Brexit: Economic Impact on North-East England

Tuesday 10th January 2017 Lords Chamber

Question

14:36

Asked by

[Lord Beith]

To ask Her Majesty’s Government what assessment they have made of the potential impact on the economy of north-east England of the outcomes they are seeking from the negotiations on the United Kingdom’s exit from the European Union.

[The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)]

The Government are carrying out a range of analyses which will help to inform our negotiating strategy and have provided a guarantee for all European structural and investment fund projects signed before the Autumn Statement. We have also guaranteed all European structural projects signed after the Autumn Statement and before the UK’s departure from the European Union, provided that they pass the value for money test and are in line with domestic strategic priorities.

[Lord Beith (LD)]

My Lords, I thank the Minister for the detailed information in her reply. The north-east of England has consistently had the most positive trade balance of any region of the United Kingdom, but 58% of its exports are to European Union countries. If the Prime Minister is no longer even trying to secure the fullest possible participation in the single market, what does the Minister think will be the effect of post-Brexit tariff and other barriers on exporting industries, which they will face long before any new deals with non-EU countries can be reached? Who is speaking up on our behalf in the Government?

[Baroness Neville-Rolfe]

My Lords, we want the deal we strike to give British companies the maximum freedom to trade, as the noble Lord has highlighted, and to operate across the single market. We are going to make the most of the opportunities that our departure presents, getting out into the world and doing business right across the globe, while at home, including in the north-east, building a Britain that works for everyone.

[Lord Davies of Oldham (Lab)]

My Lords, I welcome the noble Baroness to her new responsibilities and I look forward to a number of engagements across the Dispatch Box. Let me begin with a straightforward question. Was the Government’s approach to Nissan and the assurances given to that company the only shaft of light for the north-east at present in terms of Government policy? Was it just a spasm on the Government’s part or do they have a policy for the car industry and manufacturing generally—in fact, for the economy of the north-east? The region has so much to lose because of its commitments to exports to Europe unless the Government get some of these issues right.

[Baroness Neville-Rolfe]

As noble Lords will know, I am a glass half full person and I think that the arrangements for Nissan and the automotive sector were a very good day for the north-east. The answer is that our door is always open to talk to the sector to give it the long-term assurances and strategy it wants, and that is what we have said.

[Lord Dobbs (Con)]

Has my noble friend noted the courageous and insightful speech apparently given today by the current leader of the Labour Party in which he has said that Britain can be better off outside the EU? But we do not have to take his word for it because we can ask the heads of Nissan, Toyota, Honda and Ford, all of whom since the referendum have recommitted themselves to this country. Indeed, one can add Apple, Google and Facebook to that list. Were not the people of the north-east absolutely right and can they not be congratulated on voting to clear us out of the sadly failing internal market of the European Union?

[Baroness Neville-Rolfe]

I would add Snapchat to my noble friend’s list. The British people are clear that Brexit means Brexit and we on this side are determined to make a success of it. The list that my noble friend has shared with us shows the positive news that we have had since that surprising day, 24 June.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, does the Minister recognise that there are very different economies in the different regions of this country? The economy of the north-east is fundamentally different from that of the south-east and London. There are also social challenges that are not found elsewhere in the country. Does she recognise that many people in the north-east feel that the divisions in this country now are as bad as they were in the 1980s and the early 1990s when we lost our industrial base of shipbuilding, coal mining and steel making? What are the Government going to do to address properly the differences in our country, given that they have got rid of regional policy? They have to be addressed, otherwise the people that she has been lauding will feel very betrayed.

[Baroness Neville-Rolfe]

I recognise the special strengths and differences of the north-east, and I am glad we have this debate about them because I believe in the strengths of Newcastle, Teesside, Northumberland, and so on. The sort of investment we have made in the north-east recently shows how determined we are to try to help. The local growth fund awards have been significant. There is the further £556 million for northern local enterprise partnerships in the Autumn Statement, on top of the existing north-east funding. We are creating enterprise zones; I really welcome those in Teesside and in Newcastle. We are investing in transport, because you cannot improve an area of the country without improving that. Changes to the A1 and so on are absolutely crucial. We need to get on with those and to improve skills in the area. We are doing all that, and I am as determined as the noble Baroness.

[Lord Shipley (LD)]

My Lords, the Minister has referred to a number of organisations which are relocating to the United Kingdom. How many of those are relocating to London, and how many are relocating elsewhere in the United Kingdom? I draw her attention to the fact that figures produced by her department in the past year show that one-third of all new jobs created by foreign direct investment went to London.

The Minister said in her initial answer that her department is undertaking a range of analyses about the implications of Brexit. Will she consider creating Brexit resilience committees for each of the nations and regions of the UK, so we have real information rather than a London-based analysis?

[Baroness Neville-Rolfe]

I am surprised that the noble Lord talks about a London focus because I think this Government have actually changed. We have had the northern powerhouse document, which I hope he has read, which we published at the time of the Autumn Statement. We are undertaking an industrial strategy which I look forward to discussing in this House. The importance of place will come through strongly in that strategy. I note the other points that he has made.

[Viscount Ridley (Con)]

My Lords, would my noble friend consider looking at a proposal from the North East Chamber of Commerce to create a free trade zone in the north-east to build on the continuing success of the north-east economy?

[Baroness Neville-Rolfe]

I am glad to hear from my noble friend, who introduced me to some of the joys of the industry of the north-east. I have indeed seen the North East Chamber of Commerce’s manifesto, which makes very interesting reading. In terms of the future on trade and on Brexit, we are carrying out a range of analysis to inform our negotiating strategy, and I shall certainly bear in mind the points that he made. But I think that you need to look at the United Kingdom as a whole.