rural interests. On 1st May, the political complexion of the country changed. Millions of people live in the countryside and work in the town. Millions of people live in the town and work in the countryside. The division which has undoubtedly existed between town and country is disappearing. The RDAs must accept that one cannot ignore any element in the community. One cannot favour those who live in towns as that would disadvantage those who live in the countryside, and vice versa. I believe that RDAs will ensure that both those who live in towns and those who live in the countryside get a fair crack of the whip. I refer to greenfield and brownfield sites. The best way to preserve undeveloped sites is to ensure that derelict and unused sites are reclaimed and put back into productive use. That is not a new concept. The sparsity of rural populations can create as many problems as the density of urban populations. However, over the past 10 years those who live in the countryside have suffered deprivation, for example in terms of a lack of public transport, the closure of shops and the absence of a dentist. I live in Loughton in Essex and from my window I can see Epping Forest. Therefore, I consider that I live in the countryside. The interests of town dwellers and of countryside dwellers are the same.

I mentioned my interest in the co-operative movement. That movement looks forward to the regeneration of the economy in many areas where co-operative societies have flourished. The philosophy of the co-operative movement is participation and democracy. The movement also recognises that the Bill is designed to decentralise power and authority from the centre to the regions. The movement considers that will be a good thing if it works. Reference has been made to quangos. They have been spoken of in a derisory manner as an additional layer of bureaucracy. However, there were more quangos at the end of the previous government's term of office than at the beginning of it. That just proves that, "It ain't what you do, it's the way that you do it".

Many co-operative societies are employee owned. I should like to see the concept of common ownership being established and encouraged. I believe in finding local solutions to local problems. The co-operative society is economically fairly strong, but in a democratic sense it is weaker than has previously been the case. The co-operative movement proposes that RDAs should be provided with ring-fenced funds for co-operative development. We believe that the experience of the co-operative movement will be valuable to RDAs. I hope that my noble friends on the Front Bench will tell their ministerial colleagues that the concept we are discussing is well understood and has been well received, but that it will not be endorsed until it has been put into practice. I hope that when it is put into practice we shall be pleased with the result.

6.38 p.m.

Baroness Anelay of St. Johns

My Lords, like others of my noble friends who have spoken today I. too, am concerned that we are having yet more bureaucracy thrust upon us. Despite the calming words of the noble Lord, Lord Graham of Edmonton, I believe that bureaucracy will undoubtedly flow from this Bill. However, like my noble friend Lady Cumberlege, I hope that I take a pragmatic view; namely, that if we must have this Bill at least let us make the bureaucracy work as effectively and as equitably as possible.

The success of the RDAs will of course depend on how much value they can add to existing arrangements and spending. But I am concerned about the operation of RDAs with regard to the needs of rural interests. I assure the noble Lord, Lord Graham of Edmonton, that I do not intend to go overboard, as he put it, on this matter. I would just like the Bill to dip its toes into the water—fresh water of course—of the rural areas.

I believe it is vital that the creation of RDAs should not lead to the marginalisation of rural areas in decision making on economic support, housing, transport and services. I feel that there is a very real danger that, as a result of this Bill, the particular needs of rural areas could be unappreciated and could go unmet.

Earlier today my noble friend Lord Wade of Chorlton referred to the fact that we would at some late hour tonight be discussing the European Select Committee Report on Agenda 2000— The transition to competition: measures for rural development and the rural environment. That report demonstrates graphically the danger that Agenda 2000 itself may fail to deal with rural development and rural policy as an integrated policy. It could prove to be a significant disappointment in the development of the rural economy of EU member states into the next century. At present it represents a failure to understand how the rural economy and rural society work. I believe it is vital that we do not make the same mistake in the development of RDAs.

The White Paper makes several references to rural communities and their problems. During the passage of this Bill through another place, the Government made soothing comments about their devotion to the countryside and its prosperity but I believe they gave little, if any, proof of the reality of that. Now is their opportunity in this Chamber to show understanding and real commitment. In another place my honourable friend Peter Luff asked the Government: If we make positive suggestions for improving the rural dimension of the regional development agencies, will the Minister consider them sympathetically?". The Minister replied: The answer is obviously yes."—[Official Report, Commons, 14/1/98; col. 374.] It may have been the obvious answer, but any evidence that the Government responded to my honourable friend's concerns by amending the Bill to respond to rural worries is far from obvious when one looks through the minutes of the Standing Committee of another place.

Several omissions in the Bill must be rectified if the interests of rural communities and businesses are to be fully protected. The White Paper states that the RDA boards will have 12 members, although the Bill provides for a minimum of eight and a maximum of 15. The White Paper also says: each RDA board w ill include at least one member who can contribute a strong rural perspective". That could be considered quite an extraordinary insight into the Government's attitude towards the countryside. Twenty per cent. of the population lives there; 80 per cent. of the land area is rural; but so far we are told that just one member will represent the rural interest. As my noble friend Lord Bowness said earlier, what is even more extraordinary is that at present on the face of the Bill there is no guarantee that one of the members will be appointed from among those who can contribute to a strong rural perspective. That is a serious omission which I sincerely hope the Government will agree to put right during the passage of the Bill through this House. It is important that the Bill should guarantee rural representation on the RDA boards. Not all of those who live in rural areas are dependent upon their self-sustaining economic viability. Some of course do travel into the urban areas to work. The boards need to include those who do depend upon the sustainability of the rural areas.

I note that the response to the consultation paper by the Consortium of Rural TECs stated: There are concerns that the Regional Development Agency model may increase the focus on inner cities and fail to address the needs of the communities in rural areas. There are widespread fears that the RDAs will be urban-based bodies and will focus upon urban issues. Earlier, a noble Lord from the Government Benches stated the fact that the Country Landowners' Association welcomed this Bill. In large measure it did, but it also pointed out the dangers inherent in the Bill of neglecting rural interests. I appreciate that the noble Baroness the Minister stated earlier that the board members are not to be delegates. I understand that. The Government have argued that members should represent every part of their area, as indeed Members of Parliament are expected to do in another place. I would hope that board members would take that approach, but I feel that rural areas would benefit from the appointment of at least one member to champion their cause and to ensure that their interests are properly taken into account.

That is not the only omission from the Bill with regard to the rural interest. The White Paper gave the RDAs an explicit remit to promote the interests of rural areas, and a similar provision is surely needed in the Bill itself. I would also argue that rural representation within the regional chamber is vital (as in the case with boards) if the interests of rural areas are to be protected, and the Bill should guarantee such representation.

As the Minister said earlier, in March the Government announced that they would merge the Countryside Commission and the Rural Development Commission. If the Government do pursue this approach, the national research and advisory functions of the RDC will be of great importance. The RDC has been the only organisation providing detailed national information on what is going on in rural areas. Without that research and advice, national government and RDAs will not be in a position to make informed decisions on issues that affect rural areas. The Bill makes it possible for the Government to preserve these services, but at present it does not guarantee their future. I would hope that the Government would agree to the Bill being amended to provide an assurance that these services are continued on a national basis and are not allowed to become fragmented.

It is vital that the RDAs prove themselves to be committed to an integrated policy in rural areas, and one which truly understands and represents the needs of those who live and work in those areas. At present I believe there are a number of defects in the Bill which should be remedied, to make sure that the RDAs are as responsive to the needs of rural areas as to urban areas. I look forward to the opportunity to introduce those remedies at Committee stage.

6.48 p.m.

Lord Burlison

My Lords, I thank your Lordships for allowing me to make a short contribution to this debate. As one of a small group who met to form a body which later became the Northern Development Company (which I understand at some stage will be subsumed by a regional development agency) I would simply like to point out where, in my experience, a future regional development agency will need to give consideration. As the noble Baroness, Lady Hamwee, said, we have the experience of the Northern Planning Council in the north-east of England. We have had other bodies, as has been pointed out by other speakers, but we set out in the north to formulate a sharp but small executive body which could act as a one-stop shop, bringing together all the elements which were necessary to attract inward investment to the region. This took place in the early 1980s, before the establishment of the Northern Development Company.

The background to these discussions was such that they were held in a predominantly Labour area during the time of the Conservative government. Although these circumstances meant that all the participants had pressure put on them to come up with a compromise, there was a genuine desire by all the elements to find a solution which would give the region a greater opportunity to sell itself to potential investors. The region at that time, as my noble friend Lord Dormand explained, included Cumbria, which of course is not included in the boundaries of the northern region RDA.

At the outset, I sat on the embryonic body as chairman of the Northern Regional TUC. At this stage, I did not have its agreement, although it was aware that I was pursuing an objective to create a regional industrial executive. However, I must add that it was the first organisation to endorse this document and had it not been for its positive stance at that time the Northern Development Company would not have come about. All political parties in the region were against such a regional body being formed. If the Northern Development Company had not been formed the region would clearly have been the loser. Although the Northern Development Company achieved excellent results in the field of inward investment, as some noble Lords have said, its success could have been greater if its strategy had been more widely embracing and its resources greater.

The Northern Development Company, like the regional development agencies, at its outset had to subsume some of the existing regional bodies. Although individuals were fairly treated, the takeovers had to be aggressively resolved. Because there had been common agreement on the composition of the NDC and the involvement of strong regional patriotism, those issues were easily resolved.

My message to the Minister, therefore, drawn from my long experience of dealing with all elements of the northern region, is this. Ensure that representation is fairly selected to reflect both sides of industry. It does not surprise me that some politicians oppose the Bill. They opposed the Northern Development Company at the outset. We have got rid of tribalism in the north. Make it a partnership of people, and it will work. I can assure this House that those involved in inward investment in the north welcome the Bill.

6.51 p.m.

Baroness Thomas of Walliswood

My Lords, during this interesting debate, a large number of technical questions have been asked. There has been reference to the relationship between the regional development agencies and the regional chambers; and to the danger of downgrading rural needs among the RDAs' other priorities. There has also been discussion on the sustainability issue. I propose to speak on those four main points.

On technical matters, my noble friend Lady Hamwee raised the important issue of public information and public access to meetings of the RDA. I am sure that Ministers are fully aware that in another place our friends put down amendments on that issue.

As regards regional boundaries, I hardly dare mention the south east after the comments of the noble Lord, Lord Sefton, about the south-east mafia. However, I agree with everything said on the unsuitability of some of the regions. I find it difficult to understand the consistency of interest. All of us are interested in what happens in London, but that does not amount to creating a region out of those counties. I suspect that discussions on regional boundaries in that part of England will continue for some time.

I refer to the relationship of the new RDAs with existing local authorities, the role those authorities have played in promoting economic well being, and how and when the TECs and Business Links will be absorbed by the RDAs. From these Benches we agree with those who said that the TECs and Business Links should become part of the RDAs from their inception. I support noble Lords on all sides of the House who asked for further information on these and a large number of technical issues. In particular I seek an answer to my noble friend's point about freedom of information and public access. An excellent example of government flexibility in that respect is their modifications to the hunt Bill. We look forward to a response of that kind in relation to this Bill.

I am aware that there are at least two strands of thought on the relationship between the RDAs and regional chambers. One is that the regional chambers should not restrict the dynamic impetus of business. I believe that that comes from a well known quarrel, of which I have had experience in the past, between "business" and "planners". Among some business people, there is a conception that planners take a deliberate delight in preventing them from doing what they wish to do. I believe that that impression is misplaced, but in recent years local authorities have begun to take a more sympathetic, holistic (to use the word of my noble friend) attitude as to how business may be allowed to flourish within their communities.

The chambers bring together a wide range of interests within the regional community. They should not be treated simply as sounding boards for whatever the regional development agencies wish to do. The Minister said that the regional development agencies and the regional development chambers were set up in the absence of an elected regional tier. My noble friend Lord Beaumont intervened to say that we had looked forward for some time to a moment when we would have real regional government. He shared some of the cynicism of the noble Lord, Lord Sefton of Garston, that this initiative will lead to that desired end. He believed that the attitude of my noble friend Lady Hamwee to the Bill was more accepting—the fruit, he maintained, of a nicer personality. It cannot be wise for me to intervene in such a discussion. However, the noble Lord, Lord Graham of Edmonton, asked a pertinent question about whether the RDAs were to be the voice of national government at regional level, or the voice of the region. That is one of the most important questions that has to be answered in the course of this debate.

The Minister sought to head off criticism about the potential downgrading of rural issues within the priorities of the regional development agencies. Criticism has been vocal in another place and outside Parliament too. As noble Lords know, many of your Lordships have considerable rural interests and are always vocal on this matter. The noble Baroness made a number of suggestions indicating that we need not worry about these matters. In responding to the Minister, my noble friend Lady Hamwee said, in effect, "Methinks the lady doth protest too much". However she made a valid point which I support. It is that urban and rural issues are two sides of one coin. For example, if London does not work as a capital city, if it is not a pleasant place in which to live and work, if the smog is so bad that one needs a bandage over one's mouth when leaving the Chamber in the evening, the remainder of the south east will be unable to function. It will be overwhelmed by those in London spreading outwards in order to escape intolerable conditions in the centre of London. Those matters very much form two sides to the same coin.

Sustainability is a difficult issue. It was given impetus by the unfortunate wording of the subsection dealing with the fifth purpose of the RDA; namely, to contribute to sustainable development, where it is relevant to their area to do so". There cannot be an area in the entire country in which sustainability is not a relevant aspiration. All those who have said that sustainability should be an overarching issue within which the RDAs conduct their business have the right end of this particular stick. In responding, perhaps the noble Baroness, Lady Farrington of Ribbleton, will be able to reassure the House on that point. If not, the matter will continue to spin itself out during our debates in Committee.

I have briefly expressed some of the concerns raised by my honourable friends and others. That is inevitable at Second Reading, when Members of this House are seeking clarification on government intentions. I hope that clarification will be forthcoming. However, on these Benches we generally welcome this initiative—in clear distinction from the official Opposition, who said that they did not support RDAs as a solution to regional difficulties; at least, that is what I understood the noble Lord, Lord Bowness, to say in answer to an intervention.

Intriguingly, the noble Lord added that if his party were in power they would no doubt be able to propose alternative solutions. I am bound to ask why, if that is the case, his party were not able to turn to this problem during 18 years in government. We offer a general, though not entirely uncritical, welcome to the Bill.

7.2 p.m.

Baroness Miller of Hendon

My Lords, if the road to hell is paved with good intentions, then this present Bill must be regarded as the legislative equivalent of the M.25. The good intentions are of introducing economic advantages to England. I make no apology for referring to "England", and not treating it as though it were some minor constituent of the United Kingdom. I do not say that out of any sense of chauvinism or feelings of xenophobia in relation to the other three countries. On the contrary, I am proud to be a citizen of the United Kingdom, along with the citizens of all four countries.

In Scotland, Wales and shortly in Northern Ireland, residents have been allowed a referendum on the future of their country. The English have not. Never mind the general election and Labour's much-vaunted manifesto. They promised to, establish one stop regional development agencies to co-ordinate regional development". But even among all the fine print—microscopic print in fact—and all the ambiguous phrases, the Labour Party did not say, "We will divide England into nine regions". Yet those are the words with which Clause 1 begins.

Even under Julius Caesar, all Gaul was divided into only three parts, as many of us who struggled with Latin at school will recall. Germany, a far bigger country than England, has only 16 regions, compared with the 12 that are proposed for the United Kingdom. That includes one, Bremen, with a population of 700,000—less than the population of Leeds. So why nine regions? Why not eight, 10, or even 12 compatible regions, not the hodgepodge of disparate areas with which we are presented in Schedule 1?

In fairness to the Government—and the Minister will know that I always want to be fair to the Government—I realise and accept, as the Minister did, that in order to avoid delay in their legislative programme they have used existing regional boundaries rather than go through the procedure of a Boundary Commission inquiry, public inquiries and so on which would be needed to create new ones. But boundaries that are appropriate for whatever administrative reasons the Schedule 1 boundaries were created—Government statistics, book-keeping and other bureaucratic purposes, and the new form of election of MEPs—have absolutely no relevance to economic and industrial affairs. Why are the Home Counties north and south not treated as separate regions? Their economies certainly demand it. Instead, look at the proposed south-east region into which they are lumped—

Baroness Hayman

My Lords, I am grateful to the noble Baroness for giving way. She confuses me slightly. Is she suggesting that there was absolutely no logic to the boundaries set up for the government offices by her own government? Those are precisely the boundaries that we have used. These are not some administrative, bureaucratic construct; they are the boundaries considered sensible by the previous government for economic development and bringing together the four government departments within the regions.

Baroness Miller of Hendon

My Lords, I was suggesting that the boundaries created previously were created for reasons different from those behind this Bill.

Let us look at the proposed south-east region into which they are lumped. What possible commercial affinity do the regional interests of Southampton and Oxford, for example, have in common? Even the Deputy Prime Minister, in his White Paper, Building Partnerships for the Future, admits that this proposed region is what he euphemistically described as "especially diverse". The local Members of Parliament—my honourable friend the Members for Faversham and mid-Kent, and the Member for Tonbridge and Malling, with all his expertise as a former Minister for the Regions, described this particular region as "absurd". Even the right honourable Member for Bishop Auckland was unhappy with what the Government proposed for his area.

But this Bill is supposed to be about creating a new, modern dynamic industrial structure. What excuse is there for the arbitrary putting together of the rural parts of Cambridgeshire and the industrial parts of Southend and Essex? As the honourable Member for North Devon said during the Second Reading debate in the other place, relying on his considerable local knowledge, to suggest that the south-west is a coherent region stretching from Penzance up to Gloucester and across to Christchurch is absolute nonsense.—[Official Report, Commons, 14/1/98; col. 397.] It is the Government's aim to establish regional chambers, in time to introduce legislation to allow the people, region by region, to decide by referendum whether they want directly elected regional government". In other words, the Government are planning on the Balkanisation of the country. We on this side of the House would like to be assured that they are not plotting to establish by the back door a fait accompli as to the boundaries of those regions.

It is premature to ask what would happen if in the referendums some of those regions voted "yes" and others voted "no". What is required from the Minister is an unequivocal assurance that the proposed regional development agencies' boundaries will not be used as a precedent for any future regional assemblies of which we have been forewarned in the Government's manifesto. The Minister's answer about giving that assurance may affect what we do at the next stage of the Bill.

I have another reason for asking for such assurance. Clause 25 gives the Secretary of State a blank cheque to alter the boundaries, admittedly after consultations with interested parties. But the Secretary of State is not bound by those consultations. Clause 25(5) states that the Secretary of State "may" cause a local inquiry to be held over any proposed boundary changes. I suspect that we "may" have an improvement to suggest in connection with that very word "may".

Returning to other current issues in the Bill, let me remind your Lordships of its many shortcomings. First and foremost is the establishment of the nine mighty unelected quangos, with no democratic accountability to the localities they are supposed to serve, merely to the Minister—and that from the party which in its manifesto attacked the previous government over "unaccountable quangos". The Prime Minister, when in Opposition, said, We need to roll back the tide of quangos and to have a revival of proper democratic local government".—[Official Report, Commons, 20/2/97; col. 1076.] Well, the Prime Minister seems to be having the same trouble as King Canute in rolling back the tide; and I shall have something to say soon about his weird ideas about reviving proper democratic local government.

I referred to "mighty" quangos. Let us look at some of the powers that the Bill proposes they should have. Under Clause 5 an agency may do anything it considers expedient for its purposes—another blank cheque. Who else is given limitless powers like that? Can the agencies order the diversion of a road or a river? Can they order a business which competes with one of their projects for customers or labour to move? We hope that the Minister will give us an adequate explanation of this extraordinary provision in the legislative notes, well before Committee stage.

Agencies can also, with permission of the Secretary of State, grant loans and sell their land for less than it is worth, presumably to subsidise potential investors or form or take shares in companies. They can make compulsory purchase orders to acquire land. The Secretary of State can take land away from public authorities—ratepayers' property, that is—and from other public bodies with limited compensation and give it to the regional development agencies.

Under Clause 21, regional development agencies can issue a warrant demanding entry on anyone's land to survey it or value it and to make bore holes and take soil samples. Anyone who obstructs this invasion of his land can be taken before the magistrates and fined. There is no messing about with civil injunctions in what is essentially a civil matter.

Under Clause 24 a regional development agency can order the local authority to connect any private streets it owns—presumably estate roads in some industrial development—to the highway.

There were even more wide, sweeping proposals which would have turned the regional development agencies into their own judge, jury and executioner by appointing them to be the local planning authority and highway authority in respect of their own property. Fortunately, after strong protests by my honourable friends and others in the other place, the Government withdrew these proposals, which are no longer in the Bill.

Secondly—and I am sorry that I have only just reached secondly—there is absolutely no evidence that these new, powerful quangos will do any better than the existing arrangements for attracting both domestic and inward investment. On the contrary, I believe that by making these nine regions compete with each other, presumably with the aid of discretionary grants and loans and government guarantees under Clauses 10 to 13, they may very well detract from the effectiveness of other regions. "Come to region A, because we are far better than region B": that message—the cry of "stinking fish"—may permanently damage the credibility of region B with other investors.

Perhaps it is appropriate that here I declare an interest—or, rather, a former interest. When I was in business I built a factory in Newport with the aid of a grant from the Welsh Development Agency and subsequently provided work for 11 direct employees, three extra postmen and a number of people in two local factories supplying me with components. The point is that I did not go to Newport because of the availability of a grant; I discovered the existence of grants after I had selected my site. Talking of the Welsh Development Authority, why does Wales need only one authority while England is to have nine? North and south Wales are distinct areas with different characteristics. Many of the inhabitants of north Wales do not even regard English as their first language. Would the Government have dared to try to chop Scotland into several parts? Not so long as the Scottish National Party was breathing down their necks!

The White Paper which preceded the Bill was in turn preceded by a so-called consultation. A more perfunctory one it would be difficult to imagine. The consultation document was a mere four pages long. The circulation seems to have been somewhat limited as only 1,500 responses were received, mostly from organisations, not individuals. Of the replies received, there were many from local councils, even Labour councils, protesting about the lack of democratic accountability of regional development agencies, especially vis-à-vis the local authorities in their area. In fact, although the Government in their White Paper selectively quoted about 57 endorsements of their proposals, they carefully omitted the very large number that came from organisations which either opposed the Government's plans or which had serious reservations about them. These included a number of Labour controlled councils, the Local Government Association, the Council for the Protection of Rural England and the Royal Society for the Protection of Birds. These latter two organisations are concerned that the Government's plans do not require the regional development agencies to place sufficient weight on environmental concerns.

I think it right to say that this problem is aggravated by the geographical format of the regions, which produces a cocktail of urban and rural areas where there are conflicting needs and conflicting concerns. One has only to look at the situation in Germany, in the heaviest populated region of North Rhine-Westphalia. This includes the industrial cities of Essen, Cologne, Dortmund, Düsseldorf and Duisburg, but is otherwise made up of rural areas. Between the two there is constant conflict.

There is a genuine fear that, when considering such conflicts of interests, the regional development agencies will put the needs and wishes of rural communities in second place. Many noble Lords have commented on that this evening. This is because there is a preponderance of influence in favour of the interests of commerce and industry, which is only to be expected given the nature of the brief of the agencies. Clause 4(2) states: A regional development agency's purposes apply as much in relation to the rural parts of its area as in relation to the non-rural parts. Considering the carte blanche contained in Clause 5(1) enabling a regional development agency to do anything it thinks expedient, what is to stop Clause 4(2) being interpreted as a licence to turn vast areas of countryside into a desert of concrete and hideous industrial buildings? We would particularly appreciate the Minister's comments on this point.

It is of no less concern that the Government are breaking up English Partnerships, which has been highly successful in attracting inward investment to England and which, as a national organisation, has a team of top calibre staff. It is difficult to understand how fragmenting that team will be of benefit. It points out the folly of the Government in trying to deal with a national objective by parcelling it out amongst nine parochial quangos.

The fact is that the principle objective of this Bill is not the promotion of commerce. The hidden agenda is for it to be a launch pad for its plans to remove power from Westminster and to place it in the hands of these proposed new regional assemblies. The Government have made no secret of their objectives. Apart from what they said in their manifesto, the Minister for the Regions said in an interview with the Scotsman on 1st December that the process was "evolutionary" and that the next stage after RDAs and indirectly elected regional chambers was to give them more powers. He even hinted that the future regional assemblies would be given tax-raising and law-making powers.

I suggest that the Government should try to keep their eye on the ball. The ostensible purpose of these regional development agencies is the promotion of commercial interests. It is not to serve as the thin end of the wedge, or as a Trojan horse, whichever metaphor your Lordships prefer, for the grandiose plans to revolutionise—and I use that word advisedly—a whole tried and tested constitution.

The Local Government Association in its briefing paper, which many of your Lordships will have seen, complains that it is far from clear how the functions of the regional development agencies will sit alongside the functions of the local authorities in their area. In fact, it is abundantly clear that they will only be required to consult, and not necessarily to take the slightest bit of notice of the views expressed in such consultation. Such is the disregard of the Government for the views that the democratically elected local councils may have on the operations of their nominated quangos that, if any of the token councillors who are placed on them loses his seat, he is not required to resign or to forfeit his place, but can remain there, supposedly to represent the views of the local authority of which he is no longer a member.

Lord Dormand of Easington

My Lords, I am grateful to the noble Baroness for giving way. She mentioned a criticism which the Local Government Association had made. It was not so much a criticism as a suggestion. The Local Government Association strongly supports regional development agencies. A number of us, including some on these Benches today during this debate, have made suggestions as to how the Bill can be improved. That is the normal parliamentary process. I am sure that the Government will take notice of what has been said on both sides. But I feel that the noble Baroness has given the impression that the Local Government Association is opposed to the Bill. It is quite the contrary.

Baroness Miller of Hendon

My Lords, I had no desire to give that impression. I mentioned the 57 endorsements quoted in the White Paper; the Local Government Association is included in that 57. I was trying to point out that it is among those which commented, in the way that the noble Lord has commented, to the effect that there are other things which, in its opinion, could improve the Bill. That was the point I was making. The point I made about local councillors losing their seats was made also by the noble Lord, Lord Graham of Edmonton.

When this obvious farcical position was pointed out in the other place, the Government vigorously resisted making the obvious and reasonable change and used their voting steamroller to defeat the amendment—so much for the Prime Minister's lip service for, the revival of proper democratic local government", to which I referred earlier.

It is relevant to note that, when the White Paper was published, the first result was the resignation in protest by the admirable chairman of the Rural Development Commission. The Government are entitled and will indeed have their Bill as a result of our self-denying ordinance regarding matters contained in the Labour manifesto. But we believe that it is a bad Bill with many defects that we shall attempt to illuminate in later stages. We hope that that is clear because the noble Lord, Lord Dormand of Easington, was not sure of what my noble friend's attitude was. That is the position of Her Majesty's Opposition.

We hope, but without much expectation, that the Government will not close their ears and collective mind to logical proposals to ensure that their project can he carried out without devastating problems to the economy and the environment—problems caused by the new layer of bureaucracy that they are setting up, whose separate parts will not only compete with each other, but will also be fertile ground for conflict with the democratically elected councils within their bailiwicks.

7.20 p.m.

Baroness Farrington of Ribbleton

My Lords, I am pleased to have the opportunity to close this debate on the Regional Development Agencies Bill. As my noble friend said in her opening remarks, it is not a Bill that captured many national headlines. But as many of your Lordships will know—particularly those whose principal residence is outside London—the regional media reflected the great interests among regional people in the establishment of regional development agencies. Speaking as an advocate over many years of greater regional autonomy, from my home region of the north-west, I believe that we may come to recognise this Bill as the measure which first gave our regions the opportunity they have long sought to influence their own affairs.

I am pleased too that so many noble Lords welcomed the Bill. Many of those who have spoken have a rich experience of regional affairs and of working to improve regional prospects. This Government have shown that we recognise and appreciate the work that has been done in our regions by organisations such as the North of England Assembly and, in my own region, the North West Partnership. The purpose of this Bill is to build on that work, to develop further the regional partnership approach and to give the work of all those in our regions which strive to better regional performance a new focus and direction.

RDAs will be influential new bodies charged with formulating a strategic framework for economic decision-taking in the regions. They will have the powers and the authority to make a real difference to regional performance. For the first time there will be, in each of our regions, an organisation strong enough, and sufficiently broadly based, to make a real mark on regional economies and to give direction to regional and national programmes.

The RDAs first and most important task, as my noble friend said, will be to produce and implement regional economic strategies—strategies which reflect national and regional priorities and (I stress the importance of this in response to questions raised by many noble Lords) express the views and interests of the regional partners, including local authorities. The strategies will cover economic development, social and physical regeneration, competitiveness and innovation. Skills training and employability must also be at the heart of regional strategies. The strategies will be developed in a context that safeguards the environment and promotes sustainable development.

Many noble Lords spoke with support for the principle of the need to ensure that our regions develop, meeting the needs and potential of those regions. Frankly, I fail to see how the noble Baroness, Lady Miller, speaking from the Opposition Front Bench, could claim that, for the purposes of regional development with the functions proposed in the Bill, it is illogical, irrational or unreasonable for this Government to adopt the view that the boundaries created—not to be fixed in stone for all time—by the previous government, including the Department of the Environment, the Department of Transport, the Department for Education and Employment and the Department of Trade and Industry, were appropriate for the early stages and the building of our regional development agencies project.

Lord Bowness

My Lords, I thank the noble Baroness for giving way. While she is dealing with this point, can she tell us how she sees the establishment of regional chambers? Is she saying that it will be at a sufficiently early stage to use the government office boundaries for those assemblies when they come?

Baroness Farrington of Ribbleton

My Lords, I shall come to the question of chambers later in my response, if the noble Lord will allow me to do so.

Lord Bowness

My Lords, perhaps the noble Baroness will deal with the question of boundaries now; it is important.

Baroness Farrington of Ribbleton

My Lords, the experience so far is that the boundaries of the regions which formed regional chambers have been coterminous, with one exception. I wish to refer to that exception later because it is quite complex; it relates to the perception, about which people have made assertions, as to where people living in Cumbria believe they live. I was not clear whether noble Lords were speaking of those who live in Barrow, which those of us who live in Lancashire know is really part of old Lancashire, or those who live in the north of Cumbria. If the noble Lord will forgive me, therefore, I shall come back to that point later.

The strategies will be developed in a context that safeguards the environment and protects sustainable development. This Bill, in some detail, puts flesh on the bones of the policy that the noble Baroness, Lady Miller, seemed to make sound like something produced in a furtive document which we had hidden away and which has come as a great shock to Members of the Conservative Opposition. In fact the document was the Labour Party manifesto. It was widely available. The British public read it and were aware of our proposals.

We are committed to more accountable regional government in England but believe that much can be done within the present democratic structure to build up the voice of the regions. It was difficult to tell from comments made by the noble Lord, Lord Bowness, whether he was in favour of a fully fledged, fully accountable, agreed by the Conservative Party, regional form of government in the UK or whether he was opposed to it root and branch.

We were pleased that the noble Baroness, Lady Hamwee, set the tone for the sort of constructive co-operation on developing this tier of democracy that we welcome. I welcome the fact that my noble friend Lord Burlison referred to the fine record of the Northern Development Company and the support it is giving in principle to going ahead with regional development agencies.

I hope that as a result of this debate and listening to debates during the passage of the Bill, the noble Earl, Lord Lytton, will develop some confidence. It is the experience of those in regions where regional chambers have been together and working for some time that people develop a sense of cohesion and an ability to work together. As my noble friend Lord Dormand of Easington pointed out, there is widespread support, ranging from the CBI to the trade unions, to local authorities for this project.

We recognise that this is an evolutionary process. We must make certain that the development takes with it the wishes of the people. The noble Lord, Lord Bowness, speaking for the Conservatives, criticised us because we were not going far enough in having directly elected regional assemblies for the north-west and he was then critical of the very notion of the need to have them. We believe that this first step, through the creation of the development agencies which will be linked to voluntary regional chambers, will provide a focus for regional consultation and scrutiny.

The noble Baroness, Lady Miller of Hendon, raised the spectre, which I thought the Conservative Party might have dropped by now, of additional taxation creeping in by the back-door. I can assure her that nowhere in the Bill is there any plan to increase taxation.

Lord Beaumont of Whitley

My Lords, what a pity!

Baroness Farrington of Ribbleton

My Lords, the noble Lord says it is a pity that there is no such plan. I suspect that on the Government Benches we have got it right if we are being criticised from both directions at the same time.

We will not be more specific. We will assess the position over time. It is wrong to pre-empt the stage and rate of change towards the assessment of the demand for regional assemblies. As my noble friend Lord Dormand of Easington said, the very first stage is extremely important. The noble Lord, Lord Beaumont of Whitley, followed by the noble Baroness, Lady Thomas of Walliswood, had doubts about our commitment. Anyone looking at the record of this Government in terms of their commitment to a sound and fundamental change and democratisation and decentralisation of the United Kingdom could not fail to believe that we intend to move ahead. However, in terms of the English regions, it is important that we take people and organisations with us.

A whole range of important issues were raised in the debate. I was asked why we have started from here in terms of the boundaries. Those of us who are committed to the concept of the development of regional strategies in England are only too well aware of the siren voices of those who would lure us onto the rocks by saying, "Only when we can agree exactly where the boundaries between north-west and north or south-west, south and south-east can be drawn may we then go ahead". We in the Government are not fooled by that argument. We know it is a recipe for inaction. Therefore, we believe it is important to move ahead, using, as I have said before, those boundaries which were agreed by the previous government for many, though not all, of the functions that the RDAs will carry out.

The issue with regard to Cumbria is one which I understand has been accepted for the moment by those living in Cumbria. I understand that the voluntary and well-established north-west region assembly was chaired by someone from Cumbria at the time the consultation took place. We have not committed ourselves to using these boundaries for regional assemblies in the future. We communicated our intentions to the regional partners and asked them to put aside differences and get on with making RDAs a success. I am pleased to say that most people in both the north-west and north-east have accepted the Government's decision to move ahead on a voluntary basis.

Perhaps I may move on to the role and make-up of the RDAs. The noble Lord, Lord Bowness, and the noble Lord, Lord Elliott of Morpeth, with particular reference to the Consett experience, raised the issue of inward investment. They posed the questions: is the UK already so successful that we do not need RDAs; and why not leave it up to the local authorities or existing organisations? One has only to talk to many, many people in industry who speak of potential inward investors receiving well worked out single packages from Scotland and Wales to realise that these packages cannot be met by the English regions. There is a whole range of issues which need to be sorted out. The need to have a co-ordinated approach draws together people in the regions from both sides of industry in support of moving ahead with RDAs.

The Viscount of Oxfuird

My Lords, I thank the noble Baroness for giving way. I have personal experience of Tyne-Tees German inward investment. I was sent a letter of compliment for all the information that was provided and its particularly fine support package.

Baroness Farrington of Ribbleton

My Lords, apologise to the noble Viscount if I implied that there has never been an ability by organisations to overcome the problems involved. However, I think that those involved in industry would agree that it is far easier to bring together all the partners and to have a strategic approach with a larger unit. That is the scale of the particular project to which the noble Viscount refers. It is one on which all those concerned must be complimented. I know myself from experience in the north-west that it is important to bring people together to plan for the future in a structured way.

The noble Lord, Lord Bowness, referred to the level of funding. RDAs will be given a substantial budget in order to help them meet their objectives. The final budgets will not be decided until later in the year, but expenditure this year on the programmes which RDAs will inherit will be in excess of £800 million, with a further £1 billion of finance attracted through joint ventures with the private sector. This package of finance will ensure that RDAs are key players in the development of their regions.

With regard to the regional split, in the first instance, government funding for RDAs will be split between the regions principally to meet existing commitments. In future years we will take account of the needs and size of the region and the performance of the RDA when setting budgets. Progress is being made in all regions towards the establishment of regional chambers. The first chamber was launched in Yorkshire and Humberside in March by my right honourable friend the Deputy Prime Minister.

I was asked about the article in the Financial Times today. The Standing Orders of another place provide for a standing committee on regional affairs. The committee has not met since the 1970s and I am not aware of any plan to reconvene it.

The noble Lord, Lord Elliott, asked about the bodies currently involved in economic development. Other noble Lords raised the matter of the functions of the new RDAs and the noble Lord, Lord Bowness, raised the issue of London. The Bill does not distinguish London from elsewhere because we do not want to prejudge the plans we have for the greater London authority. But we have in mind that forthcoming legislation for the greater London authority will make whatever provision is needed—perhaps by amending the Bill—to set up a development agency accountable to the London authority.

I was asked why there is no mention of housing in the Bill. RDAs will not be housing bodies but will be able to facilitate the provision of housing by others. English Partnerships estimates that in 1996ߝ97 it facilitated the provision of 5,200 housing units. RDAs will continue the work done by English Partnerships as well as taking on the Rural Development Commission's rural regeneration programme. It will also be responsible for administering the SRB Challenge Fund which includes housing.

The noble Lord, Lord Bowness, asked whether there would be any top-slicing of funding from local government. There will be none whatsoever. RDAs will receive their funding from central government programmes.

The question of the performance of RDAs was raised by the noble Baroness, Lady Hamwee. They will be required to report their performance against targets set by the Government as part of the corporate planning process. The NAO will audit RDAs and will be able to conduct value-for-money studies as well.

Several noble Lords asked about rural membership. It is difficult to ascertain whether any reply could gain universal support. The noble Lord, Lord Bowness, wanted to know why we were spelling out the need to have at least one member with a rural background. My noble friend Lord Grantchester asked whether there should be more than one member. Other noble Lords were concerned that this aspect may be left out.

In our White Paper Building Partnerships for Prosperity, we said that each RDA board outside London would include at least one member who can contribute a strong rural perspective. The information provided to potential candidates made clear that members will be drawn from a range of regional interests, including rural interests. RDAs must be inclusive and therefore all the complementary elements—rural-urban, employer-employee, large and small—must be brought together. RDAs need to be innovative and imaginative. They must recognise that small companies need help to grow. The co-operative movement is growing in a large way in both rural and urban areas.

The RDAs' rural duty, in terms of their functions, will apply equally strongly. To have required them to have particular regard to the needs of rural areas would have meant that they would have done so at the expense of other areas and would be drawn out. If we are not careful, our intention can appear to favour one area more than another. We assume that the importance of the large and small, the rural and the urban, will be complementary, as the noble Lord, Lord Wade of Chorlton, said.

Noble Lords referred in passing to our record. As regards rural areas, an extra £50 million for rural transport was announced in the Budget. A further £1.4 million was made available for public transport in rural areas. Rural schools are to be given greater protection. In housing there will be more flexibility for local authorities and also in rural areas. Further as regards rural areas, my right honourable friend the Deputy Prime Minister announced on 27th March that the RDC and the Countryside Commission were to merge—neither is being scrapped, as the noble Lord, Lord Bowness, suggested. We see that as an important basis for going ahead.

Several other points were raised and I shall answer them quickly. My noble friend Lord Graham asked about councillors resigning. They will not be required to resign immediately on losing their seats. They will be appointed for a range of qualities, including their experience as councillors, and not as representatives of the authority. The record for the economic planning councils was good. In 1979 the Conservative Government decided to wind them down. I must gently correct my noble friend Lord Sefton in that they were neither directly accountable democratically, nor were they as small as in the present proposals.

Regional people should decide their own affairs. Regional planning councils were a good thing in that sense, but we want to move on. There is a framework within the Bill for guidance for the work of the RDAs. That allows the Secretary of State to issue guidance and directions to the RDAs in relation to the development of their strategies and the exercise of their functions.

During the passage of this Bill I hope to able to discuss in particular freedom and access to information and how that will be dealt with. The question of sustainable development was raised by the noble Baroness, Lady Thomas of Walliswood, and the noble Baroness, Lady Young. I can reassure your Lordships that the Bill is drafted to ensure that an RDA takes full account of the needs of sustainable development at all times. It will be incumbent on it to do so.

The noble Baroness, Lady Young of Old Scone, mentioned the valuable contribution of the environment industry. That underpins the importance of having wide discussion and consultation on guidance with those organisations that have a role to play.

Many other points were raised, many of which will also be mentioned in future debates. Transport, planning and delivery for the RDAs are important elements of regional competitiveness. Although RDAs will have no specific transport delivery role, they will want to influence the planning services. That was a point dealt with by my noble friend Lord Sefton.

The power to raise private capital was mentioned by the noble Lord, Lord Wade of Chorlton, and the noble Baroness, Lady Cumberlege. In particular, the noble Earl, Lord Arran, and the noble Baroness, Lady Cumberlege, stated the importance of helping small companies, of seedcorn investment and of development for the future.

There are other points which need to be covered. I am conscious of the fact that I have spoken for a long time. In summary, the Government will be establishing with this Bill nine new development agencies which will put our regions and the country generally into a better position to maximise our economic performance. The noble Lord, Lord Wade, my noble friend Lord Dormand of Easington and the noble Viscount, Lord Oxfuird, raised points on higher and further education and the importance of the interface at regional level, including the close collaboration proposed between RDAs and the Further Education Funding Council and its regional committees. These are an important and integral part of the scheme.

The Government are committed to promoting policies which pursue jobs, growth and competitiveness, but in a way that is compatible with safeguarding the environment and with social progress. These were important points raised by my noble friend Lord Graham of Edmonton and the noble Baroness, Lady Cumberlege. The Bill ensures that RDAs will similarly take a broad view of their economic remit. As we have made clear, they will be required to have regard to the needs of all their regions, including sub-regional, local, rural and urban areas, in fulfilling their statutory purposes. They will be required in all they do to consider the need for sustainable development. We want the RDAs to make their full contribution to the Government's aim of achieving sustainable growth and bringing to an end the economic deficit faced by our regions for so long.

The Government's proposals for RDAs in this Bill have been widely welcomed in all our regions. They form an integral part of the Government's objective of decentralising decision-making and creating a Britain better equipped to deal with the challenges of the global market. They are the backdrop for our vision of a more consensual partnership approach to regional working as a means to achieving a sustainable, prosperous future for all our regions. It gives me great pleasure to commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.