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Regional Development Agencies

Volume 510: debated on Thursday 3 June 2010

9. What plans he has for future support for businesses in Merseyside and the north-west; and if he will make a statement. (775)

12. For what reasons his Department plans to replace regional development agencies with local economic partnerships. (778)

15. What plans he has for the future of the regional development agency in the north-east; and if he will make a statement. (782)

The Government intend to replace RDAs with local enterprise partnerships and to bring together business and local authorities to establish local accountability. Where they enjoy clear public support, the partnerships may take a similar form to existing RDAs. In making the necessary reductions in RDA budgets and reviewing their functions, we will seek to mitigate the impact on economically vulnerable parts of the country.

I thank the Secretary of State for his answer, and congratulate him and his team on their new positions. I wish them well.

Advantage West Midlands brings an economic benefit to the regional economy of over £7 for every £1 spent. Does the Secretary of State understand that the cuts that his Government have announced will put jobs at risk in my constituency and critical projects such as the i54 business park?

The Secretary of State does understand the importance of RDAs, which of course will be changed but in a way that makes them more effective. I am sure that the hon. Lady noticed that in my first comments on RDAs very shortly after I took office I recognised that several parts of the country were especially vulnerable. I mentioned the west midlands as one.

In my constituency of Wirral South there are a great many people who are very concerned about the coalition Government’s proposals, and specifically those with special relevance to the projects that have been progressed by the Northwest Regional Development Agency. Will the Secretary of State give me some reassurance that this vital business support will continue?

Within days of taking up this job I went to the north-west of England. I visited the RDA and talked to the chairman and chief executive and to businesses in the region. I reassured them that we are well aware of the problems faced by Merseyside and the north-west, and that it is an area of priority in terms of resources.

I too congratulate the Secretary of State, and I heard what he said about not tinkering too much in the west midlands. How many jobs would have to be lost in the west midlands before he considers this policy to be a failure?

I congratulate the hon. Gentleman on being returned to the House. I remember that he was a formidable force in the Government Whips Office in his day. He has already noted the acceptance that the west midlands has particular structural problems, and they will be taken into account in the reordering of the RDAs. In my first answer, I stressed that the changes depend very much on the reaction of local business and local authorities. I am sure that he will make representations to Birmingham city council and local businesses, and I hope that they will reflect the priority that he wishes to give.

I thank my right hon. Friend for the part that he played in securing a very clear assurance from the Prime Minister yesterday that One NorthEast will continue to have a key role as a regional development agency. Will that role and the way in which it is structured enable it to continue to assist existing and new firms to develop the private sector, for example in assembling land where needed?

I hope that it will continue to play a positive role. My right hon. Friend has been extensively involved in supporting the north-east, and I talked to him about these things on the several occasions I visited Newcastle and the region. He knows that one of the early decisions that came to me was to appoint the new chairman of One NorthEast, and appointing someone to manage the transition was a statement of a wish to maintain an element of continuity. I do not pretend that the RDAs will not change: they will, but I recognise that the north-east is a particular case because of its very high dependence on public sector employment and the generally very positive feedback I get about One NorthEast.

I congratulate my right hon. Friend and his team on their new positions. Is he aware of the Richard report commissioned by the Conservative party in opposition? It found that a third of RDA money was spent on administration and that much of the rest was spent on signposting to other sources of information. I beseech him to ensure that in the new policy businesses and locally elected authorities can get together to avail themselves far more directly of all that taxpayer money.

Yes, I am aware of that report. There was a happy coincidence of thinking between my colleague’s party and my own on the future of RDAs. She is quite right to say that there was a lot of administrative waste, some of which we are now removing as a result of the changes that have been made in the last week. There will be parts of the country—including, I think, the part that she represents—where we will have a substantial cutback in RDAs. However, they will be refocused and made more effective.

I thank the Secretary of State for last week coming to visit Pace International, an excellent company in my constituency. Following on from the excellent question from my hon. Friend the Member for Stourbridge (Margot James), I have been concerned that the Secretary of State has indicated that Yorkshire Forward may be given a reprieve. May I tell him that it is just as unacceptable for the unelected and unaccountable Yorkshire Forward to spend £300 million a year of public money as it is for similar organisations in the south of England?

The language of “reprieve” is not quite right. All the RDAs will change their nature; they will become local partnerships.

Order. May I very gently say to the Secretary of State that he must turn to address the House?

What I said is that Yorkshire, together with the north-east, the north-west and the west midlands, has particular structural problems that do need to be addressed.

I welcome the Secretary of State and his ministerial team to their post and wish them well. The Secretary of State and I have something in common: we both used to work for the late John Smith in times past, but that of course was before the Secretary of State fell in with the wrong crowd—and now he has fallen in with an even worse crowd.

The Secretary of State has said several times in recent weeks that his Department will be the Department for growth. I am not going to begin these exchanges by denying that whoever won the election, there would have been difficult decisions to take on deficit reduction, but does he accept that the £300 million of cuts to RDA budgets this year are not efficiency savings? They will mean real cuts in real business support, with less private investment leveraged in and cuts to important regeneration projects. Is it not the case that the specific feature of these cuts and his plans for replacing RDAs is that they will impact on our capacity to secure the very growth that is necessary to make deficit reduction a success?

I thank the right hon. Gentleman for his welcome and congratulate him on his elevation to the shadow Cabinet. He is quite right: we both greatly respected John Smith, for whom we worked. I should also like to thank the right hon. Gentleman for what he did as a very hard-working Minister. He has made the life of this Government easier as a result of all the preparatory work that he did preparing for private capital to come into Royal Mail. But in relation to cuts, I am sure he acknowledges that the fiscal position does demand drastic action. When I joined the Department I was already aware that this process was being undertaken—cuts were already being taken in science laboratories, and further education lecturers were being made redundant as a result of cuts made under his Government.