Public Bodies Bill [HL] — Committee (7th Day) (Continued)

– in the House of Lords at 8:26 pm on 28th February 2011.

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Debate on Amendment 49 resumed.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour 8:38 pm, 28th February 2011

My Lords, I intervene briefly because I shall concentrate my remarks during proceedings on the Report stage of the Bill. I want to say a few words about how we need to consider what has happened historically when considering the future of the development agencies. I believe that the closure of the RDAs, particularly in the north of England-and when I talk about the north of England, I mean the north-west, Yorkshire and Humberside and the north-east-is ill-advised and misconceived, and will ultimately be damaging to the regions.

We really need to learn the lessons of history. My mind goes back to the early 1980s, around 30 years ago, when I was a young MP. The debates in the Commons at that time were totally dominated by the decline in the regional economy in the north of England-particularly in shipbuilding, steel, heavy engineering, mining and textiles. Week after week, Question Time after Question Time, Labour MPs-sometimes with Conservatives joining in as well-got up to object to what was happening in the region and to ask how the problems of the region were to be resolved. I was a member of the northern group of Labour MPs. We were constantly being lobbied by industry, employer groups, the trade unions and the local authorities. The CBI in the northern region was prominent in lobbying Labour Members of Parliament to ensure a change in the Government's regional strategy at that time. I remember a man called James Cran, whom some of us might recall. He subsequently became the Member of Parliament for Beverley in Yorkshire but was then the leading figure in the northern CBI. I remember him appearing on Border Television and north-east television repeatedly, week after week, demanding a reversal of the strategy and some alteration in regional policy. The cry was universal: "We need a regional strategy". The constant refrain was, "The centre cannot deliver", because the centre was not delivering. Laissez-faire regional strategy, despite European money, meant that the concentration of footloose investment and capital accumulation more widely was in the south. That was our problem.

Time and again, the differential in house prices and unemployment rates between the north and the south was cited as evidence of a north-south divide in economic development. As the late John Smith put it 26 years ago, in a debate on regional policy and the need for a regional strategy with agencies delivering, which I remember well from 17 January 1985:

"What is frightening is that the Government appear to be impervious to the damage that they are causing. As the economic storm clouds gather over Britain and become more serious every day, the Government plunge blindly on 544 destroying as they go. When they are finally called to account, the missed opportunities and wanton destruction of regional development policy will, I hope, be high on the indictment".-[Hansard, Commons, 17/1/85; cols. 543-44.]

I say that history will repeat itself. What John said then will be relevant in these coming years unless there is a change in strategy by the Government.

Then I remember the Labour Party conferences in the north of England being dominated by the debate on the need for a regional strategy. Often at the forefront of those debates was the then north-east Member of Parliament Ian Wrigglesworth-now Sir Ian-who I understand the Government have brought in to help with their new regional strategy. Maybe that is no longer true and my noble friends can correct me if I am wrong, but I read somewhere that he has now been brought in. I remember it all as though it were yesterday. It was the debate that dominated all of my 21 years in the House of Commons.

I remember the huge debate that was launched in the north in the early 1980s following the publication of a paper entitled-I know my noble friends will remember this-Let's Pull Together for a Better North. If I recall correctly, it was a paper jointly sponsored by the late Joe Mills of the Transport and General Workers' Union and the late Lord Burlison, who was in this House. I go on about this because history will repeat itself if we go down this route. Even at this late stage, the Government should revise their strategy.

The paper was closely followed by a substantial piece of work-a paper published by my noble friend Lord Prescott on an alternative regional economic strategy. He is not here but he was certainly in his place earlier. He will not mind my saying that it was a very significant paper for Labour MPs; it dominated debates in the parliamentary party over several months. It formed the embryo of the regional strategy that Labour subsequently adopted when we came into government. There were innumerable debates in Parliament on the need for a rethink on regional strategy at the time. During that period there were only two Conservative Ministers who really understood what was happening. One was a chap called Jim Lester. He was a Member of Parliament in a Nottinghamshire constituency-Beeston, if I remember rightly. He had come from the shoe industry and he was an employment and skills Minister. On the Labour Benches, we always felt that he was the one who understood the problems that we had. Surprisingly there was another one, and it was Michael Heseltine. He took the decision to establish the enterprise agencies. Some of them went to the north of England, south Wales and the north-east. He also took the vital decision to put money into Toxteth in Liverpool, the effect of which was to pump prime and bring in additional money from the private sector for environment improvements in Liverpool. The reason I mention those two is that both men, in their own way, were introducing measures to leverage in substantial private investment, a role which ultimately fell upon the broader remit of the RDAs. They were carrying out the functions which subsequently were to be carried out by the RDAs set up by the Labour Government in 1997.

I am reminded of the work of the Regional Policy Commission, a non-political initiative established by, again, my noble friend Lord Prescott, and chaired by Bruce Millan, then European Commissioner for Regional Policy. The commission's recommendations helped steer us towards the regional structures that we subsequently created. Indeed, by the mid-1990s and the eve of the 1997 landslide Labour victory, there was widespread support from the CBI, the TUC, the chambers of commerce and all the political parties across the regions. All opinion across the regions in the north was for an ambitious regional strategy under regional development agencies, bringing in both domestic and European money to fund investment in skills, training and regeneration of physical decay, small business services, assistance to industry, innovation and inward investment initiatives more widely. That is what we delivered against this background of feverish debate in the 1980s and well into the 1990s. It is now all to be destroyed.

People throughout the north of England are worried about these developments. I know that we have some friends in there. It may well be that Vince Cable is more sympathetic to our position than he makes public. If he is, and if he is listening to this debate, let him realise that we can no longer rely on Mr Pickles. We want him to intervene and indeed, in many ways, perhaps undermine this strategy before it does damage in the region. If Mr Cable sympathises with our position, let him use the structures within BIS, in a way perhaps that the Government are not intending at this stage, to bring about at least some residual regional structure that can deliver. I say that this is all now at risk, and we appeal even at this late stage for the Government to reverse their position.

Photo of Lord Judd Lord Judd Labour 8:45 pm, 28th February 2011

My Lords, I just wanted to follow my noble friend Lord Campbell-Savours because he has put so powerfully the case for the north, particularly with his origins in the north-west. He is, in every sense, a son of the north-west. He speaks with authority.

I simply say that there is a cultural dimension to all this. It has to be faced. There are many good people living in the south-east, the south and more prosperous parts of the Midlands who just have not seen for themselves the social reality of what happened in the north in the past. The noble Lord, Lord Greaves, and the noble Lord opposite have referred to Cumbria. Just come to Cumbria. I often speak about the inheritance and the beauties of the national park, but come to the west coast of Cumbria and see the physical and living evidence of what happened before. The communities are broken, disheartened and demoralised still.

The challenges are huge and, given the economic stringency that faces the nation, this is the very time that one needs strategic and powerful authorities to look after the interests of those who will find themselves in the toughest position, as economic policy takes effect. If we have any pretence of commitment to social justice, this is the very time that there should be strong voices speaking, not just tactically but strategically, for the people of a region. Those voices should look at the issues of communications and transport, and at the work that can be done with the universities in the north, to find ways of regenerating and building a new future.

Some will argue that in Cumbria we will have the one bright prospect of becoming the energy coast of Britain. If that is a prospect-and I fervently hope that we can make a contribution in that context-this is the time that we need a strategic authority speaking for us and making sure that the plan is developed to the full, not just thrown to the vagaries of the market.

What is sad about the Government having rushed into this ill considered Bill, with all its ill considered propositions that have not been properly researched, investigated and analysed, is that we might have had a case for coming up with a review of regional policy. I agree with the argument that there was a great deal of room for adjustments to the regional structure. I am not sure that my noble and very good friend Lord Campbell-Savours will agree with me on this, but I am a sceptic about whether Cumbria-particularly north Cumbria, where I live-is in the right region. It seems to me that the natural links of north Cumbria are with the north-east-up around the coast, through Carlisle and into Newcastle and the rest. We do not think of Manchester and Liverpool. We think of the north-east. Our health service is oriented in that direction. When I needed neurosurgery, I ended up, through the National Health Service, in Newcastle. When I turn on my television in the evening, I see Newcastle-based television.

There was therefore a case for a review to make sure that the regions, in their administration and structure, were best geared to meet the real social challenges that were out there. However, instead of going down that exciting route, this new Government, who pride themselves on being so radical and imaginative, just dodged all that and went for an ideological destruction of the regional development authorities at the very time that they were most needed. I know that the Minister listens. He is a sensitive man and has not only a social conscience but a feel for social issues and people. I urge him, even at this 11th hour plus, to plead with his colleagues and say, "This is a step too far. Think again".

Photo of Lord Empey Lord Empey UUP

My Lords, I have been listening to the debate, but the truth is that there is no single solution to economic development policy. There is no perfect model. There is a variety of models throughout the United Kingdom, some of which work better than others. However, the amendment is a fairly blunt instrument. The decision on the number of regional development agencies in England has to be taken in conjunction with the devolved regions. Until a few months ago, I had responsibility in Northern Ireland for certain aspects of economic development policy. Prior to that, I had responsibility for establishing Invest Northern Ireland, which at that time consisted of some 700 staff and had a budget of about £160 million.

However, the whole scene has changed. I listened carefully to the noble Lord, Lord Campbell-Savours, but what applies today is totally different from what applied in the 1980s. Europe has a big influence in this, because one of the big weapons that organisations in Scotland, Northern Ireland and elsewhere had was selective financial assistance. Since 1 January, that assistance has been largely reducing and by 2013 it will be virtually gone. Therefore, the model that we used for distributing it and the mechanism that we used for trying to bid for foreign direct investment are going to be denied us. All that will be left is soft assistance, with management plans and various other things, but the hardcore employment grants and capital grants that regions depended on to buy in business and investors will be denied us because of European regulations.

I can tell the Committee that a protocol exists within the United Kingdom to prevent all the different RDAs, the regional administrations and the national Government from bidding against each other. Foreign direct investors are not stupid. They knew that people in the regions were hungry and they went about their business going from one to the other. We had to establish protocols.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

Is it not the case that the noble Lord in Northern Ireland, we in Scotland and colleagues in Wales will continue to have development agencies, so why is he denying them to the regions of England?

Photo of Lord Empey Lord Empey UUP

First, I have not denied anybody anything. I am just beginning to develop my argument. The fundamental point is that these organisations in the devolved regions are becoming systematically weaker. They have less ability to direct financial aid because the selective financial assistance, which was their principal weapon, is diminishing very rapidly and in a couple of years' time will be gone altogether. The whole emphasis is shifting on to the development of skills. We had a fantastic conference in the United States last September and October hosted by the State Department at which we were given the opportunity to put Northern Ireland's case. What was really interesting to potential investors was no longer grant aid; it was whether a region had a sufficient centre of gravity and critical mass of skilled people with the right skills in the right place to attract people. You can no longer buy in companies.

Sitting in the Chamber tonight is the noble Lord, Lord Ballyedmond, one of our premier entrepreneurs. I dealt with him and his colleagues on a number of occasions, and they were frustrated because the agencies and organisations could sometimes get in the way of business. Therefore, the question is: what is the right balance? Is it going to be possible to develop a national policy that will allow for the creation of the correct skill base? That will be far more important to foreign direct investment-and indeed, I believe, to indigenous investment-than financial aid in the future because the latter is going to be reduced and will be so small. I remember examples of £20,000 being offered per job created and perhaps even more. On average, it was £7,000, £8,000 or £10,000 per job created, but those days are gone and are not coming back. I certainly feel that this list of agencies is no longer sustainable but, at the same time, it is perfectly clear that you cannot create a complete vacuum.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

If the responsibility that the noble Lord is referring to in the case of Northern Ireland were transferred to London, does he believe that the centre in London could deliver?

Photo of Lord Empey Lord Empey UUP 9:00 pm, 28th February 2011

I have always been a devolutionist and felt that there had to be a local dimension to most things. The noble Lord, Lord Judd, was asking whether people fully understood the social and other implications of what has been happening in this country over recent years. The answer for me is yes. I still have a constituency. It is largely an inner-city constituency in east Belfast. The people at my advice centres are queueing up, looking for help with DLA, housing benefit and how we can get them training, so I am very familiar with all of that. But having elaborate structures today, whether they be in Northern Ireland, in Scotland or anywhere else, is not the whole answer. There is another dimension.

The noble Lord, Lord Foulkes of Cumnock, will be well aware that we have another dimension in Northern Ireland, where we are up against the Republic, which has a very attractive corporation tax rate. At the end of the day, that was attracting more inward investment to that region than anything that any of our industrial development organisations could do.

Local government also has a role to play. There is no model that is absolutely applicable in every part of the UK. I would be very afraid to take a position on the north-east of England, about which a vast array of people seem to be extremely passionate. The noble Baroness, Lady Armstrong of Hill Top, made a powerful speech in respect of what she saw in her region and many other noble Lords, including the noble Lords, Lord Bates and Lord Greaves, spoke on it as well.

Photo of Lord Greaves Lord Greaves Liberal Democrat

I actually spoke about the north-west and not the north-east, but I will back the north-east as well.

Photo of Lord Empey Lord Empey UUP

The noble Lord was saying at one stage, if I recall, that part of his region felt that it belonged to the north-east. The point is that there is a large pool of people who feel passionately that the north-east in particular has a critical mass and should have representation. I know that the noble Lord, Lord Prescott, attempted to offer regional government to that region and it did not want it at that stage. Otherwise, I dare say, it would have, just as Scotland and London and other places have, its own economic development unit, probably with a Minister working full-time on that area.

The question for us is whether this is going to be solved simply by structures or by a combination of structures and a policy involving close linkages with higher and further education and training. I am not convinced, having established one of these bodies in the past, that the model that we need to go forward for the next 10 or 20 years is necessarily the model that we have adopted in the past. I am not saying that everything that is being proposed by the Secretary of State is the right solution. Local people in those areas would have a better grasp of that than I would have from a distance. But I no longer put my faith in the structures. When you talk to businesspeople, they are very dismissive of bureaucracy. Their real interest is not in any grants that you can offer them; it is whether you have the people on the ground who can do the job. That is the thing that matters most.

There seems to be a new dimension opening up. I do not have all the answers and it is not entirely clear that the Secretary of State for Business has them either. But things have changed dramatically in the past few years, not least because of Europe and what it is now deciding. We have signed up to that. The ability of local organisations to take strategic decisions and effectively to buy in the businesses that come to invest has diminished. We have to be aware of what is happening in the rest of Europe. We feel that people in other parts of Europe do not apply the rules as strictly and rigorously as we do. I am sure that noble Lords from Scotland and elsewhere have had that repeated to them time and again. We play by the rules while others ignore them. That is one source of considerable concern to people in the regions, who feel that we are not necessarily playing on a level pitch.

When one is next door to a region where there is 12.5 per cent corporation tax versus what we have, that is what I call real competition. It is something to which no individual organisation, whether regionally based or otherwise, has a solution on its own. I am for regional solutions but I am no longer putting my faith simply in the structures that we develop. Those structures themselves sometimes get in the way of business; they frustrate businesspeople and, of course, they are very expensive. Whether we have the balance right remains to be seen and I have no doubt that there will be further debate to establish that.

Photo of Lord Whitty Lord Whitty Labour

My aim is to speak to Amendment 56 which deals with the south-west region. It is not simply to convince the Committee that there are concerns on these Benches somewhat south of Watford, but as my noble friend Lord Knight spelt out before the break, the South-West Regional Development Agency has done a fantastic job in many respects, from projects such as the Eden project through to the Osprey Quay in his previous constituency where I was only a couple of weeks ago, through to the deals with the universities, science parks, and so forth. The majority of its interventions have been relatively small and, to respond to the noble Lord, Lord Empey, most of what the regional development agency has done has involved not large sums of money but soft policies, such as putting together patches of land, developing skills, getting people talking to each other who do not normally talk to each other, in the universities, professional associations, local government and small businesses.

The South-West Regional Development Agency may not have had the right geographical boundaries and it was probably not as universally loved as those in the north-east appear to be, but the prospect of its absence is causing deep and grave concern among small businesses and others within the region. Its replacement by the so-called LEPs is a shambles. It is a crazy situation. The Government who profess to want localism and to have industry-led alternatives to the agency have ended up with a situation where Whitehall is telling groups of business people and others who put their heads above the parapet what the basis to organise should be. On what basis is the man in Whitehall telling the putative LEPs in the M4 belt in Gloucester, Swindon and Wiltshire that that is not the appropriate sub-region? It seems a very appropriate sub-region to me and, more importantly, to them. Yet, they are being told that it is not the right region. People in Dorset-in Bournemouth and Poole-are being told to talk to Southampton and the Solent areas. Why? How is that allowing local businesses to decide on their own remits?

It is clear that the Government have set out on a process not on the basis of what is best for the regions or best individually for each of the English regions, but on the straightforward basis that they do not like RDAs and want to abolish them. What has happened in the south-west, which I suspect has happened in all regions, is that business men and women who some months ago were not particularly supportive of the RDA are now saying that with the abolition of the RDA in prospect, the government office for the region going and regional planning disappearing, they do not know who to talk to if they want to put together a deal, if they want to try to bring in public and private partnerships, if they want to make arrangements to develop the skills within the region that will achieve delivery of the ideas that they, as entrepreneurs, have. They are asking, "Who do we talk to?".

At the same time, the big potential investors are asking precisely the same question. The areas that miss out are going to be the more peripheral ones in the north and the west of the country and maybe in parts of East Anglia and the Midlands as well. In London, there is always somebody to talk to. In Wales and Scotland you have government-backed organisations but in these other regions you have not. It is not just a question of the industrial heartlands; we are talking about rural counties in the south-west. Indeed, it is not a question of the Labour heartlands, in case Members opposite feel that we are parti pris to this-these are the heartlands of the Liberal Democrats and many Tories as well. As the consequences of the disappearance of the RDA and the regional offices of government become clear, I imagine that many of the MPs in their parties are going to have deputations from businesses and from local government asking how to deal with this.

What has happened in the south-west and what people now fear in the south-west is that there is no point at which small businesses can talk to Government about their problems and there is no point at which outside investors can talk on a regional or sub-regional basis with some authority behind those discussions. What will they do? They will go elsewhere. It is true, of course, as the noble Lord, Lord Empey, says, that the interventions will not be so much financial in the future, although there will be some money there and there will be money in things such as the European Regional Development Fund and money from the agricultural side of this dimension. However, they will say it is easier to do this in France or Germany or Spain. It may be slightly easier to do it in London or Scotland or Wales but with nobody to talk to in dispersed regions such as the south-west the absence of the RDA will come to be a dreadful brake on developments which were beginning to see fruition.

I do not think that is what the political representatives of the south-west would wish to see. I do not therefore think it is what the coalition Government would wish to see. But by their own universal decree that RDAs are bad, that is likely to be the consequence.

Photo of Baroness Harris of Richmond Baroness Harris of Richmond Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, before we remove RDAs entirely from our lexicon, I would like to put on record the really excellent work done by Yorkshire Forward. I make no apology for being parochial. It has helped nearly 30,000 businesses a year to improve performance, which is one in 12 of the region's business, with a typical turnover gain for each of those businesses of around £15,000 a year. About one in 30 people in the region's workforce are in a job because of Yorkshire Forward's work in the past five years. It has been one of the two most successful regional development agencies at turning investment into jobs.

Yorkshire Forward was created in 1999, and by 2000 it was already investing in business parks in small rural areas in my particular part of north Yorkshire, making a huge difference to those communities. Through its investment, it was to lever several millions of Objective 2 European funding into my local district, and transformational projects were initiated through the pilot Renaissance Market Towns programme. In my town of Richmond, money was granted to the award-winning Georgian Theatre Royal. One project that is dear to my heart and which we would have had great difficulty getting off the ground-I played a small fundraising role with our local MP-was the award-winning station development and the award-winning heritage partnership scheme. None of these would have taken place without the foresight and the funding of Yorkshire Forward.

Over the years, its investment helped to transform Richmond from an underperforming market town to Great Town of the Year in 2009. It is interesting to note that the Academy of Urbanism has awarded that national accolade to three Yorkshire towns-Richmond, Scarborough and Hebden Bridge-by a vote of its members over the five years for which it has been run. All those towns had strategic investment through Yorkshire Forward's Renaissance Market Towns programme. Because of the speed at which Yorkshire Forward has been disbanded, funding contracted to complete the Richmond heritage partnership scheme had to be withdrawn. It would have brought redundant property back into economic use and, at the same time, restored the character of that beautiful Georgian market town. That is indeed a most terrible shame.

The regional growth fund is about jobs, so it will almost certainly go to large companies, not to the SMEs that need it. Important though the large companies are, it is equally important to help and support the communities that need funding to keep small businesses from falling apart. Where, in future, will we get the money to keep our rural communities going, providing jobs for people and maintaining and improving the infrastructure?

Perhaps I may make a suggestion? I was talking earlier to one of the Lords' most sympathetic and thoughtful Members, who will remain anonymous. He suggested that it would be a good idea to offer tax breaks to individuals or companies that offered matched funding for a project. I commend that excellent idea to my noble friend and ask him to look carefully into that. We also need to look at the mountains of red tape surrounding applications for even small sums of funding. That, too, should be addressed. I hope that the Minister will carefully consider those suggestions.

Photo of Lord Hoyle Lord Hoyle Labour 9:15 pm, 28th February 2011

This has been a very interesting debate on RDAs so far. I refer to some of the remarks of the noble Lord, Lord Empey, before I develop my theme. The noble Lord mentioned the difficulties faced by the Republic of Ireland because of its economic policies. As I understand it, it has been in a little difficulty recently, has it not? The noble Lord talks about Stormont, where power is devolved. I think he will understand that we want the best for our regions as well. I agree with him completely on one thing; this is about training. If that is left completely to industry, it might well, as it has in the past, go to the south-east rather than to the other regions. As has been said tonight, whether noble Lords have been speaking about the north-east, the north-west-as has the noble Lord, Lord Greaves-or other regions, such as the south-west, which my noble friend Lord Whitty spoke about, it is about ensuring that provision is spread more widely than the south-east, which, if it was left to the market, is where it would go. Because of that, I am totally against the Government's proposal and hope that, in the light of the debate and certain disquiet, as I sense it, from part of the coalition, they might just think again about their policy.

The noble Lord, Lord Greaves, raised this issue, but I want to speak a little more about what the Northwest Regional Development Agency has done and what successes it has had. In doing so, I pay tribute to the chairman, Robert Hough, and his colleagues, and the dedicated staff for their vision when they were led by Steve Broomhead, who until recently was the chief executive. I want to spell out more concretely for the Minister what the agency has done for the community. It has created or safeguarded just over 220,000 jobs; it has created 23,000 new businesses; it has reclaimed 4,000 hectares of brownfield land; and it has levered in £3.2 billion of private sector investment. This is quite a record in itself.

Data from the independent evaluation by PwC of the north-west's development activity over the period 2002-07 reported-and this is very important-that, for every £1 invested, the Northwest Regional Development Agency had achieved a £5.20 increase in GVA. Independent X-ray inspections by the NAO in 2007 showed that the NWDA was performing strongly. At the time, this was the top mark possible. A subsequent report in 2010-let us bring things more up to date-showed that the NWDA was strong on reprioritising to deal with the economic challenges of the recession. That will be lost to us. Recently, the NWDA moved into the IiP gold standard. The big thing about this in relation to development agencies generally and the north-west in particular is that they built on the region's heritage and strengths to provide the investment where it was needed-that is the important thing-and the leadership and support to ensure that the places, assets and industries of the north-west were best able to seize the opportunities for a sustainable future.

The Northwest Regional Development Agency supported the north-west in dealing with the tremors and shocks-particularly economic shocks-that can appear. They dealt with foot and mouth, which was very important in Cumbria in particular, and with the more recent flooding in Cumbria, getting practical support to businesses within four days of the floods. All that was very important indeed, especially in Cumbria. Could that be done by any other agency? I do not think so. The agency has also worked with partners to attract, host and develop a legacy from a wide range of events in the north-west, including the extremely successful Commonwealth Games-which everyone remembers-and Liverpool as the European capital of culture. This was largely based on the funds that came. The agency led the development of economic strategy in the region and produced the strategies needed. The important thing was that it brought together the regional agencies to develop the whole of the north-west economy, from Cheshire in the south to Cumbria in the north-west.

Let me go even further and develop in more detail how the agency played a part in the regeneration of Ancoats in east Manchester. In 2002, it undertook England's largest compulsory purchase order to regenerate Ancoats, revitalising historic cotton mills and ensuring the north-west's history as the birthplace of the industrial revolution, while bringing back derelict buildings for new economic use.

Let us talk a little about what they did in Liverpool. As Members here understand, the agency invested heavily in the regeneration of Liverpool's waterfront, particularly the world famous "Three Graces" and the Albert Dock. How will we do that in the future? It helped to secure the arena, the convention centre and the new museum. It reopened the Leeds-Liverpool Canal, as we know, and the Mann Island development. These investments have paved the way for a fully private sector-funded redevelopment of Liverpool's city centre. How will we do that without an agency that looks at the whole region?

I am sorry if I am going on a bit but, because we have been talking about development agencies, I want to put into context what has happened in the north-west. On businesses, the agency secured support for the nuclear industry, the supply chains, and the Nuclear Decommissioning Authority in west Cumbria. It also secured the national skills academy, the nuclear headquarters and the flagship energy facility in west Cumbria. We have talked a lot about west Cumbria because it is an area that could be forgotten. It has been said that it should perhaps have been with the north-east, but let us say what has actually been done. I notice my noble friend, who made a very powerful speech, nodding his head in agreement with what I am saying in relation to this.

Let us take Business Link Northwest. In 2007, the development agency launched a one-stop regional business link service to provide a primary access point for business support in 2008 and 2009. Over 92,000 businesses accepted the service, which was a 30 per cent increase on the previous subregional arrangements, with an 89 per cent customer satisfaction rate. What it has done is worth recalling. We talked earlier about skills. The noble Lord talked about the need for them. In Manchester, in 2004, the Victoria University of Manchester and UMIST combined to form a single university. The investment by the development agency helped to pave the way for integrating the two institutions and enabled the construction of new state of the art facilities. As a result of the help that it received, the University of Manchester is now Europe's largest single-campus university, with over 27,000 undergraduate students. It is steadily climbing in the rankings to one of the top universities in the world, not just in this country.

A bit nearer home to me in Warrington is the Daresbury Science and Innovation Campus. Investment and leadership from the agency to create a critical mass of research knowledge, expertise and capacity has resulted in extensive spillover with over 100 high-tech enterprises now located in the Daresbury Innovation Centre. They benefited from all the help they were given by the agency. Are we going to throw all that away?

The noble Lord talked about RDAs competing. Does he imagine that the local enterprise partnerships will not compete with each other? I do not know where he is coming from. The RDA was split into Cumbria, Greater Manchester, Liverpool city region, Cheshire and Warrington, plus-the noble Lord, Lord Greaves, mentioned one of them-possibly three overlapping supporting approaches for local enterprise partnerships in Lancashire. Indeed, as he said, a lot of work has been done in a territory that both of us know well: the Pendle area and Burnley. There is the Blackburn with Darwen Borough Council, and an approach is being made by Blackpool, Fylde and Wyre. All these can go together in relation to it. The question is whether that will be the powerful voice that the RDA has been in the past. I do not think so. The needs of the whole region will be neglected. I am afraid that the competition between the two cities of Manchester and Liverpool will be to the detriment of the rest of the region. That is what we are hoping to get away from. We hope to look at the north-west region as a whole. That is the way in which we should go, but I am sorry that the Government have taken this approach. They have taken the idea-

Photo of Lord Greaves Lord Greaves Liberal Democrat 9:30 pm, 28th February 2011

I wonder whether the noble Lord-as he says, both of us know the Pennines well-will agree that when a region such as the north-west finally gets a complete set of local enterprise partnerships, or LEPs, whatever pattern it is, what will happen-and it is already being discussed-is that at regional level all the LEPs will come together to form some sort of association or confederation of LEPs to recreate a structure at a regional level. However you look at it, this will be necessary.

Photo of Lord Hoyle Lord Hoyle Labour

I could not agree more with the noble Lord. Of course that is what is going to happen. Something is being tossed away needlessly by the Government in a very hasty decision, without due thought being given to either region. I certainly agree with him that these things will need to come together if the various regions throughout the country are to benefit. Unless we do that-unless we get them together-we have failed. I am so sorry that they are being split up in this way, only for them all to come together under another name, as the noble Lord, Lord Greaves, says. In view of the pleas that have been made from these Benches and from other Benches, particularly from the Benches within the coalition-they seem to sit a little bit apart at times-will the Government please think again before destroying the RDAs?

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Communities and Local Government)

My Lords, I speak to Amendment 51, which opposes the abolition of the East of England Development Agency. I am perhaps a lonely voice for the east, although it is a region that I know the Minister knows well, so I look for some particular favour in his response tonight. I do not think that the east as a region has the innate identity that we have heard about tonight, particularly with the north-east and the passion that goes with that. We are probably a bit more like the south-west; we have grown to be a region. Before I develop my theme, I just say in response to the noble Baroness, Lady Harris, who I think was arguing for the benefits of some regional selective tax breaks, that selective tax breaks can be good for job creation, but mostly for accountants and lawyers. For me, it is a slippery slope and we need to think about it very hard.

I take this opportunity to reflect on the opportunities for the east, which EEDA has encapsulated in its Blueprint for Growth, and on why the fragmentation of the regional effort will diminish those opportunities. I caution that the replacement local enterprise partnerships are no substitute for the RDA. In any event, in the east some 27 per cent of the population and 26 per cent of the businesses will not be covered by a LEP.

My first encounter with the RDA was about a decade ago, as leader of the council, when we heard the news that the Vauxhall car plant was to close; in fact it was-would you believe?-heard over the radio while people were still working on the production line. I did my job as leader of the council in my office in Luton town hall; I sent off a fax to the chief executive of General Motors in Detroit demanding that it rescind this closure notice. I still await a reply. It was the RDA that sprung into action and convened a strong local partnership, which took action around skills training, supply chain diversification, job placement, investment and infrastructure. It was the RDA's efforts that made a significant difference to the local economy and to literally thousands of local people in Luton and the surrounding area.

EEDA has a clear mission to improve the economy of the east of England. It works across the six counties of Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk. The east of England is one of the fastest-growing regions in the UK in terms of population. It is a beautiful and diverse region, rich with cultural heritage and international trade links. It can be proud of its many achievements, but it faces many challenges, especially from intensifying global competition.

Despite the lack of homogeneity across the region, EEDA's efforts have been spread right across the area-in its impact in Bedfordshire borough, central Bedfordshire and Luton, for example. In the past 10 years, EEDA has invested more than £100 million in this sub-region. Some 6,000 jobs have been created or safeguarded, 13,000 people have improved skills, 1,000 businesses have been helped to start or grow, 2,300 people have been supported into employment and 43 hectares of brownfield land have been reclaimed. Funding of the UK Centre for Carnival Arts in Luton has created a national centre for carnival excellence, boosting the local economy and the cultural heritage.

In Norfolk over that period, EEDA similarly has created or safeguarded some 6,000 jobs, improved the skills of 22,000 people, helped 1,100 start-ups and reclaimed 72 hectares of land. It has also supported projects such as the Hethel technology park in its bid to be a globally recognised centre of excellence for low-carbon engineering and manufacturing. The Cambridge rural enterprise and mentoring initiative is encouraging start-ups in economically disadvantaged parts of the region.

The East of England Manufacturing Advisory Service has supported Vacuumatic, the world leader in paper counting technology, to implement lean manufacturing principles. Over the past 10 years, EEDA has invested £81 million directly in the Hertfordshire economy, helping some 22,600 businesses to start up. Highly skilled jobs for research companies are to be created as part of a £120 million expansion of the GlaxoSmithKline bioscience campus at Stevenage. Some £8 million has helped to support small life science companies and to protect jobs in the biopark in Welwyn Garden City. EEDA investment has regenerated Ipswich waterfront. EEDA has also invested in the Haven Gateway Partnership, the single most important cluster of ports in the UK. Everywhere you look in the region, it is possible to see the impact of the RDA.

Looking back is one thing, but what of the future? One in every nine UK businesses is based in the east of England-more than 430,000. Business investment in R&D is three times higher than the UK average. It has the most successful life sciences cluster outside the US. The world-renowned Cambridge technology cluster is in the region representing 1,400 companies and employing 43,000 people. The east of England has significant capability in both mature and developing high-value knowledge-based markets. It is already a major generator and supplier of energy, including leading the way in renewable energy generation, which makes it the centre of one of the world's largest markets for offshore wind energy and the UK's most dense area of offshore development between the Humber, the Greater Wash and the Thames estuary.

Despite these successes, the region requires a skills base that better suits its needs. There are disparities in economic performance within the region and areas such as Luton have high deprivation. The region suffers from an infrastructure deficit, with congestion on the transport network costing the UK more than £1 billion per annum. There is only one commercial broadband network in the east of England, which provides coverage to only around 60 per cent of the region.

It is at this time of huge opportunities but significant challenges that the Government choose to pull the plug on the agency that has been at the heart of the success of the east of England and best placed to address its challenges. In parallel, they are killing off regional spatial strategies. There is a continuing need for joined-up interventions in support of skills, infrastructure, business support and supply chain managers.

The focus that the RDA brought to the region is being scattered, as we heard from others, in all sorts of directions-the EU programme to DCLG and Defra, inward investment to UKTI, manufacturing support to BIS, and Business Link, eventually, to some national scheme. Other noble Lords have mentioned issues of asset disposal. One of the issues that need to be addressed, especially when regeneration funding is involved, is the potential for clawbacks, particularly for local authorities.

So much for localism. The local enterprise partnership does not cover the whole region; it covers parts of three old RDAs. By all accounts the process locally fits the Cable description of being,

"a little Maoist and chaotic".

As we have heard, LEPs have inadequate funding, there are no significant resources for their development and local authorities are going to be very hard pressed to fund even the secretarial support. It is not too late to draw back from the hasty and ill thought-through decision to abolish RDAs. The east of England will certainly be less well placed to realise its potential without the RDA. This is a loss not only for the region but for UK plc.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

My Lords, I begin by thanking noble Lords for their contributions to this debate. It has been an excellent opportunity to consider the expertise that this House can provide on a subject covering all points of the United Kingdom. I understand the passion; I speak as a provincial myself. We are all in politics, to a lesser or greater extent, simply because we believe in where we come from and in the communities from which we originate and because we care about the people with whom we live and work. However, there may be other ways of dealing with the imbalances in the economy in the United Kingdom and I ask noble Lords to listen to the argument as to why the Government are proposing a changed approach. Given the breadth and detail of this debate, I regret that I am not likely to be able to respond to every point that has been raised, but I assure noble Lords that I will go through the record and seek to answer the points in a letter, which I will circulate to all noble Lords who have spoken this evening.

The Government's economic ambition is to create a fairer and better balanced economy. We wish to see business opportunities in a broad range of sectors balanced across the country and between businesses. The noble Lord, Lord Empey, spoke with experience and authority and indicated that the real challenge of building investment and providing job opportunities was probably outside the traditional structures represented by the RDAs. Our Local Growth White Paper sets out how we will put businesses and local communities in charge of their own futures, rather than having to rely on centrally imposed regional development agencies. If I may say so, I felt that some of the speeches confused the effectiveness of critical mass with the greater strength of coherence and real local empowerment and focus.

The amendments that we are debating as a group would preserve the regional development agencies as a whole, or those in specified individual regions. We believe that preserving all or any of them would be a retrograde step. In December, we placed in the Library of the House a short briefing paper, which sets out the reasons for abolishing the RDAs and gives a snapshot of the situation in each region. This has now been updated. Indeed, the number of LEPs has increased dramatically since that time. That update has been placed in the Library and I will build on this information in the course of my remarks.

We set out the rationale for our proposals in the Local Growth White Paper, which was published in October 2010. One key theme in the document is the need to shift power to local communities and businesses. We believe that localities should lead their own development and have the flexibility to tailor their approach to this and to their individual circumstances. If this is to work, they must own their own economic strategy; one imposed from regional or national level would not have this local ownership. For all the good work that they did, the RDAs did not really belong to the communities within the regions. Many of the policies and initiatives that they delivered were on behalf of national government and did not always recognise the varied needs and opportunities that individual places have.

The RDAs were also designed around administrative regions rather than real economic geography. While it would be possible to discuss this matter in the context of every one of the individual RDAs, I would like to discuss two specific examples now. My first example is the south-west region, stretching from Swindon in the east to Penzance in the west and covering an enormous geographical and economic range, from the prosperous and relatively well connected places in the upper Thames valley to relatively isolated and deprived areas in Cornwall. Bristol has many problems in common with our largest cities-those of economic success and of economic inclusion. The issues faced in rural parts of the region are quite different. Linkages, too, differ, with parts of the region having close ties to London, the south-east, the West Midlands and Wales, and others having no such link at all. The relevant policies in each case are quite different. RDAs sought to address that problem and to recognise the differences within their regions, but it makes no real sense to establish a single body to cover the entire region and to expect it somehow to understand and cope with that huge variety. It is far better for the local partners in Bristol to develop policies dealing with the specific issues that they face and for those in Cornwall to do likewise.

Photo of Lord Knight of Weymouth Lord Knight of Weymouth Shadow Spokesperson (Work and Pensions) 9:45 pm, 28th February 2011

I do not want to delay the House, because I know that there is other business that we want to get done. The Minister is talking about the south-west, where the rivalries between Plymouth and Cornwall are well known; left to their own devices, the Tamar will remain the border between them and it will be difficult to persuade a LEP to form across that river. But I also think that it is very difficult to see in economic geography terms how you can develop parts of Cornwall and Devon without taking into account Plymouth and the city region approach. That relationship between a deprived rural county, Cornwall, and the only major city and centre of population needs to be thought through in terms of economic strategy, but the LEP approach will not do that.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

I am grateful to the noble Lord for that intervention, because it gives me the opportunity to respond by saying that there is almost a mathematical relationship between size and the importance of the boundary that exists between different regions. One difficulty with regional boundaries is that they are frequently quite dramatic, although there may be a geographical coherence. I am a Fenman. The Fens are in the eastern region, about which the noble Lord, Lord McKenzie, spoke, but they are also in the east Midlands. Yet it makes sense for them to work together as a geographical whole. One great advantage of the LEP approach is that, when the models are smaller, the boundaries are slightly less severe and there is an opportunity for LEPs to work together. That is the whole point of the policy-to create greater flexibility in how the units of economic development can work together where they wish to. That supports the argument of One North East and the degree to which common policies across the north-east can work. I accept that it is possible to have a different point of view, but I am telling noble Lords how we see this. If we really want to address the regional imbalance in this country, we have not succeeded with RDAs.

Photo of Baroness Armstrong of Hill Top Baroness Armstrong of Hill Top Labour

Does the Minister accept that the Government are out of step with virtually everyone in the north-east?

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

I take a great deal of comfort from my noble friend Lord Bates, who shares my view of the ability of the north-east to develop common policies where it wishes to do so. There are individual differences between Teeside, Tyneside and Wearside. You would not want to say you were in Newcastle when you were in Washington-I remember somebody getting into terrible trouble for doing so. Locality is very specific and the north-east has different characteristics. It is not homogenous and there are methods of getting economic development in the north-east which do not depend on having a single body to deliver it. A coalition of different bodies with a common policy may well be a much more effective method for doing so.

I gave way to my noble friend when I was talking about the West Country. If I might take Bristol as an example, it is far better for the local partners to develop policies for the specific issues it faces, and for Cornwall to do likewise. I strongly believe that any economies of scale that a regional approach may have are more than outweighed by an absence of local knowledge and commitment and the consequent loss of responsiveness to local circumstances. In response to the noble Lord, Lord Whitty, who asked why the Gloucester, Swindon and Wiltshire LEP was rejected, I would say that, although there was some business support for the proposal, other businesses in the area felt that a different geographical approach was right. Ministers have gone back and asked the partners to discuss their proposals again in order to develop an approach which takes the full range of local views into account. So the matter is not concluded; it is still under debate, and the Government await evidence on which to make their decision.

Photo of Lord Greaves Lord Greaves Liberal Democrat

I will give my noble friend a slight rest. Does he not accept that, not only are the Government apparently out of step with what most people in the north-east think, but their thinking on regionalism is completely out of step with pretty well every other country in Europe of a similar size. It really risks England becoming the most centralised country in the whole of western Europe. While what he says about LEPS and putting the emphasis at a more local level might well be a perfectly acceptable way forward, the real problem is that the LEPs are being deprived of pretty well all the resources which the RDAs and regional bodies have at the moment. Therefore, unless they are lucky enough to get some of this relatively small amount of regional development fund money, they are going to be toothless.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

I should remind the noble Lord that I do not consider £1.4 billion in the regional growth fund to be insignificant. I know noble Lords may well feel-and they clearly do-that it is better that the taxpayer should fund large redistributions through RDAs. There may be other ways where economic policy can be directed, as my noble friend Lady Harris of Richmond mentioned. She talked about tax incentives. Far be it for me, as a very lowly member of the Government, to challenge the Treasury on tax incentives, but there are different ways of doing these things other than handing out taxpayers' largesse. I emphasise that that is the way in which this Government are thinking.

Perhaps if I talk about the north-east, I might be steering into danger. I am not too frightened of doing so because we should recognise that the north-east does not have a single monolithic economy. The region has a varied economic geography, with significant economic poles, across the Rivers Tyne and Wear and the River Tees. Each place has a different industrial heritage and different strengths, opportunities and threats. The local authorities in Tees Valley have a strong track record in working together and were quick to put forward an application to form a local enterprise partnership. This argues that they recognise the benefits of these new arrangements. A partnership has now been established, covering the authorities in the rest of the region. As Vince Cable has made clear, this is not to say that some form of co-operative arrangement across the north-east is not justified if local partners want it. I said that at Second Reading and I have just said it again. However, I strongly question whether a regional development agency, with all its attendant complexity and bureaucracy, is necessary to achieve this.

The previous Government gave RDAs the task of narrowing the gap in growth rates between the prosperous region of the greater south-east and the rest of England, and provided them with significant resources over a sustained period to help them achieve this. However, it was a target that they failed to meet. Between 1990 and 1999, the real gross value added per head in the greater south-east grew by around 1.8 per cent in each year, compared with around 1.4 per cent in the other six regions-a gap of 0.4 of a percentage point. Between 1999 and 2009, annual growth in the greater south-east fell to 1.4 per cent, compared to 0.8 per cent in the other regions-a gap of 0.6 of a percentage point. Therefore, the gap in growth rates has widened by around 0.2 of a percentage point. It is time to try a new policy, even in the north-east.

As the White Paper makes clear, we are encouraging businesses, local authorities and their partners to develop local enterprise partnerships based on real economic areas, rather than artificial administrative regions. The new partnerships are based on where people live and work. Businesses and civic leaders will work together to drive sustainable economic growth and create the conditions for private sector job growth in their communities. Partners have responded to this invitation in an enthusiastic and innovative way. So far, 31 partnerships have been asked to form boards, covering 87 per cent of England's population and a similar proportion of businesses. We are actively engaged with partners in the remaining areas, helping them to develop proposals that will meet our broad criteria.

I reassure the noble Lord, Lord McKenzie of Luton, that five LEPs have been asked to establish their bases in areas that cover the east of England. I assure the noble Lord that there will be partnerships covering the entire region. There will be no businesses or parts of the population that are not covered by an LEP.

Photo of Baroness Whitaker Baroness Whitaker Labour

What the noble Lord has to say about LEPs does not exactly fit the situation of Newhaven, where the LEP is just wrong for it.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative 10:00 pm, 28th February 2011

I was coming to the whole business of Newhaven. I am grateful to the noble Baroness for mentioning earlier that she wanted to talk about Newhaven. As she will know, Newhaven is currently covered by the LEP for East Sussex, Kent and Essex. It is perfectly possible for Newhaven and the Lewes district to work with the Coast to Capital LEP as well. The whole point is that boundaries are not as important with LEPs as they are with RDAs. I hope that Newhaven's position will indeed be recognised by Lewes District Council in the way that it operates within the LEP framework. It is perfectly at liberty to do just that.

I come to a few other parts of the country; we have mentioned everywhere, I suspect. There is perhaps an example of cross-regional development that I should also draw your Lordships' attention to. The partnership in the south-east Midlands attempted to deal with an economic area in which the former regional boundaries were particularly irrational and obstructive-the area around Milton Keynes, which the noble Lord, Lord McKenzie of Luton, will know. To an extent, the RDAs recognised this but they were largely ineffective in responding because their structures hampered them from doing so. The local partners do recognise it fully, and they are basing their proposals around a practical response, and I regard this as progress.

The White Paper also described the regional growth fund, which, as I said, is worth £1.4 billion over three years. This is money to be spent outside the south-east of England. This complements the other measures that the Government are taking to support growth through investment and to provide support for education and skills. The noble Lord, Lord Empey, emphasised the role of skills, improvements in competition and support for research and innovation. These are the focus of the measures and will lead to real jobs and skills. Without a skills base, we have no opportunity of building the jobs and the industries that will provide employment in the future.

Photo of Lord Hoyle Lord Hoyle Labour

Will the Minister say why he thinks he will develop skills better than the RDAs have done?

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

The skills will be developed as part of the skills policy of the Government. My honourable friend in another place, the Minister, Mr John Hayes, has recently announced a skills strategy for the country. If we have not debated it in this House, it is because we have been very busy debating other things. However, it is a very important strategy, and it is part and parcel of the strategy for economic growth in this country.

Perhaps I may continue to describe the regional growth fund. It is intended to encourage private sector enterprise and create sustainable jobs. In particular, it is designed to help places currently reliant on the public sector to make the transition to private sector-led growth. I suspect that there is a feeling across the House that this is important. Once again we are encouraging proposals to come from the bottom up, responding to local circumstances. When the first round of bidding closed at the end of January, we had received nearly 450 proposals, showing that there is a significant appetite for an approach of this kind. My noble friend Lord Heseltine is chairing the panel which will be selecting the best of these proposals; and noble Lords have referred to my noble friend in contributions to this debate. Noble Lords will need no reminding that encouraging growth throughout the country is a cause dear to his heart.

Photo of Lord Greaves Lord Greaves Liberal Democrat

I apologise for intervening again. The resources may be significant, as the Minister said, but they are considerably less than the resources available at the moment, either through RDA or through the regional housing pots and all the other resources, which are being either dramatically cut back or scrapped altogether. Is not the problem that many of these places that have put forward good, exciting schemes and want to get ahead will be denied a penny because they will not win the competition that the noble Lord, Lord Heseltine, is presiding over?

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

I cannot guarantee that all the 450 proposals will find funding. However, I can be sure that the ones for which funding is found will be successful and provide opportunities for the people in those areas.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Health)

Can the Minister indicate in monetary terms the extent of the bids that have been made?

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative

No, I do not have that information available, but we know the amount of money that is available for the fund, which I have stated.

Finally, noble Lords raised the question of what will happen to RDA assets and activities. There has been some concern that there might be a fire sale. That is not the case. These bodies will be run down, the relevant clauses of the Bill will become law, and the RDAs will finally be abolished. RDAs have been liaising with the relevant local authorities, local enterprise partnerships and other local partners. On 31 January, all RDAs submitted detailed plans for the disposal of their assets. They recognised that there will be a variety of destinations for these assets, depending on their nature and associated liabilities. These plans are currently being scrutinised by the Government. After scrutiny, each RDA management board will sign off its plan and begin implementation. RDA asset-disposal plans have been developed while taking into account the principles that we set out in the White Paper. These include maximising value for money from these assets, ensuring that liabilities follow assets and passing control down to local level where possible. Where this is not appropriate-where, for example, an asset is of national importance, such as that set up in the south-west and mentioned in the debate, and considerable resources are needed to run it-other options will be considered.

Similarly, co-ordination of some activities formerly undertaken by RDAs will be taken back to national level, and some activities, such as those of the England Rural Development Programme, will retain local accessible support. In some cases, such as managing the European Regional Development Fund and the England Rural Development Programme, we need to ensure compliance with our obligations to the European Union. In other cases, such as co-ordination of inward investment activity, we need to ensure that we can put over a coherent and effective message to potential investors. However, even in those cases, we are setting up mechanisms under which local partnerships have the opportunity to influence policy and help drive the decisions we make. For all these reasons, we do not believe that retaining all or any of the nine RDAs will help to achieve local growth. I therefore ask the noble Baroness to withdraw her amendment, and for noble Lords not to move theirs.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Shadow Leader of the House of Lords, Shadow Spokesperson (Cabinet Office), Shadow Spokesperson (Northern Ireland)

My Lords, I am grateful to the Minister for his response, which I will carefully consider, and I look forward to the letters that he has undertaken to write. All around the Chamber we would agree that regional development is key to the economic recovery of this country. RDAs have been, and for the moment are, excellent strategic catalysts for growth. I have to say that I am not confident that their replacement by LEPs will suffice. However, I will take into consideration what the noble Lord has said. At this juncture I beg leave to withdraw the amendment, but I reserve the right to bring something back at Report.

Amendment 49 withdrawn.

Amendments 50 to 58 not moved.

Amendment 59

Moved by Baroness Royall of Blaisdon

59: Schedule 1, page 17, line 23, leave out "Security Industry Authority."

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Shadow Leader of the House of Lords, Shadow Spokesperson (Cabinet Office), Shadow Spokesperson (Northern Ireland)

My Lords, this amendment is on the abolition of the Security Industry Authority. I pay tribute to my noble friend Lady Henig, who has been its chair. My Government established the SIA in 2004 to reduce criminality in the security profession and to raise standards in the industry. This is exactly what the SIA has done and what I would like it to continue to do. The body has two main duties: the compulsory licensing of individuals undertaking designated activities within the private security industry, such as security guarding, door supervision, close protection, public space surveillance by CCTV, and protecting cash and valuables in transit; and to manage the voluntary approved-contractor scheme.

It is easy to understand why the police campaigned for the industry to be regulated, why they are content with the way in which the authority is working and why they do not want it to be abolished. Neither do I. It is not difficult to see why such an industry should have been regulated. You just have to think about how the actions of nightclub bouncers have, according to my children and their friends, improved exponentially over the past few years. You just have to think about the potential for people who wish to harm our society with acts of terrorism and how much easier it would be for them to find employment in an unregulated industry. You just have to think about the potential for employing people-perhaps illegal immigrants-at below the minimum wage. I realise that employers in the industry have a responsibility but I am sure that they are greatly assisted by the SIA.

Can the Minister confirm that the Home Secretary has decided that there will be no significant changes to the SIA until after the Olympics in 2012? If that is the case, it is certainly very telling. I suggest that our citizens should be able to enjoy a properly regulated security industry at any time, not just in the period leading up to and during the Olympics. I ask the Minister whether there are plans for a smooth transition to a self-regulated industry and whether the police are content with the transition. Finally, what reviews do the Government intend to carry out following the proposed changes to ensure that the public can continue to have confidence in the system? I simply do not understand why the Government wish to abolish this body and I look forward to hearing from the Minister.

Photo of Lord Whitty Lord Whitty Labour

My Lords, I rise briefly to support this amendment. I do so partly because I was in on the beginning of the campaign to regulate the security industry when I still worked for my trade union, which organised the more respectable end of the security industry. However, 20 years ago, and indeed more recently, it was an industry with some very dodgy people in it. There was an element of criminality; there were occasional outbursts of violence; there was fraud; and there was a straightforward dereliction of duty to the businesses and individuals that employed so-called security companies. There was much in the industry that, to put it at its mildest, was short of customer service.

It was not a pleasant industry but in many respects it was one on which, because of the nature of our society and the value of the goods in which we trade, more and more businesses came to rely. They needed to be assured that the people they brought in to protect their premises, their transit arrangements, their valuables and, in many respects, their staff and customers knew what they were doing and did not have any record of transgression. That is what, after a long campaign, led to the setting up of the Security Industry Authority.

The Home Office has ummed and ahed about this for many years and has done absolutely nothing about it. The first time the authority's abolition was proposed, it was suggested that its responsibilities went back to the Home Office, but that would have been absolutely disastrous. Now, a degree of self-regulation for the industry is proposed. However, the problem with that is that the more respectable end of the industry will undoubtedly attempt very effectively to ensure a degree of quality of service and vetting of staff and individuals but the less respectable end will re-emerge and so-called security firms will spring up all over the place employing people who have not been through the vetting procedure. Therefore, any self-regulation is dependent on the majority of the industry participating in it and being able to exclude others.

There may have been criticisms of the SIA but most of those have probably been invalid. I feel that there should have been a mandatory system of approving companies, as well as individuals, but the authority, together with the police, undoubtedly helped to clean up the industry. Taking away this protection from businesses and individuals is a big risk for the Government to take. I hope that the Home Office will think again, because it cannot do this job itself. Those at the respectable end of the industry do not really want to be reduced to self-regulation. They will operate such a system if the Government insist on it but it will not be as effective as the development of the SIA. For that reason, and in the interests of protecting a lot of small and large businesses and public premises, I ask the Government to think again.

Photo of Baroness Henig Baroness Henig Labour

My Lords, I declare an interest as the current chair of the Security Industry Authority and president of the Association of Police Authorities. In the speech I made at Second Reading I told the House about the enormous concern with which the Government's proposal to abolish the organisation and return to self-regulation of the industry was greeted, particularly by people in the industry and also by Scotland and Northern Ireland. Last week the chairman of Security Alliance said how the inclusion of the SIA on the list for abolition came as a great surprise to the industry. He said that since regulation was introduced, there had been a general acceptance in the industry that licensing had been a force for good. So that is clearly understood and agreed across the industry.

We know there has been a lot of criticism recently in the other place by the Public Administration Committee about the handling of the bonfire of the quangos. The committee said it was a rushed, botched job with no clear evidence of savings or concern for value for money or efficiency. More important for the SIA was the lack of consistency in applying the three questions and the issue of whether they were even the right questions to ask. I asked at Second Reading why the SIA was being abolished when the Gangmasters Licensing Authority was being spared-a question which has not yet been satisfactorily answered. The Public Administration Committee's report asked exactly the same question. The silence in response is deafening.

I asked another question to which there has been no response: why is it that the Government believe the industry is mature enough at this moment in time to regulate itself when the Scottish Government, the Northern Ireland Administration and even large parts of the industry disagree very strongly. Yet the Minister told us at Second Reading that there had been no major disagreements on the legislation between the Government and the Scottish Government. I do not think that is entirely an accurate description but obviously I defer to others on that.

The most serious issue I had with the Government on this matter was their lack of consultation with the industry. After all it was the BSIA and other bodies and individuals within the private security industry which consistently pressed for regulation of the industry in the 1980s and 1990s and they have supported it and for the most part paid for it. Surely, therefore, the views of the industry should have been sought before the policies were drawn up, not to mention the uncertainty caused to 350,000 individuals working in the industry, many of whom funded their own licence fee and invested in their training. Surely there should have been consultation with all these people. Certainly the view of the Public Administration Committee was that there should be consultation with all the bodies listed in this Bill, even at this late hour, and who can say that it is wrong?

In the case of the security industry, its leaders sensibly were not prepared to wait that long. Indeed, they made their opposition to the ending of regulation and the abolition of the SIA very clear. They wrote to the Home Secretary, the Prime Minister and the Deputy Prime Minister. They organised and they highlighted the tremendous risks inherent in the Government's proposals, forcing the Government to change their mind. Instead of abolition the Government agreed that there should be a phased transition to a new regulatory regime and that the SIA should no longer be an NDPB.

So there has been a change and therefore this Bill is already out of date in terms of regulation of the private security industry. In the exchange of views that took place between the Government and the industry, industry leaders made it clear that they were already discussing with the Security Industry Authority a blueprint for the evolution of regulation whereby the regulator and the industry would work together to produce smarter, more cost-effective regulation and would press the Government to introduce business registration alongside individual licensing so that we could move to a more efficient, effective and lighter-touch regulatory regime-"better for less", to use the Government's own phrase. That was certainly what the industry was working towards with the SIA. As the Public Administration Committee so rightly observed, the major issue at stake in relation to quangos should not be about their status or structure but about effectiveness and delivering value for money. Since last summer the SIA has been in discussion with the industry about precisely these matters.

The issue before us in this discussion on the Security Industry Authority is not a simple should it or should it not be abolished, but how best to facilitate a phased transition from the current regulatory regime to lighter touch, smarter regulation in which industry bodies and leaders play an increasingly active and important role alongside the SIA. There is no disagreement about that. The issue is that it is a process which will take time. It cannot be rushed. It has to include all sections of the industry that are currently regulated. While the recent emergence of the Security Alliance as a unified voice for the industry is to be welcomed as a very positive development, it is by no means fully established across the industry. So there is a lot of work to be done, and along the way the decisions made by the Home Office and the Government in relation to the extent of regulation-for example, that it should not include in-house security, or for the time being private investigators or security consultants-will undoubtedly be queried and challenged by many in the industry. If we are discussing the industry's future, people working in it want to raise many things.

Then there are the views of Scotland and Northern Ireland. I cannot speak with enormous knowledge about these areas but the licensing of private security has been a huge success both in Scotland and Northern Ireland. It has been in Scotland since 2007 but licensing in Northern Ireland is just a year old. The Northern Ireland Administration are in no rush to change it and we can understand why. They think that it has made a big difference. Both those areas have elections in the spring and we will have to wait to find out the views of the new Administrations and Governments that result. A lot is standing in the way of progress at the moment. As part of the phased transition process, the industry is strongly of the view that the Government should play their part by showing a willingness to bring in business registration in the industry, alongside the licensing of individuals. I hope that the Minister will be able to commit the Government to action in relation to business registration when she replies, as the industry is keen to see that.

We are working to move forward. We in the SIA are consulting a whole range of bodies, including the strategic consultation group, a Security Alliance industry panel, and so on, because it is important to have agreement with the industry and major stakeholders on key principles and milestones for the future, while being conscious, as was said, of the need to proceed cautiously before the Olympics in 2012. There are also the Commonwealth Games in Scotland in 2014 and we must not forget that. It is important to put on the record that many senior figures in the industry are urging caution. They do not believe that the industry is yet ready for self-regulation. I strongly support giving the industry more responsibility in terms of licensing and training, but I share its view that there is no evidence at present that it is sufficiently mature at this point for self-regulation. We have to move very gradually towards that goal. Substantial progress will have been made towards establishing a new regulatory regime by 2014 but there is the big issue of effective intelligence and enforcement operations. It is important that they continue and that the state continues to maintain a strong regulatory regime in respect of criminality; in respect of criminals and their associates; and in respect of those who continue to seek to undermine and weaken the regime. Everyone who works in the industry wants the regime to be effective in driving out and keeping out criminality and in upholding robust standards. That is extremely important because the credibility of the industry requires strong intelligence and enforcement activity, which has to continue in any new regime.

There is a considerable way to travel. Listing the SIA in Schedule 1 to the Bill was a misguided and inappropriate step for the Government to take. We are talking about Schedule 3 and changing the nature of the organisation and moving it to something different. The important thing is that we all want to build on and improve the regulation that has been introduced. It has been a great success and we want to continue it both with the industry and the devolved Administrations. We have to work with them at their pace, which I hope the Government will be supporting so that we can move forward together.

Photo of Baroness Meacher Baroness Meacher Crossbench

My Lords, I will speak very briefly in support of the comments of the noble Baroness, Lady Henig, the current chairman of the SIA. I should mention that I was the first chairman of the Security Industry Authority some years ago and in that capacity I came to respect very highly the considerable number of companies that control the vast majority of companies within the security industry. However, I was introduced to the industry prior to regulation and can certainly endorse the comments already made that the industry does attract a large number of highly unscrupulous individuals who, without very tight controls, are more than willing to take advantage of the unsuspecting, either employers or members of the public.

The two big achievements of the SIA, and a credit to its current chairman, have been the raising of the educational level of the 350,000 or so security officers and also, as others have mentioned, the protection of the public and employers from these unscrupulous security guards. I am sure the Minister would like to recognise the value of its work.

There is of course merit in the proposal to focus in future on the system of business registration, leaving the individual licensing largely in the hands of the industry. However, I too do not accept the Government's argument that none of the SIA functions needs to be carried out by a public body. In view of the extent of criminality within the industry, and the potential for far greater amounts of criminality, this just does not seem realistic. It is difficult to imagine that all aspects of the SIA can effectively be carried out by the industry itself.

The Government refer to employers in other industries taking responsibility for making appropriate recruitment decisions and suggest that this approach would be appropriate for the private security industry. My understanding is that the industry just is not ready. I do not think the Government have at all taken into account the degree of criminality in the industry. It must be quite alone-in fact I cannot think of any other industry that has comparable problems.

It is certainly most encouraging that Ministers have now agreed to the SIA's plan for evolution towards a new system based upon business registration. However, Ministers do not seem to be taking account at all of the degree of opposition to these changes both in Scotland and Northern Ireland. It seems the Government will need to move much more slowly if they are to have any hope at all of bringing the devolved Administrations with them. I hope the Minister will take very seriously the points already made by the noble Baroness, Lady Henig.

I want to mention one small but particularly threatening sector of the security industry-the security officers who control parking on private land. The Government are committed to ending the right to clamp vehicles on private land. I applaud this move wholeheartedly. However, there is no move to prevent, as I understand it, these operators charging unsuspecting members of the public extortionate fees for parking on private land. It is in this area that threats are made and extortionate quantities of money are demanded, increasing over time if people do not pay up quickly, that lead to people submitting to the fees charged. I hope the Government will be able to deal with that relatively small but really alarming sector of the security industry in the course of their deliberations about reform.

I was very pleased to note in the Government's briefing that any proposed changes will be subject to parliamentary approval. Perhaps I may take this opportunity to applaud the Minister, who told us in a meeting recently that he will be eliminating Clause 11 and Schedule 7 from the Bill. This does seem to me an enormous step forward and I imagine I am speaking on behalf of others too in saying that this is extremely welcome. That is at least an excellent piece of good news.

Finally, as others have said, the SIA regulatory system is self funding. There are no public spending implications in this reform. Perhaps the noble Baroness will explain to the House the motivation for a reform which seems to be opposed not only by the devolved Administrations but also by the industry which currently pays the bill for the Security Industry Authority. I look forward to the Minister's response.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour 10:30 pm, 28th February 2011

I add my congratulations and thanks to my noble friend Lady Henig for the work she does as the chair of the authority. I have had a number of discussions with her over the past year or so about the situation in Scotland, and she has been most helpful. She carries out her work in a modest but very effective way. I also echo what my noble friend Lord Whitty said earlier: before the SIA was established, the industry was characterised by cowboys and gangsters. I remember it well-not that I was part of it in any way, but I remember how it operated. I remember its links with organised crime. It was also characterised by low pay, which created particular problems with bribery in the running of operations.

That did not all change through self-regulation. It changed because we legislated and because the Government took clear and decisive action to ensure that the industry was properly regulated.

My main point relates to Scotland. I see the noble and learned Lord, Lord Wallace, here. I think that he will confirm that there is no doubt what is the view of the Scottish Executive in relation to the future of the SIA. On 8 September, the Home Secretary wrote to the Scottish Government seeking their views on the UK Government's intention for the future of the Security Industry Authority. Kenny MacAskill, the Justice Minister in Scotland, in a reply to my colleague in the Scottish Parliament-he is not my noble friend yet-Richard Baker, stated on 11 November:

"I responded on behalf of the Scottish Government on 13 September 2010, setting out my concerns about the UK Government's proposals and strongly emphasising the need for continued regulation of the private security industry in Scotland. These views were also set out in a letter that I wrote to the Deputy Prime Minister on 24 September 2010 and in a further letter to the Home Secretary following my meeting with the Scottish security industry representatives on 13 October 2010".

There is no doubt about their view, which was made very clear to the Home Office and the Deputy Prime Minister. In another reply, also on 11 November, Kenny MacAskill stated:

"The Scottish Government does not support the decision of the UK Government. The Security Industry Authority has been working very well in Scotland, and the Scottish Government made a very strong case to the UK Government for its continuation as the independent body responsible for regulating the private security industry".

There is no doubt about the view of the Scottish Government. As my noble friend Lady Henig has heard directly, I can confirm that the shadow Justice Secretary, Richard Baker, who asked the Question, agrees. It is not often that he agrees with Kenny MacAskill, but on this occasion, he agrees 100 per cent with him.

So we have the two largest parties in the Scottish Parliament at one in wanting to keep the Security Industry Authority in operation. One might say, "It can continue to operate in Scotland", but it would be ridiculous for a United Kingdom industry-which it is, because Securicor and G4 security operate north and south of the border-to have completely different regulation, a completely different kind of supervision.

The issues for the industry are the same in Scotland as they are in England. There are other areas where things are different in Scotland, where we are proud of the differences, but in this area, there are no differences in the operation of the industry and there should not be any difference in the regulation of the industry.

As my noble friend Lord Whitty said in a robust way and as my noble friend Lady Henig said in her usual gentle way, I say to the Minister: think again about this. Have further discussions with the Scottish Executive to find out more about their concerns, have discussions with the Welsh Assembly Government and with Northern Ireland about their concerns to try to find something which is acceptable to all parts of the United Kingdom, and come back to this House and the other place with alternatives. The very co-operative way in which the Minister, the noble Lord, Lord Taylor of Holbeach, started off the discussion on the Bill at about 3 o'clock-all those hours ago-was very refreshing. I hope that, on this particular issue, the Minister will act similarly to the noble Lord, Lord Taylor, look at it positively, take account of the views that have been expressed and take the matter away, think again and come back with revised proposals.

Photo of Lord Ramsbotham Lord Ramsbotham Crossbench

My Lords, I add just one concern to what has already been said. That is in relation to the criminal justice system and the use of private security companies in it, coupled with my increasing concern about their involvement in the activities of the UK Border Agency. The Green Paper published by the Ministry of Justice, Breaking the Cycle, envisages increased use of private sector companies, for example in providing probation services. At present they are conducting a number of private sector prisons. Those are under supervision of the Inspectorate of Prisons but the training and the selection of staff has always caused concern.

As far as the UK Border Agency is concerned, the activities of the private sector in such activities as the deportation of people was drawn into high relief the other day with the death of someone who was put under restraint while being deported in an airplane from Heathrow. As a result, the activities of private sector guards have come under greater scrutiny rather than less. Therefore, with this increased activity, I have to admit that I am nervous at the thought of the SIA being removed from a role that it could have if raised to the stature of that work, in favour of self-regulation, which I do not believe is right in this particular area.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Labour

My Lords, I rise to support my noble friend Lady Royall of Blaisdon. I am most surprised that the Government proposed the abolition of the Security Industry Authority in the first place and that they have not moved on this matter. The Security Industry Authority is a great success story. It has professionalised the private security industry, driven out criminality and ensured that people are safe when attending a variety of events in pubs, clubs and elsewhere. I am aware that they have their own licensing body. I was at a football match on Saturday and it was reassuring, walking around the ground, to see security professionals with accreditation on their arms. How different that was only a few years ago.

I read the Government's brief. It provides no reassurance on the position going forward. In the document, the Government say that Ministers decided that there is no evidence that the Security Industry Authority carried out a function that needed to be undertaken by a public body. Will the Minister expand on that in her response? Also, whatever is decided in the future, it must surely be inferior to what we have at present, if for no other reason than the fact, as my noble friend Lord Foulkes said, that different systems operate different authorities round the country. It is ridiculous.

I also ask, as my noble friend Lady Royall did, how the Government will ensure that criminality is kept out of the industry. I am pleased that the Government say in the briefing note that there will be little change this side of the Olympics in 2012-though, for me, that highlights the weakness of the proposals in the first place. I would like the Minister to comment on that in her response as well.

I agree with the comments of my noble friend Lord Whitty about the respectable and less respectable arms of the industry. I pay tribute to my noble friend Lady Henig for all the work that she has done. In conclusion, I hope that the Minister has something to say and is at least prepared to take away this proposal and come back with something on Report.

Photo of Baroness Neville-Jones Baroness Neville-Jones Minister of State (Home Office) (Security)

My Lords, I thank the noble Lords who have spoken in this debate and made some important points. Many of them I accept. In putting forward the Government's proposed measure, I hope to convince the Committee that many of the anxieties they have expressed will prove unfounded.

The Government intend to resist this amendment, which would remove the Security Industry Authority from the list of public bodies that Ministers will be able to abolish via secondary legislation. We will do so because we consider it unnecessary. I want to explain what the Government intend to do because I believe that many of the things that have been said on the Floor this evening perhaps represent a situation that no longer pertains.

Before I do that, I join other noble Lords in expressing my appreciation for the work done by the noble Baroness, Lady Henig, as chairman of the SIA. There is no doubt that under her guidance the authority has raised the standards of the industry, which is one of the things that give us confidence that we can move on to a different regime. I will come back to that in a moment. Many of the things that she said are points on which there is a very large measure of agreement between her, the Government and, I hope, other Members of your Lordships' House.

In looking at the SIA, the Government have applied a number of tests to retention in the public bodies review. We concluded that there was not compelling evidence that, given the standards that are now being reached, the SIA's functions need to continue to be performed by a public body. The SIA was established by the Private Security Industry Act 2001, as has been said, and it has succeeded, as was the intention, in reducing criminality in the security industry. It also set out to improve standards. The approval system has undoubtedly resulted in improvements in those standards and uses the compulsory licensing of individuals to achieve the reduction in criminality. It carries out criminality and identity checks in addition to confirming the training that has to be completed before issuing a licence.

The Government do not intend that any alternative regime should result in a lowering of these standards. Licensing began in 2004, and there are currently more than 350,000 licensed individuals. The SIA has done something else important, which is to raise standards through the voluntary approved contractor scheme that allows companies to demonstrate that they meet a wide range of standards and are therefore worthy of being accredited as approved providers of security industry services. That is also something that will continue. More than 650 companies employing about two-thirds of the industry now have the ACS standard. That is a record of achievement and I pay tribute to it.

On that basis, however, we believe that it is now right to move over time to a new regulatory regime. I stress that it will be a regulatory regime. The private security industry has matured under the aegis of the SIA since SIA regulation began, and there is evidence of increased standards in the industry. We believe that employers should now be given more responsibility for making safe and legal recruitment decisions in the same way as employers in other professions. In other words, they should not have normal responsibilities removed from them.

As was mentioned in the debate, the security industry has formed a so-called security alliance of trade bodies which by their own reckoning represent more than 80 per cent of the regulated security industry. This group recently wrote to the Parliamentary Under-Secretary responsible for equalities and criminal information, Miss Lynne Featherstone, and outlined its willingness to work with the Government. It has already been working with the SIA to shape the future regulation of its industry, as the noble Baroness, Lady Henig, mentioned. Indeed, we intend to build on the work that has already been done. There is no doubt that challenges still lie ahead for the industry, but I have a slightly different picture of the attitude of the industry and some of those who are affected by the changes that lie ahead. It is more positive than has been noted in discussions so far. There is no doubt that they are willing. They have shown considerable alacrity in stepping up to take responsibility. That should encourage noble Lords.

Photo of Baroness Meacher Baroness Meacher Crossbench 10:45 pm, 28th February 2011

The Minister has repeatedly referred to the industry as though it was some uniform set of organisations. Does she accept that there is a tremendous divide between the reputable end of the industry and these highly dubious individuals and pairs of people who go about taking work in the security industry? You cannot refer to them in the same breath-and certainly not in the same phrase. Does she accept that?

Photo of Baroness Neville-Jones Baroness Neville-Jones Minister of State (Home Office) (Security)

I accept that this industry-I do not know what other term I can use: perhaps "this occupation"-has a wide spectrum of activities and individuals in it. I will come to that in a moment. I want to encourage your Lordships to have more confidence that those in this industry can be relied on and are willing to take further responsibility and be more accountable for their own actions in future. I understand that there is some concern that if the SIA is abolished there will be no effective regulation of the private security industry. I want to offer reassurance on that point. We are not going to do anything immediate. We have been convinced by those who have argued that that would be unwise and that it would not be sensible to do that. The regulation of the private security industry will continue in its present form. The SIA will not be abolished until the new regulatory regime has been fully established and is properly functioning.

Since the outcome of the public bodies review was announced by the Cabinet Office on 14 October, Home Office Ministers and officials have been in close contact with the SIA to discuss how to take this forward. The Parliamentary Under-Secretary of State for Equalities and Criminal Information, who is the lead Home Office Minister for the SIA, has met the SIA representatives. The Home Secretary herself has been in correspondence with the noble Baroness, Lady Henig, about the future.

Ministers have asked the SIA to work with the private security industry and key stakeholders to put together a detailed plan to achieve a phased transition to a new regulatory regime. We do not intend to do this in anything but careful detail. To inform the plan, the SIA started targeted consultations with stakeholders, including industry and law enforcement partners. The police were mentioned, and they are involved in the consultation process. A detail of the phased introduction of the new regulatory regime that will replace regulation by the SIA will be the product. The SIA started this work by hosting an initial meeting with a number of industry stakeholders on 28 October. I understand that this work is progressing well.

In the Second Reading debate on this Bill on 9 November, the noble Baroness, Lady Henig, stated that the SIA had already agreed with the industry,

"a blueprint for the next few years to move to greater industry involvement in the regulatory regime".-[Official Report, 9/11/10; col. 133]

She also quoted from a letter that she had had from the Home Secretary in which she very kindly said that she was happy to accede to the Home Secretary's wish to ensure that,

"any transition to a new regulatory regime is phased in smoothly and takes into account the needs of the industry as well as the priorities of the Government including the devolved Administrations".

To confirm the point made by the noble Baroness, Lady Royall, the Home Secretary has agreed that there should be no significant change prior to the Olympic Games in 2012. That is in line with a number of measures in other areas in which we are staying any kind of change until after the Olympic Games.

My point in all this is that the SIA itself is involved in the work to move towards something that is described as self-regulation by the private security industry but which is a pretty tough form of self-regulation. I will come back to some of the details in a moment. The SIA plan was presented to Home Office Ministers earlier this month for consideration, and on 16 February there was another meeting with Lynne Featherstone to discuss the plan further. We have now considered and agreed that this will form the basis for moving forward on phased transition. I hope I am reassuring the Committee that this process is being done in careful consultation with the SIA and the industry on the basis of trying to ensure, therefore, that we come out with a regime that offers the same degree of assurance of high standards that has already been established.

As a result of the consultation, we are now in a position to give a few more details of the shape of the new regulatory regime, although the Committee will understand that as we are still in discussion-the whole point of the discussions is to get an agreed format between the parties-not all the details have been decided. So far, the agreed proposals will ensure that responsibility for the private security industry is transferred to a new body for self-regulation as soon as that is sensible after 2012-not before it is sensible and not before the Olympics in 2012. No significant change will happen before that.

Primary legislation will then be needed to set up the new regulatory body that will succeed the SIA. We will ensure that provision is included in a future Home Office Bill. Full transition to the new regime should, we hope, be completed by the end of 2013. Again, this is not a rushed process.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

Would that be a new regulatory body for England or for the United Kingdom? If only for England, what will the situation be in other parts of United Kingdom?

Photo of Baroness Neville-Jones Baroness Neville-Jones Minister of State (Home Office) (Security)

I will come to the noble Lord's point about the relationship with the devolved Administrations. I have it in mind.

The new regime will also see a significant shift of responsibility from individual workers to businesses. That is one of the changes in structure. We believe that that will be efficient and that it will also reduce regulatory costs and burdens. Instead of every single employee having to be registered separately at a cost of something like £250 each, it will be a business paying for the registration. In getting that registration, businesses will be required to show that they meet a comprehensive set of conditions set by the new body.

The industry itself has a strong interest in ensuring that the standards it sets are maintained and that they are high. Clearly, that has to be one of the really important parts of the new regime. Businesses that fail to meet these comprehensive conditions will have their rights to trade in private security removed. There is no reason to suppose that somehow a transition to another regime will by definition, and automatically, result in a lowering of standards. On the contrary, the industry will have a strong self-interest in ensuring that the cowboys are not allowed in and are not permitted to sully the reputation of an industry that is responsible for its regulation. There is a strong incentive actually to take this regime and make it work well.

It is obviously too early to give full details on costs, but we know that instead of more than 350,000 individuals paying £245 each for licences, much of which is currently paid for by the companies that employ them, the new regime will involve fewer than 5,000 companies having to register, giving considerable saving to the industry.

One of the other things that we are doing, however, is to ensure that the impact on smaller businesses is minimised by reflecting business size in the registration fees in the new regime, so that we do not get a situation in which small companies are paying a flat fee which is the same size as very large ones. They will be gradated. There will also be a sensibly phased transition to the new regime, the details of which are still to be worked out. We do not expect all businesses to move to the regime at the same time. Some of the big boys are clearly going to be ready to move at an early stage. Some of the smaller companies will not necessarily be so ready, and they will be given time to achieve the necessary transition. The big ones that have already met the high standards of the approved contractor scheme will be able and willing to move immediately, but we will maintain mechanisms to ensure that smaller companies, which may not be in the position immediately to transition to the new regime, can continue to trade.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Labour

Does the Minister envisage, in the new regime, that the individuals themselves will undertake CRB checks?

Photo of Baroness Neville-Jones Baroness Neville-Jones Minister of State (Home Office) (Security)

Clearly, CRB checks will be relevant. I cannot immediately answer whether they have to be done by the individuals themselves or by their businesses to ensure that they are employing fit and proper people. I would have to write to the noble Lord. The registering of these individuals is another point that worried some noble Lords, who thought that this new method of regulation would somehow allow the bottom end of the industry to have free rein, if I can put it that way. This will not be permitted, because a registry of individuals will also be maintained by the new body to support the needs of the customer and the industry. That will do two things. First, it will ensure that named individuals are known to the regulatory body. Secondly, it will enable those individuals who are of fit and proper standing to move from one company to another with greater ease than would otherwise be the case. Any proposed changes will be subject to parliamentary approval. I thank the SIA for the help that they are giving in moving the industry along to the new regime. We have also asked the SIA if they will take forward the work necessary to ensure the full delivery. This Bill confers an ability to abolish the SIA, but this will be done only at an appropriate time in the transition to the regulatory regime.

Some noble Lords, particularly the noble Lord, Lord Foulkes, raised the issue of the response of the devolved Administrations. Since the correspondence to which he referred, and which I have seen, there have been further contacts with the devolved Administrations, and we are now in consultation with both the Scottish Government and the Northern Ireland Executive. Although it is the case that, on a voluntary basis, both the Scottish Government and the Northern Ireland Executive decided that they would accept the regulation of the SIA, the regulation of the private security industry is a policy decision for the devolved Administrations. It is a devolved matter, which we fully respect, and they will have the opportunity, if they choose to exercise it, to have a different regime. However, I agree with the noble Lord, that, given the nature of the industry, which operates across the country, it would be highly desirable if we could get agreement on a single regime.

Photo of Lord Empey Lord Empey UUP

I thank the Minister for giving way. The noble Lord, Lord Foulkes of Cumnock, raised this earlier. I declare an interest as a member of the justice committee of the Northern Ireland Executive. The reason why we have a particular issue must be fairly obvious to most Members. We have a lot of people who, sadly, have come from a background where they were, shall I put it, organised, and were able to bring intimidation and pressure and other things to bear. Consequently, we are not talking about precisely the same situation that would exist here, albeit that there are always criminal elements there. The noble Baroness, Lady Henig, asked whether the results of the election in May would make any difference. I think that they will not, because the circumstances that we have had to deal with have a long history and will take some further time yet to work their way out of the system. I do not anticipate any immediate change in the regime following the elections in May.

Photo of Baroness Neville-Jones Baroness Neville-Jones Minister of State (Home Office) (Security) 11:00 pm, 28th February 2011

I understand entirely the point that the noble Lord makes. I would say two things about that. Clearly, it is desirable if the regulatory regime that operates throughout the United Kingdom makes it easy for companies to operate across all three Administrations. It does not follow from that that these regimes have to be identical. Certainly, the Home Office takes the view that if, for regional and local needs, variation is needed, we would want to accommodate that. The object is to get an effective regulatory regime that does not put obstacles in the way of companies operating across the country but permits local variation, if it is necessary.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

I know that there are other topics that we need to discuss and I apologise for intervening, but it looks as if we are moving inevitably towards a separate regime, with a Scottish and a Northern Ireland Security Industry Authority operating as the Security Industry Authority in the UK does at present and a move to a completely different regulatory regime in England. Is that not absolutely daft? It will create huge problems for the security industry. Why are we doing it? Would it not be better to accept what the noble Baroness, Lady Henig, the Security Industry Authority, all the people in the security industry and the Scottish and Northern Irish Parliaments have said, and stick to the present arrangement? Why are the Government so determined to change, when no money is going to be saved and no advantage will be given? Also, I hope that at some point the Minister will answer the question asked by my noble friend Lord Kennedy. If it is so important to keep the authority going for the Olympics, does not that undermine the whole argument for changing at all?

Photo of Baroness Neville-Jones Baroness Neville-Jones Minister of State (Home Office) (Security)

To take the noble Lord's last point, I do not think that it follows that, because one decides not to make a change before a big event, there is no case for change at all. It does not follow at all. It is a sensible thing not to institute change immediately before a big event. However, it does not follow that no change is possible or desirable.

On the noble Lord's other point, I think that he is jumping to conclusions. It is not our impression that the attitude of the Scottish Government is as negative as he fears it may be. We are in consultation and I do not think that what I said indicated that we were suddenly leaping to entirely different regimes. We are going to have consultation; we believe that it will be possible to have a national regime. We may need, and it may be fitting, to have a certain amount of local variation. However, as I say, that is an area that is still being consulted about. We will work for a sensible outcome and we want one that fits the needs of all UK Administrations.

Some noble Lords raised the issue of wheel clamping. I should mention it briefly. As was rightly mentioned, the Government are taking measures to regulate this area, which include the abolition of the right to clamp and tow away on private land. This legislation will be put into effect through the Protection of Freedoms Bill. The ban will end the abuse by devious firms and their employees who prey on motorists with signage, excessive fees and unscrupulous towing. That regime is going to come to an end, which obviously means that the power does not need to be included in the new regulatory regime.

The noble Baroness asked whether we were also going to cover parking tickets. That is not an SIA issue. It is regulated by the Department for Transport and the DVLA, so it lies outside the scope of this piece of legislation.

The SIA had already proposed the move to a more self-regulatory model before the Government took this issue on. It is in the spirit of building on that that we want to proceed. If the amendment were accepted, it would create an administrative anomaly that would deliver, in our view, no benefits to the public, even after the SIA had successfully implemented its plans to transition to the new regulatory regime. We are endeavouring to work in close co-operation with the existing authority on a transition to a regime that we hope the authority itself will feel fulfils the job, so I hope that, on that basis, the noble Baroness will feel able to withdraw her amendment.

Photo of Lord Whitty Lord Whitty Labour

My Lords, before my noble friend decides what to do with this amendment, I should like to ask a question. I understood the noble Baroness to say that, at the final stage of this, we will need further primary legislation. If that is the case, I do not understand her last point. Why do we need to include the SIA in this Bill if we are going to deal with it later in primary legislation?

Photo of Baroness Neville-Jones Baroness Neville-Jones Minister of State (Home Office) (Security)

Having removed the basis for the present regime, we obviously need to have a basis for the new regime.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Shadow Leader of the House of Lords, Shadow Spokesperson (Cabinet Office), Shadow Spokesperson (Northern Ireland)

My Lords, I am utterly perplexed at the end of this very good debate. We have a regime which was introduced seven years ago at the behest of the police and the industry itself-the good elements of the industry-as well as Parliamentarians. The Minister herself has said that standards have been raised as a consequence of this good regime; it is working well throughout the United Kingdom. Usually, when there are demands for a regulatory body to be disbanded, it is because the industry itself wants it to be disbanded or because of an exorbitant cost. It seems to me that there is no cost in this; the industry is very happy to meet the bills and is content with the present situation. It looks very much as though the Government are tinkering around the edges-forgive me if it sounds rude-and they are tinkering with a system which is working well and that everybody is content with. I simply do not understand why we are dealing with this issue now.

I recognise, as the noble Baroness has said, that the industry is content to have a phased transition, but it seems to be a complex way of going about things. I do not feel at all reassured by what she has said this evening. The point made by the noble Lord, Lord Ramsbotham, about the interaction between the security industry and the prison service- which, if I had thought about it, I would have been dismayed and concerned about-makes me even more concerned about the proposal before us today. The noble Baroness has talked about the need for transition and has said that consultation is already taking place. She has also said that primary legislation will be needed for a new body, so I am slightly perplexed as to what we are doing now. Notwithstanding that, I am content to withdraw my amendment now, but I will certainly bring back an amendment on Report.

Amendment 59 withdrawn.

Photo of Lord Judd Lord Judd Labour

My Lords, there are hazards in going away from London in the middle of a Bill. Rapid developments sometimes change the situation. I rise to move this amendment in the knowledge, which I should share with the House, that-

Photo of Lord Judd Lord Judd Labour

I am so sorry.

House resumed.

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House adjourned at 11.11 pm.