TONY BLAIR today promised early action to set up a North West Regional Development Agency to draw in overseas cash and companies.

And the Labour leader also said there was a strong demand for a Regional Assembly in the North West.

In an exclusive interview with the Lancashire Evening Telegraph's political correspondent Bill Jacobs, he promised a Labour government would respond to such a demand, calling a referendum on the issue before abolishing Lancashire County Council and setting up an assembly for the whole region.

He said: "We don't intend imposing regional government on people at all but there is a very strong move in the North of England and the North West of England and other parts down in the South of England for greater regional government.

"How swiftly they move towards regional government really depends on what they want there. This is not something which should be imposed on people.

"Already, for example, in the North West you have something called the North West Partnership that brings together businesses, unions, local government and other interested groups to try and give the North West a voice because in things like inward investment that's very important.

"In the North East we have formed ourselves a Northern Development Company, that is, a putative development agency, to give ourselves a greater voice economically.

"If they want to move towards a regional government system, yes, they will get it provided of course you reorganise local government underneath it. We don't have unitary systems of local government there." He said there was no timetable yet for referendums on whether areas want regional assemblies and what will happen if they vote yes.

Mr Blair said: "This is something which has got to grow and be discussed with people in those areas when Labour comes to power. We are not going to impose another layer of bureaucracy.

"I think it is important that we move with the consent of the people."

Mr Blair reaffirmed Labour's commitment for regional development agencies for both the North West and North East attract inward investment.

They would be a key part of the Labour's regional package, he said.

He was also adamant that there was no backpedalling on Labour's commitment to a Scottish Parliament set up within a year of coming into office and that there would be no reduction in the number of Scottish MPs after devolution. Mr Blair said that the need for a Scottish Parliament was now accepted by MPs in the North of England and there would be no repeat of the backbench rebellion which torpedoed Home Rule for Scotland in the late 1970s.

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