HC Deb 06 December 1991 vol 200 cc512-82 9.36 am
Ms. Joyce Quin (Gateshead, East)

I wish to call attention to the need for regional government in England, and I beg to move, That this House deplores the excessive centralisation of government in the United Kingdom since 1979 and the failure to decentralise and devolve power to the nations and regions of the United Kingdom; notes that this is in direct contrast to the general trend towards decentralisation evidence elsewhere in Europe; furthermore deplores the severe cuts in the regional assistance budget since 1979 together with the failure to enact dynamic and effective regional economic policies which would have promoted balanced economic growth and prosperity; expresses alarm at the regional divisions which continue to characterise the United Kingdom economy; and considers that the creation of a regional tier of government in the English regions as well as national devolution to Scotland and Wales is now vital to the United Kingdom's future economic and political well-being. I am pleased to have the opportunity to raise this subject which has interested me for a long time. The privilege of addressing the House on a Friday morning and of winning the ballot to present a private Member's motion is, however, something of a mixed blessing for hon. Members like myself who represent constituencies a long way from London. We often look forward to Fridays as a day that we can spend with our constituents.

None the less, I am delighted that many of my hon. Friends who I know have a keen interest in the subject of regional government are in their places this morning. Indeed, many of my hon. Friends find it frustrating that regional issues are seldom debated in the House. That is something which we should like to be changed in the future.

Unfortunately, regional policy could hardly be described as one of the current Government's priorities. I believe that that is one reason why regional policy is so seldom debated here. Indeed, we often think that it does not figure at all on the Government's agenda.

I am pleased that my hon. Friend the Member for Normanton (Mr. O'Brien) is in his place on the Opposition Front Bench. He deals with regional government as part of the shadow environment team. During the debate, I shall obviously be referring to matters that come within my hon. Friend's remit, although I shall also be speaking about some of the important issues relating to regional economic and industrial policy which fall within the remit of the Department of Trade and Industry. As a member of Labour's trade and industry team, those issues are of particular concern to me in that capacity.

I have been in favour of regional government for as long as I have been in politics. I stress that point because the fashionable view of some London-based political commentators is that regional government has become popular among Labour party members in England only as a response to the position in Scotland. That is far from true. We are not here simply in response to what has been described as the "West Lothian question" in deference to my hon. Friend the Member for Linlithgow (Mr. Dalyell),

When we arrive to take up our seats in the House of Commons, we are obviously strongly influenced by the constituency that we represent and the part of the country from which we come. Indeed, all the experiences that we have had before coming to the House influence us. That is certainly true in my case. The experience of coming from the north-east of England is an important influence on my views on the issue with which we are dealing this morning.

When one grows up in the north-east, one is aware that the region is a long way from the English seat of power in London. Many people in the north-east often feel marginalised and that their views are not taken into account. Geordie humour sums that up in the phrase, "The English divvent want we and the Scots winna have we." Whether or not that is true, the fact that it is said shows that there is a feeling of isolation in the north-east. The region has many characteristics in common with Scotland, perhaps as many as it does with England. It certainly has characteristics of both, which are evident in such things as its folk music tradition.

The north-east of England and the lowlands of Scotland are also ethnically similar, if one can put it that way. Certainly the same surnames are evident on both sides of the border. However, I do not pursue the ethnic argument to too great an extent because in the United Kingdom our backgrounds are very mixed up. Indeed, the irony of someone with the surname Quin introducing a debate on the north-east should be borne in mind. I have Irish and Scots ancestry as well as many Geordie and northern England forebears. As many of us have mixed backgrounds I would not like to say that ethnic reasons are the main reasons for tabling this motion. I and many others of us believe that a regionalised system is sensible and efficient, both economically and politically. That is one of the main motivations behind my motion.

The history of devolution has been a chequered one in our country, perhaps since the second world war. Whether we were Members of Parliament in the 1970s or not, many of us will remember the many debates on devolution that took place in Parliament at that time. The position is different today and there are many more reasons to pursue devolution further. The debate has moved on and new elements have crept in which make devolution attractive to many people who perhaps did not feel so strongly about it or were even hostile to it in earlier days.

The first difference between now and the 1970s arises from the experience of the past 12 years, during which we have witnessed a growing and marked centralisation of power. Local government has had its powers and influence greatly curbed. The metropolitan counties, such as Tyne and Wear, in which I live, have been disbanded, basically because the Government did not like their political complexion and the fact that people in those areas consistently elected Labour authorities. More and more decisions seem to have been concentrated not merely in Westminster or Whitehall but, increasingly, and particularly during the period of office of the right hon. Member for Finchley (Mrs. Thatcher), in No. 10 Downing street.

The degree of centralisation was particularly marked in England. The regions of England, unlike the nations of Scotland and Wales, do not have their own Cabinet Minister, separate structures or, indeed, such elements as a separate Question Time in the House. That has led to an unbalanced position. We have about 45 million people in England, whereas there are only 5 million in Scotland and slightly fewer than 3 million in Wales. That is an imbalance in population terms. It is not healthy for the 45 million people of England to be so dependent both economically and politically on decisions made at the centre. It makes England one of Europe's most centralised states.

During the past 12 years the Government have shown a lack of interest in regional economic policies. For example, regional aid and selective assistance have been dramatically cut. The cuts were considerable in the early years of the Conservative Government when the country was suffering a deep recession. It was a tragedy that the very regions that needed support and had previously enjoyed a generous level of regional assistance suffered those cuts. It was at the precise moment at which they needed the assistance that it was cut.

That regional neglect has fuelled a feeling in many regions that perhaps they should be empowered to assist themselves in the face of an unsympathetic central Government. I can quote some of the figures on the cuts in regional selective assistance in the period in question. Between 1978–79 and 1990–91, regional selective assistance declined in the north by 78.8 per cent., in Yorkshire and Humberside by 68.8 per cent., in the east midlands by 36 per cent., in the north-west by 80 per cent. and in England as a whole by 75 per cent. Those severe cuts were inappropriate and harmful, in view of the recession of the early 1980s, to the prospect of economic recovery in those areas.

Throughout the past 12 years the regional gap has widened. I admit that the present recession is somewhat more complicated and is biting fairly hard in the south-east of England. None the less, it is clear from the figures for average per capita gross domestic product that the northern regions, Scotland and Wales have a smaller share of the nation's per capita GDP today than in 1979. Several figures, including the Government's own, document that clearly.

Mr. Peter L. Pike (Burnley)

My hon. Friend rightly highlights the problems caused by what the Government have failed to do in the regions. Is it not also a fact that, because industries in the north and north-west and other such places have increasingly been taken over by industries based in the south, the north has always been last for investment and first for cuts? That factor, on top of the Government's failure actively to pursue policies to attract manufacturing industries to the regions, has made the position even worse.

Ms. Quin

I am happy to endorse my hon. Friend's comment. He is right. That is one of the reasons why the Opposition are so keen to get measures going which would enable the regions to promote their own economic development and regeneration for the future.

Mr. William O'Brien (Normanton)

Will my hon. Friend also take into consideration the disappointing development on the RECHAR money that is available to regions, especially those where mining, steel and textiles and, indeed, shipbuilding and defence in the south, have suffered as a result of the Government's policies? We are being denied that money by the Government's policies. Will my hon. Friend address that point?

Ms. Quinn

I assure my hon. Friend that I was going to come to that issue, which is important. It is significant that the regions that would be eligible to benefit from RECHAR are supporting the European Commission's attitude and not the Government's. They know that the European Commission is blocking that money for sound reasons. Unless pressure is put on the Government, they will simply substitute that money for money that they were going to spend in the regions anyway, and the regions will not receive any direct benefit, although that was the whole purpose of the RECHAR regulations.

Mr. Tim Devlin (Stockton, South)

I believe that the figures that the hon. Lady gave earlier were for regional development grant rather than for regional selective assistance, which has been in existence for only about three years, as she will recall. Under the last Labour Government was not a subsidy of more than £1 million a day given to British Steel and to a number of other companies through regional development grant? It was disguised as if it were some form of regional assistance, whereas it was bailing out uneconomic, old industries which ought to have been modernised. Is not the success story of the present Government's policy the fact that they have managed to turn British Steel into a profit-making industry? Other industries such as shipbuilding, which were previously heavily subsidised, have ceased to take subsidies, with the result that the figures for the northern region appear quite different. A large number of smaller companies there have been receiving regional selective assistance since the middle 1980s.

Ms. Quin

The figures that I quoted were given in a written answer to a question that I put down about the cutbacks in regional preferential assistance. Obviously I strongly believe that industry has to be modernized—none of us is against that—but during the Government's term of office the restructuring in many of our industries has been far too savage. It has cut down our industries in comparison with those of our competitors to too great a degree.

The hon. Member for Stockton, South (Mr. Devlin) mentioned steel. Our steel industry is only a fifth the size of even the steel industry in what was West Germany. It is very much smaller than the Japanese industry. While I welcome the modernisation and some of the measures taken within British Steel, I should like the United Kingdom to have a much larger share of the European steel industry.

As I am sure the hon. Member for Stockton, South is aware, I regret the tremendous contraction in our merchant shipbuilding industry. If regional governments had been in place, greater efforts would have been made to modernise and to retain the valuable parts of the shipbuilding industry, for example the yards of North East Shipbuilders Limited in Sunderland. A southern-based Conservative Government were not able to understand the importance of shipbuilding to the industrial future of this country. It is sad that we have allowed our industry to decline. The Japanese are the largest shipbuilders in the world and Japan is hardly a less-advanced or a back ward industrial country. We have neglected sectors such as shipbuilding. Regional governments would have evaluated the economic strengths and weaknesses of their region and would have stood up for those industries far more vigorously than the Government have.

Mr. Giles Radice (Durham, North)

Perhaps it is also relevant to the debate and to the area that the hon. Member for Stockton, South (Mr. Devlin) represents that during the 1980–81 recession ICI—a large employer and a flagship in the area—lost one third of its suppliers. That does not sound like sensible restructuring but slaughter. I am sure that it would not have happened if we had had a more sensible regional government at the time.

Ms. Quin

I am happy to concur with my hon. Friend's telling comments which certainly describe the situation in the constituency of the hon. Member for Stockton, South.

During the Conservative Government's period of office there have been high levels of unemployment. Those levels have varied widely and dramatically from region to region. Even today there are fewer full-time jobs in the northern regions, Scotland and Wales than there were in 1979. Again, the Government's figures make that absolutely clear.

The current recession has affected all areas, including the south-east. I should not like to give the impression that I think that the south-east of England is uniformly prosperous and everywhere else badly off. I know that it is more complicated than that. Even in London there are great areas of poverty. There are wide differences between the well-off and the least well-off in all regions. The widening of the prosperity gap has been a strong feature of the Government's period in office and is amply documented in their statistics, such as those in "Regional Trends".

Despite that and despite the fact that the south has been hit by the present recession, regional divisions continue to characterise the United Kingdom economy. If we are interested in achieving balanced economic prosperity that should be a matter of concern to all of us.

Interestingly, during the Conservative Government's period in office regional economic disparities have been paralleled by regional disparities in voting patterns. General elections in the 1950s, 1960s and early 1970s tended to be characterised by fairly uniform swings across the country. If one party was doing well, it tended to do well throughout the country. Since the Government came to office their regionally divisive policies have explained the marked differential patterns of voting. In the 1987 election there was a larger swing to the Opposition in areas such as the north, Scotland and Wales, whereas in the south there was a slight swing to the Conservatives. We must take regional differential voting patterns seriously. They have a message for democracy and for the Government. The case for regional devolution is reinforced, because the views expressed by the majority of people in each region would not be overlooked. They would at least be heard at regional level, if not at national level.

Mr. David Nicholson (Taunton)

It is certainly true that in Scotland and Wales, which are rather different from the English regions, what the hon. Lady told us was true, as it is true of her part of the world, the north-east. However, I do not think that there was a significant swing against the Conservative party in the north-west or Yorkshire and Humberside in 1987. The hon. Lady may have the detailed figures, I do not. I believe that we held on to our position rather well in Yorkshire, Humberside and the north-west.

Ms. Quin

I think that what the hon. Gentleman says is less true of Yorkshire. I do not have the detailed figures with me, although I have studied them. It is true that there is more support for the Government the further south one goes.

Mr. Tony Lloyd (Stretford)

On behalf of the north-west I must point out that my hon. Friend the Member for Gateshead, East (Ms. Quin) is right. While the Conservative party held on to seats in the north-west, despite a swing against it, there were massive swings against the Conservative party in the industrial belt from Liverpool to Manchester, which is the most dispossessed part of the north-west. That simply emphasises my hon. Friend's argument.

Ms. Quin

It is also true that in areas which were already held by Labour there was a further swing to Labour, which shows the polarisation between regions, and within areas where people felt that the Government had failed to understand their economic problems and difficulties.

Mr. Kenneth Hind (Lancashire, West)

The hon. Lady talks about there being a polarising effect as one comes south. If she looks carefully at the whole north-west region she will find that it is roughly divided, with nearly as many Conservative as Labour seats. In Lancashire there are 15 seats. Twelve are Conservative and three Labour. The same situation arises in Cheshire. The only strength that the Labour party has in the north-west is in Greater Manchester and Merseyside, and the only reason for the movement towards Labour in 1987 was the demise of the Liberal Democrats, who disappeared virtually without trace in our region.

Ms. Quin

In many towns and cities where the Conservatives were once strong they have become an endangered species. In Newcastle, for example, the Conservatives controlled the city at times in the 1960s and 1970s, but they have now been reduced to a humiliating third place. That is because the people of the north-east feel that the Government have failed to address their problems or understand their difficulties. An examination of the figures confirms the polarisation that I have been describing.

Mr. Pike

As a Lancashire Member, I assure my hon. Friend that her argument on polarisation—which is shown markedly by local council changes in Lancashire—will be revealed even more starkly at the next general election.

Ms. Quin

I am happy to agree with my hon. Friend.

Mr. David Nicholson


Ms. Quin

I will give way once more and then I must make progress, because many hon. Members wish to take part in the debate.

Mr. Nicholson

The point that the hon. Lady makes about the cities is valid, but I suggest that it is more of a social than a political problem. In the regional cities of England—it is not true of Edinburgh—the middle class has left the city area, and that is a social problem. It is not true of London, where the Labour party has been in steady decline for a long time and has been driven out of areas such as Fulham and Putney, which used to be Labour or marginal seats. The hon. Lady cannot apply her argument to the capital.

Ms. Quin

The social problem which the hon. Gentleman describes has been greatly increased by the Government's divisive policies.

I have referred to the Government's lack of interest in regional support and policies. That was reinforced in a letter to me from the Department of Trade and Industry, in which it was admitted that the assisted areas map of Britain had not changed since 1984, although the economic situation of areas had changed greatly over those years.

The regional structures that have been allowed to survive—in some cases new ones have been set up—in the last 12 years have tended to be quangos with little or no local involvement. For example, regional health boards have been filled with Government-approved appointees rather than people who would reflect the majority view or majority political view of the region. There is great resentment about that in many regions. Indeed, people feel that some areas are being treated rather like colonies. In my county of Tyne and Wear, 80 per cent. of the elected councillors are Labour, yet Labour is practically excluded from all the quangos that are governing a large part of the county's activities. That is not good for democracy.

I point out in my motion that in terms of regional development the United Kingdom is increasingly out of line with other European countries, where there has been a move towards decentralisation. In Britain there has been greater centralisation in recent years.

Mr. Chris Mullin (Sunderland, South)

Does my hon. Friend agree that, as a general principle, the nearer decisions are made to the people over whose lives they have an effect the better those decisions are likely to be, and that the further away those decisions are made the worse they are likely to be? Does she further agree that our impending closer union with Europe makes it even more urgent for us to have regional government?

We in Sunderland have already suffered over the loss of our shipyards because a decision was taken in Brussels, not in London, that overrode not only local public feeling but all logic. We in particular understand the need for regional government. so that we may have some power over our own lives.

Ms. Quin

I strongly support my hon. Friend. He describes the principle of subsidiarity, an ugly word which nonetheless describes an important aspect of our lives. Decisions should not be taken at a higher level than is necessary, and I find it ironic that the Government should say that they worry about centralisation in Brussels when they are so good at centralising power here at home.

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key)

Will the hon. Lady explain how, if she agrees with her hon. Friend the Member for Sunderland, South (Mr. Mullin) that it is retrograde that decisions about, for example, ship building should be taken in Brussels, a regional government or assembly would make a ha'porth of difference?

Ms. Quin

Under the German structure it would have been harder for that shipyard decision to have been taken. I assure the Minister that I do not hold the Government guiltless in the closure of the shipyards. Instead of meekly accepting the agreement that had previously been signed in Brussels, the British Government should have done much more to challenge the decision, which was no longer appropriate to the circumstances.

Mr. Mullin

It is not a question of the Government simply having meekly accepted the decision. It emerged in the case of the closure of the shipyards that the Government did not even know that Brussels had taken the decision. The Secretary of State was among the last to learn of it. Had we had regional government, such decisions would have been more open—

Mr. Key

indicated dissent.

Mr. Mullin

The Minister is wrong. I do not believe he knows the facts. There is no point his coming to the House posturing when the Secretary of State at the time—as I believe he would admit in private, if not in public—did not know that an undertaking had been given that the shipyards would never open again, regardless of whether an offer came forward. In the event, an offer did come forward and it would have been commercially viable. An offer made by a Greek shipping company was rejected, not because any loss of public funds would have been involved but because a deal had been made of which the Minister was not even aware.

Ms. Quin

My hon. Friend is right and in raising that important issue he dealt with another important point. The Council of Ministers in Brussels makes decisions in secret and it is difficult to know precisely what is decided at those meetings. I understand that under the German system there are observers representing the regions at those meetings. Had we had a similar system, it would have been more difficult for the NESL yards to be closed in the circumstances in which they were closed.

Mr. Radice

Is it not a fact, on the link between the European regions and Brussels, that a number of the German Länder now have offices in Brussels from which they are able to find out what is going on and influence decisions in Brussels?

Ms. Quin

Yes, and it is important, and will become even more important, for regions to have a presence in Brussels to argue their corner and ensure that their valid interests are recognised before decisions are taken.

While the example of the German Länder is important, it should be remembered that, ironically, Britain and the allies set up the regionalised system in Germany after the war. The Germans were initially not too keen on having the system, and it is illustrative to examine the results of opinion polls in Germany on the regionalised system there.

In 1949, only a few years after the system had been set up, about half the German population was unhappy with its regionalised structure. That figure has now plummeted to less than 10 per cent. It was significant that, when East Germany was reunited with West Germany recently, the regional structure was adopted in eastern Germany without difficulty. It was one of the smooth elements of the transition—it certainly seems to have caused few significant problems.

We should also consider the economic successes of some of the German regions, which are varied in size and in other aspects. Tremendous efforts have been made in Baden-Wurttemberg in technology transfer, for example, which has been influential on thinking within the Labour party about regionalised structures in the future. Nordrhein Westfalen spends about ten times the amount that the Department of Trade and Industry spends on research and development. The Saarland is a useful model for our traditional industrial regions because it was traditional industrial region, yet its regional government have developed their own strategy for getting to grips with problems of over-dependence on one or two specific industries and have successfully tackled problems that are familiar to many parts of Britain.

Decentralisation has also taken place in other parts of Europe. Spain is a newer recruit to the European Community and it has already achieved considerable regionalisation. It has economic difficulties and I do not seek to disguise that, but the political tensions to which a centralised Spain was prey, particularly in the Basque region and Catalonia, have been greatly eased by the fact that those regions can affirm their own identities and have their own relationships with the European Community, and can develop their own economic potential.

Even in formerly centralised France, where the joke used to be that all school kids were learning exactly the same thing at the same time in whatever part of France they lived, important decentralisation and regionalisation reforms have taken place. They have helped France's economic effort and created impressive "technopoles" which are centres of technological excellence based in different regions, working with industry in those regions to ensure that they are technically and technologically efficient and effective for the future.

Italy, too, has had its regional successes despite the intractable problems of the south, where special factors have been at work. In other regions of Italy, for example Emilia-Romagna, the regional government have worked with local authorities to promote the creation of small businesses in an area where there were few small businesses previously. That has been a particularly striking success.

European countries outside the European Community also have impressive regional models. Last year I attended a conference in Austria, which was also attended by my hon. Friend the Member for Durham, North (Mr. Radice), and I found that even in that smaller country there was none the less an extensive regional network which people of all parties felt was beneficial to their political and economic success. Japan also has a regionalised structure, which is important in the operation of its economy. That fact is sometimes overlooked by western observers.

Despite the many examples of successful regionalisa-tion, for success to take place at a regional level, it is important for the efforts of regional governments to be backed up by a strong regional policy at national level. That is certainly the case in the German system, for example, which has a financial balancing mechanism that favours less-prosperous regions. That commitment at national level needs to be carried on even once the regionalisation process has taken place.

Many of us feel that one of the good aspects of the European Commission is that it seems to be more regionally minded than the Government. It is clearly trying to promote the participation of the regions in European decision making and I am afraid that the United Kingdom will simply be left behind in that process. As my hon. Friend the Member for Durham, North said, many German and other regions have offices in Brussels and thus have a higher profile than many British regions.

My hon. Friend the Member for Normanton mentioned the dispute between the European Commission and the British Government over the RECHAR scheme. Local authorities criticise the Government rather than the Commission because they believe that Europe is more a friend of the regions. They feel that pressure from Europe may eventually result in an unwilling Government being forced to give the regions the direct extra help to which they are entitled. However, it is a tragedy that the RECHAR scheme is already going ahead in France and Spain but not in the United Kingdom.

I urge the Minister to take those points on board and perhaps use his influence with his ministerial colleagues. I understand that the Department of the Environment is in favour of accepting the Commission's rulings on the matter, but that the Department of Trade and Industry and the Treasury are the obdurate departments in refusing to unblock the money. If so, I hope that the Minister will use his influence with those other departments to ensure that a sensible decision is taken and that the areas that need those funds can have them in the near future.

Despite—or perhaps because of—increasing centralisation in Britain in the past 12 or 13 years, important initiatives in the regions have sought to redress the imbalance. I pay tribute to the work of the Northern Development Company, which has been set up by industry and trade unions with the support of local authorities in the northern regions because they felt that a development body was important to the northern region as a whole. At first, the Government were reluctant to see that body set up and gave it very little or no help, but subsequently they have been persuaded to help the Northern Development Company by awarding it a grant.

The initiative took place within the region and is an important example of how regions want to help themselves in an unsatisfactory national situation. The company was recently named development agency of the year as a tribute to its efforts, despite the fact that it was greatly underfunded compared to the Welsh or Scottish development agencies.

I also pay tribute to the enterprise boards that have managed to survive in the new climate and to continue their work with a great deal of entrepreneurial skill. The Yorkshire, West Midlands and Greater London enterprise boards have all continued in different ways to encourage regional economic development in their areas.

Business people, too, increasingly see the value of organising at a regional level. The chambers of commerce in the north-east have taken some important initiatives recently. Separate chambers of commerce on Tyneside and Teesside now seek to come together for the good of the region as a whole. The Government should pay greater attention to the fact that chambers of commerce now see the need to group in larger units to exercise more economic clout. The more I consider such developments, the more it appears that the Government are out on a limb and everyone else is coming round to a regional perspective.

Mr. Devlin

I also applaud the work of the Northern Development Company and think that it has a valuable role to play, but why is it necessary to go further and impose on the people of the northern region an extremely costly extra level of government which will presumably have powers to increase taxes and will also have a capital in Newcastle and a bureaucracy which, according to the Labour party's only document on the subject, would seem to be expected to run everything from sport to hospitals? Why is all that necessary and how would it be financed?

Ms. Quin

I do not know why the hon. Gentleman seems to be so worried about the costs involved. We are talking about the simplification of government—decentralising government—which would bring cost benefits. We are also proposing a regional tier of government, with one tier below that. We would not intend to add an extra tier, but want to make the system more effective in future.

I caution the hon. Gentleman about making wild statements on costs, because when the details are considered and the process implemented, it will not be seen as a costly, huge bureaucratic effort, but a more effective one than we have at present.

Dr. Ashok Kumar (Langbaurgh)

What about the poll tax?

Ms. Quin

My hon. Friend mentions the poll tax—I agree that we should not take lessons from the hon. Member for Stockton, South about wasting public money.

Most political forces in Britain—apart from the Conservative party—favour a regionalised system. I note that the hon. Member for Berwick-upon-Tweed (Mr. Beith) is present. I know that the Liberal Democrats' spokesman on local government recently argued strongly in favour of regional government in England, as well as devolution for Scotland and Wales. The Government should consider why there is such a large weight of political opinion in favour of regionalisation.

The Labour party's commitment to regionalisation goes back a long way, certainly in my region. Resolutions calling for regional devolution were passed at the 1945 regional conference, and there has been a strong feeling in support of regional government at all the regional conferences that I have attended.

I pay tribute to some of the initiatives on regional government taken in the House by my hon. Friends. My hon. Friend the Member for Durham, North presented a Bill on behalf of the northern group of Labour Members shortly after I came into the House. My hon. Friend the Member for Makerfield (Mr. McCartney) presented a Bill calling for a north-west regional assembly. I also pay tribute to the work done on regional policy by my hon. Friend the Member for Sheffield, Central (Mr. Caborn). He does a great deal to co-ordinate the work of different policy sectors that would be influenced by the introduction of a tier of regional government. I wish him well with his further efforts in the months leading up to the general election.

The inspiration for our commitment to regionalisation lies partly in our experience of overcentralisation, and its economic and political disadvantages, and partly in the fact that we have seen successful examples of regionalisation elsewhere, to which I have referred. The Labour party believes that much can be achieved in the regional sphere economically as well as politically. We are convinced of the need to set up regional development agencies, building on existing initiatives such as the Northern Development Company, but allowing the work of those agencies to be greatly expanded so that they have a proper investment arm, can properly assesss their region's strengths and weaknesses, and take appropriate action to remedy some of the imbalances.

We believe that the Department of Trade and Industry should be far more decentralised. We want matters such as export services to be organised on a regional level so that there is immediate input into the system, with the regional level acting as co-ordinator between the various sources of advice and information that can be given to both small and large firms on their exporting efforts. Even if only about 10 per cent. of the companies that at present do not export did so in future, there would be a huge difference in the balance of payments deficit, and this country would take a great step towards improved economic performance.

A recent report from the Confederation of British Industry, entitled "Competing with the World's Best" showed that we should have a regionally organised system of technology transfer, as outlined in various Labour party documents. Obviously, however anything that happens at regional level will not detract from the necessity of taking action at a sub-regional level when there are specific economic problems.

It is clear that in the northern region, districts such as Barrow—which is geographically distinct and has a particular dependence on specific industries—may well need sub-regional efforts to ensure that they are given the necessary assistance in future. Nothing that I say detracts from the necessity of having task forces, action teams and organisations that will also tackle the problems at a sub-regional level.

I believe strongly that we must involve local people in such processes, and not simply impose solutions from above as has been done in so many ways during the past 12 years. The regional economic measures that we propose must have a democratic underpinning. Therefore, I strongly support the Labour party's proposal to set up regional assemblies. I also welcome the party's proposals for a sensible transition towards regional assemblies—involving the elected members of local authorities throughout a region in a regional forum so that they become used to working together before the regional assemblies are set up.

I realise that I have spoken for a long time—[HON. MEMBERS: "Carry on."] I shall now move towards a conclusion.

I believe that the Government have wasted a huge opportunity by not introducing the regional agenda before now. It is a great tragedy that the current local government review seems to have entirely ignored the regional perspective. The Government may well find when they look at the results of the review that many people want a regional organisation, not simply a change in local government boundaries of the sort that the Government seem to envisage at present. If the Government are not careful, they will simply repeat the disastrous local government reforms of 1974 that imposed many new authorities on people without proper consultation. The Labour party is committed to consultations on the establishment of regional structures and to ensuring that people will be working together by the time the regional structures are in place.

Mr. Jack Thompson (Wansbeck)

Does my hon. Friend recall that a considerable battle developed over the issue of the northern region, particularly in northern Cumbria, and the BBC? The activities of the people of northern Cumbria were so sustained that the BBC changed its mind and once again included the northern part of Cumbria in the northern region. The people of Cumbria identified with the northern region, not the north-west.

Ms. Quin

I fully accept what my hon. Friend said. His point is important; the BBC cannot be in any doubt of the regional feelings that exist in the northern region as a result of the campaigns that we have fought. There was also a strong reaction when it looked as though we would lose our regional news programme based on Newcastle and simply receive a merged programme emanating from Leeds. It was not that we were anti-Leeds, but we wanted to have our own regional identity and receive the news affecting our district.

Perhaps if representatives of the BBC are listening to this debate they will realise that many of us do not like the fact that so many BBC decisions now seem to centre on the mega-northern region that does not correspond to regional and local identities. We believe that there is no point in having a regional structure unless it corresponds to people's regional identities.

I shall now deal with some likely objections by Conservative Members. One of them has already been voiced by the hon. Member for Stockton, South who said that this would be yet another tier of costly government. Conservative Members may also mention boundaries. In order to get the best system we must consult on boundaries so that people will feel happy in their regions. The present standard planning regions provide the best basis for a regionalised structure and would work well. However, I am prepared to admit that in certain cases adjustments may be needed, depending on the strength of local feeling. The structure already exists. The fact that Conservative Members have created or gone along with a structure of quangos at regional level shows that they see the need for regional structures but are not keen on their being democratically controlled.

We need a flexible system. We might even like to start with a pilot project in one region, and the most suitable candidates may be the regions that are already well advanced on the regional road. I should prefer a regionalised structure overall, assuming that people will accept that and feel happy about their future.

Another objection is that people in pubs and clubs are not talking about regional government. To a certain extent that is true. People do not rush up to me in my constituency and say that they want a regional assembly with this, that or the other power. None the less, they talk about policies imposed from the centre and have the strong feeling that the Government take no notice of their region. We should listen to those real feelings.

An ICM opinion poll published in The Guardian on 17 October said that electors warmed to proposals for devolution and that far more people supported than rejected the plans of the Opposition parties to devolve powers to governments in Scotland, Wales and the English regions. That is important. It may not be the highest matter on people's political agenda, but it shows that there is not the hostility to regionalisation that some people would like to claim.

Mr. Devlin

I should like to know a little more about that poll. Was not the question whether people would support devolution in Scotland and Wales and were the English regions tagged on as an afterthought? Most people are in favour of devolution in Scotland and Wales. There is not a large ground swell of opinion, even in the northern region, for regional government. There may be a demand for Scottish independence.

Ms. Quin

It was a national poll and it stated: Some political parties are proposing to set up regional governments for Scotland, Wales and the English regions which would take over responsibility for some services run by central government. Do you oppose or support these reforms? For the English regions the figures were: 43 per cent. In favour, 28 per cent. against, 29 per cent. don't know. Strangely enough, the figures were fairly similar for Scotland and Wales. The hon. Gentleman should bear that in mind.

Mr. Devlin

The poll carried out in The Scotsman more recently showed that 45 per cent. of Scots were in favour of outright independence and that a further 39 per cent. were in favour of some form of devolution. That means that over 80 per cent. of the Scottish people favour some form of devolution or independence for Scotland. If that question was posed to the ordinary man in the street in Teesside, Newcastle, London, St. Albans or anywhere else, he would immediately focus upon Scotland and Wales and consider what should be done with them rather than considering whether he should be governed from Taunton or from some other place with which he did not identify.

Ms. Quin

I think that I have already answered the hon. Gentleman. I read out exactly what was stated in the newspaper. Fortunately not all Conservatives seem to be uniformly hostile to regional Government. I was interested to read in the "European Parliament EP News" this month that Sir Fred Catherwood the Conservative MEP for Cambridgeshire and Bedfordshire North concludes: the centralisation of power in Britain … is not at all healthy for society. Contrasting this with the strong regional governments found in Germany and Spain, he feels that regional loyalties—not only in Scotland and Wales, but also in many parts of England, should be reflected in more appropriate and identifiable levels of regional and local government than the current administrative local government areas. That speaks for itself.

Mr. Hind

Will the elected representatives of the regional assemblies be full time and salaried or will a proportion be full time and the rest part time?

Ms. Quin

I can give the hon. Gentleman my personal opinion, which is that they ought to be full time, given the importance of their work, and they should be salaried. I should not like to think that those who did not come from wealthy backgrounds would be inhibited from becoming members of their own regional assemblies.

In recent years there has been a huge and growing interest in constitutional questions in our country. The growing interest in regionalisation is an importan part of that trend. Regionalisation and regional government can both enrich our democracy and make us more successful economically. I look forward to a Labour Government making that possible.

10.36 am
Mr. Tim Devlin (Stockton, South)

It is no surprise that the motion is proposed by a Labour Member from Newcastle, which has pretensions to be the regional capital of the northern region. Labour is trying to overcome its frustration at not being able to form a Government in England and is trying to break the kingdom into manageable chunks which it hopes it can take over one at a time.

It is also no surprise that Labour, which is in hock to the Scottish Labour party, is trying to free itself from a very difficult hook. It knows full well, as we know, that the Scottish people and particularly those in Strathclyde are greatly over-represented because that region has smaller constituencies than any other region in the kingdom.

A growing cultural change is taking place in Scotland and it demands some form of political expression. Through its constitutional convention north of the border, Labour has been forced into a number of promises to the Scottish people and those promises are incompatible with Labour's continued presence in the United Kingdom Parliament. Labour is in a difficult position. It is trying to square the circle or, as the hon. Member for Gateshead, East (Ms. Quin) said, trying to answer the West Lothian question. Labour seeks to find a way by which, after all responsibilities for Scottish home affairs have been devolved to a Scottish Parliament, Scottish Members in this House would still have some basis to come here and vote on domestic matters on all subjects in order to support any future Labour Government. Labour cannot have it both ways and I urge it to make up its mind.

As I said, a significant cultural change is taking place in Scotland. That is evidenced by the fact that there is renewed pride in Scottish institutions and cities; Glasgow was the European city of culture. There is now much interest in the speaking of Gaelic. Bands such as Runrig and Capercaillie are singing in Gaelic and their concerts are sold out everywhere they go in Scotland. That does not necessarily mean that the same cultural change that is taking place north of the border is to be seen in the region from which I come or in others in England. Scotland has a separate, national identify—and many Scots would balk at the hon. Lady's reference to Scotland as a region. Many Scots refer to their country as a nation.

I have urged upon the Scottish Conservative party that the Government should find some way of consulting the Scots on what they want and ask whether they want independence and to opt out of the United Kingdom, or to remain part of the United Kingdom—in which case, they must do so on the same basis as the rest of us. That would mean a reduction in their representation in respect of the smaller Scottish constituencies, so that Scotland had the same number of Members of Parliament per head of the population as the rest of the kingdom.

I represent a constituency which has the same population as two Scottish constituencies put together.

Mr. A. J. Beith (Berwick-upon-Tweed)

I do not disagree with the hon. Gentleman's views on representation, once devolution is brought about. However, why does he suggest that there are only two options—independence for Scotland or remaining in a centralised United Kingdom on the present terms? Most other European countries have found ways of maintaining regional and even national differences within one state.

Mr. Devlin

There is a way out, which is to devolve the powers of the Scottish Office to a Scottish Parliament and then to disallow all Scottish Members of Parliament who sit in this House from voting on any matters on similar subjects relating to England and Wales—while permitting them to vote on issues of foreign policy, defence and national economics. If right hon. and hon. Gentlemen think about that carefully, they might consider it an acceptable solution.

Mr. Beith

Why did the Conservative party never once do that in the history of Stormont, when Ministers who were Members of Parliament for Northern Ireland constituencies served in a Conservative Government?

Mr. Devlin

I am proposing a way round the problem for the future. Stormont is a long-running question and I do not particularly want to be sidetracked by it today.

Mr. David Trimble (Upper Bann)

The hon. Gentleman might learn something if he did.

Mr. Devlin

I am sure that the hon. Member for Upper Bann (Mr. Trimble) will have his say later, because Northern Ireland regards itself very much as a separate region of the United Kingdom.

The hon. Member for Gateshead, East referred to the experience of other European countries, but they have very different histories. For example, Spain was brought together under Ferdinand and Isabella as a single kingdom fairly recently, in the 15th century.

Mr. Trimble

Before the United Kingdom was formed.

Mr. Devlin

Let me just point out that it was brought together from separate, distinct entities whose populations spoke different languages. If one travels round. Spain today, one finds that the inhabitants of the different parts of that kingdom still speak many different languages.

My point about Scotland holds true for the United Kingdom. England and Scotland are distinct entities, but the north and south of England, or the north and the midlands, or the north and north-west, are not sufficiently distinct to merit separate Parliaments. Similarly, France only recently became a united nation and Germany was the most recent of all, in 1860. Those countries embraced different ethnic groups, having marginally different languages.

Mr. Jack Thompson


Mr. Devlin

I am coming to the subject of geordies, if that will help the hon. Gentleman. I know that geordies refer to themselves as being slightly different from the rest of us. When I watched the English and Scots playing each other at the recent international at Murrayfield, I noticed that the geordies cheered for the Scots. I do not know how that would score on the cricket test of my right hon. Friend the Member for Chingford (Mr. Tebbit), but when I asked the geordies about their support in the pub afterwards, they told me, "Well, man, we geordies are only Scots who have been sent south of the border to guard it."

Mr. Jack Thompson

As to other European countries, Germany and France have a regional structure and that of Spain was specifically developed during the post-Franco period, when the central Government negotiated for each region its own form of regional structure. That is the sort of arrangement that could be devised for English regions.

Mr. Devlin

The attempted coup in Spain was a significant element in propelling that country towards regional government.

Mr. David Nicholson

We obviously need to address the histories of other European countries, but is not there a significant contrast between England—which is the subject of the debate—and the countries of Europe that my hon. Friend mentioned? I hold certain views on Scotland and Northern Ireland which may not commend themselves to all my right hon. and hon. Friends, but England is much smaller in area than united Germany, France or Spain. A form of regional assembly may be possible in countries of that size, which also have different histories, but it would be a ridiculous innovation for this country.

Mr. Devlin

I am grateful to my hon. Friend, because that was to be my next point—the smallness of our country and the fact that our people live together compactly within small areas. With modern communications—high-speed trains, telephones and fax machines—it is possible for me as a Member of Parliament to have my only office, which also services my Westminster work, in the northern region. Everything is conducted from there. Many businesses run their affairs from locations in the north, west, south-west, or other areas of England and they are perfectly able to communicate, so talking in terms of separate regions is increasingly nonsense.

How much does the hon. Member for Gateshead, East think that it would cost to establish and to run regional assemblies? I am happy to give way to her if she can answer that question. The Treasury conservatively estimated that it would cost at least £20 billion a year to run—

Mr. Richard Caborn (Sheffield, Central)

Is that figure net or gross?

Mr. Devlin

I am sorry, I misread that figure—it is early in the morning. I meant to say that the cost would be at least £200 million a year. Labour's document, "Devolution and Democracy" does not say where the money for regional government would come from, but suggests that in the early years it would be paid for by a block grant which presumably would be deducted from national taxes. Labour says that regional government would also get a share of the new fair rates that it proposes to introduce. I will give way if I am wrong on that. That means a block grant of we know not how much—and I will give way to any Labour Member who can tell me.

Mr. Caborn

Can the hon. Gentleman say whether that figure of £200 million would be net or gross? What is the basis of the Treasury calculation? What was fed into it? Many of the services that are currently run from Whitehall and Westminster would be developed in the regions. I presume that they are not provided as freebies at present and that costs are incurred in providing them.

Mr. Devlin

The Treasury forecast was on the basis of additional cost, so it must be a net figure. One is considering the establishment of 12 regional assemblies comprising various salaried members and their secreta-riats, plus the cost of the Scottish and Welsh assemblies. It will be an extremely expensive exercise.

Mr. O'Brien

Can the hon. Gentleman tell the House what is the cost of regional health authorities, regional transport, regional environment offices, regional training, training and enterprise councils, regional employment units and regional travel-to-work areas?

Mr. Devlin

Those costs will still be there. What the hon. Gentleman and his party fail to point out time and again is that the Government already have an active regional policy, in that central Government provide integrated government units in various regions. The hon. Member for Gateshead, East referred to the regional composition of many Departments of state. Those costs will not be subsumed into the new regional council costs—

Mr. O'Brien

Why not?

Mr. Devlin

Because the running costs of the new regional councils will include regional bureaucracy, members' salaries and allowances, members' secretarial allowances, and so on. The costs currently borne by the national taxpayer of the regional employment service will be passed on to regional government. The hon. Gentleman and his party propose a block grant from the national Exchequer, which presumably will roll up the cost of each regional Department of state, as currently constituted. In addition, there will have to be a block grant to pay for the establishment and running costs of the various assemblies.

Moreover, the hon. Gentleman and his party have not made clear what is to happen to the Government's extremely valuable inner city regeneration programme, headed, in my region, by Tyne and Wear development corporation and Teesside development corporation. The document published by the Labour party says that they will become democratically accountable. Only last week the hon. Member for Langbaurgh (Dr. Kumar) said in his maiden speech that he looked forward to the day when they were made democratically accountable. Is it correct that, according to the Labour party's plans, they will be subsumed within the regional councils' purview?

Mr. O'Brien

Existing regional officers and their expensive bureaucracies will no longer, under regional government, be responsible to central Government. The buildings used for that purpose could then be used for regional operations. The hon. Gentleman's point is misleading. He has not thought through the implications.

Mr. Devlin

I am grateful to the hon. Gentleman, even though he did not answer my question. The Labour party would presumably want to take over regional government in my area. It would then try to run directly all the regional services and put them under the control of such luminaries as Councillor Paul Harford of Cleveland county council. We should have to wait and see just how well they would do. I suspect that that would be to the enormous disadvantage of my constituents. Moreover, I suspect that there would be a great deal of ill feeling in my part of the world about regional government being run from Newcastle. Traditionally, there has been great rivalry between Teesside and Newcastle over matters relating to the northern region. I see no attraction in the prospect of regional government for my area being run from Newcastle.

During the Langbaurgh by-election the hon. Member for Langbaurgh alleged that people had said that they might not vote for foreigners. My experience on the doorsteps was that that was sounding back very much against Michael Bates, the Conservative candidate, who came from outside the area but from only 30 miles away—Newcastle. He was regarded on the doorsteps of Langbaurgh as a foreigner.

Ms. Quin

The hon. Gentleman insists on referring to Newcastle when he means Gateshead. If there is such rivalry as the hon. Gentleman suggests between Teesside and Tyneside, why are the chambers of commerce of both Teesside and Tyneside coming together in the regional form to which I referred?

Mr. Devlin

As I have explained before to the chamber of commerce in Teesside, the attitude of modern business men towards international and national travel and regional identities is entirely different from that of the people in the street. I find that there is no feeling of identity in my constituency with the people of Newcastle. My constituency is the only one that straddles the River Tees. Half my constituents want to go back into North Yorkshire; the other half want to go back into county Durham. None of them likes being in county Cleveland. Most of them would be happy to see the demise of the Teesside entity. They are hardly likely, therefore, to be happy about the prospect of a joint entity that stretched from the River Tees, or even further south of the River Tees, right the way up to the Scottish border. The differences between the proud Yorkshireman and the guy from the border region of Northumberland are immense. There is very little identity between the two.

I was interested, therefore, to hear what the hon. Lady said about boundaries. I am sure that when we come to consider where these regional governments are to be established, the boundaries will be absolutely essential. If the hon. Lady is promising us consultation on these matters, perhaps we should leave the whole question alone until after the next election when this Government have been returned for their fourth term in office. A local government commission will be established in every area of Britain, starting in Cleveland, which will have as its mission consultation with local people regarding what they believe would be the most appropriate local government unit for them. If they all miraculously stand up and vote for regional government to be run from Newcastle, the hon. Lady and her party can cheer and be happy, but I suspect that they will be sadly disappointed.

What is going to happen to the poor old Members of Parliament? The hon. Lady and I spend time lobbying individual Ministers at the Department of Trade and Industry, the Department of the Environment and other Departments of state. We do so because we know that that is where the power lies and because we want to get something done for our constituents. There is a direct link between my constituency surgery, held at the weekend, and Ministers' offices in Westminster where the decisions are made. What will happen if there is some form of regional government that is responsible for different layers of government?

If we follow the Labour party's model, there will be a local authority, which will be the main purpose authority, a regional government, which will be responsible for strategic decisions, and the national Government. If a group of my constituents came to me and complained about the continuing road delays on the A 19—there is a road bridge that should never have been built and which has been constantly under repair since it was started—what would I say to them? Should I say, "I'm sorry; although I'm your Member of Parliament, you really should go and see the local main purpose authority"? Or do I go and see the regional government, in which case I will need to get hold of the regional councillor for the area and bend his or her ear? Or do I go and see the Minister, who would promptly tell me that the strategic authority for roads in the north of England falls under the responsibility of the regional government? Instead of simplification, I see obfuscation of the issue as different layers of authority vie with each other for authority over, say, the A roads in the region. I see people arguing about who is responsible. Even now there are great arguments between Cleveland county council and Stockton borough council or Middlesbrough borough council about who is responsible for the level of the poll tax, or for the way in which the housing department has done something, or for matters relating to the fabric of schools. The imposition of an even more remote layer of government will lead to further complication.

If the hon. Lady is so keen on regional government, I strongly suggest that she goes up to Scotland, which is not very far from where she lives, and talks to people about what they feel about it. My Scottish relatives, of whom there are many, are deeply unhappy about the disappearance of the old traditional counties with which they felt they could closely identify and about the introduction of regions such as Borders, Central, Highland and other massive areas. They do not like them because they feel that they are too remote and because they do not know whom to ask about the provision of services.

Page five of Labour's document mentions the development of regional centres. Interestingly, it states that Edinburgh is an example of the success of regional financial centres. I spent some time studying the centres with a Scottish bank, so I can tell hon. Members—exclusively for those who wish to know—that Edinburgh's success as a financial centre has nothing to do with regional or developmental authority, but is 100 per cent. down to the enterprise and ingenuity of Scottish entrepreneurs.

Let us look at the tangled web of bureaucracy that we shall have if the Labour party wins the next election. First, Labour will be our landlords, will run the English Industrial Estates Corporation and will collect the business rates. Secondly, it will be the regional investment bank, which will simply mean that instead of proper decisions being made on what is best for the future needs of the region, it will once again be in hock to its union paymasters. Thirdly, it will wind up the urban development corporations, which have been the most successful entities in achieving the economic regeneration of the north-east.

The hon. Member for Gateshead, East said that the Government had failed to provide for the north-east, but let us see what my predecessor—hon. Members will recall that I defeated him at the last election when he was an Alliance Member of Parliament—has to say about it. He is the new chairman of the Teesside branch of the CBI. He said: The North is poised to make a further stride down the road in its development as a modern, forward-looking, prosperous region. Even Labour-controlled Cleveland county council agrees that there have been successes. It says: Cleveland has seen a great deal of change in the 1980s. More of its people own their own homes. They have higher incomes and live longer. They have more choice as consumers, and demand better service and higher quality. The hon. Member for Gateshead, East relied much on the views of chambers of commerce, so let us see how the Association of British Chambers of Commerce feels about taxation being handed to the northern region. It said: The Uniform Business Rate gives vital benefits which businesses can't ignore. Predictability in rate bills. What will happen to that under a Labour regional authority? I suspect that we shall be back to the bad old days when, in March, companies did not know whether they were going to get slapped for half their profits. The association further says: A cap on rate poundages increases to an inflation level or less … A level playing field in the effect of rates on business costs removing distortions between neighbouring areas. The chief unfairness of the previous system was that businesses in the North and Midlands had for many years paid more than they should. This wrong is now being put right. I remember campaigning hard for the uniform business rate because I did not understand why a shop selling jewellery in Stockton high street should pay more than a jewellery shop of the same size selling the same items in Bond street. That absurdity resulted from our having two expensive layers of Labour government, which stopped at nothing in milking business to pay for its excessive spending promises but found, to its surprise, that businesses were moving to neighbouring areas. How does one explain the fact that companies in a thriving business park in a nice quiet market town such as Northallerton in North Yorkshire are called Yarm Engineering or Stockton Fabrication? Those businesses have been driven out of Stockton-on-Tees and Teesside, a main industrial manufacturing area, by the high cost of maintaining their plant and factories in the centre of the area.

We still have not heard from the hon. Member for Gateshead, East or her party where the regions will be. We have heard that there will be consultation on boundaries. We have not been told where their capitals will be, which will be a highly contentious issue. Would any Opposition Member like to hazard a guess on whether Ipswich or Norwich would be the regional centre for East Anglia? I wonder what the people of Norwich or Ipswich would say about it. Should Shrewsbury, Taunton or Plymouth be the capital of the south-west region? I can foresee nothing but grief in such decision making.

Mr. Hind

What about Liverpool or Manchester?

Mr. Devlin

I should be interested to stand on the sidelines and watch the blood running down the walls as that is sorted out between the two ruling Labour groups.

I am interested to see that the hon. Member for Dagenham (Mr. Gould) would not balk at the prospect of having to sort out those knotty problems. He said that that is not just an early priority but an immediate one. How immediate? Would it be done in the first year of a Labour Government, in the first Labour Parliament, or in two or three terms, or will there be an exchange rate mechanism-type growing process whereby we get used to the idea over 10 or 15 years and the Scots can have it immediately because they are culturally and politically ready for it, but the people of the north, who are not that bothered, will have to wait 15 years until they see the advantages that will supposedly accrue to Scotland and then will mount the barricades and demand the same for themselves? It is clear that no one in the northern region is demanding that yet.

Labour wants to set up a Parliament in Scotland, where public spending is 23 per cent. higher per head than in other parts of the kingdom. If it had to finance that by raising its own taxes, Scotland might become a socialist state along Albanian lines with high taxes, centralised planning and everyone living in council houses and enjoying the beauties of the socialist system in its most untrammelled form. The people of the north-east might look across the border, full of envy, and say, "Not for us, thank you very much, please rebuild Hadrian's wall."

I can foresee that scenario. What will the Labour party do? As the hon. Member for Dagenham says, it will have to begin such a system in the first year of a Labour Government. Unless it starts us down that road fairly quickly, the people of the north-east and the other regions will not want to follow.

I should be interested to hear how that will be paid for, because in addition to giving £200 million a year the Labour party is committed to regional development agencies, to investment in first-class infrastructure for the area, high-speed rail links and other exciting prospects for the region. It is quite happy to hand the promises out, but not so happy to tell us how they will be financed.

That perhaps gives us some idea of what the regional taxation profile will look like. I rather suspect that the present regional disparities to which the hon. Member for Gateshead, East referred, not least the voting disparities, will change as one moves further south. As one goes further north, taxes will get higher as people are more likely to vote Labour. As one goes further south, people will be paying lower regional taxes and will vote Conservative. I suspect that rather than looking north, the people of the north-east will look south and say, "Hang on, why are they only paying such a small amount in the midlands or south when people to the north of us, who are experiencing the full generosity of the Labour party's form of government, are paying much more?"

I do not think that the Labour party has anything to crow about, because Labour-controlled local authorities have the most empty homes available and have the highest community charges. I am sure that my constituents are mindful of the fact that not everyone in the country pays £440 in community charge. They were extremely grateful to the Government for stepping in with a £140 rebate because they saw their aunts, uncles, friends, cousins and others elsewhere in the country paying a great deal less. I suspect that if ever the day came when we had the misfortune of the Labour party inflicting regional government on us from Newcastle, those people would be wondering why their income tax or whatever other form of tax that Labour would seek to impose was so much higher in the northern region than elsewhere.

One reason why people in our area consistently vote Labour is that they are told by the Opposition that the whole country owes them a living and that everything that has happened to them—the economic misfortunes of past years—has been inflicted purposely by a Conservative Government. That is the impression that is given and Labour likes to think that one should never say anything good about our region. We can perhaps refer to the superior working-class culture and superior beer, but we are not allowed to refer to the economic or industrial successes. We must sit back and say how awful everything is, blame the Government and say that they should hand out more money to the regions to assist them. That does not mesh with the reports from the region at the moment.

It is interesting that the present recession is much deeper in the south than in the north. Indeed, the CBI northern region economic situation report states: The northern region, one of the last to experience the effects of the recession, will also be one of the first to enjoy the benefits of the recovery. This is based upon the knowledge that Northern business is now genuinely far more broadly based and will be able to respond quickly and positively to future improvements in both national and international economies. The idea of a home-grown recession is ludicrous. I am currently trying to assist a company in my constituency with export credit guarantees. That company is having difficulties exporting overseas because of the sluggishness of other economies—it does not sell its products in this country.

The Minister of State, Home Office (Mr. John Patten)

As someone interested in trying to promote industrial regeneration and further growth in the north-east does my hon. Friend agree that the additional burdens laid on businesses in regions such as his own by the absurd idea of the imposition of a regional tier of government and the increased taxation necessary to pay for that tier would have an adverse effect on local business, would increase costs, would reduce competitiveness and would help to drive business and jobs away from his region?

Mr. Devlin

One of the great pleasures of the north-east is that we attract the second-largest amount of outside investment after Wales. We do so because business conditions in the north of England are excellent and the work force is highly trained. There are many attractions to the area and the Government offer a comprehensive range of incentives and other packages for people who want to invest in it. That is why there are so many Japanese, American and other foreign investors in our area. We rarely hear anything about that from the Opposition.

Mr. Jack Thompson

Does the hon. Gentleman accept that in my constituency there has been no major industry since 1979, except for last year when two British companies sold their businesses to the Taiwanese? Glaxo sold its factory, as did Gresham Lion, and its successor, Dowty, which could not make the business succeed, sold to the Taiwanese. I am not criticising the Taiwanese, because they were better than the British. There has not been any real investment in that region since 1979.

Mr. Devlin

When I spoke to the Conservative association in the hon. Gentleman's constituency I heard only a litany of problems caused by the Labour-controlled council, which has done absolutely nothing to promote the area.

Let us consider the region as a whole. The chairman of the Northern Development Company—Sir Ron Dearing —said in The Northern Echo on 17 September: I am not saying the recession hasn't hurt. It has. But in terms of the rest of the country, we have survived better than anyone". The road to recovery is now clear. A recent regional survey by the accountants KPMG Peat Marwick McLintock concluded that small and medium-sized firms, which have been encouraged by the Government, would set the pace, blazing a trail for others to follow. That view is shared by the assistant regional director at CBI Northern, Mr. Neil Etherington, who said recently: The North East will pull us out of the recession. And I do believe, because this region's economy has a broader spread, that it will be the small- to medium-sized companies which will lead to economic recovery".

Ms. Quin

The hon. Gentleman refers to Sir Ron Dearing, the chairman of the Northern Development Company, but is he aware of his recent speeches in which Sir Ron lamented the lack of a structure in the north-east which, he was worried, would weaken that area in Europe in the coming years?

Mr. Devlin

Sir Ron Dearing heads one of the most successful regional development companies in the country. He is entitled to his view, but I do not accept the case—and the Labour party has yet to make it—for imposing a very large and costly bureaucracy on people in the north-east of England. If Labour wants economic regeneration and redevelopment, why cannot it support the development corporations that already exist? Some hon. Members from Newcastle and Teesside have nothing but ill to say about development corporations. One of the startling omissions from the maiden speech of the hon. Member for Langbaurgh was any mention of Teesside development corporation. That was quite extraordinary.

The CBI also found that more of the region's businesses expected new orders to increase rather than to decrease. It said: Firms remain optimistic about demand prospects for their industries … Growth is expected in both domestic and export orders. Similarly, it said: Survey respondents indicate that by UK standards Northern investment levels will hold up quite well over the next 12 months. Indeed, it continued: Investment intentions are now worst in the West Midlands and South West and best in the North and … Humberside. When one considers the whole spectrum of economic indicators one finds that the north looks surprisingly healthy. Unemployment, which is in decline in the north and has declined significantly since 1987, is rising fastest in East Anglia, which is currently supposed to be the most economically successful region.

The survey by international management consultants A. T. Kearney—produced in association with but not by the CBI—reported that businesses in the north were the most optimistic in the country. Figures for receivership were less positive, but entirely consistent with the view that the region has suffered a much shorter and less severe recession than any other. The restructuring that has taken place during the Government's tenure of office has been remarkably good for the region.

The Government's economic role in the north-east—as elsewhere—is to create a climate in which businesses can prosper and, in turn, generate strong and sustainable employment growth. However, in view of the region's deep-rooted difficulties—such as its overdependence on declining industries—the Government have sought to underpin the policies with substantial central support. Indeed, the north-east region has benefited to the tune of more than £3.5 billion since 1979. Much of that public sector support has been designed also to attract investment from private enterprise. Teesside urban development corporation, for instance, is an example of the Government using pump priming to attract private sector money and skills to help in the process of urban regeneration. In 1991–92, the TDC had a budget allocation of £51 million, which it is using to great effect.

If the hon. Member for Wansbeck (Mr. Thompson) wants to know about urban regeneration, he should know that the most exciting urban regeneration project probably anywhere in western Europe is that on the river bank in my constituency. The next time the hon. Gentleman is on the train for Newcastle he should get off at Darlington and I will arrange a guided tour of that project for him. He would be most welcome.

The hon. Member for Wansbeck believes that no inward investment has come to his constituency and, if that is the case, I am sorry for his constituents. However, Dr. John Bridge, the NDC chief executive, said recently: Since 1985 some 25,000 jobs have been either created or safeguarded in the North of England as a result of inward investment. I have great doubts and misgivings about the concept of regional government. I believe that it offers no benefits to my constituents. The Labour party is trying to prop up its popularity in Scotland by seeking to impose a similar solution on the rest of England. We are a happy, contented, compact little country with 48 million people who live together in perfect harmony with their own local, often county, loyalties. Yorkshiremen who currently live under the authority in Cleveland would have no inclination to join the northern region. Geordies and tykes have never got on particularly well—they are always friendly to one another, but they are distinct groups.

I do not believe that the case for regional government has been made. The motion should be rejected.

11.21 am
Mr. Richard Caborn (Sheffield, Central)

First, I thank my hon. Friend the Member for Gateshead, East (Ms. Quin) for initiating this debate, which is extremely timely. When my hon. Friend was a Member of the European Parliament she did a tremendous amount of work to promote not only her region, but the concept of regional government for England. She also did a lot to develop that concept within the European Community. Unfortunately this debate has revealed the narrow and naive view held by the Conservative party—illustrated graphically by the hon. Member for Stockton, South (Mr. Devlin).

Although the single currency and the new powers for the European Parliament continue to grab the headlines, they are not the only issues to be hammered out at Maastricht next week. A new role for the European regions is also on the agenda. During the summit, Heads of Government will decide whether the European regions should be given a greater role in decision making in the Community. No doubt the rest of Europe will say yes to that, but the British Government will, as usual, drag their heels on such a development.

The new article 198(a) to chapter 4 of the draft treaty on the union, on a committee of regional and local authorities, has not been opposed by the British Government. Consultations were held with regional and local authorities on the new article and the Commission submitted evidence to it. On article 198(a) it stated: The members of the Committee shall be elected representatives at regional or local level. They shall be appointed in their personal capacity and shall not be bound by any mandate. When the Parliamentary Under-Secretary of State for the Environment replies to the debate, I hope that he will tell us how the British Government will apportion the 24 delegates from the United Kingdom who will represent us on that new body, the committee of regional and local authorities. Many people on the other side of the English channel believe that that may become an important institution for the future development of Europe. Initially, the committee will be a consultative body, but many of our European colleagues hope that its role will be enhanced.

Given that we have no true regional representatives, I hope that the Minister can tell us how the Government believe that the committee will operate.

Just because the regional dimension has not received the attention afforded to monetary union, that does not mean that it is less important to our future economic well-being. We believe that regional government has proved to be a key economic regenerator of many of the European regions. Our lack of a regional strategy has acted as a brake on our economic development and, in the future, it will be a barrier to competing in the single market.

The lack of fuss about regional policy in the United Kingdom is not in tune with the rest of Europe. The lack of attention devoted to it by the British Government and, in particular, by the British press, in terms of the discussions at Maastricht, is symptomatic of our isolationist approach not only to Europe, but to the development of regional policy.

In every other European country, regional policy has become a hot political issue, particularly in the past decade. In the current debate about Maastricht that policy is worthy of public and Government interest. If there is a move towards monetary union, convergence across the Community must take place. The first part of the mechanism for developing and delivering that convergence will be regional policy.

It is unfortunate that the Government have adopted such a negative approach to regional policy. That was amply demonstrated by the speech of the hon. Member for Stockton, South, as it was by the chairman of the Conservative party who produced a document in July entitled "Regional Red Tape". That document was in response to that produced by my hon. Friend the Member for Dagenham (Mr. Gould) on devolution and democracy. At least Labour's document tried to lift the debate about Europe and the regions and their inter-relationship. It also sought to initiate a debate on how we can start regenerating the north of England and develop a more balanced nation. That would assist all our regions.

The chairman of the Conservative party, the right hon. Member for Bath (Mr. Patten), and the hon. Member for Stockton, South have tried to knock down the political and economic case for regional policy that has been advanced by the Labour party. Unfortunately, all the Government have done is to ask why we did not support the purchase of council houses or the provisions for grant-maintained schools. The level of debate has been poor. The Conservatives have not put forward one constructive alternative to the Labour party document. Those outside the political arena believe that the Government have made a poor attempt to answer some searching questions. Those in industry and those who are concerned about our future in Europe have been disappointed at the level of debate.

Mr. Devlin

The Conservative party's vision on this issue is clear. We want a single tier of local authority in each area. Therefore, we shall establish a local government commission to consider the needs of each area. We shall allow single-tier local authorities to be established within the boundaries considered necessary by that commission. That is a clear policy statement.

Mr. Caborn

I accept that. It is important to consider the role of the Government in terms of economic regeneration, the role of local government and, by implication, the need for strategic levels of government. Those issues were raised by the Secretary of State for the Environment, especially when he was running for the leadership of the Conservative party.

Mr. David Ashby (Leicestershire, North-West)

There is one thing I cannot understand about the Labour party policy. In my area the local district council is Labour controlled. That district authority and I agree entirely on the future of local government. It wants a unitary authority and it wants it to be based upon its present framework. It believes that it should be free to unite with other district councils, as it sees fit, to provide wider services, rather than have them imposed by Whitehall and central Government. In my part of the world, therefore, the Labour party is agreeing not with the hon. Gentleman, but with the Conservative party.

Mr. Caborn

I do not know to which local authority the hon. Gentleman is referring, but may I try to explain the context of the debate to him, because it seems to be going straight over the heads of Conservative Members, as was evident in that intervention which I shall now try to answer.

What the hon. Gentleman's local authority is saying is absolutely right. There will be all-purpose authorities for the delivery of services. I do not think that there is any disagreement between us on that. Indeed, the Secretary of State for the Environment has said that we should remove the county council layer of government and move down to all-purpose districts, the size and boundaries of which have yet to be decided. It is clear that such districts should be the point of contact with the local population. That is the point at which the services will be delivered. That idea is wholly compatible with the argument about subsidiarity. We are saying that there is a structural weakness in the United Kingdom and that we need a strategic authority, not for providing services, but for developing and co-ordinating—

Mr. Ashby


Mr. Caborn

Perhaps the hon. Gentleman will allow me to develop my argument and I shall then come back to him.

Such a strategic authority would have an economy of scale of about 5 million people. If the hon. Gentleman looks at what has happened in Europe in the past decade —in France, Belgium, Denmark, Sweden and Italy—he will see that all those countries have devolved their powers down to regional authorities. On average, their economy of scale is about 5.7 million people. Those countries are co-ordinating their industrial and economic strategies at the regional level. We are not talking about removing powers from the layer of government below local government and sucking them up; we are talking about taking power from the centre.

I stress that a council of the regions will be agreed next week which will probably become operative in January 1993 and on which the regions of Europe will be represented. The regions will then have some control and not only over such things as regional grants. They will start to have an impact on the regulations and directives that come before the House and our Parliament and become part of our statute book. We must understand what regional government is all about. It is not local government; it is part of the government of the nation.

Mr. Ashby

I am grateful to the hon. Gentleman for giving way, because I had misunderstood him a hit. Does he agree, however, that what my local authority wants is a wider authority for strategic services, for the delivery of those services, and that local authorities can group themselves as they see fit in providing what may be different services, but that what the hon. Gentleman wants is another tier of central Government, which will impose on the regions what central Government do? Is he not seeking to impose another burden on our people? Is not that what we are really talking about?

Mr. Caborn


Mr. Ashby

I thought so.

Mr. Caborn

If that is the description of regional government, yes, but the hon. Gentleman has highlighted the negative part and, unfortunately, that thinking is prevalent among Conservative Members. The Opposition take a totally different attitude. Obviously, the hon. Gentleman will argue his case and people will come to a judgment—that is what debate is about—but our judgment is that there is a need to bring decision-making nearer to the people. The hon. Gentleman may choose to ignore developments in Europe, but what has happened there means that a different form and structure of government, a newly developed decision-making arena, will result from the Maastricht discussions. I am asking the hon. Gentleman whether he wants to go down that road. This country has so far gone in the opposite direction.

I shall seek to show clearly where the hon. Gentleman went wrong on public expenditure and how other nations, which are much more balanced, have been able to develop their real economies, their manufacturing bases and their wealth-creating processes so much more effectively than we have been able to do in the United Kingdom. Regional government has provided the framework for other European countries to develop the entrepreneurial atmosphere and spirit that are necessary for the development of small and medium-sized businesses.

I hope that I have answered the hon. Gentleman's question. We are not talking about local government; we are talking about a strategic layer of government. That layer would not be an imposition; it would be democratically accountable. It would encompass the many quangos that the Government have set up in many areas, the operations of which have been highly criticised by the Public Accounts Committee and the Audit Commission. We would bring all that together in a strategic authority, which would not be dictated to by Whitehall and the mandarins down here.

A few weeks ago we had a classic example of that in a debate on the Cardiff Bay Barrage Bill. How do I, as somebody from Yorkshire, know what Cardiff wants? It would have been far better if a decision on that matter had been taken in Wales. Such decisions should not be made here. We criticise the European Commission for its interventions about our roads and about the development of the channel tunnel, but the people of Wales and of many of our regions should also say, "We should be making our own decisions, not people down there in London with little or no interest in us." What is even more frightening is that the decision-making down here—I am not talking only about the Government, but about the media and the City of London—is conditioned by the thinking of the south-east and of London in particular. In many cases, such thinking has no bearing on what is happening in the regions. Many industrialists and people from local authorities on both sides of the political spectrum are saying, "We should have more power over the decisions that affect our lives", instead of being subject to arbitrary decision making from institutions down here. I repeat that in the past 10 years there has been a devolution of power down into the regions right across Europe, not only inside the EC.

I was interested to read an article on local government financing in the Financial Times of Monday 28 October by the Controller of the Audit Commission, Howard Davies. Referring to the Government's Green Paper, he stated: The word 'Europe' does not appear in the green paper on introducing unitary authorities. Yet the European Commission is open about its desires to create a Europe des regions. There's a European Assembly of the Regions and regional social policy is oriented towards regional needs. It's certainly arguable that without some sort of regional structure, the UK will be increasingly disadvantaged with no way of influencing Community regional policy. My feeling is that we probably need to create a set of interlocutors on a regional basis who can have the right kind of influence on EC regional and social policies. That interview was part of an in-depth report on a person who is well-respected in the House.

Mr. Ashby

I was interested to hear the hon. Gentleman say who wrote that article. The hon. Gentleman has completely failed to understand that he has not yet asked himself the question, "What is a region?" Throughout Europe, regions have evolved into states only recently. Europe has a completely different concept from this country of the question, "What is a nation?" It is completely different in Germany and France and throughout Europe where there are new nations, most of which are not more than 100 years old. Those nations are made up of regions. We are talking about a return of local nationalism, which is something that we do not have over here. That is the difference. The hon. Gentleman is trying to impose regions here, whereas Europe has regions.

Mr. Caborn

I am not trying to impose anything. I am trying, within the context of the debate, to identify how we can move forward from the 1990s to the 21st century, the problems that we as a nation will have to face, our relationship with Europe and how we can learn from the nations that we have said are the best, such as Germany, and develop a sound strategic regional policy. We need a delivery mechanism to deal with many of the issues that have been raised, such as convergence.

I shall come to what the Audit Commission has said. It answers some of the questions posed by the hon. Member for Stockton, South.

Mr. Devlin

Will the hon. Gentleman give way?

Mr. Caborn

I wish to go through the argument and then I shall willingly give way to the hon. Gentleman.

In 1989 the Audit Commission published a series of documents on the local government dimension of urban regeneration and economic development. The critical part of one of the reports said that the Government had some 30 or 40 different schemes in operation. It said: The Commission reported that individual programmes such as Urban Programme assistance from central government were unnecessarily bureaucratic. The commission also said that the Government's many schemes, including the urban development corporations, were a 'patchwork quilt' of complexity and idiosyncrasy. That was further underlined by the Coopers and Lybrand Deloitte report which referred to "confusion and uncertainty" and "absence of co-ordination."

The Public Accounts Committee also examined the wide band of assistance for regeneration, especially of the north. It spoke of insufficient liaison between departments at national level. It described the multiplicity of bodies and initiatives as potentially a recipe for confusion and overlap. I ask hon. Members to compare that with what is happening in Scotland and Wales. The simple co-ordination through development agencies in both Scotland and Wales does not receive the criticism that the Audit Commission has levelled against the system in England.

We must consider the way in which some Departments operate. We have the most departmentalised approach to many of the complex issues that we seek to resolve. There is in-fighting in Westminster and in the regions. That was most graphically illustrated when Sheffield was arguing about an urban development corporation. I do not want to go into that argument; I simply wish to illustrate my point.

The chamber of commerce, the local authority, the trade unions and the Members of Parliament came down to London to see the Secretary of State. We all sat on one side of the table and the Secretary of State sat on the other. The person who sat at the side of the Secretary of State was the regional officer from Leeds. As he saw it, his role was not necessarily to support the region but to be the earpiece and branch line for the Secretary of State. That is where the influence is and remains. That branch line of decision-making is there.

Opposition Members argue, with a great deal of support from industry and commerce, that such decision-making should be at a lower level.

Mr. Key

I shall deal in my speech with the importance of the regional offices. The hon. Gentleman has got the wrong end of the stick about how they work. The article in the Financial Times to which the hon. Gentleman referred was a good article. He also quoted from Audit Commission reports, but he has not quoted from the Audit Commission response to our consultation paper on the structure of local government. As he said, it makes some criticism of the European dimension, but in paragraph 8 headed "Europe" it also says: While local government structure in the UK cannot be determined by the nature of European structural funds and the case for regional authorities with power over service delivery has not been made out, the European dimension must nonetheless be considered in the longer term. That is a slightly different gloss.

Mr. Caborn

I am sure that the Minister will recall that I said a few moments ago that in our view the role of regional government is not delivery of services. We believe that that should go to the lowest level. Regional authorities should be strategic bodies to co-ordinate and enable. That is what happens in many other European countries. I do not necessarily disagree with the Minister. Where it is possible to deliver services at the lowest point, one does just that. That is why we examine the expanded role of all-purpose authorities. Even the Government accept that all-purpose authorities will have a wider role; but the local authority delivers services.

There is a major difference of opinion about the centralisation of government and the state. The Government want to continue to centralise. That was illustrated during the Conservative party leadership contest in an article in The Sunday Times of 18 November 1990. The right hon. Member for Henley (Mr. Hesletine), the present Secretary of State for the Environment, laid out how he saw the development of local government. He said: I know enough of our local government to know that if there is a cash pool out there, they go for it. Within no time at all, the directly elected mayor of some industrial town or city in the north would spot that if he came along with imaginative ideas for raising standards and delivering services, he would get support, he would be the one that would claim the credit and the central government would be proud to let him have it. This would give value for money, a competitive sense between community and community and a new surge of local independence and pride. That illustrates the thinking of the Conservative party. It must always be community against community. There is a big pot of gold down in Westminster for which we all scrabble. We all get into the trough and try to grab a bit for ourselves. What a way to run a country—an advanced industrial nation! The Conservative party's attitude is epitomised by that statement and followed through by the Audit Commission.

Is not it more sensible to say that we have responsible people out there with whom we have developed partnerships? We should create a synergy of activity in which local small and medium-sized companies can develop, technology transfer can be operated and academic institutions can be brought in. One of the great incentives for development in Germany has been the ability to bring academic institutions into the real world of production to allow technology transfer, aided, abetted and assisted by the Landers and the local authorities.

In Britain, public sector-led investment has taken place down the M4 corridor and in the south-east. It is not surprising that there has been such growth in the south-east. It has been aided and abetted. That has been illustrated. The points that have been made about public expenditure are as far from the truth as one can imagine.

Let us look at the figures for central Government expenditure per head of population in the north and the south. In 1989–90 expenditure in the north of England was £1,707 per head. In the south-east of England it was £1,876 per head. The figures for expenditure by the Ministry of Defence and the Departments of Trade and Industry and Transport in 1989 were £248 per head of population in the north of England and £546—almost double—per head in the south-east. That is the amount of public money per head of population spent on overheating the south-east of England. That imbalance has become progressively worse in the past decade. In the past eight years, the amount has increased by 15 per cent. in the north of England but by 24 per cent. in the south.

Mr. Key

The hon. Gentleman puts his finger on an extremely important issue which has absorbed an enormous amount of my time in the past year. I should be happy to have a five-hour debate on this part of his speech alone, let alone the rest of regional policy and government. The real problem that Governments always face anywhere in the world is how to distribute central funds to regions and localities as far down as possible. The hon. Gentleman appears to argue that it would be better to use a method based on population, irrespective of need or possibly even a sensitive formula-driven system which would take account of different needs of different regions. That is exactly what the standard spending assessment system has been designed to do. It has been refined over many years. The hon. Gentleman's party does nothing but criticise it. What is the hon. Gentleman's answer then?

Mr. Caborn

As the Minister well knows, we have had this argument about standard spending assessments many times—whether on the police authority, transport or the local authority. I could debate standard spending assessments for five hours.

With no disrespect to my colleagues from the north-west, how can one have a position in which Manchester gets 35 per cent. more than Sheffield or South Yorkshire? Why is it that Rotherham, Doncaster and Barnsley have been charge-capped? Why is the standard spending assessment for South Yorkshire considerably lower?

The figures that the Government used for their calculations were based on the 1981 census. There have been massive changes. If that is the extent of the sensitivity of data used by central Government for determining a major part of public expenditure, I suggest that they find a different calculation and that they do not bring the poll tax into it either.

Mr. Devlin

If people in the regions blame the Government for the inequitable distribution of resources from the centre, what will happen under regional government? Presumably, as I outlined in my speech, there will be an argument about which town should be the regional centre, and the other towns will feel that they are not getting their fair whack of resources from for instance, Newcastle, Leeds, Manchester or Liverpool. There will be ill-feeling between the two. Will one area, if it is composite, be allowed to opt out of the regional government and go to another, or will it have to stay and take its medicine?

Mr. Caborn

The hon. Member for Stockton, South always has centralised thoughts. Things have to be centralised in Newcastle, Leeds or in Westminster. Has he ever thought that regions that contain about 5 million people could devolve within the region, not unlike the Germans have been doing for the past 40 years?

North Rhine Westphalia and the other Lander try to devolve within their regions. Funnily enough, they have a co-operative attitude. What is happening in Brussels? If there is a problem or a new directive or regulation has been introduced, the German Lander meet their representatives —whether they are Christian Democrats or Socialists—at the regional offices which have been set up in Brussles. The problem will be brought to the attention of the Lander and there will be a co-operative approach to it. They are not battling against each other, but battling "Germany Limited". It is about time that we got rid of the mentality that everyone must be at each other's throats and that there has to be confrontation, whether in industrial relations or with one community fighting another for the pot of money. We should think how we can best maximise the wealth of our nation and its talent, instead of setting one community against another.

For the past 10 years everything that has come out of the Conservative Benches has been confrontational or has played one community off against another. The great Secretary of State sits in his plush office in Whitehall saying, "I've got my pot of gold", à la right hon. Member for Henley. Until there is different thinking on the Conservative Benches we shall continue to be confined to the margins of Europe.

The facts and figures are clear, if one compares any of the main economic indicators—GDP is down 2.3 per cent., manufacturing output is down 5.3 per cent. I wonder at the cheek of Conservative Members talking about small and medium-sized businesses, saying that one or two have moved out of their constituencies, when 200 of them are going under each day. In the past 12 months there have been 45,000 business failures. They are not merely moving out; the Government are putting them out of business.

The hon. Member for Stockton, South told us that one or two businesses were moving out. He ought to have an audit of his area and find out how many have gone out of business.

Opposition Members argue that there must be some restructuring of our government if we are to bring it back into balance. I have quoted the public expenditure figures. Another indicator is unemployment. An article by Edward Balls in the Financial Times on Friday 8 November, entitled "Recession cannot close the divide", said: The north-south divide is one of the few realities of economic life in Britain that were more deeply entrenched at the end of Mrs. Thatcher's premiership than at the beginning. The divide has appeared to go into reverse over the past year —but appearances can deceive. The frontiers of prosperity may be becoming blurred; but regional economic discrepancies remain as stubborn as ever … One result of the growing divide in the 1980's has been much of higher unemployment in the north than in the south … The reason is the collapse of manufacturing industry in the north in 1980–91. By 1985 the regional spread of unemployment rates was wider than at any time since the 1930's. The difference in unemployment rates between the north and the south increased from 1.4 percentage points in 1974 to 6 percentage points by 1986. That is an indictment. The hon. Member for Stockton, South knows the problems that that has created. Those are the statistics, but considerable deprivation results from them. Take any economic indicator—they all show a massive imbalance. We must start to tackle that and consider how we lock into Europe in a more effective way.

It was also interesting to read the CBI report "Competing with the World's Best" which was rushed out to demonstrate that it is still acting for industry. It gave the correct analysis and asked for more training, more innovation and more stability in terms of investment. However, the CBI did not have the guts to say how those could be delivered. On the one hand it was saying that it did not want government—whether local, regional or national—to pick winners or losers, but on the other it said that it wanted a framework within which industry could grow. It did not say what the framework would be, and how it would operate. The CBI's analysis was correct, but it did not offer a solution. At the time, the Financial Times said that the CBI ought to start getting its act together, rather than being an apologist for the Government, and should say what British industry requires and how it can be delivered.

I know that a number of my hon. Friends wish to speak. My speech has been longer than I anticipated as there have been a number of interventions from the Conservative Benches.

The discussions in Maastricht next week will have an impact on our nation into the next century. We shall be making decisions for our kids and grandkids. The Government must start to face up to those realities. We must ask ourselves seriously why we are the most unbalanced nation in the European Community—we still have an overheated south-east and an under-utilised north. How can we start bringing the country back into balance? How will we play our role in Europe as far as the regions are concerned? It is becoming patently obvious that the Government must change their thinking about how we lock into Europe and influence it. One of the mechanisms must be some form of decentralisation to regional government because the new institution will be set up, will become influential and will ensure that it impacts on regulations and directives.

Secondly the Government must give some credit to, if not agree with, people in the regions who believe that with a looser arrangement the regions could deliver better economic growth and quality of life for their people. They ought to be given the right to be able to represent their people in Brussels without going through a centralised Department of Trade and Industry. We ought to be able to ensure that we have regional representation in Brussels, as other countries have. Spain came into the Community in 1986 and by 1988 every region in Spain had set up an office in Brussels. They were set up not by public funds but by private funds, in co-operation with local and regional authorities.

We are on the margins of that type of decision, but we are not influencing it. That makes this debate even more important, not only in terms of subsidiarity, in which many of us believe, but in terms of how Britain can begin to have real influence on some of the major decisions that will be made in the coming few years. We must resolve that problem not simply for ourselves and our children but for our grandchildren.

I hope that the Government will consider the issue in that context, rather than in the narrow-minded way they have been looking at issues nationally, playing one area off against another. Such a form of administration will not and cannot work, so we must have a different form of government in Britain.

12 noon

Mr. A. J. Beith (Berwick-upon-Tweed)

I hope that when we get regional assemblies, we shall dispatch our business reasonably quickly and manage to get through more than three speeches in the first two and a half hours of debate, which seems to have been our rate of progress so far today. With northern determination, I am sure that in our region we will get through the business promptly.

I welcome the motion and congratulate the hon. Member for Gateshead, East (Ms. Quin) on choosing the subject and on putting it forward in terms which my hon. Friends and I warmly endorse. Having regional assemblies and devolving power from central Government to the regions has been the policy of the Liberal party, and then of the Liberal Democrats, for nearly 50 years. We have argued consistently for it time and again.

I welcome the change that seems to have taken place in the Labour party on this issue in the intervening years, since the 1970s, when it was in government and set about the task of providing devolved government in Scotland and Wales. Labour Members were driven to that task by electoral considerations and that led them to misunderstand how they needed to do it and the revenue-raising powers and electoral system that would be necessary.

At that time, northern Members were among those who put blockages in the way of achieving devolved government for Scotland. They were divided between those, such as the hon. Member for Durham, North (Mr. Radice), who was in his place earlier, who were genuinely in favour not only of devolution but of regional government in England, and those who were violently opposed to the whole idea of devolution for Scotland and any part of England. They were opposed to the lot.

It was a pity that at a time when we were pressing the Labour Government to introduce not just devolution for Scotland but powers for the north of England as well, those Members did not use the bargaining power that they had in the Labour party to say, "Our support for devolution for Scotland, about which some of us may not be happy, will be conditional on getting a deal for the north of England at the same time." That was a missed opportunity.

When Conservative Members talk about the regions of England as though they do not exist, they are ignoring the practice of their Government. The Government are in favour of regional institutions, so long as they appoint and control them and tell them what to do. They are opposed only to elected regional institutions. They are prepared, for example, to have regional health authorities, so long as they appoint all the members and make sure that as many as possible are card-carrying members of the Conservative party. They are prepared to have substantial regional offices of Government Departments—such as the shared offices of the Department of the Environment and the Department of Transport in Newcastle—so long as the orders for what those offices do are given by Ministers in central Government. The Government are perfectly prepared to see regional institutions of various kinds develop—indeed, they are prepared to co-operate with them—so long as there is no elected element about them. If there is anything elected, such as local government, their objective is to reduce its powers as much as possible and restrict its freedom to act independently on behalf of its region.

That is at great variance with the practice in other countries. It will not do for us to be told that this is a small country or that the affairs of one part of a region do not impact on another. I was amused to hear the hon. Member for Stockton, South (Mr. Devlin) arguing that his part of the northern region had nothing to do with the rest of the region. Only yesterday, during Home Office questions, there was a question about the Northumbria police authority, the area of which the hon. Gentleman does not represent any part. But I welcomed his asking a question in which he pointed out that the Northumbria police spent much time getting bodies out of vehicles involved in accidents on the A1, in my constituency, because of the inadequacies of that road. He rightly perceived that the A1 in the north of Northumberland was an important strategic road from the point of view of the whole northern region, including his part of it. He was taking a genuine interest in a regional matter. He cannot now pretend that there are no such issues, when he took part in discussing one of them.

People in the north of England resent having so many decisions about their affairs determined by people in London. It is a constant theme which people raise with me. It is not true to say that people do not talk about regional needs. They never call it regionalism; they just say, "Why should somebody in London decide to ship away the sand from the beach at Druridge bay in Northumberland?" They wonder why someone in London should have been able in past years to say, "We do not care what local people think. We, central Government, decide that that sand can be taken away." That is precisely what happened. The decision was taken centrally. Why should someone in London decide that we do not need any more houses in Alnwick or in other towns in the north-east of England when people locally can perceive the need? It is not good enough for decisions of that sort to be taken centrally.

I see the Minister wagging his finger at me as I speak about that local housing project. He recently came to visit a revitalisation project at a housing estate in my constituency. It was not the building of new houses but a revitalisation project and an extremely welcome one. Again, it is extraordinary that decisions about whether we could have such a project had to be taken in London by Ministers centrally. I do not mind the Minister coming to my area to see what is happening there—and perhaps taking some of the credit for the fact that the Government allowed the project to go ahead—but what system of government is it under which the decision whether a family in Elm street in Alnwick should have their kitchen renewed must be taken centrally?

Mr. Key

The hon. Gentleman is adducing a respectable argument, but I invite him to appreciate that the decision is taken in London because United Kingdom taxpayers' money is funding the project. Is he arguing that his regional government would have tax-raising powers as well, in which case it would be a different argument from the one being argued today?

Mr. Beith

Any regional government scheme, in our submission, requires tax-raising powers and an equalisation mechanism. Those two components are an essential part of it. It does not make sense to us that decisions of such detail affecting, for example, a revitalisation scheme in Alnwick should have to be taken by civil servants in London, who must assemble the necessary information to ensure that it is a right decision to take.

As hon. Members have pointed out, Britain's attitude in this matter is uncharacteristic of the rest of the Community and much of the rest of the world. We have the clear example of Germany, which we advised after the war. We pressed the Germans to set up a decentralised system of government, just as we told them to have a fair electoral system, to reform their trade union system and to give workers participation in industry. They did all those things and now people such as the right hon. Member for Circencester and Tewkesbury (Mr. Ridley) complain about the Germans being more successful than we are. They took the advice which we gave them—advice we never took ourselves. Apart from Germany, countries with a long centralised tradition, such as France and Spain, are also now using more regional devolution and creating institutions to ensure that decisions are taken more locally.

Support for the development of regional assemblies is stronger in some regions than in others. It is obviously stronger in the north, in Yorkshire, in Cornwall and in London, which lacks any voice for Greater London. I do not regard that as an obstacle to allowing regional government to develop. It is not necessary to obtain total evenness and complete bureaucratic tidiness. Some regions could proceed before others to having full-scale devolved government. There is no serious obstacle to that.

It is instructive to remember that the so-called West Lothian question was advanced by a Labour supporter who was passionately opposed to there being any devolved government in Scotland. It is a nice intellectual device, but it does not represent an argument for denying power to people. In a family, one does not say to a member of the family who is older than the other children, "You cannot have control over the way in which you spend your pocket money" because another member of the family is neither old nor wise enough to be given that power.

It is not reasonable for parts of the country that have a good case to have the powers to be denied them because others do not see that case or do not feel that they need to develop in that way. I believe that once the system develops, most regions will want to follow the north and others in the vanguard, but any unwillingness on the part of some regions is no argument against the north.

Supposed problems about Members being able to ask questions about matters affecting some parts of the country that are devolved are not new to the House. They existed throughout the history of Stormont and still exist in relation to the police. There is no devolved police authority in London, but there is a devolved police authority in every other part of the United Kingdom. It is therefore possible for an hon. Member to ask a question about the Metropolitan police force in the House, but not about the Northumbrian police force because the system is different. The House does not fall apart because of it. It is not a national constitutional crisis, but a recognition of different ways of proceeding. I believe that there should be a devolved police authority in London, but the fact that there is not and the discrepancy in the way police affairs are handled have not created a problem for policing in Northumbria or a reason to deny those powers to areas that have a devolved police authority.

As the hon. Member for Sheffield, Central (Mr. Caborn) said, regional government is not a substitute for, alternative to or part of local government. The case for regional government does not rest on taking powers away from already denuded local authorities, some of which are too large to provide reasonable local government for the areas that they represent. Previous local government reorganisations, not least those carried out by the Conservative party, have produced local government areas that are much too large and unwieldy. I welcome the fact that the Government have now accepted that they should consult local communities much more widely to establish the future pattern of local government. No local government powers should be taken over by regional government. Those powers should be exercised at a genuinely local level and, in many cases, more locally than at present.

The object of regional government is to take power away from central Government—our excessively centralised system—and to have those powers carried out at a much more regional level. So many of the policies currently carried out by central Government or their agents at a regional level, such as housing, health, social services, roads, public transport, education, training, planning, water supply monitoring, tourism and recreation, should be carried out under the democratic accountability of regional assemblies. The existing regional structures in our cities—the outposts of central Government Departments—should in future be accountable to the elected regional bodies.

Another key feature is that a written constitution should provide a basis for regional government. Shortly after the Government abolished the GLC, I was travelling in the United States. People there constantly asked me how the Government could abolish London. They could not understand now the power of an area could simply be taken away and they asked whether we had constitutional safeguards to prevent that. There are no such safeguards, agreements, understandings or conventions to prevent the Government from taking over every single power of local government tomorrow. The Government have already gone a long way in that direction.

That brings me to the word that the Government find so discomforting in the Maastricht treaty—the dreaded word, federalism. I now know why the Government do not like it. It is not so much that they are worried about the transfer of power from Britain to Europe, but that they recognise that the European concept of federalism involves power being decentralised within nation states to their component regions. In all the other countries, there is a clear concept that some powers should be exercised at a regional and local level and that central Government in the nation state should have no right to take them away. That is why the Government did not want to sign the Council of Europe convention on local self-government. They do not like the idea that any part of the country would have powers that they could not snatch away.

That is one legacy of the Thatcher years. The right hon. Member for Finchley (Mrs. Thatcher) could not conceive that voters in any part of the country could vote for and have carried out policies with which she did not agree. She did not conceive that some parts of the country might decide to follow a more socialist or liberal path, or even a more Heathite Conservative or Majorite Conservative path than the path that she wanted to take. The logical answer of any democrat to the possibility of that happening is to go to the region concerned and, with the help of his party, seek to persuade voters not to elect a socialist majority or Liberal Democrat council in the regional assembly. However, the response of the right hon. Member for Finchley was to say, "I won't let them; people will not be allowed to vote for policies which central Government do not like, so we shall make sure that there is no power to carry out those policies". That is not a democratic or federal system, which is why the Government find the word "federal" so uncomfortable.

We need a written constitution to safeguard the autonomy of the regions and nations of the United Kingdom. We also need a fair electoral system to elect regional assemblies. That is important, as shown in the campaign for a Scottish assembly. One reason why the referendum did not achieve the weighted majority required by the Government in the Scottish devolution referendum was that there was no fair voting system. The majority of Scots voted for a devolved Scottish Parliament, but they were denied it because of the artificially weighted majority that was introduced. The majority was not bigger because of fears in some parts of Scotland that one party would dominate the assembly on the basis of the first-past-the-post voting system and that that party would represent one region of Scotland. In a regional system, it is important to have a fair electoral system.

Reference has already been made to the RECHAR row and the fact that money is being denied to communities in the United Kingdom that have suffered from the privations of the decline of the coal industry because the Government will not treat those revenues properly. They will not recognise that those funds must be additional to the expenditure that they have allotted to those regions. I cannot imagine that regional assemblies and governments dealing with the European Commission would have got into such a mess or would have failed to recognise the nature of additionality—that those European funds are designed to be added to existing Government commitments, not replace them.

I know that the Under-Secretary of State has taken a keen personal interest in the matter and today's debate is an opportunity for him to take the matter a little further. He came to my constituency and listened to the views of members of the local authority from different parties, all of whom felt strongly that the area was being denied the help to which it was entitled. If there is a row between Departments, I hope that he will be successful in the pursuit of his arguments and that the Secretary of State will be thrust into the heat of the battle, with all his formidable powers of argument, to deal with anyone who stands against the logical answer to the problem: that he should accept the European Commission's view, clearly expressed by Bruce Milian, that those funds must be additional and that only on that basis can they be paid to the regions.

I am glad that the issue has come before the House today because Britain cannot for much longer stand against the trend of the whole of Europe and the wishes of people in the regions and nations of this country to have more power over their affairs.

12.17 pm
Mr. David Nicholson (Taunton)

It is a great pleasure, for the first time in this Parliament, to follow the hon. Member for Berwick-upon-Tweed (Mr. Beith). I hope that I shall not destroy my prospects or embarrass him or horrify my hon. Friend the Under-Secretary of State if I confess that, some 25 years ago, when the hon. Gentleman was at Nuffield college I received tutorials on local government from him. He is about to see the benefit that I derived in the longer term from those tutorials. I shall not follow him on matters of written constitutions, except to say that most of the horrifying regimes of eastern Europe and the third world all seemed to have written constitutions, which were completely useless in protecting opposition parties, political dissidents or individuals from human rights outrages.

I congratulate the hon. Member for Gateshead, East (Ms. Quin) on raising this interesting and relevant subject.

It is particularly relevant for European reasons because of the important discussions that will take place at Maastricht next week. It is also relevant because of the Scottish and Welsh implications of any debate on the English regions. I also welcome the presence of my hon. Friend the Under-Secretary of State for reasons that I shall make apparent towards the end of my speech.

Earlier the debate seemed to be turning into a discussion on regional government for the north-east. There is an apparent lack of interest in the subject within the Labour party which initiated the debate: at present, one Labour spokesman and two Labour Back Benchers are in the Chamber and we have not heard and do not seem likely to hear from the Labour party's west midlands or east midlands representatives about how keenly the party there supports regional government.

Mr. O'Brien

What about Conservative Members?

Mr. Nicholson

My hon. Friends are absent because they are not particularly interested in or supportive of regional government, for reasons that I shall make clear. The Labour party is in such terminal decline in the southern part of the country that it contains only one representative for the important regions of East Anglia and the south-west.

I believe that there are good historic reasons for regional development in some European countries. Reference has been made to Germany and to the structure which, for very good reasons, we helped to introduce after 1945. The authoritarian central Government in Germany had brought the world into two dreadful wars this century. The allies were determined to break up Prussian-centred authoritarianism in Germany. Others had more drastic plans: the House may remember the Morgenthau plan to reduce Germany to a primitive agricultural country, which would probably have involved reducing the population by half. Fortunately, that did not happen. Before 1871, when Germany was united by Bismarck, Prussia, and "blood and iron", Germany had a considerable regional structure. It was inevitable that the regions of Bavaria, Saxony and others should seek to retrieve their identities when proper democracy was restored.

The history of Italy before unification in the mid-19th century is similar to that of Germany. There was, before unification in the mid–19th century, and still is a massive gulf between north and south Italy not only in economic and social conditions, but on attitudinal matters. There is a growing political movement in northern Italy called the Lombard league, which looks to closer identity with Germany in order to get away from the problems, the expense and, dare I say it, the mafia domination of southern Italy. There are good historic reasons for Italy to have a different attitude to regionalism.

The position is similar in Spain. During the past 150 years there has been great resentment in Spain over central control, particularly under the Franco regime. An inevitable plank in the republican platform in the civil war was the call for greater devolution to the regions of Spain, not only to Cataluna, but to Aragon, Andalusia and Valencia. When the centre left took power in the country in recent years it was obvious that they would implement that policy.

The countries that I have mentioned are much greater in area than England—today's debate is on England. Germany —both east and west—contains 137,000 sq m, Italy has 116,000 sq m, Spain has 194,000 sq m, France has 211,000 sq m and England has just over 50,000 sq m. That great contrast bears out my argument and that of my hon. Friend the Member for Stockton, South (Mr. Devlin) that such regionalism would not be valid here.

Mr. Trimble

Will the hon. Gentleman give way?

Mr. Nicholson

I shall give way now, but I believe that the Chair is anxious that our speeches should be relatively swift.

Mr. Trimble

I shall not interrupt again, but, as the hon. Gentleman was considering size and its relevance to local self-government, perhaps he will explain the position in Luxembourg.

Mr. Nicholson

I would not dream of being drawn into a discussion on Luxembourg, but I hope to refer briefly to Northern Ireland, which is closer to the hon. Gentleman's interests.

France is still the exception to the rule in Europe. A regional element in terms of economic development is emerging in France, but the new regions are very much the old provinces—the great historic provinces of France which were abolished in the revolution and cut up into departements. Therefore, the position of France helps to bear out my argument.

On Europe, I do not support the federalist case. I do riot believe that the majority of my hon. Friends or even—if they think the matter through—other hon. Members support federalism, but unfortunately it has support in other European countries. It would seem to give more powers to Brussels and Strasbourg and, in the United Kingdom, devolve more powers to the regions. Inevitably, that would result in the withering away of the national state and particularly the national Parliament.

It has often been said in European debates in the House that this country has a long and proud tradition of supporting its national Parliament which our European neighbours do not have for the obvious historical reasons that I have outlined. It is important to make that point as my right hon. Friends the Prime Minister and Foreign Secretary are about to attend the vital conference at Maastricht next week.

It would not be in order to refer in detail to matters relating to Scotland and Northern Ireland. There is undoubtedly some political malaise about the Conservative party in Scotland. The top poll for the Conservatives in Scotland was, I believe, in 1955 and there was probably a link between that and the subsequent decline of the British empire and Commonwealth from which Scotland had done extremely well. The Conservative party has not understood exactly what has gone wrong with the Scottish dimension since then. Despite the Conservative victories of 1970 and 1979, there were no similar political effects in Scotland.

I believe that if the Government of my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) had survived in 1974, we would probably have put forward Conservative measures for Scottish devolution. If that devolution is to command support in the House, I expect that proposals for it will have to come from Conservative, not Opposition, Members. We cannot debate those matters today, although I commend to my English colleagues the need to respect the considerable feelings of malaise in Scotland.

If there were ever to be a Scottish assembly, it would be difficult to resist pressures in Northern Ireland to have one there or, alternatively, to have Northern Ireland fully incorporated in the United Kingdom. The present limbo is not satisfactory. I promised the hon. Member for Upper Bann (Mr. Trimble) that I would refer to Northern Ireland.

The relevance of Scotland to today's debate on English regions is that if there were ever to be a Scottish assembly there would have to be a reduction in the number of Scottish Members in Parliament as happened in Northern Ireland when Stormont existed. For obvious reasons Labour does not want the number of Scottish Members to be reduced, hence its anxiety to foist on the English regions assemblies that those regions clearly do not want.

If one of my hon. Friends from the south-east of England were to speak in the debate he would say that there is no way in which a region could be bounded in that area. I am told and my hon. Friend the Member for Daventry (Mr. Boswell) will confirm that in Northamptonshire and North Buckinghamshire business people look several ways. They look towards London, the east midlands, the west midlands and probably also towards Oxford. There is no regional identity in most of the home counties and in the south-east.

Mr. Michael Brown (Brigg and Cleethorpes)

I can underline the difficulty that my hon. Friend illustrates. Even further north in my part of the world, for economic purposes my constituency is in the Yorkshire and Humberside region. For Conservative party purposes it is in the east midlands, but for water purposes the authority is Anglian Water. For electricity purposes we are covered by the Yorkshire electricity board, while for gas we are in the east midlands gas area. For telephone purposes my constituency is in the Lincolnshire telephone area.

Mr. Nicholson

My hon. Friend makes his point perfectly.

Perhaps the Minister would like to reflect on the lovely concept of Wessex and King Alfred. Where would the boundaries be in Wessex and where does one place Hampshire and Wiltshire? Would the three counties in my region of the south-west—Devon, Cornwall and Somerset —form a region, or would the rather bastardised Avon be included? I hope that the Government will speedily return Avon to its pre-1974 status. Would the region consist of seven counties including Gloucestershire, Wiltshire and Dorset? If it did, what about the disparities between those areas and what about the distances? What would be the capital of a south-western region? Some people have been kind enough to suggest that it should be Taunton. If my constituents considered the planning, developmental, housing and congestion consequences of that, I do not think that they would want Taunton to be the capital. Equally, they would not want to be ruled from Bristol and I am sure such an objection applies even more in Devon and Cornwall. Of course, Exeter and Plymouth would make even less effective capitals.

We in the south-west are not attracted to the sort of regionalism proposed by Labour and, I am sorry to say, by the Liberal Democrats. However, in planning matters regional co-ordination, assuming effective local government, is valuable. I shall come to that later. SERPLAN, the south-east regional planning authority, has played a powerful role in the south-east and those of us who are interested in avoiding excessive planning development have found SERPLAN and SANE planning in the south-east valuable. The same is true of the south-west regional planning conference, which meets regularly in Taunton. I hope that the Minister will comment on the role of regional planning conferences because they are an important way forward.

The hon. Member for Gateshead, East made an interesting reference to the role of chambers of commerce. I declare an interest in that because I am an adviser to the Association of British Chambers of Commerce. In that context, English business could be considerably enhanced if our chambers, which expect to remain voluntary, were brought closer to the strength and effectiveness of and played the same role as European chambers. That is the intention of the chamber movement and it is attracting greater support from the Government, especially from the Department of Trade and Industry.

With the exception of Belgium and Ireland, where the chamber movement is weak, all chambers of commerce and industry in the EC have public law status. I have visited them in France, Germany and Holland and I know how effective they can be in advancing and representing business and industry in the areas that they cover. The British chamber movement, together with its continental counterparts, is now giving assistance to the development of the chamber movement in eastern European countries such as Poland, Hungary, Czechoslovakia and even Romania. That will greatly enhance economic development in eastern Europe.

That is relevant to regionalism and to the points made by the hon. Member for Gateshead, East. In effective business, lobbying and developmental representation bodies such as the larger chambers of commerce that we envisage in Britain will be valuable. I am happy to say that the need of filling an important gap in the map is being considered with the proposed development of a Somerset chamber of commerce and industry. That is largely inspired by the training and enterprise council in Somerset with assistance from the Department of Trade and Industry and the Association of British Chambers of Commerce. That would greatly help business in Somerset. Linkage is expected with chambers in Bristol and Gloucestershire which would establish an important sub-regional role. These are important developments and I am grateful to the hon. Lady for mentioning the subject.

Finally, I give my hon. Friend the Minister a warning. My rejection and that of my right hon. and hon. Friends of a regional tier of government presupposes the continuation of the historic counties in retaining certain governmental powers. I do not suggest that they should remain the same as at present. My hon. Friend the Minister knows the views of myself and some of my hon. Friends in respect of the counties of Avon, Humberside and Cleveland. However, as someone who was born in Cheshire and brought up in Lancashire, who married a girl from Devon and now lives in Somerset—I hope that my family will consider themselves a Somerset family, although by some strange quirk of the Post Office, we have a Devon postal address—I am very conscious of the way in which people still identify themselves, particularly those who live outside the great cities, with the historic counties, which in most cases go back before the Norman conquest.

The boundaries of the counties of England—apart from some interference in 1974—have their beginnings in the days of King Alfred. They are of the right size to be governed and they engender fierce loyalties.

I referred earlier to the effect of the French revolution on the historic provinces of France. I should be concerned if a Conservative Government or the Conservative party were to consider sweeping away all those historic counties. There may be pressures in some areas for districts to take over the role of certain counties. I appreciate that districts, with their responsibilities for housing, waste disposal and other community services are closer to the elector, but let us not argue against the role of counties in some educational matters, social services and planning matters in particular. I referred earlier to regional planning conferences.

If we swept away the historic counties, which I believe is both Liberal Democrat and Labour party policy, it would be difficult to resist pressures for a regional tier to interpose between the smaller-scale districts—such as those covered by Somerset—and central Government. I do not believe that the House would want all the powers and roles that counties currently have to pass to the centre. Nor do I think that it is practicable for those powers and roles all to be devolved to district level.

We are not attracted to the idea of regional government. The further from the north-west and north-east that we get, the less practicable the concept seems. I made the point earlier, in the absence of the hon. Member for Gateshead. East, that there appears to be some interest in regional government among north-eastern and, to a lesser extent, north-western Labour Members —but not among those representing other areas of the country.

I commend that warning to my hon. Friend the Minister and I look forward to hearing his comments later.

12.38 pm
Mr. William O'Brien (Normanton)

Today's debate is significant and important, because the House does not often have an opportunity to consider English regional matters. I congratulate my hon. Friend the Member for Gateshead, East (Ms. Quin) on introducing the topic and on describing the benefits of regional government in England.

My hon. Friend said that the issue has long been an interest of hers. As someone who was born and bred in the north, she realises the need for a Government—and I assure the House that it will be a Labour Government —to review the English regions and to introduce regional government.

As my hon. Friend said, people in pubs and clubs are not talking about regional government. However, chambers of commerce, local government organisations and other business interests are talking about it. The hon. Member for Taunton (Mr. Nicholson) said that he is an adviser to the Association of British Chambers of Commerce. I intend to refer to reports prepared by the Leeds chamber of commerce and the Yorkshire and Humberside chamber of commerce. I am sure that all hon. Members agree that they are not supporters of the Labour party.

Conservative Members seem to live in the past. Neither the hon. Member for Taunton nor the hon. Member for Stockton, South (Mr. Devlin) referred to the fact that the regions are concerned about the position they will face after the introduction of the single market in 1992. The chambers of commerce are worried about what will happen to industry and commerce in the regions after 1992.

My hon. Friend the Member for Sheffield, Central (Mr. Caborn) referred at length to the need for the English regions to measure up to their European counterparts and for the regions to be given the opportunity to develop economically so that income can be generated there, which would provide them with additional resources. I do not intend to refer to RECHAR. That has already been dealt with adequately. Nevertheless, a way must be found to attract resources to the regions so that they have some say over their own destinies.

Mr. David Nicholson

The fact that I omitted to refer to 1992 was accidental. My point was that the business community and industry would very much benefit from much stronger chambers of commerce, on the European model. My hon. Friends and I envisage that those stronger private sector bodies might take a greater share of economic development operations from county and district councils in order to make them much more responsive to the needs of business and industry. Some say that they do not fulfil that role at present.

Mr. O'Brien

I accept that that was an oversight. Although the hon. Gentleman dwelt for some time on the historic reasons why there should not be regional government, he forgot to tell us why it is important that we should deal with the position in the regions after 1992. Conservative Members talk about minor issues. The hon. Members for Taunton and for Stockton, South both omitted to refer to major issues that need to be addressed on behalf of the regions.

There is nothing more up to date than the report published by the Leeds chamber of commerce and industry dated 2 December. It refers to a number of factors that are causing concern to business people and to those who are employed in the Yorkshire and Humberside region. It refers to international trade and says: With 1992 and the Single European Market almost upon us, businessmen wishing to exploit this huge market need to start thinking in E-numbers—not the controversial food additives but hard-cash Euro-money. Phil Dore, Barclays bank's regional international services manager says: Trading in the EC may seem a daunting propect to the beginner but it is a market that no go-ahead company can really afford to ignore. Europe already accounts for virtually half of Britain's overseas trade and when the single market comes fully into effect towards the end of 1992, that figure is likely to increase. That message is not from a Minister but from the regional international services manager of Barclays bank. If the Government want examples of why regional government should be considered, they should take note of what Barclays bank is doing.

In an article entitled "Leeds' Gateway to Europe", the report of Leeds chamber of commerce says: Not many major cities have one of their major assets more than 50 miles away. That refers to Leeds' connections with the M1 and M62 and the Humber ports and draws attention to the importance of regional dimensions and regional issues. There are not many members of the Labour party on Leeds chamber of commerce, yet its thinking is similar to the Labour party's but miles away from that of Conservative Members.

The report says: The region's big cities show the dramatic turnarounds in the fortunes of rail travel for fairly obvious reasons. As more local industries—such as coal mining—have declined, so more people have been compelled to find work in the cities. Leeds, for example, has emerged as a leading provincial centre for finance and commerce. It is saying that cities such as Leeds and Sheffield should be give more autonomy.

Mr. Rodger Bird, regional secretary of the northern regional Freight Transport Association—I do not think that he will be a member of the Labour party—says: The trouble is that, even before joining the single market, the UK has long suffered from an inertia that prevents policies being realised and all too often when action is finally taken it is too little, too late. Conservative Members should take note of the reports of the chambers of commerce.

I have a report of the association of Yorkshire and Humberside Chambers of Commerce, which covers Barnsley, Bradford, Calderdale, Doncaster, Goole, Grimsby, Immingham—the area that the hon. Member for Brigg and Cleethorpes (Mr. Brown) mentioned—Hull, Kirklees, Wakefield, Leeds, Rotherham, Scunthorpe, Sheffield and York—right across the broad region of Yorkshire and Humberside. It refers to a regional dimension and states: The general image of the region remains positive. The decision to hold the World Student Games in Sheffield, the growth of Leeds as a commercial centre and the success of Humberside in attracting inward investment are just some of the features that have caught national attention and which are inspired, provoked and brought about by regional bodies, local authorities and local business people. There is no reference whatsoever to central Government. The report continues: The interest of the construction industry in the region is unprecedented. Indeed, in parts of the region such as Kirklees and Wakefield and Bradford the problem remains of a lack of suitable acreage rather than a shortage of projects. That speaks volumes. The lack of suitable acreage is influenced by central Government. Therefore, there is no greater call than that from the chambers of commerce in the regions who are asking for more freedom which could come from regional government.

Mr. Michael Brown

The hon. Gentleman has quoted from documents produced by the Association of British Chambers of Commerce—one national and one regional—and drew attention to the regional dimension of Humberside and the Humber ports, singling out the latter for particular attention. He then said that central Government had provided nothing for such development. I remind him that the success of the Humber ports occurred despite the fact that in this House only a year ago every member of the Opposition sought to prevent their development. I agree that there is massive economic development based on the Humber ports, but it is only because the Conservative party supported me in the Division Lobbies in the teeth of opposition from the Opposition.

Mr. O'Brien

The only reason that the hon. Gentleman supported the Bill was because it made it easier to import to Yorkshire and Humberside, which would mean the demise of the mining industry and other jobs in that region. That is why the hon. Gentleman fought for the Bill—it was not to promote jobs in Yorkshire and Humberside but to demote industry there. Had it not been for the Opposition, the devastation of the Yorkshire and Humberside regions and the midlands would have been more aggressive. However, because the Opposition fought, I can say with honesty and sincerity that it was only the numbers behind the hon. Gentleman that led to his success. He did not win on principle or on the arguments—he won on numbers.

The report continues: All in all, the region is successfully standing on its own two feet. In the light of such a report, what would be the fortunes of the regions if they had more say in their autonomy and if more of their energies were applied to generating wealth and the necessary resources to provide the sports centres, the infrastructure and what is necessary for education? That is what we mean when we talk about regional development.

I also refer to another organisation that is not Labour controlled. The Association of District Councils is Tory controlled. It has an economic and development committee which considers the way in which its members are controlled by central Government.

Representatives of the ADC have had meetings with Commission officials because they want to be in contact with the EEC. The EEC is more willing to work at a regional level than with the central Government to promote regional development. The EEC appreciates the value of the regions and that is why it provides us with regional aid.

The ADC report states: A meeting was held with the Commission on 25 October."— officials from the regional policy and social fund directorates were present— Briefly, Commission officials thought that the EEC would not be in a position to finance any new initiatives until 1993–94 when the new structural fund regime comes into operation. New funds might actually not be available until 1995–96. Officials did not consider that non-eligible areas would receive any assistance as it was expected that any areas seriously affected would become eligible during the review of the structural funds. Because the British Government do not negotiate on European involvement—they act as a spectator—our local government authorities have to press European officials and regional Ministers for support. Because of the Government's attitude towards local government, resources have been lost not just from RECHAR, but from other regional funds which should be channelled into local government services.

It is extremely disappointing to have to argue with Conservative Members on behalf of local authorities. Those authorities are pressing for benefits to be channelled into their areas so that regional developments can take place. There is a hard-pressed need for sports halls, new schools and infrastructure, but all that is denied because of the Government's policies.

The ADC report also stated that it had given consideration to establishing a European presence in Brussels to promote the role of the districts". The ADC is not Labour controlled, but it is so concerned about what is happening in Europe and by the fact that it is denied any regional representation that it is now considering opening an office in Brussels to establish direct contact with EEC officials. ADC representatives could then try to persuade those officials to ensure that resources are available to their associate members in the districts.

The Labour party does not need to make the case for regional government, because it has been made by supporters and members of the Tory party. The difference is that Conservative Members, and Ministers in particular, pay no regard to the points made by Tory party members in local government and the regions.

The federation of small businesses—I doubt whether it is Labour controlled, although I accept that some members of the Labour party have small businesses recently published a report on 26 November in which it says: It is a short-sighted Government which ignores the needs of Britain's five million small businesses. Both economically and politically it makes sense for the concerns of small firms to be taken into consideration in formulating policy. Small businesses provide a vital source of employment, wealth and the seed-corn for future economic development. But what chance do our small businesses have, given the present Government's policies and their approach to the EEC? Small businesses face difficulties over trading in Europe after 1992 because even the policies that are designed for the English regions are decided by Tory Ministers in Whitehall. The hon. Member for Stockton, South was not in his place earlier when I commented on the fact that he did not mention what would happen to the regions after 1992, yet that is the main reason for my colleagues and myself saying that we should be looking at the issue of regional developments now. That would enable our regions to generate their own resources and to come up with the policies by which they can become involved in the new Europe of the single market.

I realise that other hon. Members wish to participate and I shall conclude by referring to the issue of regional boundaries, which was raised by two Conservative Members. I advise them that the original boundaries were abolished as a result of their Tory Government's policies. The two local government reorganisations, which brought about the demise of the English counties and of the City of London—[Interruption.]—were the result of the Tory Government's policies and although they are now saying that they are wrong—

Mr. Michael Brown

The hon. Gentleman is wrong. It was the Greater London council that was abolished—

Mr. O'Brien

Yes, the GLC, but I am prepared to discuss the position of the City of London, which the Minister and I discussed only yesterday. Indeed, we have spent more time discussing local government in the past few weeks than we have spent with our families.

If the hon. Member for Brigg and Cleethorpes wants to discuss the GLC, I am prepared to do so. The Greater London council was abolished because of Government's policies—and they have been proved wrong. On the poll tax, the Government have again been proved wrong. They have been proved wrong also on education and the economy. If they do not give careful consideration and sincere thought to this motion on regional government, they will be proved wrong again in the near future, and the people who will prove them wrong are the electorate. I feel sure when the general election is called, that the Labour party will be pursuing policies on regional government that will benefit people living in our regions.

1.2 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key)

I begin by congratulating the hon. Member for Gateshead, East (Ms. Quin) on being successful in the ballot, on introducing such an important subject for debate and on doing it so well.

This has been one of the best Friday debates that I have attended for a long time. Our Friday debates tend to be of rather higher quality than some of our midweek debates and all hon. Members who have spoken so far—and, I am sure, those who will follow me—have spoken to a high standard and have contributed to a serious debate on this important issue.

My response is not a traditional wind-up speech, because this is the hon. Lady's debate and I am sure that she will receive the leave of the House to reply to it at the appropriate time. However, I shall try to answer some of the specific points that have been put to me.

I start from a position of very much respecting the fact that the hon. Member for Gateshead, East was a Member of the European Parliament for 10 years before becoming a Member of this House and I recognise the expertise that she has acquired in this subject. However, I disagree strongly with some of her comments and I begin by disagreeing with her that the north-east is as isolated as she thinks it is. I see it with a rather different gloss. I am a southerner whose first job was in Leeds, whose second job was in Edinburgh and whose third job was in London. I suppose that where I live now depends on the day of the week. As a result of improved communications in every sense—be they electronic communications, our airports or any other form of communication—the regions of this country have never been closer to London than they are today. I shall develop that point later.

Of course, I recognise, respect and enjoy Britain's regional diversity, of which we can be particularly proud. The hon. Member for Gateshead, East referred to folk music. I am immediately drawn to comment on the technological superiority of the Northumbrian bagpipes over the Scottish bagpipes. As there is no Scottish Member of Parliament present, I feel that I can say that without being lynched on my way out of the Chamber.

The regional policies that have been developed, refined and improved in Britain in the past quarter of a century owe a great deal to the foresight of then Prime Minister Harold Macmillan in deciding to send Lord Hailsham, as he is now, to the north-east to make some progress. That was but a seed, but it was a seed well sown and matters have moved on a great deal since then.

The hon. Member for Gateshead, East said that we should not be dependent on central decision-making. I agree entirely with that sentiment, but I find it hard to understand how she can then be so keen to hand over so much power to Brussels on decisions that affect people at a local level, whether on farming, training or whatever. Her enthusiasm for the social programme is astonishing. Decisions will be made in Brussels on social matters whatever happens and I am not convinced that those decisions would be affected by any new form of regional government. The hon. Lady must address that point.

I am intrigued that the hon. Lady thinks that 11 regional parliaments would not be costly or bureaucratic. If only that were true. She asked for some answers to specific points. She said that large cuts were made in regional selective assistance in the early 1980s. The RSA scheme expenditure increased during the 1980s from £86 million in 1980–81 to £177 million in 1989–90. The hon. Lady was probably referring to cuts in regional development grants, which reflected a move away from automatic grants which went into loss-making nationalised industries.

The hon. Lady also said that the Government had not supported the Northern Development Company. That is not what my evidence suggests. The Department of Trade and Industry gave three years of core programme funding to it and makes annual grants to the NDC and other regional development agencies to undertake our important and beneficial inward investment promotional work. For 1991–92 the DTI's grant to the regional development agencies increased by £0.5 million to a total of £4.5 million.

Ms. Quin

The Minister referred to the figures that I gave on regional assistance. The figures were for regional preferential assistance and were provided by the Department of Trade and Industry in response to a written question, as I explained to the hon. Member for Stockton, South (Mr. Devlin).

The Government were not enthusiastic about the creation of the Northern Development Company. It was created from within the region. Only later did the Government decide to support it. I am glad that they did, but it was rather late in the day.

Mr. Key

We are nothing if not pragmatic and we like to see success. We are delighted to support that success when it occurs.

The hon. Lady also said that the assisted areas map had not changed since 1984. I accept that there are some anomalies on the 1984 map, but it is still focused on the areas of greatest need. I assure her that if the Government had thought that changes were called for, we would have made them. But they are not called for. Our policy remains the same. We shall not make changes to the assisted areas, at least in the lifetime of this Parliament.

My hon. Friend the Member for Stockton, South (Mr. Devlin) made an excellent speech, as ever. He began by drawing attention to the different histories of other countries. He was right. My hon. Friend the Member for Taunton (Mr. Nicholson) intervened to make an extremely important point that we should all bear in mind. He drew attention to the size of England in terms of population and geography. It is quite different when dealing with a country as big as France in terms of population and area.

Mr. Caborn

On the basis of that argument, can we take it that the boundary review that will be undertaken will now be on geographical location rather than population distribution?

Mr. Key

I am sorry, I did not catch the hon. Gentleman's meaning.

Mr. Caborn

In the light of the arguments which have been put forward about the size of the constituency can we take it that there has been a change in Government principle on the boundary reorganisation? Are they going to take area rather than population as the criterion now?

Mr. Key

I am sure that the hon. Gentleman will spend the weekend reading the document and will see exactly what we said about that. He is teasing me, as the hon. Member for Normanton (Mr. O'Brien) and I were teased occasionally in the Standing Committee on the Local Government Finance Bill during the past three weeks.

My hon. Friend the Member for Stockton, South talked about the representative role of a Member of Parliament and how it had changed, which is also important. I dare say that my hon. Friend's constituents complain about their district council, county council and central Government. Who will they go to if there are regional governments as well? I can tell the House exactly whom they will go to—they will still come to their Member of Parliament at Westminster. It will be good business for Mercury, British Telecom and the Post Office, because we shall keep them busy when we are trying to sort out which tier of government we should be addressing our thoughts to on behalf of our constituents. The only beneficiaries will be the bureaucrats employed to answer the letters.

My hon. Friend the Member for Stockton, South also made an important point about choosing regional capitals. My hon. Friend the Member for Taunton talked about the difficulties in the south-west and whether Taunton should become the capital or whether it should be Bristol, Plymouth or Exeter. Manchester and Liverpool have been mentioned. Those are serious problems which will have to be tackled if that were to happen.

The hon. Member for Sheffield, Central (Mr. Caborn) made a thoughtful speech, which I shall look forward to reading. I am sure that it will merit reading. He asked about the regional conference. The Commissioner, who is anxious that the regions are represented in discussions on regional policy, has announced a committee of the regions, in the context of the intergovernmental conference. It is the Commission's view that the members of that body would all be elected representatives and would advise the Commission on a wide range of policy issues relevant to the regions. It will be a huge body, approaching 200 people. I am not sure that it will be frightfully effective if it is that big. Nevertheless, we support the creation of the body, provided that it is guaranteed that member states can nominate members. No decision has yet been taken on how United Kingdom delegates will be apportioned and I would welcome the hon. Gentleman's ideas.

Mr. Caborn

Can we take it that elected members will be representing the United Kingdom on that body, but the formal distribution of that representation has not yet been worked out?

Mr. Key

That is how I understand it. We support the creation, provided that it is guaranteed that member states can nominate members of the body.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) made some generous remarks in his speech about my visit to his constituency, for which I was grateful. One of the advantages of my job as a Minister representing local government is that I travel throughout the country. I do not merely spend time in Manchester—where I spend more time than anywhere else outside London and my constituency, which is my home town. I ensure that I hear the views of parish councils in rural areas outside my constituency.

The hon. Member for Berwick-upon-Tweed said that as far as he was concerned, regional government would not take away the powers of local government. That is an article of faith for him. Therefore, he has a problem with the Labour party, which is pledged to take some of the powers of local authorities into regional government, as well as co-ordination.

The hon. Member for Gateshead, East looks doubtful, but in a debate in the other place yesterday, Baroness Hollis of Higham said: Thirdly I suggest that a few functions would appropriately come up from the county councils." [Official Report, House of Lords, 5 December 1991, c. 401.]

Mr. Deputy Speaker (Sir Paul Dean)

Is the Minister quoting a speech in the other place? It is only in order to quote a Minister. If it is not a Minister, please will he paraphrase.

Mr. Key

The damage is done. It was an Opposition spokesman and I am sure that, however delightful she may be, she will not be a Minister for long. I am grateful for your guidance, Mr. Deputy Speaker.

The second point made by the hon. Member for Berwick-upon-Tweed was about RECHAR and I am anxious to respond positively to him. The current objective No. 2 of "Community Support Frameworks" will end on 31 December 1991. Discussions are currently proceeding with the Commission on the successors. The structural fund regulations allow for a fundamental review of the fund's operation to take effect from 1 January 1994. Consequently, member states and the Commission wish to see the minimum change in the operation of the current CSFs and programmes for the years 1992 and 1993.

There has been discussion with the Commission on the issue and it seems to adopt a similar approach. The financial allocations for 1992–93 have already been given to member states and plans and programmes are being prepared on a minimum change basis. Departments are evaluating ways in which, after 1993, the use of the structural fund could develop. That will enable officials to discuss with the Commission the way in which the fund could operate in the future.

Discussions are also proceeding on a document called "Europe 2000." It is not a master plan for member states or for the development of Europe, but it will provide a useful reference for member states and others to enable them to take decisions with due regard to the European dimension. In other words, we are continuing to discuss the matter and its development with the Commission on a no-change basis across the Community.

My hon. Friend the Member for Taunton made a thoroughly thoughtful speech and provided an honest analysis of his views. In particular, he spoke of the importance of counties. I assure him that we are not talking about sweeping away counties. Our policy is to make changes to the structure of local government in the shire counties. In some cases that may involve the abolition of councils. There is no intention to abolish either county or district councils as a whole and there is no discrimination between them.

Changes to the boundaries of shire counties or districts are also possible, as at present. We intend to ask the local government commission, which we hope to set up, to consider whether people want unitary authorities to be treated as part of historical counties for certain traditional or non-administrative purposes such as sport, a theme to which I shall return. We shall certainly not sweep away the counties. That is not our intention.

I assure the hon. Member for Normanton—with whom it is a pleasure to be debating again; it has been our daily dose for the past three weeks, and he is a worthy opponent —that my party and I are not living in the past. When I visit Labour leaders in the north-east, north-west and elsewhere I do not think that they are living in the past, either. I sometimes wonder, though, whether they speak much to the occupants of the Labour Front Bench because I see the 1990s as the decade of the north-east and the north-west. I see thrilling regeneration every time I visit Tyneside and Teesside, Manchester and Merseyside. A great deal is going on in those regions, and people in the south who have not been north of Watford Gap for a few years should go and see what is happening there.

I was delighted to hear of the conversion of the hon. Member for Normanton to full-blooded capitalism. I suspect that the right hon. and learned Member for Monklands, East (Mr. Smith) is quaking in his shoes as the Labour Front Bench is clearly in line for a takeover from Barclays Bank, I fear, however, that it would be a hostile takeover.

Mr. O'Brien

I feel that I must put the Minister right yet again. The Official Report will show that I said that the Government should take advice from an official of Barclays Bank because, I said, if Barclays Bank was successful with regional reorganisation, the Government should not resist regional reorganisation for the English regions.

Mr. Key

We take advice from a number of bankers, but we are not monopolists. I should be just as happy to take the advice that I read in National Westminster Bank's quarterly review, for instance. If the hon. Gentleman does not read it, perhaps he should. Wide-ranging advice is preferable to the advice of just one particular bank. Nevertheless, I have checked with my hon. Friend the Member for Leeds, North-East (Mr. Kirkhope), who would have leapt to his feet to speak if he were not precluded from doing so by virtue of his office, and I have read the document to which the hon. Gentleman referred. The chamber of commerce in Leeds is very positive about the future, as well it might be, and it was hard to infer from the report that the chamber of commerce felt that there was a need for a regional government, as the hon. Gentleman suggested. If members of the chamber of commerce disagree about that, I am sure that they will be in touch with me.

In proclaiming the supposed need for regional government in England, the hon. Member for Gateshead, East works from the assumption that such a system would bring government closer to the people. In fact, regional government would have the opposite effect. It would impose another tier of bureaucracy on top of local government, taking it further away from the people.

We are committed to simplifying local government, not to creating extra layers. We are committed to giving people the councils that they want—that means creating councils based on the communities with which local people and organisations identify. Such councils should be able to provide services to their communities that are more cost effective and efficient than they are now.

Our proposals for establishing a new, independent local government commission for England are currently under consideration in the Local Government Bill in another place. The commission's task will be to review the country area by area and make recommendations for improving the structure of local government, taking account of local views, the costs and benefits of change, and the economy and effectiveness of service arrangements. They may recommend a structure based on unitary authorities or the present two-tier arrangements. We make no presumption about the right size of authority that will emerge in an area, but we expect that in most areas a system based on unitary authorities would be the most popular and effective. We do not desire to impose a blueprint on England. Rather, we desire that the commission should recommend the most appropriate form of local government for a particular area.

Mr. Devlin

Will my hon. Friend repeat the commitment given by the Secretary of State for the Environment when he said that the new councils of Avon, Cleveland and Humberside would be among the first to receive the benefit of that new commission? I hope that that will happen as soon as possible in the case of Cleveland.

Mr. Key

If my memory serves me correctly, my right hon. Friend the Secretary of State for the Environment said that Humberside would be the first because it has already been the subject of a local government boundary commission report. It will be up to the Secretary of State to decide on the exact order of priority and we shall publish guidelines to help the new commission. There would be precious little point in appointing a local government commission if we then took all the decisions.

The hon. Member for Gateshead, East is right to suggest that government should be accountable and responsive—but to achieve that we need government that truly reflects local communities. The vast majority of district and county councils that responded to our recent consultation paper on the structure of local government in England expressed their desire to become unitary authorities. In contrast, only 26 out of nearly 1,900 respondents expressed a desire for regional government.

In documents outlining their plans for regional government, the Opposition state that the new tier would take its powers from Westminster and Whitehall, and be empowered to carry out only those functions of a strategic or regulatory nature, currently exercised by the counties. This is patently unnecessary. Our proposals will empower the new local authorities to exercise all the functions, including strategic planning, local planning and development control. Before any new authorities are established, it will have to be shown that those issues can be dealt with satisfactorily.

Moreover, the regional context for structure and local plans prepared by local authorities is safeguarded under regional planning guidance from the Secretary of State. The Planning and Compensation Act 1991 requires local planning authorities to have regard to any regional or strategic planning guidance given by the Secretary of State when preparing their development plans. Regional planning guidance already exists in the south-east and East Anglia. Strategic planning guidance exists in all the metropolitan districts, including Tyne and Wear. Progress is being made towards establishing regional planning guidance in all the regions. We hope that regional planning guidance for all the north, which is currently in hand, will be finalised by June 1992.

The hon. Lady has also raised the issue of the European dimension, both here and on other occasions. On 15 November she wrote to the Financial Times. The headline over her letter stated: An England of regions is the way forward in a Europe of regions". I believe that the structures of local and regional government vary substantially between the different member states. I do not believe that our participation in the European Community implies that a level of regional government should be established here. Regional government is un-English, unworkable and unwanted.

There is no cultural identity in a region. People feel no loyalty to it. They regard themselves as English, and after—or sometimes before—they identify with their county or city, not some falsely created region. Our entire culture is built around those loyalties. Our literature and language are full of examples illustrating our pride in country and county. Let us imagine how uninspiring Shakespeare's Henry V would have been, had he proclaimed that gentlemen of the east Midlands, now-abed shall think themselves accurs'd they were not here". That is foreign to our culture.

Ms. Quin

The Minister completely exaggerates his case. If he were to ask many people in the north-east where they come from, they would say "the north-east". The expression "the north-east" trips easily off the tongue. People do have regional identities, but the Minister completely overlooks that. It is true that people had loyalties to the old counties, many of which were abolished by the Conservatives in 1974, but people do have regional identities.

Mr. Key

I would find the hon. Lady's argument more credible if I had not experienced the difficulties of trying to remember, when on Tyneside to talk about Tyneside. However, if I talk about Tyneside when I am a few miles away in Teesside or Wearside, I am in real trouble. I can identify with the north-west, the south or Wessex. But, first, people feel that there is a more local and historic dimension. People also feel proud of England, being English, and of all that has stood for over 1,000 years. Our nation's culture is bound up in that philosophy, which cannot be written off as looking backwards or day-dreaming—it is deeply ingrained in all of us.

Hon. Members will be familiar with the lines from Henry V, but imagine if they were as follows: I see you stand like greyhounds in the slips, Straining upon the start. The game's afoot: Follow your spirit; and upon this charge Cry God for Harry! the south-east regional government and St. George. That is not very credible. It is not silly to suggest that we should consider those aspects.

Mr. Tony Lloyd

The Minister must recognise that the concept of England as a unitary nation may make much sense in the south of England, but there is a much greater feeling of distance among people in the north. Having grown up a northerner, I make no apologies for saying that I do not regard myself as a southerner who happens to live a few miles up the road. We are different. On the issue of regional government, I do not want to distance myself from English history, but I recognise that Whitehall government is a long way from Manchester.

Mr. Key

I am also from the provinces—I am glad to say that I am not a Londoner, but come from Wessex.

Therefore, I have no difficulty with what the hon. Gentleman says. Thank God that we do have regional diversity and differences, but if we are not careful, if we pursue regionalist policies it will lead to a break-up of England. If he were to reflect on that, I do not think the hon. Gentleman would want it to happen.

We can be facetious about the examples that I am using. We do not want to talk about south-west regional cream instead of Devonshire produce, roast beef and north-east regional pudding or Greater Manchester hot-pot.

Mr. David Nicholson

Given the recent record of local government in Manchester and Liverpool, constituents in Lancashire and Cheshire would be appalled at the prospect of being governed from either of those places.

Mr. Key

I spent much time in that area and I know that brighter things are on the horizon for Manchester and Liverpool. I give credit to the people of those regions who, as we have seen, are realising some of the follies of the past. Even some of their political masters in London have recognised the follies of some of the goings-on in those areas.

Mr. Devlin

Of course it is right for people in the north-east to think of themselves as north-easterners. The Minister is right to say that people think of themselves as Yorkshiremen or Durhamers or Teessiders rather than Tynesiders. I have had to pull up the Minister when he has visited Teesside and talked about companies in Tyneside which are of no interest to people on Teesside. It is not the identity that people feel. Labour has carried out a trawl of Departments in order to find something for their Labour colleagues in Newcastle to do and to justify giving them a huge bureaucracy and their own budget. It is another case of Labour trying to give jobs to the boys in the north-east.

Mr. Key

My hon. Friend is right. I wonder where the Labour party was while all these lessons were being learned. It has clearly been in hibernation as well as in opposition for the past 12 years. It is worrying that after all this time Labour appears to think that being in opposition means solely that one must oppose everything. There have been few examples of sensible, alternative ways to do things.

The Opposition argue that other European countries have regional government and we must have it as well. Why must we be the same as our neighbours? Italy may be what some people have called a geographical expression, but England certainly is not, and we have 1,000 years of history to prove it. We should not assume that because some European countries have regional government the people there want it. I have canvassed the views of my hon. Friend the Minister for Local Government and Inner Cities who is very European, and he assures me that people who live in the southern part of Spain were totally bemused to wake up one day and find themselves in an invented region called Andalusia with a different Government from than in Madrid. They did not particularly want that, but it was foisted upon them.

Notional regions without definitive boundaries are used for the purposes of economic development, and our regions get aid from Europe without the need for a formal structure. We should ask how such a structure would work. Who would decide where regional boundaries begin and end. That topic was only touched upon by the hon. Member for Gateshead, East. As my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) said, British Gas decides its regions according to the location of its gasworks and the lie of the pipes. Electricity was privatised in regions dictated by the positioning of cables. British Telecom directories and area codes are also based on service delivery and not on the existence of defined regions.

Regionalism is not about service delivery. Labour has completely misunderstood the concept. It talks about only another layer of government and more red tape and state control, not less. That is ironic given Labour's supposed support for the concept of unitary authorities which the Government are pursuing. Our legislation is about bringing local government closer to the people, giving them the councils that they want. Our recognition of the importance of tradition and loyalties will permit the re-creation of historic counties as non-administrative entities. One does not need a council in order to prove the existence of well-established areas such as Lancashire or Somerset.

I have not forgotten Scotland, Wales and Northern Ireland, but I shall deal with them separately, because devolution is a different issue. As usual, Labour is muddled. Regionalism and devolution are not the same. Scotland and Wales are nation states, not regions, and neither country wants nationhood. Both have voted against it. However, Scottishness exists without a separate government. Cultural identity forms over hundreds of years and cannot be imposed. There is no point in the Labour party in Scotland pretending that Grampian or Strathclyde regions have captured the affections of the people.

What would regional assemblies do? Labour says that powers would be devolved from Whitehall. Which powers? It would be very divisive to break up England in this way. There is no constitutional precedent for regional government such as that proposed by the Opposition. That would merely be another way of manufacturing extra government—no doubt to employ Labour's trade union supporters, at great expense to the taxpayers. We are told that the initial creation of the assemblies would include a strategic body for London—Greater London council mark 2. They would cost more than £200 million—imagine 11 GLCs all over the country.

Labour says that the assemblies would he financed initially by block grant, but that eventually they would be give tax-raising powers of their own. That would have a disastrous effect on economic development. No doubt the hon. Member for Normanton would confirm that business men and professionals in Leeds and elsewhere would leave high-tax Labour regions in their droves for efficiently run, Conservative regions. Inward investment from abroad would follow. That would leave some regions without investment and jobs. How can Labour argue that their plans would be benefitial to regional development?

Mr. O'Brien

The references that I made were not to Labour party documents but to papers published by the chambers of commerce. How can the Minister say that those people are not living in reasonably-rated areas—or did not do so, long before the introduction of the unified business rate?

Mr. Key

I did not say that. I said that I feared going down the road of different regional governments having different tax rates. That is an interesting parallel with the Liberal Democrats' proposals for local income tax, whereby local councils would be given authority to raise taxes locally—which would have a profound effect on industrial location.

I must tell my right hon. and hon. Friends that we have an ally. The hon. Member for Gateshead, East and other Labour Members who spoke should be in no doubt that by no means all Opposition Members agree with their point of view. The hon. Member for Norwich, South (Mr. Garrett), who is charged with improving Labour's performance in the south of England, denounced his party's proposals in forceful terms. He called them "unwise", "incoherent", and "folly". He predicted that devolution would be divisive and questioned the very motives behind the policy. I quote from Tribune of 10 March 1989: Those who advocated regional government also have little idea of the amount of managerial talent required to organise and control it. It would take at least a generation to find and train effective top management cadres for the English regions … Reorganisation of the management of English government on this scale would cause a decade of chaos in local services. Someone even more influential than the hon. Member for Norwich, South disagrees with the hon. Member for Gateshead, East. I refer to the right hon. Member for Islwyn (Mr. Kinnock), who proclaimed in Blackpool that regional government would result in guaranteed disharmony, disunity, conflict and competition throughout the whole of Britain … The dominant issue of politics will be the jealousies of region against region, nation against nation, argument against argument. That will be … very bad news for Britain. Or has the right hon. Gentleman changed his mind again because he wants the key to No. 10? Labour does not have its act together.

This Government's many imaginative and effective initiatives are far more helpful to the regions than any hare-brained scheme from Labour. We firmly expect that the single market will benefit all English regions. There is no evidence that they will be adversely affected by its completion.

I will briefly outline the ways in which our policies are working together to improve the quality of life in areas that face particular problems. I repeat that it would be wrong to impose another layer of bureaucracy, when a more streamlined local government structure is needed. We have done much to develop regional policies over the past decade. It is within the overall context of national development that regional development can most effectively be addressed and actioned.

This Government are committed to an effective policy of regional development, and I remind the hon. Member for Gateshead, East that much has been achieved over the past 10 years. Our city challenge and other inner-city initiatives were enthusiastically received by local authorities and the private sector—particularly in the north-east. Middlesbrough and Newcastle are among the 11 local authorities chosen to be the pacemaker front-runners in the new city challenge initiative. So enthusiastic were other local authorities, including the constituents of my hon. Friend the Member for Stockton, South, that his council, together with Sunderland, put in a late bid. It did not want to be left out.

I should like another five hours of debate with the hon. Member for Gateshead, East, because we could learn much from it. She referred to the problems of democracy. There are severe problems of democracy that we as a nation need to face, particularly in local government. I am in no doubt about that, particularly as I have toured regularly the difficult areas in all parts of the country. The people who live in those areas have lost power. They perceive that they have no influence over their own lives, or over the quality of their own lives. They are in need of empowerment. That is the problem which faces us all.

Whether I am talking to the residents of Moss Side in Manchester, or Scotswood in Newcastle, I am left in no doubt that they dislike their local councillors and councils as much as they dislike the Government. Members of Parliament who represent those areas know that that is the problem which we face. We must address it. We must ensure that those people can play their part with local government, national government, the private sector and the voluntary organisations in creating their own future.

That is what city challenge is all about. City challenge will deliver £7.5 million of Government assistance to each authority each year for a five-year programme of concentrated regeneration—for example, in the west end of Newcastle and in east Middlesbrough. This year we are spending £42.2 million on our northern region urban programme. That is a special allocation, in addition to the normal resources made available to local authorities to support their inner-area programmes of social and economic regeneration. It is allocated to the north-east —to Newcastle, Gateshead, North Tyneside, Cleveland, Hartlepool, Middlesbrough, Langbaurgh and Stockton.

In addition, since we introduced the city grant in May 1988, 39 schemes in the northern region have received grant aid of £18.1 million to enable developers to undertake otherwise uneconomic housing, industrial and commercial developments.

Ms. Quin

I do not know whether the Minister has seen today's announcement about the loss of 370 jobs at the Volvo plant in Copeland in west Cumbria. Is he able to make an announcement about a review of the assisted area status for west Cumbria which was taken away from that area in the early 1980s? Do the Government intend to introduce initiatives to help that area which is, of course, part of the northern region?

Mr. Key

I do not doubt that representations will be made about that private sector decision, which I very much regret. I am very sorry about loss of jobs. The hon. Lady had the advantage of slipping out for an hour, when no doubt she managed to get hold of that news. I have been stuck here and have not received it, but I shall, of course, give it proper consideration.

There are urban development corporations in the northern region and throughout the country. The housing investment programme has allocated £99 million to the northern region this year, with an additional £20.5 million coming through estate action resources. A very good example of development is the Calgate estate in Newcastle where the Department of the Environment, the local authority and the housing corporation worked together to refurbish housing in the area, to build new homes and to raise the profile of the area. I have been there and seen the remarkable progress that is being made.

Mr. Hugo Summerson (Walthamstow)

My hon. Friend knows that there is a housing action trust in my constituency of Walthamstow. Would it be possible for other areas to be given housing action trusts, in addition to all the resources and programmes that my hon. Friend has mentioned?

Mr. Key

The development of housing action trusts is one of the most exciting ways in which central Government are helping the regions. One of the most enthusiastic authorities taking up housing action trusts has been Liverpool city council. It has seen that this is an obvious way to make real progress in the regions, using central Government—taxpayers'—money.

Dame Elaine Kellett-Bowman (Lancaster)

Will my hon. Friend give way?

Mr. O'Brien

The hon. Lady has only just come in.

Dame Elaine Kellett-Bowman

I came because I regard the debate as important. I used to work in Liverpool. I know that it has one of the worst housing problems in the country. I am delighted that it has now decided to co-operate with the Government and solve a problem that I brought the regional affairs committee of the European Parliament over to look at 14 years ago.

Mr. Key

My hon. Friend is wise and experienced, both at a European level and in her constituency. Her constituents are lucky that she has decided to stay down here today. I am glad that she has joined us for the debate.

The motion refers to cuts in the regional assistance budget. I have tried to explain why the hon. Member for Gateshead, East and I were talking at cross purposes. In 1979, the assisted areas covered almost half the country by working population. They now cover 35 per cent. of the working population and are carefully targeted on the areas most in need. Our regional policy measures are not the heavy-handed, high-spending models of the past. I remember well being an economics teacher in the awful years of the Labour Government of the 1970s. I had to change the A-level economics syllabus to take account of yet more dotty ideas that poured out of the Department of Economic Affairs, of national plans that were revised because they did not work and of huge methods of distributing money through regional policy, where more than half the country was part of a development area. I remember the ridiculous plans such as the selective employment tax. It is typical of the Labour party that it has not learnt a thing since. It still thinks that by interfering and pouring on more layers of bureaucracy and government it will achieve something that has eluded it for so long and will continue to elude it if it takes that path.

Mr. Tony Lloyd

I hear what the Minister says about regional policy in the past. I have great misgivings about what was done by the previous Labour Government. [HON. MEMBERS: "Oh!"] Yes; it is not difficult to say. Government spending has a strong regional dimension. The latest available figures—they are not Government figures because they will not publish theirs—show that in the south-east Government spending per head was £1,876 but it was only £1,707 in the north—10 per cent. less. That is a strange regional policy. Unfortunately, the money is spent on the strongest and least-vulnerable economic regions at the expense of the weakest and most vulnerable.

Mr. Key

As I said to the hon. Member for Sheffield, Central, when he was here, I would welcome a five-hour debate on the distribution of grant, which is one of the hardest tasks facing any Government. I take the hon. Gentleman's point. I assert that our regional policies will more than balance the points that he makes. It would not be appropriate to pursue that now.

Regional selective assistance remains the main regional programme for industry. It is available to British and foreign-owned businesses for projects providing or safeguarding jobs and for the development of intermediate areas. There is the regional enterprise grant scheme for very small businesses and consultancy support for firms under the enterprise initiative. When the private sector is unwilling to invest in the assisted areas, factory and commercial premises are provided by English Estates. Since March 1986, it has created more than 5 million sq ft of floor space in such areas.

However, instruments and expenditure are not always enough. That is why the Invest in Britain Bureau is active in promoting foreign inward investment. The regions benefit considerably. Regional programme grants are used to encourage investment in assisted areas. In the northern region alone, there are more than 220 foreign-owned businesses employing more than 42,000 people. For example, Fujitsu is setting up a £600 million semiconductor plant at Aycliffe, county Durham, creating 1,500 jobs. There are many more examples.

There is abundant evidence that our regional measures have had a significant impact on unemployment in assisted areas. Tens of thousands of jobs are created each year by regional selective assistance. Unemployment in the northern region has fallen by more than 52,000 from 201,000, or 14.1 per cent. at the beginning of 1988, to 149,000, or 10.6 per cent. in October this year. Far too many people are unemployed, but we are making progress. We are committed to an effective regional industrial policy.

The economic development of the regions is further assisted by structural funds, which are made available through the European Community. Since the Commission confirmed its objective 2 list in 1989, most of the assisted areas and some others have benefited under the RESIDER, RECHAR and RENAVAL schemes. These conversion schemes aim to foster industrial diversification in areas that formerly relied on iron and steel production, coal mining and shipbuilding. I responded to the hon. Member for Berwick-upon-Tweed on that point.

Another example of regional development has been in the relocation of Government Departments away from the south-east. Since we announced the launch of our relocation policy in March 1988, about 30,000 posts—two thirds of the total reviewed—have been recommended for creation in or relocation to the regions. A large proportion of the posts already announced for relocation are destined for locations targeted by our regional development or urban programme policies and we expect that about 60 per cent. of the posts will be filled by local recruitment.

For example, in the past three years 8,610 posts have been relocated to the assisted areas and 18,700 posts to the urban programme areas. Of the 24,170 posts in England, the northern region has so far received about 2,500, including 855 with the Inland Revenue in Sunderland, Middlesbrough and Washington and 1,205 posts in a number of departments in Newcastle. The others are being distributed among the east and west midlands, the north-west, Yorkshire and Humberside, East Anglia and the south-west. The full breakdown of the figures was given in a parliamentary written answer on 3 December.

Our policies promise a bright and vigorous future for regional development and local government in England. Our plans for local government will bring decision-making closer to the people rather than alienating them by imposing an extra layer of bureaucracy on top of local government. We shall create councils which reflect local communities and which are able to predict and respond to people's needs. Building on the achievements of the past few years, we shall continue to target aid and assistance where it can be most constructive, for the regions and for the nation as a whole. Effective regional policies—not regional government—are the way forward for England.

1.51 pm
Mr. David Trimble (Upper Bann)

I shall begin—as did other hon. Members—by congratulating the hon. Member for Gateshead, East (Ms. Quin) on choosing the subject for the debate. It was potentially a valuable and interesting debate, but, as happened during the debate on constitutional reform on 17 May, which was also held in private Members' time, time has become rather squeezed, mainly because the Conservatives seem keen to spin out the debate through their speeches and interventions instead of allowing a proper debate. Consequently, I shall try to keep my remarks as brief as possible so that other hon. Members may contribute.

Hon. Members have referred to the increasing centralisation of government that has taken place, especially in the past decade. I shall not add to what they have said, but it underlines the need for a rethink. Another reason for a rethink is what has been called the European dimension. Not all of us are happy with the developments in Europe, but we cannot ignore them. References have been made to the impact that the regional policies and structure in Europe will have and to the desire of the regions to have some direct representation in Europe. Whether or not the Government facilitate that, it will tend to happen.

Regions are increasingly arranging for their own unofficial representation—such as happened recently in Northern Ireland where local industry and local authorities banded together to establish their own local office—because they recognise that existing Government channels have let then down in that respect and that the worst tendency will continue. The tendency will be apparent at both ends. It will come from the regions, which will want effective direct representation in the centre, and from the centre, which will want a body in the regions —a viable interlocutor—with which it can deal.

It has been said that we must look to the future. Other factors in addition to Europe are leading us in that direction. The subject of additionality has been mentioned and will continue to be a source of friction until we have found a way to resolve the problem. Increasing the autonomy of the regions is one solution. Cohesion is another term which has come into vogue. I understand that the Government are reluctant to adopt the measures for cohesion suggested by the European Commission and to be discussed at Maastricht. I accept that cohesion within Europe is important, but we must also consider it in terms of the United Kingdom.

In terms of single markets and their evolution, reference was made by the hon. Member for Taunton (Mr. Nicholson) to the way in which Italy and Germany evolved into unified nations in the 19th century. I understand that economic integration took place rapidly in Italy, within a decade of that state becoming unified in 1870, but the speed of that integration helped to perpetuate regional disparities within the country. In Germany, a fair degree of economic union had been achieved in 1844—decades before political union—and relatively slow pace of economic and political union meant that the same degree of regional disparity as that in Italy did not exist. Unfortunately, for various reasons, other European countries are set on the faster approach towards economic and political union, but that is likely to accentuate regional differences. A rush towards a single market in Europe will hurt the regions, particularly the peripheral ones. I am concerned about that, and the serious impact of that market on the economy of some of the United Kingdom regions, particularly my own.

It is also important to consider the way in which the single market within the United Kingdom has operated. I was interested to study the table produced by The Guardian two months ago which showed trade movements in terms of gross domestic product per capita as a percentage of the United Kingdom average. Of the 11 regions of which people talk, that is the eight English planning regions, and Wales, Scotland and Northern Ireland, eight have fallen behind in the past 10 years. Three —East Anglia, the south-west and the south-east—have gained, and it is from those areas that opposition to the development of regions is expressed, as revealed by contributions today. However, the growing disparity and lack of economic cohesion between the regions of the United Kingdom is a motor towards the development of regionalism.

Diminished political uniformity has also been discussed today. That has been an issue for many years, not just the past decade. A number of Conservative Members displayed an important misunderstanding of the nature of the political unit within which we operate. There was a constant reference to "this country", "this nation" or "this state" as though it were a unitary one. That is wrong.

The United Kingdom is not and never has been a unitary state. Conservative Members think in terms of the closely-knit, integrated society which developed in southern England a thousand years ago. That society has been the greatest and most influential element within the state which subsequently developed, but it is a particularly southern English phenomenon and the same is not true of northern England.

Conservative Members referred to various historical examples and I should have loved to take some of them up, including the palatinate in Cheshire and the north-west, the Council of the North which once existed and the separate arrangements on the Welsh marches and elsewhere. Conservative Members believe in the concept of a tightly knit, integrated, unitary state, but that is only true of southern England. That area is now the dominant element in population terms and, based on that experience, people from southern England make mistakes about the United Kingdom as a whole. It is not a unitary state but consists of a number of different national and regional groups. It is said that it has existed with a single legislature for most of its existence, but it has certainly not done so for all of its history because this single legislature is less than 200 years old.

There is a tendency to think that our institutions have greater antiquity than is, in fact, the case. Although we have had a single legislature, underlying that have been understandings between the regions and, underlying them, a series of treaties between the major constituent elements of the Union. We are not a unitary state. We are a multinational state. In that context, it is natural to think of political institutions which reflects that underlying reality. However, another mistake is made when we look at those institutions. People think that we are talking about Parliaments and Governments, but we are not: we are talking about regional administrations, which do not have to have all the elaborate paraphernalia of Governments, such as Prime Ministers and Cabinets. Indeed, I am not certain whether it is necessary today for them all to have legislative powers.

In that context, it it well worth looking back to the minority report of the Kilbrandon commission in 1973, and to Crowther-Hunt. Interestingly, the Kilbrandon minority report seemed to pay more attention than the majority to the European dimension and the impact that the European Community would have on our institutions. It is well worth reconsidering the sort of administrative devolution that was then suggested.

Conservative Members have talked about size and communication. I intervened to ask the hon. Member for Taunton what he thought about Luxembourg. Taking what is perhaps a parochial view, I have pointed out to other people that Luxembourg is smaller in area and in population than County Antrim, but it manages to operate with its own administration. Therefore, in this context, size—whether geographic or any other—is not important. It is a question of natural human units.

I appreciate that there are serious difficulties and problems over questions of finance. I have heard the horrible phrase "block grants". If we have the block grants that Whitehall has thought up in terms of devolution for Scotland and Northern Ireland, we shall not make any advance. The sort of block grant that has behind it a detailed Treasury line-by-line examination of everything that the administration is to do will not work. I believe that the same problem underlies the standard spending assessments. They are trying to be too sophisticated. In addition, underlying those provisions is a degree of administrative and political control from the centre which deprives the regions or the local authorities of any real autonomy. The financing arrangements must allow the relevant body to have real autonomy.

When we are dealing with the formulae the House might like to consider the formula for the Süd Tirol or the Alto Adige, depending on one's sympathies, where a fixed formula relates not only to the population, but to the geographical area. The population is taken as a percentage of that of Italy as a whole and the geographic area is considered as a percentage of the size of Italy, and the two are taken together. That is it. Central Government have no say in the money, which is derived automatically from the formula. It is well worth looking at different formulae, provided that they are automatic and do not conceal central Government control.

On the issue of legislation, we must rethink what is appropriate at the European and national levels and, if at all, at the regional level. That applies to the question of subsidiarity.

We must also consider what is called the West Lothian problem. In our debate on 17 May, I commented that I find it strange that people are reluctant to look at the various proposals that have been made in respect of Ireland since 1886. The hon. Member for Taunton suggested that we should have an arrangement whereby Members from the area that would be covered by the regional authority—let us say Scotland for the sake of argument—should not be entitled to vote in this place on matters relating to, say, England. In other words, those Members would have voting rights on some issues, but not on others. That is utterly unworkable. Within the one Chamber, we cannot have a majority for some purposes, but not for others. If that is what would happen in the Chamber, what would happen in the Cabinet? What about people who are Ministers for one locality but not for another? Indeed, we should bear in mind that the majority of members of the Cabinet are English Members with responsibility for English areas not United Kingdom areas. That is another can of worms, and another issue.

Let us consider what happened with the various home rule Bills. They started with "everybody out" or, in other words, no Irish Members in Westminster. Then in the 1892 Bill the Liberal party changed its mind and had "everybody in". Eventually in the 1921 Bill it adopted a rather arbitrary reduction in the number of Members not merely to the theoretical figure which produced equality within the United Kingdom but to even fewer than that. For example, the six-county area which became Northern Ireland had 30 Members of Parliament immediately before 1920. That was reduced to 13 after 1920. Hon. Members will understand, therefore, why an increase from 12 to 17 is not something that we regard as a great favour. However, that is a different issue.

I mentioned Lord Crowther-Hunt. It is worth considering what he stated in his minority report to the Kilbrandon commission report. He said that in considering what arrangements there should be his guiding principle was: In our view an essential conditon for maintaining this unity is that there must be a substantial equality of political rights and obligations for the peoples of its different nations and regions. That basic view led Kilbrandon to conclude that there should be a form of regional administration in England, and not only devolution for Scotland, Wales and Northern Ireland. That should be the guiding principle in our approach to these issues. As Crowther-Hunt later said: Clearly, there would no longer be any reality to the concept of the political unity of the United Kingdom if individuals in one part of the United Kingdom had significantly greater or lesser political rights and obligations than those in another part. In that context, I am afraid that I must criticise the motion. After referring to the need for regional government in England, it refers to the excessive centralisation of government in the United Kingdom since 1979 and the failure to decentralise and devolve power to the nations and regions of the United Kingdom. Later it moves that the House expresses alarm at the regional divisions which continue to characterise the United Kingdom economy; and considers that the creation of a regional tier of government in the English regions as well as national devolution to Scotland and Wales is now vital to the Untied Kingdom's future economic and political well-being. There is something missing there. A mistake has been made. The motion refers to the English regions, to Scotland and to Wales. That is not the United Kingdom, but Great Britain. The United Kingdom is the United Kingdom of Great Britain and Northern Ireland. I find it remarkable that while the motion calls perfectly reasonably for regional administrations in England and similiar measures of devolution for Wales and Scotland, it is silent about the rest of the United Kingdom. I remind the House of the perfectly correct statement made by Lord Crowther-Hunt that there would no longer be any reality to the concept of the United Kingdom if individuals in one part had significantly greater or lesser political rights than others. That is significant. The hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to the Government's difficulties over the Council of Europe's convention on local self-government. It is not simply that the Government are reluctant for political or ideological reasons to sign the convention. They cannot sign it. They would immediately be in breach of it because of the total absence of any form of local self-government in Northern Ireland.

In Northern Ireland we have suffered uniquely from Whitehall's desire for total political control over other local authorities. That desire has been maintained by the Northern Ireland Office regularly placing obstacles in the way of any restoration of local democracy in Northern Ireland. I have no hesitation in identifying it as the main obstacle to the restoration of democratic local administration there. It plays on our smaller size in the kingdom and consequent lack of influence and our desire not to disrupt the essential unity of the kingdom. But if that approach is followed elsewhere in the kingdom and the same attitude is applied, as the Government appear to do with regard to Scotland, the United Kingdom will be damaged.

I found particularly alarming the comments made by the hon. Member for Stockton, South (Mr. Devlin), who seemed to want to make a unilateral declaration of independence for the south-east of England and to tell the rest of the country to go away. He clearly said that about Scotland. That attitude will do more damage to the United Kingdom than any form of regional administration. A little-England approach will end up impoverishing us all. It is necessary for us to consider a form of regional administration which would give some realistic opportunity for control and influence to the regions, which will become essential if we are to have some form of dialogue with European entities as they develop.

2.10 pm
Dr. Ashok Kumar (Langhbaurgh)

I thank my hon. Friend the Member for Gateshead, East (Ms. Quin) for bringing this important issue to the forefront of our minds. I have been listening to the debate and find that other hon. Members have said everything that I want to say. However, I shall make a couple of points and I intend to be more constructive and rather less self-indulgent than some Conservative Members.

I shall try to be positive. Such an important issue cannot be dismissed lightly. We need to put the arguments for regionalism and for regional government in a wider context—national and international. Throughout Europe the demands for popular autonomy, regional self-determination and for a renewal of a sense of identity and self-esteem are rising daily. In many parts of eastern Europe that has a negative edge—indeed, some might say a barbaric edge in Yugoslavia. However, even that Balkan tragedy must be seen in its historic context.

In western Europe the same pressures are manifest, but in the main there is a more mature response. The vast majority of western European nations, the European Community partners and the European Free Trade Association countries have flourishing local and regional government structures. They know that the centre cannot and should not determine every small element of local spending and what is local need. In the one country that bucks the trend, the United Kingdom, that determination results in an undemocratic straitjacket confining local needs and local aspirations to the diktat of Marsham street and Whitehall.

Under the Government, since that miserable and bleak day in 1979 when the right hon. Member for Finchley (Mrs. Thatcher) first assumed office, regional spending has been slashed. In the last years of the Callaghan Government, regional spending was in the order of £1.8 billion while today that spending, expressed in the prices of the period, has been reduced to an annual average of £242 million. Even that meagre amount has been largely taken out of the popular, public domain, with the focus of spending attention now geared towards unelected, unaccountable and undemocratic urban development corporations. The hon. Member for Stockton, South (Mr. Devlin) said that I had not mentioned Teesside development corporation—now I have. In many cases, those organisations appear to believe that a new economic dawn can be built on the backs of tin sheds in primary colours and the industrial activities of B & Q and MFI.

The patterns of inequality in our society precisely mirror the regional divides. If one lives in the north, one is likely to die younger, to enjoy—if that is the right word—a greater incidence of disease, to have less chance of owning a car or owning one's home, less chance of a job and less chance of a well-paid and permanent job. One will lead a less satisfying and less promising life, perhaps shorter than that of a similar person who happens to live in the south-east of England.

If one lives in the north, big decisions affecting one's life and the lives of one's family—whether a new hospital is to be built or a new road constructed, or whether new investment and jobs are to be steered towards the area—will be taken by faceless civil servants from the home counties or by business men nominated by the Tory party machine.

The previous, popular powers of local authorities to take such decisions, to see whether they fitted distinct local needs and to ensure that those intended to benefit from the decisions do in fact benefit, have been eroded to the point where they are invisible. The fundamental truth is that the one group of people who have no say whatsoever in those decisions are the people who most need to benefit from the decision-making process.

It is obvious that the so-called free market has done little for those who live and work in the regions. The Conservative campaign guide for 1991—the guide for the general election which the Prime Minister was too frightened to call—said that it was the Government's policy to create sustainable growth for all Britain's regions by freeing markets and stimulating enterprise.

The Minister talked about great economic success in the north-east. Let him try telling that to the people of my constituency, who are now facing Christmas on the dole because of the slump in orders for the retail and household goods which caused a hi-tech lighting company to close its factory at Skelton. Let him try telling it to my constituents employed in the steel industry who have seen the results of the profits crash of British Steel, job losses at Skinningrove and the shelving of a new platemill project for the Teesside works. Only two days ago 500 more redundancies were announced by British Steel, reducing the company's work force on Teesside by 20 per cent. in one year to 4,500.

People see this happening against a backdrop of regional inequality. My constituents are not blind. They have families and friends living in other parts of the United Kingdom and they can see with their own eyes, even allowing for the effects of the recession, what is happening. They see the evidence of two nations, with the physical and economic effects of the creation of more than 1.3 million jobs in the south since 1979, while we must live with the despair caused by the loss of more than 100,000 jobs in the northern region alone.

Labour will reverse that catalogue of man-made disasters. We will regenerate and democratise the regions and allow the United Kingdom to be seen yet again to be swimming with the incoming tide of decentralisation, democracy and accountability which is sweeping across Europe.

My hon. Friend the Member for Gateshead, East referred to development agencies. When Labour comes to power, I intend to play a strong role in setting up the new agencies, which will act as the cutting edge of the new deal that is urgently needed. I want to see my constituents, many of whom know little other than the miserable dole queues or the underfunded, underpaid, so-called training schemes which the Government were proud to announce, including the youth training scheme and employment training, benefit along with others from the surge of democracy and regeneration.

For far too long we have all—Labour and Conservative alike—talked ceaselessly about "the regional problem." Instead, we must talk urgently—under the next Labour Government we shall certainly talk in those terms—about the coming regional renaissance in our areas. That is why we need regional government. I urge the House to support the motion.

2.19 pm
Mr. Michael Brown (Brigg and Cleethorpes)

This has been an interesting debate and I was privileged to be able to hear a number of speeches. My hon. Friend the Under-Secretary of State and my hon. Friend the Member for Taunton (Mr. Nicholson) made particularly important contributions.

I hope that the House will forgive me if I concentrate on the region known in my area as Yorkshire and Humberside, which is not accepted as a loyalty region by those who live in the area. At present, people in my area have difficulty even in identifying with the present locally based county of Humberside. The county was created in the 1974 local government reorganisation and my constituency used to fall within the county of Lindsey. There was never a Lincolnshire county council, but we had Lindsey, Kesteven and Holland county councils, all of which were accepted as ideal, decentralised local government areas dealing with strategic matters. Those counties were much missed after the reorganisation of 1974, so the last thing that we want to do is create larger units than the present counties. We should question the very existence of counties and ensure that we return to a much more locally based system of local government.

I could not quite understand the point raised by the hon. Member for Normanton (Mr. O'Brien), who was contradicting the argument that he sought to make when he quoted the journal of the Association of British Chambers of Commerce. He seemed to be saying that the Labour party's case for regional government was based on the fact that cities such as Leeds needed to be intertwined, through the motorway system, with the Humber ports. He made a case for regional government because of the development of the Humber ports and said that he wanted that development to be shared for the benefit of the Yorkshire region. As I said to him in an intervention, the Labour party did more to prevent the development of the Humber ports, which the hon. Gentleman was praying in aid for the Labour party's policy on regional government, than any other political party in the House. He questioned why I had promoted the development of the Humber ports. The simple reason is that I am the Member of Parliament for the constituency which contains the Immingham docks.

The hon. Gentleman and several other Opposition Members also spoke about 1992, the need for Britain to be at the heart of Europe and for regional industry to have access to wider markets. Had we not expanded the Humber ports by means of private legislation between 1987 and 1990, industries, especially in the north of England, would have been denied the opportunity of transacting through a port with the most modern facilities in the world, and investment would have gone to Rotterdam or elsewhere in Europe instead of the United Kingdom. The hon. Gentleman contradicted his and the Labour party's policies by praying in aid the Association of British Chambers of Commerce document in support of regional government and suggesting how important it was for the Humber ports to be linked to wider opportunities for trade in Yorkshire and Humberside, yet that development came about only through the support of my right hon. and hon. Friends on a free vote in the House over a period of two or three years.

May I return to the main theme that guides debates on regional government in Humberside. Humberside is loathed and detested. The sooner the county of Humberside goes, the better. Fortunately, the local government boundary commission, which was charged by my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) two and a half years ago to countenance the prospect of getting rid of that county, has made various decisions and its report is now on the table. I hope that it will be on the top of the agenda of the new local government commission and, when the statutory provisions are enacted, I hope that the commission will be guided by the boundary commission's report. I hope it will be possible for that report to be considered at an early stage.

There is no doubt that the last thing the people of Humberside want is to traipse all the way over to a regional centre. It is bad enough when I have to discuss the funding of my local health service with the Yorkshire regional health authority in January and have to traipse from Cleethorpes to Harrogate, which is miles away.

We want more power to be devolved downwards in all aspects of central Government and local government. We want the district health authorities to have more power so that they may consider the hospital trusts, and leave out the regional health authorities. The Department of Trade and Industry uses an inappropriate regional map of Yorkshire and Humberside. If I have to go to office meetings in Leeds, it means I have to travel miles from the far extremities of my constituency. It is miles from Cleethorpes to Harrogate, which makes it difficult when considering any regional organisation.

The system of the old counties of England was the best one and constituted an ideal way of retaining local loyalties. I believe that the local government commission and the structural reform that the Government are bringing forward in this Session of Parliament will ensure the best reform of local government.

2.27 pm
Mr. Kenneth Hind (Lancashire, West)

I have examined the Labour party's plans for regional government and endorse the comments of my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) that the old system of local government—on whichever structure it was based—constitutes the right way to deal with future regional organisation, pressure for development and the interests of the local people.

The Labour party's series of proposals does not focus on the differences between local and regional govern-ment—there is total confusion on which roles will be played by each. First, it is suggested that the regional assembly and its functions will be financed centrally by a block vote of the House and, eventually, by a proportion of local government rates. Unfortunately, the general public will consider that to be another burden heaped on their local tax bill by the Labour party which views people as money milch-cows for Labour local government, free from central controls.

The simple relationships that will exist between central, regional and local government are not covered under the proposals. The Labour party's answer seems to be to create a series of quangos that, in a loose way, will relate to the regional assembly. The only result will be a massive increase in expenditure for the regional assemblies in England, whereby large numbers of elected representatives will be paid salaries and will no doubt require staff, offices and the whole panoply of mini-Westminsters in eight centres up and down the country.

The strength of the Conservative policy has been to devolve power downwards, often to the smallest units—as with schools. We want to give parents choice in schools and give local authorities greater control. The way forward lies in single-tier local authorities representing the interests of the regions. The Labour party's proposals completely ignore that.

I am also worried about the cost of the proposals, which have all the hallmarks of ideas that have been cobbled together. The Labour party addresses issues in Scotland and Wales by stating that it realises that it must give those countries devolution, and so must justify that in the rest of Britain. It is a hash and a mess. It will not do and I urge the House to reject Labour's proposals.

2.29 pm
Ms. Quin

I have very little time in which to sum up. The debate has been interesting and worth while and I thank hon. Members who have taken part for raising so many different aspects of the issue of regional government.

Almost all my hon. Friends and some Conservative Members spoke about the European dimension and how important it would be for the future of our regions. When the Government agree at Maastricht to the setting up of a regional advisory body, I urge them to make sure that English regions are represented on it, and that the English regions represented on that body also—

It being half-past Two o'clock, the debate stood adjourned.