Regional Economic Development

Part of the debate – in Westminster Hall at 9:30 am on 13th February 2001.

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Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Work and Pensions) 9:30 am, 13th February 2001

My hon. Friend is absolutely right. It is interesting that both Ireland and France have established systems involving a single point of entry and a single application form. Their purpose in that is to take the weight of complexity and red tape and bureaucracy off the shoulders of local partnerships and businesses and to work out those issues out internally, rather than to weigh down projects with the burden of what is unquestionably a bureaucratic system, bound in red tape. That often applies to matched funding, which can have forests of strings attached. Many projects are weighed down by bureaucracy, red tape and guidance.

The second obstacle involves the appropriateness of Government intervention. In my constituency, that difficulty has been overcome by the development of integrated area plans based on a number of parishes working together on projects, with the support of the Government offices. In the Lizard and Helston area, for example, they had worked for months, if not years, on plans and had established a committee. The project was bringing the community together and those working on it were largely ahead of the game compared with other parts of Cornwall. They had worked well and achieved unanimity as to how they might progress their plans and programmes for the area to kick-start objective 1 and develop appropriate projects.

However, very late in the day, having discussed the issue with the RDA and the Government Office for the South West, the Government office insisted that they change their area, so the whole process had to begin again. That is not an edifying way to help a local community that has been enthused by the opportunities made available by the success of having achieved objective 1 status.

Thirdly, many businesses have expressed concern to me, and I am sure to other hon. Members, about the fact that their approaches to the objective 1 process are met in a complex and confused way, and they are not given the help that they need.

One business wrote to me recently saying that last summer it had

"made enquiries about accessing Objective One funds to develop certain parts of the business. The enquiry was passed from one department to another, mainly around the Government Office for the South West. Each department was polite but ineffective; the general tone was 'It's not my responsibility. I'm not sure who deals with that sort of thing. I'll get someone to phone you back later today.' Needless to say, after several days no-one had phoned back and we had to chase them again. Eventually we received an application form for starting a project. This was completely inappropriate to a very small business. The amount of administration, form-filling and reporting would have exceeded the amount of useful work we were planning, so we threw the form in the bin and abandoned the idea." Despite the fact that the purpose of objective 1 is to help business, that experience is by no means exceptional.

Although the local office has been working effectively to try and make sense of the system and get the best out of it, allocating the money is one thing--the £30 million that has been allocated so far represents excellent progress--but drawing it down is another. While some projects in Cornwall have received European structural fund money, so far not a penny piece of objective 1 funding has gone into any capital programmes there, and that is a matter of great concern. At the end of the day, we will need to judge objective 1 on its fundamental strategic success to Cornwall--not on whether the pot of money has been spent in a first come, first served basis in an unstrategic way--and on what sustainable economic developments have been established through objective 1, that would not have happened otherwise and that have made a significant difference in turning around the depressed Cornish economy.

A significant project is the combined universities in Cornwall, on which there is unanimity that the project must be properly and effectively established within the seven-year period. I would welcome any encouragement that the Minister may wish to give local people that the project will go ahead and that the Government office will take a flexible view when considering the various strands and stages in its development.

Another important project in Cornwall, in which we will invest much effort, is building on Cornwall's distinctiveness. Cornwall does not have a lot going for it, but at least people know where it is. Some like it and some do not, but generally people have a positive view of Cornwall as a distinctive place with a distinct culture and a strong environment. Moreover, Cornwall produces a range of unique products and it wants to develop a unique and distinctive brand image. It does not want Government offices and regional development agencies preventing that.

Cornwall has a number of distinctive features and opportunities. Its maritime potential has been ignored for far too long. It has the busiest shipping lane in the world within three miles of the largest natural harbour in Europe. In the past, the sea has been something to be paddled in or gazed at, but it could be a great economic resource. If only we could get a small proportion of the passing trade to come to Cornwall--that is a realistic prospect--objective 1 could make a very significant contribution. It is important to identify the strengths of Cornwall, rather than consider it to be weak because it is not the same as everywhere else. I will return to that theme later in my speech.

Hayle harbour is another important project in Cornwall. It is important to develop communities where the economy has failed and Hayle harbour is one such example. The project, which has strong local support, involves a multi-million pound development of the harbour and it wants Government backing. I understand that the recent planning application that has been approved by the district is now with the Government. Hopefully, it will not be delayed unnecessarily. Although the use of taxpayer's money should be properly scrutinised, I hope that the plans that are being considered by the Government Office for the South West will move forward swiftly.

The local Federation of Small Businesses has expressed concern about objective 1. It has 2,500 members in Cornwall, but not one has yet succeeded in getting objective 1 money. It makes the rather amusing comment that it is concerned about the

"velocity at which Objective 1 is progressing--it has been overtaken with ease by an arthritic snail". Whether or not the hyperbole is fair, local businesses are concerned about progress.

There is also the issue of matched funds. Regional selective assistance should provide an important source of matched funds in objective 1 areas, but it is aimed primarily at large projects. The minimum eligible capital expenditure is £500,000. Many small businesses in Cornwall would not be able to afford a project of that size. However, another fund available to small businesses is the enterprise grant, but the total budget throughout the whole of the seven counties region is £450,000 per annum. If Cornwall got its fair share, it might get £50,000 of the money on a pro rata basis. That will hardly make a significant impact on the development of objective 1 projects in terms of matched funding.

Recently, the Western Morning News carried out a poll of business leaders in Cornwall and Devon, most of whom had a frequent or occasional contact with the RDA and, according to the newspaper, represented "the cream of business leaders" in Cornwall and Devon. In answer to the question:

"How well does the RDA represent Cornwall and Devon's interest?", 57 per cent. said that it represented their interests badly, 41 per cent. responded "quite well", and 2 per cent. said "very well".

In response to the second question:

"How do you rate the general performance of the RDA to date?", 55 per cent. said "poorly", 2 per cent. said "excellently" and 12 per cent. said "good".

The third question was:

"Are they doing enough to attract inward investment?", to which 58 per cent. responded no and 11 per cent said yes. The newspaper concludes that the RDA has not delivered for the local business community.