Tory government would scrap Midlands overseas offices
A network of offices to promote West Midlands industry overseas would be scrapped under a Conservative government, the shadow Trade Secretary has pledged.
Alan Duncan said it was “baffling” to foreign business leaders when the West Midlands set up offices in Germany and America which competed with rival offices representing other English regions – at a cost of £20 million to the taxpayer.
There are seven rival offices in Japan, encouraging businesses to invest in Yorkshire, the north-east and the south-west, as well the West Midlands.
Mr Duncan said the offices undermined the work of national body UK Trade and Investment, led by Trade Minister Lord Jones of Birmingham, which also tries to promote British industry overseas.
The regional offices are run by development agencies such as Advantage West Midlands, which is directly responsible for spending about £291 million each year to boost the local economy.
The shadow Business Secretary set out Tory proposals to reform regional development agencies, in a speech to the Policy Exchange thinktank.
He warned that regional development agencies competed with each other – which meant they were more likely to fail.
“As an example, all but one of the RDAs say they want to prioritise biotechnology in their region. I’m sorry to break the news – but it’s highly unlikely that the UK can sustain eight major bio or even nano-technology hubs.
“But nowhere is this adverse competitiveness better visible than in one of the great absurdities of Labour’s quangocracy: the overseas bureaux.
“The South East England Development Agency has an office in Korea. Advantage West Midlands employs staff in Belgium. One North East spreads itself all over North America, from Atlanta to Chicago and from Boston to Los Angeles.
“Instead of attracting inward investment, this process of rival bidding only exports regional competition. It must be baffling to the Chinese or the Koreans. It must be equally baffling to the taxpayer, who has had to fork out over £20 million on these vanity offices since 2002.”
Mr Duncan also promised a “rethink” of whether regional bodies were needed at all.
Advantage West Midlands covers an area from Stoke-on-Trent in the north to Stratford-on-Avon in the south, taking in Birmingham and the Black Country.
Critics have argued that the boundaries are artificial. For example, it is claimed that Worcestershire and Herefordshire, which are considered part of the West Midlands, have strong economic ties with Gloucestershire, which is considered part of the South-west region and covered by a different development agency.
He added: “Despite the creation of an entirely new tier of regional government, with a specific remit of encouraging economic development and narrowing wide regional disparities, all the evidence suggests that we’re still seeing huge differences between the entrepreneurial culture of north and south, east and west, the City and the rest of the UK.”
Mr Duncan said: “The real threat for the UK is not only that some regions are lagging behind – which is the natural state in an economy exposed to new global pressures – but that the economic tension in the south-east is becoming dangerously overheated. If a man has one very strong leg, and one weak one, it’s quite likely that he’ll start walking round in circles. And so it is with the British economy.”
An Advantage West Midlands spokesman said: “Over the past three years we have pulled in record investment for the West Midlands from overseas."