Shared Prosperity Fund
(5 years, 6 months ago)
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Dan Jarvis (Barnsley Central) (Lab)
I beg to move,
That this House has considered the UK shared prosperity fund.
It is a pleasure to serve under your chairmanship, Sir David. I am pleased to see so many colleagues present to debate an issue that will affect all corners of the United Kingdom and all our communities.
There has been considerable discussion and debate, especially within the Welsh, Scottish and Northern Ireland devolved Administrations, about the shared prosperity fund. Many of us have raised it formally with Ministers in written and oral questions, meetings and correspondence with the Government over the past year. However, it is right that today we take the opportunity to lead a national debate that seeks to heal the divisions in our country—divisions that were laid bare by Brexit but whose seeds were sown long before. Today is an opportunity to look at an important issue through the eyes of our communities, rather than through the prism of party politics.
The Government must respond to three key challenges: to accept that they cannot leave local areas facing major financial uncertainty, to signal that they trust devolved Administrations, mayoral combined authorities and local authorities to know their communities best, and to commit to a clear timetable for action. I speak not only as the Member for Barnsley Central, but as elected Mayor of the Sheffield city region—a unique position that gives me a unique perspective.
Mr Clive Betts (Sheffield South East) (Lab)
I congratulate my hon. Friend on securing this important debate; I apologise that before too long I will have to leave it to chair a meeting. Is it not disappointing that, despite the promise to consult on the shared prosperity fund by the end of last year, we still do not know its terms or the amounts involved? Secondly, should the Government not make a simple promise that no area will be worse off if we leave the EU than if we had stayed in?
Dan Jarvis
I agree. I will make those points later in my speech.
I have seen at first hand what local areas can do when they come together to drive economic growth, but also how they can be limited and constrained by the powers and resources available to them. European or Government funding can often come with limitations that inhibit creative thinking, making it difficult to deliver significant structural changes.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate my hon. Friend on securing this debate. When I was leader of Coventry City Council a long time ago, we badly needed regional aid, which at that time came from Europe. One thing that investors asked was what our skills, transport systems and so forth were like. If we could not answer those questions, sometimes we did not get the aid, and as a consequence we lobbied for regional aid for a couple of years. It is very important that we get some guarantees out of the Government, because whether we happen to live in Wales, Scotland or the west midlands, we need real answers. If we do not get them, investment will fall, costing us jobs. This is a very serious situation; I cannot stress that enough.
Dan Jarvis
My hon. Friend speaks with great authority on these matters. He has put his finger on the nub of the issue, which is that decisions that will have an impact on local communities are best made by those communities themselves. Through the devolution agenda, the Government have a very exciting opportunity to devolve not just decision making, but the powers and resources required to deliver those decisions.
I was expressing frustration about the criteria that are sometimes applied to pots of funding. Central Government funding in particular can often be short-term or pit places against one another. Sadly, at times it can be driven by political short-termism, by pork barrel politics or by who shouts loudest and longest. Under such circumstances, it is hard to plan for the future, and it can be more difficult to be strategic.
From 2020 onwards, the funding allocated to regions from the European Union will come to an end. From 2021, so will the funding allocated through the local growth fund programme. Together, the programmes have totalled billions of pounds of investment. The European funding element in the current programme alone has been worth €207 million for the Sheffield city region, €796 million for Yorkshire and the Humber, €513 million for Northern Ireland, €895 million for Scotland and €2.413 billion for Wales.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
In the highlands, the European structural funds were awarded on properly assessed need for roads, harbours and suchlike. That funding was fantastic in halting continuing depopulation, that great curse of the highlands. If we get this wrong—if we do not get something proper in place of the funding—I fear that that ghost will haunt the highlands once again.
Jo Stevens (Cardiff Central) (Lab)
My hon. Friend mentioned the timing for the funding running out and the possibility of taking a strategic view of funding for the future. Does he agree that the delay in publishing the consultation makes it even more difficult for people throughout the UK to think about strategic funding for the future and delivering projects for our communities?
Albert Owen (Ynys Môn) (Lab)
My hon. Friend rightly noted that in previous schemes that we have had in this country, assisted areas were pitted against one another. The European structural funds were just that—they were structural. They allowed us to invest in infrastructure, but also, importantly, in social projects. That dimension must not be lost.
Dan Jarvis
My hon. Friend makes an important point, which I will address in just a moment.
If we remained in the European Union, research produced by the Conference of Peripheral Maritime Regions suggests that UK regions would receive €13 billion under the future EU cohesion programme.
Sarah Newton (Truro and Falmouth) (Con)
I congratulate the hon. Gentleman on securing this debate. He is making a powerful case, but as one of three Cornish MPs present, I have to note that he omitted Cornwall from his list of regions of the UK that have benefited significantly from regional growth funds and from European funds. It is important that we have this debate and that we encourage the Government to publish the consultation, but it is also important that we should work right now, as we are doing in Cornwall, on how to spend regional growth funds to the benefit of our communities. We do not have to wait for the consultation to come out; we can all work with our local authorities and businesses to shape the future funding arrangements. Will the hon. Gentleman encourage colleagues in this Chamber to work together to ensure that we learn from the lessons of the past and have funds that work for our areas?
Dan Jarvis
I hope very much that this debate will provide an opportunity for hon. Members to make points that they have sought to make for some time. On Cornwall specifically, if the hon. Lady bears with me for no more than a few seconds, she will, I hope, be pleased with what I am about to say.
I was saying that certain areas with a specific interest in the work of the Conference of Peripheral Maritime Regions were due to get an even greater proportional increase: South Yorkshire, Tees Valley and Durham, Lincolnshire, southern Scotland, parts of outer London, Cornwall and the Isles of Scilly, west Wales and the valleys.
Dan Jarvis
And Devon—I am grateful for that intervention.
Let me move back from Devon and Cornwall to South Yorkshire for just a moment. In South Yorkshire, we would have seen an increase from €117 per head to more than €500 per head. It is therefore my view that any future shared prosperity fund needs to replace the funds on the basis of what would have been received, had the referendum result been different.
Wayne David (Caerphilly) (Lab)
On the question of how funds are allocated, does my hon. Friend agree that if there is any combination of needs-based formulae and competition, allocation on the basis of need should overwhelmingly be the most important factor to be taken into consideration?
Dan Jarvis
I do agree. My hon. Friend makes a very important point, and I will say more about that later.
When it comes to the funding criteria for the shared prosperity fund, it is important to understand that resources previously received support some of the most vulnerable in our society, through projects delivered by charities from Mencap and the Salvation Army through to local and voluntary community organisations, such as South Yorkshire Housing and Sheffield Futures, in my patch—organisations rooted in our communities, born out of need and surviving in some cases by the skin of their teeth. The resources also support investment in high-profile, multimillion-pound research and innovation schemes. They unlock town and city regeneration. They provide business support and finance in urban and rural areas. They deliver sustainable development projects that support the low-carbon agenda. Taken together, these local growth and European funds have been the glue that holds our communities together.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)
I will be brief, as I know many others want to speak. Will the hon. Gentleman expand on that? Many of the areas he listed as the biggest beneficiaries of European structural funds were also areas that voted to leave the European Union. I was surprised to hear him say that we should have the same system, had the referendum result been different. Will he say why he thinks that people in many of those areas voted in such high numbers to leave?
Dan Jarvis
I do not think that that is an unreasonable question. We can have a debate if we like, although perhaps on another occasion, about why it was that people decided they wanted to leave the European Union. For many, it was because they felt that their local areas were not receiving the benefits that other, more affluent parts of the country were. This is a very good opportunity for the Government to seek to heal some of those divisions and invest in some of the communities that feel left behind. The United Kingdom shared prosperity fund must be designed and delivered so as to deliver on the aspirations of the communities such as the one that I am proud to represent. Those funds have previously done an incredibly important job in providing the glue that holds some of our communities together, creating new jobs, and in supporting disadvantaged and hard-to-reach communities that have often been neglected.
Mike Amesbury (Weaver Vale) (Lab)
The Employment Related Services Association has highlighted the very point that my hon. Friend makes—that these initiatives and organisations support people furthest away from the labour market. I used to be a Connexions manager and would draw down some of that funding to help young people who were not in education, employment or training. Does my hon. Friend agree that 2020 is just around the corner and people are getting desperate to plan and deliver those programmes?
Dan Jarvis
I do, and furthermore there is a real opportunity to place these resources in town halls and in mayoral combined authorities—in people who have their own democratic mandate to take decisions and allocate the resources in the most effective and efficient way.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I commend my hon. Friend on securing this debate. He will know that, apart from Cornwall, the north-east and the Tees Valley are the areas that have received the most funding from the European regional development fund and social fund. He will also know that by the Government’s own economic analysis, those areas are also set to suffer most from the impact of any Brexit outcome, however delivered. Is it not incumbent upon the Government to take this opportunity not only to match up to the promises that have been made on that funding, regardless of our departure from the European Union, but to do that in a fair and properly targeted way, so that it gets to the areas that need it most—the areas suffering from poverty and low living standards—regardless of our patchwork of local devolution?
Dan Jarvis
My hon. Friend is exactly right; she makes a powerful point. This is a big opportunity for this Government and the next Government to invest money in our regional economies. I said at the outset that I hoped we would see this debate through the eyes of our communities and what is in their best interest, not through the prism of party politics. There will be a range of different views about Brexit and what it may or may not mean for our country, but I hope there is a unanimity of view on wanting to do the best for our country, whatever happens. We want to invest money wisely and effectively in the regions and nations of our country. If we are serious about doing that, the shared prosperity fund is an incredibly important element and ingredient in it, but we have to design it in the right way. We have to get the criteria right. We have to make sure that the formula in place is agreed by the regions and nations. That is why we need to get on with the consultation and make some progress.
Caroline Flint (Don Valley) (Lab)
It seems to me that, for one reason or another, moneys that have come from Europe—or that we have put in and that have come back to us from Europe—and moneys that a number of Governments have allocated have not dealt with the inequity in our country between north and south or between cities and towns. Does my hon. Friend agree that, whatever else happens in the future, unless there is an offer for our smaller towns and communities, no fund will match the expectations of those communities, or the demoralisation that they feel at how they have been treated by national Government and, for that matter, city government?
Dan Jarvis
As always, my right hon. Friend makes an important point. I hope that what is starting to emerge as a consensus in this place is that whatever happens over the next few weeks, months and years, business as usual and the way we have done our politics previously are not going to cut it. This is an opportunity to look at how we invest in our regional communities and to empower decision making at a regional and local level. That is not a silver bullet solution—it will not necessarily address all the challenges that we face—but it has to be part of the solution to many of the concerns that our constituents have.
My right hon. Friend provokes me to make another point. This country has one of the most centralised systems of public finance, policy making and political control of all the OECD nations. The Guardian—I am not sure whether the Minister is a regular reader—reported that local government in this country controls only 1.6% of GDP. That figure is 6% in France, 11% in Germany and 16% in Sweden, yet local government delivers around a quarter of all public services. The inevitable consequence is that decisions, however well meaning, do not always adequately reflect the needs or opportunities of local areas.
The issue is no more acute than in the way that successive Governments have decided where to prioritise investment. I have made this point many times before: when it comes to spending on transport infrastructure, the gap between more affluent areas, such as London and the south-east of England, and the north is particularly stark. Despite the work of the Minister and those in Government supporting the northern powerhouse, it is still the case that, since the northern powerhouse was introduced by the Government in 2014, public transport investment per person has been three times higher in London than in Yorkshire and the Humber.
It is no surprise that that is the case. However herculean the efforts of individual Ministers, the rules of engagement are stacked against us. The inequalities are built into the criteria of the Treasury Green Book model, which favours infrastructure development in more affluent areas, meeting existing demand rather than stimulating latent potential. In the words of my friend and neighbour, the Mayor of Greater Manchester, Andy Burnham—himself a former Chief Secretary to the Treasury—the Government have
“a tendency to shovel more and more into the areas that are already doing well.”
We see that in transport investment and other Government programmes.
Scott Mann (North Cornwall) (Con)
I am grateful to the hon. Gentleman for securing this debate. Does he acknowledge that it is not just the north that suffers this problem? Some areas in the south-west have exactly the same difficulty. Does he agree that the Treasury should have other mechanisms, rather than looking at just the economic benefits? Perhaps it could look at the social benefits of putting money into areas such as his and mine.
Dan Jarvis
I absolutely agree, and I always try to choose my words very carefully. Not for one moment will Labour try to pit the north against the south, or different parts of the country against each other. I absolutely accept that there are different needs in the remoter regions of our United Kingdom. The hon. Gentleman is absolutely right to make the point that there are areas of deprivation in the south, south-west and south-east, and indeed in London, just as there are in the north. That is why it is so important that we take this opportunity to get the design of this fund right, so that every corner of the country will be best placed to benefit from it.
I was about to make the point that in 1960 the UK had the highest levels of productivity in Europe. Now, though, a French worker produces, on average, more by the end of Thursday than a worker in the UK does by the end of the week. In the UK, the gap between the richest and poorest regions is around 150%, which is almost twice as large as in France and three quarters larger than in Germany. Such gaps in wealth distribution and productivity are neither normal nor inevitable, but for some of our most deprived regions they are increasing. The consequences of public policies and investment decisions entrench the economic and social divide. If we fix that, the prize will be huge.
Looking at the north of England, Transport for the North’s “Northern Powerhouse Independent Economic Review” suggests that we could add £97 billion to our economy by 2025, which is over and above business-as-usual levels. Over the same period, we could add 850,000 jobs, which is also over and above business-as-usual levels. We can do that by focusing on what we are good at. In South Yorkshire, the same qualities that fired the world’s first industrial revolution now power our 21st-century advanced manufacturing and engineering story. Companies such as Rolls-Royce, Boeing and McLaren have chosen our region because we are in the vanguard of developing new materials and solutions to real-life manufacturing and engineering problems. This must be the start of our economic transformation, not the end. To go further, we must have the tools and resources.
Anne Marie Morris
Many valuable points have been made, but the points the hon. Gentleman is now making refer to prosperity. One of his colleagues asked earlier whether we are looking at meeting need or at driving prosperity and productivity—those two things almost conflict. My concern is about how much of this fund will be delivered through local enterprise partnerships, which will be looking competitively at growth, and how much will be delivered through local government, which will effectively be looking much more at need. Is the hon. Gentleman also concerned about ensuring that both issues are addressed? This concerns not just the areas where we will drive productivity; we need to get other areas up to at least a basic level, so that the need is at least average.
Dan Jarvis
The hon. Lady asks the right questions, and the point of the debate is precisely to flush out these kinds of question. That is precisely why we need to have this consultation, so that collectively we can have that debate and put in place an arrangement—a formula or criteria—that serves our country in the way that I hope we would all want it to be served.
I was making some observations about the challenges that specifically relate to poor connectivity, issues regarding skills, and productivity. Owing to devolution, and hopefully to the design of this fund, I am hugely positive about our ability at a regional and local level to address some of these challenges. Change is afoot, and there is growing recognition that the answers to these issues do not lie just in Whitehall or Westminster. The recent election of the North of Tyne Mayor—I know the Minister is quite enthusiastic about that recent election—means there are nine metro Mayors across England. They represent 20.7 million people, which is 37% of the population of England.
We are adding our voice to that of our friends and colleagues in devolved Administrations in Scotland, Northern Ireland and Wales in calling for greater freedoms and resources to help us do our jobs. This is a powerful voice and one that, to be fair, I believe the Government listen to. The Government have made place central to their industrial strategy, recognising that no one size fits all, that each and every part of the UK has a different set of opportunities, and that different approaches are required to develop them.
Over the coming months, many of us will be working with the Government to develop our local industrial strategies—joint agreements that set out how central Government and local government will work together to grow our economy. With the creation of powerful sub-national transport bodies such as Transport for the North, we increasingly have the capacity, capability and voice to effect real change. Taken together, these new models of governance, the growing recognition of the importance of place, and an acceptance that the status quo cannot be allowed to persist suggest a brighter future.
That brings me back to the shared prosperity fund, which has to be part of the solution. With some frustration, I say that despite many interventions in the House— through written questions and correspondence with the Department—and despite many promises that consultation would take place, we do not yet have clarity on how much funding will be available, what activities will be eligible for support or who will take the decisions about how the money is spent. We know that the new fund will be a central pillar of the Chancellor’s spending review, and that Departments will be working on the development of the fund. On that basis, we have not been sitting idly by, waiting to be asked. Indeed, I commend the work of the all-party parliamentary group on post-Brexit funding, and the analysis and contributions of colleagues in local and regional government who have been addressing these issues.
I have set out my four guiding principles on which I think the fund should be developed, which are as follows. First, the annual budget for the UK’s shared prosperity fund should be no less in real terms than both the EU and local growth funding streams it replaces. It must guarantee that regions will not be worse off because of Brexit, in the funding available for regional development beyond 2020. Moreover, that should be a baseline rather than a cap.
Secondly, there should be no competitive bidding element. Instead, an open and transparent process must be put in place that strikes a balance between targeting areas of need and rebalancing our economy, and supporting economies that have the greatest potential to grow.
Thirdly, the fund must be fully devolved to those areas that have in place robust, democratically accountable governance models, including devolved Administrations, combined authorities and mayoralties. It must be up to local areas how best to invest this money, be it on skills, helping the most vulnerable and disadvantaged, infrastructure investment, employment or support and education. Fourthly, the funding must be stretched over multiple years, beyond the vagaries of spending reviews and parliamentary cycles.
I want to take this opportunity to implore the Government to untie the hands of our local areas—to trust that we know our communities and can develop, appraise and deliver projects on time, on budget and in line with local need and opportunity. The year-by-year drip-feed of central Government funding for local economic growth has to end. The imposition of priorities and projects has to end. The competing against, rather than collaborating with, our partners for funding has to end.
The shared prosperity fund will be a litmus test for this Government on their commitment to devolution; it will be the proof of the pudding. The central question is whether we all have the courage and the conviction to let go of powers and resources that for too long have sat in Westminster and Whitehall. If we want to tackle the scourge of regional inequalities and create a country that works for all, let us be bold. Let us ensure that the shared prosperity fund does what it says on the tin: enable all our communities to share in this country’s economic growth, and prosper.
Several hon. Members rose—
Sir David Crausby (in the Chair)
Order. I ask Members to limit their contributions to three minutes. That includes any interventions, so if Members do not want to lose time, they should not give way.
Anne Marie Morris (Newton Abbot) (Con)
In my constituency of Newton Abbot, workplace earnings are 78% of the national average; we have a higher percentage of people on carer’s allowance or disability allowance; we have three lower layer super output areas, or neighbourhoods, in the 20 most deprived areas of the country; and 40% of our jobs are part time, compared with the national average of 32.5%. How will a shared prosperity fund address all that? In Devon more broadly, productivity is 17% lower than the UK average, fewer people go on to higher education, 24%—almost 25%—of people are over 65, and 5% of people live in the most deprived wards in the country. We are disproportionately endeavouring to support small and medium-sized enterprises, farming and fishermen. It is therefore very important that support for that type of community is there for us, as it has been in the past.
Since 2014, in Devon we have had 29,000 new homes and 28,000 new business accommodation sites, £183,000 has been invested in infrastructure for broadband, and 2,000 new start-ups and 5,000 new training places have been established. However, we need clarity about how each individual area will get its share of the “cake” and what the criteria will be. We must ensure that there is an appropriate balance between dealing with competition to increase productivity, and accepting that some areas will never reach the Government target. We need to address their need to get them to the base starting point.
We need to be clear. Are we delivering through the LEPs and their industrial strategy? The LEPs certainly think we are, but my concern with that is that it is very competitive, and I cannot see that it will focus on needs. Or is it going to go through local government? That is not my understanding at the moment, but I think that at least some of it should. Clarity would be very much appreciated.
Devon has EU transition status, and we have 11 neighbourhoods in the 25% most deprived areas of the country. My concern is that if we start measuring productivity in those areas, we are measuring economic contribution divided by the number of individuals, rather than the number of workers. That means that we will always do worse. It is crucial that we look at the productivity question differently in rural and coastal areas. My ask for the Minister is that there should be a ring-fenced pot for rural and coastal communities so that, when we focus on the need of SMEs, we look at farmers and fishing. In particular, we should look at raising education and skill levels, because without that we can never get pay up, and investment in infrastructure, which at the moment is well below the national average. The requirement is always for match funding. It is a nice idea, but it does not work in a poor area.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
It is a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on securing this important debate.
The communities I serve are among the poorest parts of the European Union. According to Eurostat, we have a GDP ratio of only 68% of the EU average, whereas the corresponding figure down here in London—the richest part of the European Union by a country mile—is 614%. There are several reasons for that grotesque difference, but British Government policy is a key factor. Public spending per head in London is higher than it is in Wales, while infrastructure spending in London dwarfs the crumbs offered to my country. The trickle-down economics pursued by successive British Governments has failed the communities I serve.
Wales is not alone. Nine of the 10 poorest parts of northern Europe are within the British state. Every single nation and region within the British state, apart from London and the south-east of England, runs a deficit to the UK Treasury. The UK has a chronic under-productivity problem, as many hon. Members have already said. The easiest way to tackle that would be to target investment at the poorest parts of the British state.
My county of Carmarthenshire has hugely benefited from European structural funds. During the 2014-2020 programme, EU funds have so far assisted 611 enterprises, created 130 enterprises, generated 884 jobs, supported 877 people into work and helped 3,557 people to gain qualifications. Of all the nations and regions in the British state, west Wales and the valleys has the most to lose.
In the absence of any commitment from the British Government, Plaid Cymru has produced its own model for post-EU regional funding. Our approach is based on a few simple principles. First, we should receive not a penny less than what would have been available through future funding, as the people of Wales were promised during the referendum campaign. Secondly, decisions about Welsh funding should be made in Wales. A power grab of any nature that undermines the Welsh constitution will be met with fury. I hope the British Government are alive to the problems that they are brewing for themselves in my country.
Thirdly, the new framework must be ready to take over seamlessly from the end of EU structural funds. Fourthly, funds should be pre-allocated and not subjected to a competitive bidding process, which would inevitably mean that the poorest parts of the British state lose out. Finally, we believe that the programme funding in Wales should continue to meet the goals of European structural funds, including streams relating to employability and economic development.
Paul Masterton (East Renfrewshire) (Con)
It is a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on securing this debate. There is no question but that European structural funds have played a huge role in many of our regions and constituencies—in fact, the building in which my constituency office is located was built on the back of European money—so it is really important that we get to grips with this new fund.
The hon. Gentleman drew out a lot of the difficulties and conflicting ideas very well. One of the difficulties is that we all have a slightly different idea of what the prosperity fund should be trying to target, how it should look and what sorts of projects would fit into it. That is one of the reasons why we need the Government to move much more quickly and set out their view of how it should look.
Although EU structural funds have some real benefits and strong points, we have an opportunity to do things a bit differently. The pre-allocation over a seven-year period is too inflexible for what we will need. We need more flexibility so we can react more quickly to what is happening in the economy and to local areas. We must also look at how funding is allocated, and we should have a discussion about exactly how we will do that. I do not want the UK prosperity fund to become effectively an England-only fund, with money passed on under the Barnett formula to the devolved nations under the current funding formulae, which are not ring-fenced. That money could be used for things that are completely unrelated to the aims and purposes of the prosperity fund or to plug holes in other budgets. That is not a political point about a Conservative UK Government and an SNP Scottish Government; that problem will exist whoever is in power in either location.
If we are serious about using the UK shared prosperity fund to reduce inequalities among communities across the four nations, we must ensure that each and every part of the United Kingdom can benefit from it fairly. The Barnett formula is a pretty good argument that the devolved nations would actually lose out, rather than gain, under that arrangement. I hope the Minister agrees that that means that the UK prosperity fund should be operated as a single fund, based on need and not on where people live in the UK.
The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) gave a good example of how European funds have been very good in the highlands and have been targeted. If that were just a block of money that went to the Scottish Government as part of the Budget, there is no guarantee that a penny of it would reach the highlands or be targeted at the initiatives that have benefited under European arrangements.
I hope we will get a few answers from the Minister about the timing, what shape the Government think the structural fund will be, and how much money might be put in. I look forward to the introduction of the fund, because it is hugely important, but we absolutely must get it right, for all the reasons that the hon. Member for Barnsley Central set out.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing this debate, which is, I hope, an important opportunity for us to influence the way billions of pounds will be spent.
I think the point about maintaining minimum levels of expenditure is absolutely right, but if we simply adopt a carbon copy of the old EU scheme, we will have failed. What is the point of replacing a bureaucratic, unaccountable system with another bureaucratic, unaccountable system? That means that we must move away from the current regional format. It most definitely should not be run by and from Whitehall. It needs to be embedded in local communities and run by people from and accountable to the communities, and that means the local councils.
Let us take one example of what is wrong now. My town centre in Ellesmere Port has been struggling for a long time. Like many other northern towns, the rise of the internet and changes in shopping habits have led to shops closing down on a weekly basis. We need a new approach that regenerates the town centre, restores civic pride and gives people a positive reason to visit their high street and spend their money there. I am pleased that my local authority has bid for funding from the future high streets fund, but, realistically, if every town centre that bids gets a slice of the pie, there will never be enough to go round. The sums that we need for a truly transformative approach will not come from one pot alone. When a lot of the town centre is in private ownership, as mine is, there is a limit to what the public sector can physically do, but if the shared prosperity pot was operated in tandem with other funding pots, as the LGA suggests, there would be an opportunity for an integrated and creative approach that could lead to better outcomes for both funds.
We have spent a lot of time in here talking about what people meant when they voted leave, but not nearly enough about why they voted leave. We talk to ourselves, but not to the communities who voted leave. When will they be asked for their opinion and what their priorities are? When will they truly be given the opportunity to shape their own destinies? When will they be able to take back control? People already feel as though they do not have the power to make decisions about the most important things in their lives—whether a local hospital should stay open, where a new school might go or even how often the buses run—and the consequences are there for us all to see.
We need to think big and empower local communities. We do not need more crumbs from the table. Can we not see that people are fed up to the teeth with the patronising approach, not least because it clearly does not work for the vast majority? Power flows towards London. Wealth flows upwards into the hands of the elite. A Westminster handout on Westminster terms will not change that, and the sooner we realise that business as usual is not going to cut it, the better.
Our country is undergoing massive changes now, but with future automation the changes will accelerate and impact even more on those who can least afford it. We need to find a way to give communities responsibility and the power to shape their own futures.
Steve Double (St Austell and Newquay) (Con)
I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on securing this debate. I agreed with many of the points that he made in his very good opening speech.
I represent a Cornish constituency. It is well known—it has already been mentioned in this debate—that Cornwall has been one of the biggest recipients of European economic support funding. Yet as the Minister pointed out, Cornwall voted by a fairly substantial majority to leave the EU. There are reasons for that. It is largely because of the way in which European regional development funding has been spent in Cornwall, and there is a view that much of it has been wasted. During the past 20 years, Cornwall has received almost £1 billion of European funding, yet it has not achieved anywhere near what it was set up to achieve. In 2000, when the programme began, Cornish GDP was at 75% of the European average. The latest assessment is that we are at 68% of the European average, so despite three rounds of ERDF funding and almost £1 billion, we have fallen behind the rest of Europe.
There are good reasons for that: the European programmes are over-bureaucratic and difficult to access. In fact, the people in Cornwall who are most upset that we are leaving the EU are the consultants who have made a small fortune out of advising Cornish businesses on how to apply for European grants. They are the most upset people because their gravy train is coming to an end. Also, the programme has been far too prescriptive. We have been part of a centralised European programme that has not allowed people in Cornwall—the businesses and the local authority—to invest the money in the things that Cornwall really needs.
The shared prosperity fund is a brilliant opportunity for us to get it right. We can have a programme that is much more fit for purpose, less expensive to run, less bureaucratic and far more easily accessible to the businesses that need to access it in Cornwall. As many Members have said this afternoon, we have to grasp the opportunity to get a programme that is fit for purpose and delivers investment into our most deprived areas and really does the job.
Some things are absolutely essential, as other Members have mentioned. Whatever fund is put in place has to be locally administered, because local people know better what local areas need. It has to be more easily accessible and less bureaucratic, and there has to be a single dedicated pot for places such as Cornwall so that we are not put in a position where we have to be competitive and therefore miss out. I urge the Minister to do all that he can to ensure that the consultation is brought forward as soon as possible.
Jo Platt (Leigh) (Lab/Co-op)
I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing this important debate. It comes at a crucial time, as we leave the European Union, but we must realise that the existing fundamental imbalance of investment, decision making and power across the country is a major reason that we saw the Brexit vote. For too long, Westminster has held the purse strings, made the decisions and held power over our communities. Is it any wonder that northern towns such as the one I represent feel isolated from the economic progress of our cities and isolated from the decisions that impact their daily lives?
For the constituents of Leigh, such isolation is not only metaphorical, but literal. My town has no rail connectivity. Decisions made in this place mean that my constituents struggle to access the employment, educational and social opportunities of our nearby cities, while outside investment is effectively blocked from flowing into our towns. My constituents in Leigh are left believing that, after nine years of Tory austerity, the country does not work for them. That is why it is important that the shared prosperity fund not only replaces vital EU funding, but restores their faith in our communities, gives them a voice, a stake in society and empowers them to transform local economies for the 21st-century economy.
At the heart of the debate is not just a matter of replacing funding, but instilling a sense of agency in our communities. We must therefore adopt a place-based approach, putting our constituents at the heart of transforming their areas and not leaving them to feel that they are receiving a pity handout. Gone should be the days when a selected elite decide what is best for our local area. We must instead empower and entrust those whom the decisions impact the most.
One great example of how the current system is failing can be seen in the digital and cyber worlds. The Centre for Towns has found that 55% of digital jobs are in the south-east of England, with just 12% in the north. It is a tragedy. The only way we will reunite our country after years of austerity and Brexit-induced division is by empowering, entrusting and investing in our communities. We in this place must let local areas take back control to make the decisions that transform their towns while restoring their damaged trust and confidence in a society that should work for them.
Scott Mann (North Cornwall) (Con)
Cornwall has been a net beneficiary of objective 1 and convergence funding, as we have heard from other Members, for the past 20 years. If we step away from the coastal towns that many people visit on holiday, we find pockets of rural deprivation that successive Governments have found difficult to identify. Although the moneys that have flowed into Cornwall have been welcome, there have been challenges with how the money has been administered. I want to raise those challenges with the Minster today in the hope that we can avoid them when we allocate the shared prosperity fund.
Cornwall was a net recipient of almost £1 billion over 20 years. Although there have been some noteworthy allocations of the cash—probably the most important and successful was the roll-out of superfast broadband across Cornwall—much of the money was allocated to buildings and industrial parks. Without a strategic investment plan, the net result over the past 20 years has not really moved the dial. Much of the failure came from the application process and does not reflect any lack of will by the people administering the funds. Most of the businesses in North Cornwall are small family businesses employing between five and 10 people. They generally work six days a week, 10 hours a day, and did not have compliance teams that could pore over complex and onerous forms. There was therefore a tendency for the bigger companies and charities to put in their bids, and because they had the time and the resources, they were able to make the applications that the small businesses were unable to.
One stat that struck me was in a recent cost-benefit analysis of the objective 1 funding: for every £250,000 that was spent, Cornwall was the net beneficiary of one job. That fundamentally illustrates why small businesses were unable to access the money when that is exactly where it needs to go. Can we simplify the application process to make the shared prosperity fund easier to access? The countryside productivity small grants scheme, a similar fund, is administered by DEFRA, which is simpler and much more straightforward.
We are still waiting. After assurances that the funding criteria would be in place, we are still in the dark. I encourage the Minister to lay out the fund as soon as is practical, so that Cornwall can benefit. Cornwall has seen historic growth over the last five years. Unemployment is at record lows and tourism in the county is booming off the back of great weather and the devaluation of the pound.
Many of the small businesses in North Cornwall are exporting for the first time, but we need to start investing in people. Young people growing up and going through secondary education and college will now work until they are 80 and will have at least four careers in their lifetimes. The Government need to invest in those young people in college and give them a future by moving the dial on their social mobility.
In summary, we need a more straightforward process, quicker allocation and the apprenticeships and investment in skills that our young people need.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on bringing this issue to the Chamber. I am sure that I am not the only one who longs for a prosperous UK. I, alongside 17.4 million others, believe that that means a UK outside the EU. The vote must be respected and if integrity, honesty and simple human decency have anything to do with it, we will leave.
To replace the EU structural fund, which is reputedly worth £2.4 billion annually, we must continue to reduce inequalities between communities. There must be wise consideration to decide how the UK shared prosperity fund will be formed and distributed. In the past, that was done by identifying the priorities and objectives, the amount of money to be allocated, the method of allocation between countries and regions of the UK—the hon. Member for Barnsley Central said that the fund should be driven regionally, which is correct—the model by which funding will be allocated, whether pre-allocating an amount for a country or region or inviting competitive bids from across the UK, the length of the planning period, and deciding who administers the funds and whether they are controlled from Westminster or by the devolved Administrations. Clearly, neither should be involved; it should be done by devolved authorities or local councils depending on the issue.
It is time for me to put my spoke in. I firmly believe that the fund must be administered at a regional level and, at the very least, to the same level of support as before. Brexit was not an attempt to save a single penny but to manage every penny to greatest effect. That is what we must try to do in the short time available.
The European structural investment fund consisted of four moneys coming from the EU: the European regional development fund, the European social fund, the European maritime and fisheries fund and the European agricultural fund for rural development. Of those, the ERDF and ESF account for over 60% of ESI funding over the programming period of 2014 to 2020—they are very important to my constituency of Strangford.
Strangford, through the fisheries fund and others, has certainly seen improvements to businesses and communities that would be left to languish were money distributed per capita. Although we received only 10% of EMFF money for Northern Ireland for our fleets and communities, clearly that level of support must continue at the very least.
Simply put, our fishing community, including suppliers, producers and all the rest, could not make the needed improvements to fleets or diversification in the communities to help sustainability without the fund. I believe that the same level of money must be delivered, and I stand today to speak for the communities who rely on the fund.
We need a regional hands-on approach that helps those in need to continue or enhance what they are already doing. That opportunity must be seized so that local people can make local decisions and local differences with their own funding. It is time to get the fund in place and make it accessible to those who can use it for business that will impact the local economy in the local community.
Chris Elmore (Ogmore) (Lab)
It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing this timely debate. Interestingly, we have had two debates on this matter in the last two weeks, and I feel that more will come.
My constituency of Ogmore relies enormously on regional development funding from the European Union, whether it goes towards supporting businesses, opening the new train station in Llanharan, or the future redevelopment of the much-loved Maesteg town hall. Those projects really matter to my constituents, so it is important that the Minister understands that all hon. Members across the House need decisions to be made. We need to know when the consultation will start and—as soon as possible—how much assurance we can give to our communities that those funds will continue and will not be means-tested or business-led, but distributed on the basis of need.
Some of the poorest communities, including my own, need the funding to continue beyond 2020. The Government’s austerity drive over the last nine years has meant that the Welsh Government have lost almost £1 billion in investment. That is £4 billion in real terms. The £680 million that is delivered to Wales through membership of the European Union is hugely important to communities up and down Wales.
Much of the work done with the European funding that is given to communities across Wales is done with the support of the Welsh Labour Government. Over the last 18 months to two years, we have been told many times that consultations will start, but they do not. We ask questions of Ministers, but they do not have the answers. I have asked Ministers in the Department for Business, Energy and Industrial Strategy, the Treasury and the Wales Office, and no one seems to have any answers about when the funding will start, how it will be allocated and, importantly, how it will be managed.
Every hon. Member here has made it clear that it is extremely important that decisions are made locally by devolved institutions, mayoralties, councils or whatever it may be. A key point is that the Tory Government must not use this matter to rewrite the devolution settlement of the United Kingdom. It is absolutely pivotal to any forward planning for a shared prosperity fund that future decisions are made by the Welsh Labour Government, so that they can provide certainty to business, local authorities and further and higher education institutions.
At the moment, nothing from the UK Government suggests that those decisions will be made locally. In fact, Conservative Back Benchers frequently say that perhaps the Welsh Government can be bypassed and the money delivered directly to Welsh local authorities. That simply cannot be allowed to happen. We have a devolution settlement for Wales that must be respected. It is extremely important that those decisions are made locally, and that the funds target the most deprived communities across Wales and the United Kingdom.
Paul Blomfield (Sheffield Central) (Lab)
I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing this debate.
In the 1980s, when the Thatcher Government broke the industries on which our economy was built—steel and coal—we faced really tough times in South Yorkshire. We sunk to become one of the poorest regions in Europe, and because of that, the EU stepped in with funding. In reply to some of the comments that have been made, I say that that funding responded to what we asked for locally and funded programmes that were delivered by local organisations.
European structural funds were key to rebuilding our economy. Objective 1 funding provided £820 million to more than 250 organisations and 650 projects, from major projects such as the Advanced Manufacturing Research Centre, which has become a national flagship for industrial innovation, to small community initiatives that reskill people. The economy grew by 8.5%.
Shamefully, under Government policy since 2010, regional inequality has grown again. We are back where we were before: below 75% of the average gross domestic product of the EU and one of the poorest regions in Europe—formally designated a “less developed region” along with Tees Valley and Durham, Lincolnshire, west Wales and Cornwall, which have been mentioned.
On those regions, the February report from Conference of Peripheral Maritime Regions of Europe, which my hon. Friend the Member for Barnsley Central mentioned, stated this for 2021 to 2027:
“All five of these regions would stand to receive EU support in excess of 500 euros per capita for the seven-year period.”
That would mean £605 million for South Yorkshire.
I was puzzled by the Minister’s intervention, as he seemed to suggest that because those areas voted leave they should not expect to receive that funding. That is not what they were promised in the referendum campaign, nor was it what they were promised subsequently.
Paul Blomfield
The Minister is chuntering from a sedentary position, but I hope he will respond to the question that I am about to ask.
To cast our minds back, we were promised that we would not be worse off, and in February I wrote to the Secretary of State, asking him to commit to providing the £605 million that we would have received had the country remained a member of the European Union. Replying on behalf of the Secretary of State, the Minister sidestepped the question and instead told me about a stakeholder event in Huddersfield—I am sure it was very useful. Today, I again ask that simple question: will the Government commit to providing regional development funding that is equivalent to the money we would have received from the European Union as less developed regions—yes or no?
Stephen Kinnock (Aberavon) (Lab)
I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on an outstanding speech and on securing this debate. As things stand, we still do not know how much funding will be available, how it will be divided across the country, what activities will be eligible for support and who will decide how the money is spent. But this is not just about money—there is a real fear that it will be not only a financial grab, but a power grab, and that the Westminster Government will use this opportunity to reduce funding for the areas that need it most, and to claw back powers that sit naturally with devolved Administrations and other local areas.
Those deep-seated concerns led to the creation of the all-party group for post-Brexit funding for nations, regions and local areas, which I am truly proud to chair. Our wide-ranging review of 80 organisations across the UK heard clear and unanimous representations that the UK’s shared prosperity fund must comprise not a single penny less in real terms than the EU and UK funding streams it replaces. Westminster must not use Brexit as an opportunity to short-change the poorest parts of the UK. Equally, the UK Government must not prevent local areas from having appropriate control over the funds.
Although it is disappointing that the Minister has so far refused to meet our group, last month officers from our APPG met the Secretary of State for Wales to make those points, and last week they met the Chief Secretary to the Treasury. Both meetings were conducted in a positive and constructive spirit, but it is shocking that there is still no sign of the public consultation on the SPF being launched any time soon. In fact, there was a suggestion that the consultation may be delayed until the comprehensive spending review in the autumn. Given that the CSR will include information on the funding of the SPF, I am not sure how the relevant bodies are supposed to contribute meaningfully, when the horse will have already bolted. I assure the Minister, however, that our APPG will be watching carefully to ensure there is no sleight of hand from the Government on that point.
We need a guarantee that the SPF budget will not be a penny less than current and projected EU funding, and that the devolution settlement will be fully respected. We need clarity about when the SPF consultation will be published. The great advantage of the current system is that it is data driven and evidence based, thus guarding against pork barrel politics. There is a fundamental worry that the SPF will become a politicised slush fund, with a Conservative Government using it to buy votes in marginal seats. I hope that the Minister’s response today reassures us that our constituencies will not be left short-changed by a sleight of hand in Westminster.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
It is a pleasure to serve under your chairmanship, Sir David, and I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on securing this important and timely debate. We have all been waiting far too long for details on this matter. The hon. Gentleman spoke about looking through the eyes of communities, and his challenges to the Minister were repeated by many others in the Chamber. We must respect the devolved Parliaments and ensure that badly needed regional aid is in place. The hon. Member for Coventry South (Mr Cunningham) intervened to speak about the dangers of listening to who shouts the loudest, and of pork barrel decision making.
The hon. Member for Barnsley Central mentioned data from the conference of peripheral maritime regions—I must declare an interest because, as a former leader of Highland Council, I am a former vice-president of that body—and the data were very detailed. He highlighted €895 million for Scotland in this spending round, including €180 million for the highlands and islands. For the Minister’s benefit, I remind hon. Members that both that country and that region voted in great numbers to remain in the European Union.
The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) spoke about the funding being used to challenge depopulation, as well as other issues that have gone unaddressed by Westminster Governments for many years. Indeed, one symbol of European funding joins our two constituencies. After decades of no or little investment in the highlands and islands, the Kessock bridge that now spans our constituencies was made possible only by EU funding—something people in the highlands are very much aware of.
The hon. Member for Barnsley Central spoke about supporting the most vulnerable, and he mentioned the need for regeneration and business support, and the low-carbon agenda that comes with such funding. In response to an intervention, he recognised that people are becoming desperate for information, which is true—people are desperate to find out where such support will now come from. The devolved Administrations must be told what the money will be, how it will be used and how it will work. Currently, they do not have clarity about how much money there is, when it will be allocated and to whom, or how the system will work.
The hon. Gentleman spoke about the guiding principles of there being no less money than already exists, that the regions must not be worse off and that the system should be fully devolved. This funding must go beyond parliamentary cycles and spending reviews.
Drew Hendry
I will not as there is not much time and I have a lot to say.
The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) spoke about Westminster’s failings, and the feeling in his communities about Westminster’s trickledown economics. He mentioned the benefits of EU funding in education, jobs and innovation, and said that his area requires not a penny less than was promised. There should not be a power grab. That would not be acceptable to the people of Wales, or indeed of Scotland.
The hon. Member for East Renfrewshire (Paul Masterton) took great pains to try to support his Government—he even had to call for them to move on—and raised concerns about this being an England-only fund. For different reasons, I have the same concerns, because if we look back into history, we see what happened in the highlands and islands before we were members of the European Union.
The hon. Member for Ellesmere Port and Neston (Justin Madders) said that this must not be a Westminster handout on Westminster terms as that will not cut it, and I completely agree. The hon. Member for St Austell and Newquay (Steve Double), along with other Members from Cornwall, seemed to argue that European funds have somehow been negative for the area. I know they were talking about the details, but I think people will find that hard to understand.
The hon. Member for Leigh (Jo Platt) spoke about the imbalance of investment, and said that for too long Westminster had held the purse strings and the power. She is absolutely right, and that must be respected when the scheme is introduced. Although the hon. Member for Strangford (Jim Shannon) and I do not agree on everything, he said that this funding must be devolved and at the same level as before, and he listed the improvements that have been made in his constituency with EU funding.
The hon. Member for Ogmore (Chris Elmore) spoke about how funding matters in his community, and how important it is across Wales, including the fact that it is devolved. This scheme must not be used as an opportunity to rewrite the devolution settlement; devolution must be respected. The hon. Member for Aberavon (Stephen Kinnock) repeated the call for this not to be a power grab. It will not surprise you, Sir David, to hear that I agree with that sentiment.
Communities and charities have been waiting years to find out what funding will be available post Brexit, and we urgently need the details of this so-called prosperity fund. Since joining the EU in 1973, Scotland has benefited from European structural fund money to the tune of billions. Those funds have been used to support getting people into work and out of poverty, to improve their education and skills, and for investment in our infrastructure and communities. The European regional development fund promotes balanced development across the EU, and the European social fund invests in employment-related projects.
The Ministry of Housing, Communities and Local Government has repeatedly promised to publish full details on the consultation. On 15 November 2018, Wales Office Ministers told MPs that a full consultation would be published before the end of the year. We are six months on, and there is nothing to be seen. If Brexit is drawing the Government’s business and long-term planning to a halt, they should revoke article 50—not the concept of long-term planning.
I do not have much time and I want to make sure that the other Front-Bench speaker and the Minister have the opportunity to contribute, so I will wrap up with these words, although there is much more I could say on this subject. Where is the post-Brexit funding? Communities and charities want to know where it is and they need the details urgently. When is it to be revealed? Will it respect the devolution settlement and prove not to be just another power grab?
It is not good enough that this Government are tied in knots and uncertain of the future. If the UK Government’s long-term planning has ground to a halt, they must get past that and get the details to people and communities of how the money will be distributed. We already know that Brexit will cost Scottish communities millions, so they need details on funding urgently. Our people cannot be left behind by a Government who are too chaotic to get out the details of how they will support communities.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing this important and timely debate.
We heard from the Chair of the Housing, Communities and Local Government Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), who expressed real frustration at the lack of a consultation. We expected that before Christmas but it is still not here. We heard from my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), who restated a position that I firmly believe in: we should use this opportunity to reset and recast how that fund can be used. He spoke about the importance of town centres and how people feel about the future direction of their town, and the ability to include people in a more active way on decisions that affect their lives.
My hon. Friend the Member for Leigh (Jo Platt) said that far too often power is held away from local people. With the best will in the world, decisions made about what is right for local areas are for nothing if local people are not involved and feel that they have no agency or control over the future direction of the place where they live. My hon. Friend the Member for Ogmore (Chris Elmore) talked about the importance of targeting the fund on the basis of need, and the importance of respecting our devolved nations. They cannot be bypassed—they have to be front and centre in whatever new settlement comes forward. My hon. Friend the Member for Sheffield Central (Paul Blomfield) said how much regional inequalities have increased since 2010 because of successive decisions made by the current Government.
Finally, my hon. Friend the Member for Aberavon (Stephen Kinnock) spoke about the perception that this is not just about money, but is a power grab by Government to retain as much power as they can centrally and not distribute it anywhere. I congratulate him on his work on this issue in the all-party parliamentary group for post-Brexit funding for nations, regions and local areas, which holds the Government to account and works in partnership to try to create a new way forward that provides an alternative.
The importance of EU structural funds has been set out in the debate, but it is worth highlighting again the importance of the £17.2 billion of investment directed at some of the most significant regions that have not shared the capital’s booming fortunes. The EU regional development fund has focused £655 million on supporting small and medium-sized enterprises. It has supported research and innovation with £342 million and invested £197 million towards a low-carbon economy. The EU social fund tackles head-on the barriers preventing people in towns such as mine from accessing the labour market and decent, well-paid and secure jobs. Almost £1 billion has been spent on developing an inclusive labour market, with more than £333 million further to develop new skills that are vital for accessing jobs and vital for the future of our economy.
There are very real concerns about the Government’s intent in this agenda. We have heard not just concerns about the places that people represent, but a significant amount of distrust in the background motives of the Government. There is little wonder why: we have seen nearly a decade of austerity targeted at the most deprived communities, where vital public services have been taken away from areas that could least afford it and that have seen the biggest cuts. The evidence tells us that the Government are not in the game of sticking up for the most deprived communities—the very people we represent in this place. Left to their own devices, what would the Government do with the opportunity to recast the fund, and what might that mean for the communities we represent?
The same is true of education funding, skills funding and further education funding, all of which are under chronic pressure. The same continues to be true of UK capital investment spend, where our regions are held back by a failure to invest in growth. We have seen that on transport investment and housing investment; across almost every line of central Government, capital investment favours the capital of the UK. What about our regions? If we want the UK to be the best that it can be, every one of our regions must be the best that it can be—not just the cities and city regions, but our towns.
There is real fear that what might follow is a competitive process that pitches one area against the next, with rules dictated by a centralising Government who do not want to give power away and have always neglected our towns and our most deprived communities. We might see that the rules are doubly stacked up against getting the money to the very communities and people who ought to be beneficiaries.
Today, the Minister can put some meat on the bones. He can explain why there has been a significant delay in the consultation. He can outline what a future fund might look like: how will local people have agency and be involved? How will we make sure that our towns benefit as much as our cities do? How can we make sure that this is not a pot of money in isolation, but a wholly different approach to how Government spend their money—not just favouring the capital and doing it the easiest way possible, but making sure that every part of the UK gets the money that it needs?
Why has this taken so long? We are nearly three years in from the EU referendum. Had we left on 29 March, we would have been six weeks out of the European Union, but there is not even a programme in place for spending the money that should go to our regions post Brexit. The Government might have been saved by a temporary relief, but at some point they will have to put pen to paper and set out exactly what they have in mind, and make sure that local people are included. I hope that the Minister takes from this debate the fact that there is a great deal of interest, and that the MPs who have spoken are not going away. They will come back if answers do not come forward.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)
It is a pleasure to serve under your chairmanship, Sir David. I start in the traditional way by congratulating the hon. Member for Barnsley Central (Dan Jarvis) on an excellent speech. As with so many things that we do together, with our shared passion to drive forward the economy of the northern powerhouse, there was very little I disagreed with in his speech, although there were a few things I will mention if I get the opportunity. Many Members asked similar questions, so before I deal with individual contributions I will address some of the more general points.
Let us be realistic about this debate: Members have picked me up on my saying that many areas that voted leave have been recipients of EU structural funds. One of my jobs in Government is administering many EU structural funds, and some Opposition Members may have done that job during the Labour Government. Those funds are hugely bureaucratic, and they do not target many of the things that we are desperate, across the Chamber, to drive in every constituency—including mine in east Lancashire, which is a deprived area in the north of England. Those funds are often inefficient. Although we have heard about some of the brilliant things they have done, such as supporting Mencap, which the hon. Gentleman mentioned, they have been hugely inefficient in many places.
My hon. Friends the Members for St Austell and Newquay (Steve Double) and for North Cornwall (Scott Mann) made interesting points about how some of those funds have been wasted in Cornwall. I suspect that may be part of the reason—although I would be the first to accept that the picture is very complicated—why 68% of the people who live in Barnsley and 60% of the people who live in Oldham voted to leave the European Union. We in this place have to address some of people’s deep frustrations about inequality, which traditionally have not been addressed or targeted by European structural funds.
We keep referring to European structural funds as European money. Let us be absolutely clear: this is British taxpayers’ money, which is given to the European Union and then, after a large percentage of it has been removed, returned to our country.
Jake Berry
I will not, sorry—there have been many interventions.
That is why, looking to the future, in our 2017 general election manifesto, my party—the Conservative party—said we would come forward with a new UK shared prosperity fund that would be designed to reduce inequalities between communities across the four nations of our United Kingdom and target productivity. That was reiterated by my right hon. Friend the Communities Secretary in a written ministerial statement in July 2018 laying out some of the foundations of the UK shared prosperity fund.
The Government accept that tackling inequality is absolutely something we need to grip in this country. The hon. Member for Leigh (Jo Platt) mentioned that Leigh, which I know well—it is just down the road from my constituency—does not have a railway station. It is not the case that there was a railway station there that was closed by a Conservative Government; that is a sign of decades of under-investment in northern transport infrastructure by successive Governments. The UK shared prosperity fund should seek to challenge some of the inequalities that we see north, south, east and west across the United Kingdom.
Stephen Kerr
The Minister has mentioned inequalities several times. I want to be absolutely clear that the Government are committed to ensuring that the shared prosperity fund is led by need and, in respect of Scotland specifically, that the money is not Barnettised. It may be ring-fenced, but it must not be Barnettised.
Jake Berry
I am not able to give that commitment today, because we are going to have an active consultation.
Jake Berry
If Members give me the opportunity to say when, I may try to provide an answer. One of the points we heard was that we must respect the devolution settlement across our United Kingdom. For me, as the Minister with responsibility for the northern powerhouse and devolution, that means respecting the devolution settlements that this Government have brought forward, by which I mean mayoral devolution in England, which now covers 48% of the north of England.
Jim McMahon
I understand why the Minister does not want to go down the cul-de-sac of the Barnett formula, but can he confirm that no region will be worse off than it is under the current programme?
Jake Berry
As the hon. Gentleman knows and I was just about to say, the quantum of the UK shared prosperity fund will be determined as part of the comprehensive spending review. That is the appropriate time for the Government to make commitments of the sort he seeks. However, he and the hon. Member for Aberavon (Stephen Kinnock) are correct that the Government must come forward with their consultation—I am clear that this must happen—before the comprehensive spending review to enable areas to contribute to that consultation.
We have not been sitting on our hands, as people who have listened to the debate may think. We have already engaged with more than 500 stakeholders. We have had 25 official-level engagements across the country, including with our counterparts in the devolved Administrations. In addition, in my role as Minister for the northern powerhouse, I have engaged with mayors. I have talked to them specifically about how we can work together to provide evidence to the consultation that demonstrates that, as so many people have said, the impetus for investment of the UK shared prosperity fund should come from our regions rather than being directed out of Whitehall.
Having listened to contributions to the debate, I think everyone believes that it would be nice if that happened. The point is that by working with our metro Mayors, our local enterprise partnerships and authorities across England—that is certainly my role as English Minister for local growth—to create the evidence base, we can move beyond thinking that it would be nice to proving that it is how we will get the biggest return on investment. There is work ongoing in my Department, in advance of the consultation, to ensure that that hugely important argument is made, and won, when my dear chums in the Treasury are making decisions about how the money should be distributed following the consultation. I hope that answers some of the questions that Members asked. My response to the main question is that the consultation will start very shortly.
Let me move on to some of the specific points that were made. On public transport investment, Members may not have seen the most up-to-date figures, which are available on the Treasury website. They show that transport capital expenditure is higher per capita in the north of England than in London. People often talk about total capital expenditure across the north of England versus London. There are some parts of the north of England where very few people live, so it is much more realistic to talk about capital expenditure per capita, and it is higher per capita in the north of England.
Many colleagues talked about the weakness of Green Book calculations for making investment decisions, which I think is acknowledged across the House. That is why the Government came forward with a rebalancing formula in the industrial strategy. That formula looks at areas that are less developed, depending on how we define that, and at factoring future growth into Green Book calculations. Changes have been made recently to ensure that community benefit is also included in such calculations.
My hon. Friend the Member for Newton Abbot (Anne Marie Morris) commented on the ring-fencing of coastal money. By the end of the current spending period, the Government will have invested £200 million directly in coastal communities through our coastal communities fund, which is about driving prosperity on our coasts. The UK shared prosperity fund must not be viewed on its own as the only support the Government give to drive regional growth. We have contributed £53 million to part of the exciting growth deal in the highlands and islands, which has resulted in things such as the north coast 500 route, which I hope to visit this summer, prospering.
Jake Berry
I will let the hon. Gentleman advise me about the best place to stay.
Drew Hendry
I am grateful to the Minister for raising that money for the Inverness city region deal. Will he go a step further and match 50:50 the commitment of the Scottish Government, who put considerably more money into that deal than the UK Government did?
Jake Berry
We will have to look at how much new money the Scottish Government have committed. Since we have talked repeatedly about devolution, particularly from a Scottish viewpoint, I note that the Smith commission agreement, which was signed by all parties in Edinburgh, contains a commitment by the Scottish Government to look at further devolution to local councils in Scotland. Devolution does not stop in Edinburgh, but I understand that no progress has been made on that.
I could go on, and I would like to, but I want to give the hon. Member for Barnsley Central the customary time to conclude the debate. I hope that colleagues do not doubt the Government’s commitment not just to devolution, but to regional growth. The UK shared prosperity fund, which we will consult fully on shortly, will continue that commitment to driving productivity and growth everywhere.
Dan Jarvis
I am grateful for the opportunity to debate this important issue, and I thank everyone who contributed; we heard from people representing every corner of the United Kingdom. The debate teased out some big and important, but in some cases still unanswered, questions. There is an urgent requirement for clarity about the design of the fund—how it will work and how it will be administered. There is also a need to guarantee that, at the very least, our communities will not be worse off. That is the right thing to do, not least because, at this very difficult time for our country, if we want it to be both successful and united, we need to ensure that we get rid of the systemic inequalities between our regions and our nations. If we are serious about doing that, the shared prosperity fund will have a very important role to play. Let us get on with it and work out how we are going to do it.
Question put and agreed to.
Resolved,
That this House has considered the UK shared prosperity fund.