With permission, Mr Speaker, I should like to make a statement on the English Regions.

Today, my Rt Hon Friend the Secretary of State for Transport, Local Government and the Regions and I are presenting our White Paper "Your Region Your Choice". Copies are available in the Vote Office.

Mr Speaker, right across the United Kingdom and Europe there has been a growing recognition of the importance of regions as a focus of economic growth and social identity.

This Government has challenged the notion that the only decisions worth making are those taken in Whitehall and Westminster.

We recognise that people in Birmingham or Bradford, Liverpool or Lowestoft, Falmouth or Faversham, Newcastle or Norwich, deserve to have their voice heard as well.

We believe that Britain as a whole cannot achieve its full potential unless all of our regions share in success and drive that success.

When we offered devolution, we placed our trust in the people of Scotland and Wales.

Today I am announcing measures to bring decision-making closer to the people of England, by strengthening regional powers and by giving them the choice of regional government.

We trust the people to make that choice and, if they so wish, to choose to elect a regional assembly and give a new voice to their region.

This White Paper gives effect to our Manifesto commitment to provide for directly elected regional assemblies for those regions that want them.

My interest in regional policy goes back over 30 years.

In the early 1980s Michael Foot asked me to draw up a new policy framework to secure agreement for devolution for Scotland, Wales and the English regions – which as some of you will remember was causing us a local difficulty at the time!

The result was our Alternative Regional Strategy, published in 1982, which set out a framework for devolving power to Scotland and Wales and decentralising power to the English Regions.

Later, in 1994 I appointed Bruce Millan, the former Scottish Secretary and European Commissioner to chair the Labour Party’s Regional Policy Commission.

His report Renewing the Regions said that "without strong regional policy rooted in the regions themselves, and without firm commitment to decentralisation we are unable to develop our national economy to its full potential".

Many of the ideas in this White Paper find their origins in those earlier pieces of work. I would like to express my appreciation to those who worked on these reports, some of whom are members of this House today.

Mr Speaker, this Government has always recognised the Regions’ potential.

In 1997 we inherited one of the most centralised systems of government in the Western world.

We’ve changed that.

In our first term we devolved power to Scotland, Wales and Northern Ireland.

And in England:

• We restored democratic city-wide government to London
• We reformed local government
• We strengthened and broadened the Government Offices for the Regions
• We set up nine Regional Development Agencies, which in their first two years created or safeguarded more than 80,000 jobs; and
• We helped establish a network of regional chambers and assemblies, which have improved accountability and given the regions a new voice.

Today’s White Paper takes that a step further.

It sets out a range of options for people in the English regions.

But whatever they decide, this White Paper will strengthen Regional Policy across England.

In all regions we are giving extra resources and greater flexibility to the Regional Development Agencies.

In all regions Regional Chambers will have greater responsibilities and will have a greater role in regional planning.

In all regions we will give extra responsibilities to the Government Offices to strengthen regional decision making and to ensure that government is joined up in the regions.

But for those regions that wish to proceed to directly elected regional assemblies this White Paper sets out the process.

Members are well aware of the different needs and aspirations of our English regions.

There is a strong and growing demand in some regions to have a distinct democratic voice and a greater say over their own future.

The people of the English regions should rightly have the same choice that we gave to the people of Scotland, Wales and London.

This White Paper is about

• striking the right balance;

• its about trusting the people;

• its about responding to the needs of a modern, diverse, and more progressive society;

• and its about creating the conditions for greater prosperity and reducing disparity in and between our regions.

The key is flexibility. That requires a pragmatic approach and the consent of the people of the regions.

Where there is a referendum in favour of them we will establish elected Regional Assemblies. And I believe where one or two regions lead, others will follow.

Mr Speaker, the White Paper sets out the powers, functions and financial arrangements for these new elected regional assemblies.

They will have real power and funding to improve the quality of life of people in their region - particularly by improving regional economic performance.

Indeed, raising growth by just half a percent for the worst performing regions would increase our national wealth by £20billion in 10 years.

And as my Rt Hon Friend the Chancellor’s Pre-Budget Report made clear, if all regions raised their productivity to the national average the average person in the UK would be £1,000 a year better off.

Regional assemblies will be responsible for developing joined-up regional strategies on issues such as:

• Sustainable development;
• Economic development and regeneration;
• Skills and employment;
• Planning;
• Transport;
• Housing;
• Health improvement; and
• Culture

Assemblies will have a range of powers to help them deliver those strategies.

For example, they will allocate funding for economic development, housing, tourism, arts and sport. And they will be responsible for the Regional Development Agencies – appointing the Board and approving the Regional Economic Strategy.

Mr Speaker, regional assemblies will be funded primarily by central government grant.

And they will have complete freedom to spend that grant as they judge best. We will agree targets with them and provide a single pot for regional government.

In addition they will have the power to raise further funds through a precept on council tax and through borrowing.

Naturally budgets will vary depending on the population of each region. But on current expenditure the budget for the North East would be around £350 m a year and in the North West would be around £730 m.

And on top of that assemblies will have a direct influence over large amounts of central government’s public expenditure – some extra £500 million in the North East and £1.3 billion in the North West.

Mr Speaker, elected assemblies need to be big enough to properly represent the interests of the different communities in the region, but not so big that they become unmanageable. We therefore propose that assemblies should have 25 to 35 members.

For an assembly of that size it is important that there is broad political representation in the assembly.

In Scotland, Wales and London we have used the Additional Member system of proportional representation to elect the members of the Parliament and Assemblies. On balance we have decided to use the same system for English regional assemblies.

The boundaries of each region will be the existing ones used by the Government Offices for the Regions and the Regional Development Agencies.

In addition to elected regional assemblies we would like to see greater involvement of groups such as the business community, trade unions, voluntary organisations and environmental groups.

We want to encourage the regional assemblies to draw on the experience and skills of individuals in the region who may not be able to stand for election themselves.

We want to build on the experience of the Scottish Civic Forum, the partnership arrangements in Wales, the London Civic Forum and the arrangements introduced in a number of English regional chambers. Different regions may want to use different models and we are specifically asking for views on this.

For example, there could be appointed assembly members who could play an active part in the role of assemblies but without the right to vote.

Mr Speaker, regional assemblies represent a new tier of political accountability.

Regional assemblies will work closely with their local authority partners. However, in areas that currently have county and district councils an assembly would add a third tier of government.

We believe it would be more efficient and simple if in those cases we moved to a fully unitary system of local government.

So where a decision is made to hold a referendum for an elected assembly – and only in those regions – there will first be an independent review of local government structures conducted by the Boundary Committee for England.

This review - before the referendum - will examine the two-tier areas of the region and make proposals for wholly unitary local government. Existing unitary authorities in the region will not be affected.

We believe that when a referendum is held voters should know:

• what the proposed structure of local government would be; and

• are clear who would do what in their area.

I should emphasise that these reviews will take place only – only – in those regions where a referendum will be held. And any restructuring of local government would take place only if there is a "yes" vote in that referendum.

The White Paper sets out the process and timetable for establishing elected regional assemblies.

Before we decide which region or regions should hold the first referendum we will consult all the English regions on our proposals.

The Secretary of State will decide whether a region should hold a referendum primarily by assessing the level of public interest in the region. In reaching his conclusion he will seek the views of the Regional Chamber, local authorities and other key stakeholders.

We intend to introduce legislation to provide for referendums and local government reviews as soon as Parliamentary time allows.

Our intention is to allow for a referendum to be held before the end of this Parliament.

After a region has voted for an elected assembly, we intend to introduce further legislation enabling assemblies to be established.

This would make it possible for the first regional assembly to be up and running early in the next Parliament.

In conclusion, Mr Speaker.

All English regions will benefit from our strong regional policy, and we will continue to develop the regional structures and agencies we put in place in our first term.

In addition to that our White Paper now offers the opportunity of a new constitutional settlement for the English regions – a choice which has been denied to them for far too long.

Mr Speaker, the opponents of these proposals must answer this question:

• If devolution is good enough for the Scottish and the Welsh why would they deny that choice to the people of England?

Our proposals today will give the regions of England new choices, new powers, and a new voice.

By devolving power, we can elevate our democracy.

By empowering our regions, we can engage people more effectively.

By harnessing the energy of the regions, we can drive forward the nation’s economic growth.

By embracing diversity, we can strengthen the United Kingdom.

And by liberating the potential of our regions, we will be helping Britain to prosper.

Mr Speaker, I commend these proposals to the House.