Alistair Arkley column

Jun 7 2006 By Alistair Arkley, The Journal

In the recent Cabinet shake-up, most of the media attention has concentrated on either the host of problems on the desk of new Home Secretary John Reid or the view that perhaps there isn't quite enough paperwork on the desk of John Prescott to justify him retaining a substantial salary, together with the use of a country estate (now no longer, of course!) and a stylish London apartment.

Little attention has been paid so far to the massive change in the Government's approach to regional policy. Whatever your view of John Prescott, there is little doubt that he was the driving force behind the Northern Way programme and that his fellow Cabinet Minister at the now defunct Office of the Deputy Prime Minister, David Miliband, had been developing significant policy initiatives on the way regions such as the North-East should be governed.

So enter Ruth Kelly, fresh from a torrid time as Education Secretary and now heading the newly-created Department for Communities and Local Government. It is, of course, the way of the political world that within days of her appointment, she found herself in the North-East, fulfilling an appointment in the Tees Valley, previously in the diary of David Miliband.

The event was supposed to be an exchange of views on ways of strengthening regional and sub-regional structures but, inevitably, the new Secretary of State was keen to stress that she was in "listening" mode.

That's understandable but I fear it will serve no one's interests if, as a result of ministerial changes, we are in for another lengthy period of uncertainty on the direction of regional policy.

From a business point of view, we need a clear indication from the new Secretary of State of whether or not she is committed to seeing our sector genuinely engaged in driving forward the regeneration of the region.

I hope she is because without a thriving private sector we will not succeed. I would like her to consider the recent finding from the Centre for Economics and Business research on the regional differences in the balance between the public and private sectors.

In London, public spending represents just 33.4% of economic output. In the North-East, the figure is 61.5%.

That's a pretty horrifying indication of the huge challenge we face and surely a message to the politicians, both local and national, that they cannot do it alone and that, as well as spending money, they need to work with those of us who create it.