Business groups oppose end to One North East and Yorkshire Forward

3:16pm Wednesday 25th November 2009

By Rob Merrick

TORY plans to axe regional development agencies reveal a "vindictive ideology" and will bring disaster, Gordon Brown said today.

The prime minister turned up the heat on the controversial policy, which is threatening to backfire by wrecking the Conservatives traditionally strong support from business groups.

Mr Brown said One North East, Yorkshire Forward and the other RDAs had proved their worth by winning badly-needed investment and jobs.

And he added: "In every region of this country, business organisations, engineering employers and local authorities are saying that regional development agencies are doing a job that helps businesses through recession.

"I think the Conservative party will be making a terrible mistake if they decide, in an act of vindictive ideology, to abolish regional development agencies."

The comments, during prime minister's questions, came just days after the Tory-friendly CBI and British Chambers of Commerce joined the chorus of criticism that the party's plans to scrap RDAs are misguided.

They would be replaced by town hall-led 'local enterprise partnerships' with businesses, which would take over responsibility for economic development.

The Tories have suggested a drastically-slimmed down RDA could survive where it is popular, but they will be stripped of powers over housing and planning - and their funding streams from Whitehall cut off.

Two weeks ago, business spokesman Ken Clarke admitted that local council-led partnerships would lack the same power as the agencies they would replace.

Critics have also pointed to a study, earlier this year, that concluded RDAs are "generating economic benefits", adding at least £4.50 to regional economies for every £1 spent.

Adam Marshall, the British Chambers of Commerce's director of policy, said this week: "There's a need for something to exist between Whitehall and central government and the level of the local authority.

"Localism is something many people believe in, but there's a danger in going so local that you can't take care of the strategic infrastructure which business thinks is so important."

And John Cridland, the CBIs deputy director-general, added: "There's a danger the Conservatives' policies don't give business sufficient involvement in key regional decisions which affect them."