Row over funding to boost economy
Sep 21 2009 by William Green, The Journal
SOUTH East Labour MPs want to snatch cash boosting the North East's economy to help their region, it emerged last night.
The Commons South East select committee, made up only of Labour MPs, has complained their regional development agency (RDA) has the lowest funding compared to other RDAs in a new report.
Demanding a review, the MPs claimed spending public money in the South East would produce a “greater return” than in other parts of the country despite their own Labour Government promising to cut the North-South economic divide.
The committee’s report added: “We accept that less prosperous regions will always, rightly, aspire to levels of investment to allow them to build economic activity in their own communities to those enjoyed in the South East and Government will always have difficult decisions to make in balancing these demands.
“However, it is arguable that investment in the South East can more quickly generate revenue for the public purse than investment elsewhere.”
John Shipley, Liberal Democrat leader of Newcastle City Council, issued a furious response and a robust defence of development agency One North East.
His comments came as Lib Dem leader Nick Clegg called for RDAs to be axed and their powers handed to councils to cut public spending during his party’s conference in Bournemouth yesterday.
The Tories have also called the future of RDAs into doubt, while Whitehall officials are reportedly drawing up plans to scrap them whoever is in charge to get Britain’s finances back in order.
Mr Shipley said: “Public investment in regeneration needs to identify long term projects which will enable the United Kingdom as a whole to compete in the world. That means being at the cutting edge of research and development in fields which will have major commercial potential.”
He slammed the South East MPs’ view as “too short term”, adding: “Investment in the North East in electric vehicles and renewable energy, for example, will have lasting long term benefits for the UK as a whole.
“Making investment decisions on the basis of short term pay-back will fail to develop the infrastructure the country needs as a whole. It will simply fuel the overheating of the South East and ultimately make the UK less competitive.”
