Inequalities of Region and Place
(3 years, 2 months ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Liddle
To move that this House takes note of the case for producing a (1) coherent, (2) cost effective, and (3) longer-term, regional strategy to tackle inequalities of region and place.
Lord Liddle (Lab)
My Lords, I declare an interest as a member of Cumbria County Council and a former chair of Lancaster University. I am greatly looking forward to the maiden speech of my noble friend Lord Stansgate. It is something of a privilege that he is taking part in this debate. I am also greatly honoured that a mentor from my past is in the Chamber in the shape of the noble Lord, Lord Rodgers of Quarry Bank.
The Prime Minister made levelling up the centrepiece of his post-Brexit agenda. But, after listening to his conference speech, the Financial Times’ Robert Shrimsley memorably described this ambition as
“all destination and no map.”
This debate is your Lordships’ opportunity to advise the Government on what the plan should be. I agree with the Prime Minister that
“We have one of the most imbalanced societies and lop-sided economies of all the richer countries”.
We have no world-beating status here. We have one of the worst records for regional inequalities—worse than Germany once it incorporated the eastern Länder; worse even than Italy with the Mezzogiorno.
The Prime Minister is, of course, right that this is not simply a regional problem, and we remember the report by my noble friend Lord Bassam on the seaside towns. He was right to ask how, within the relatively deprived north-west, life expectancy is seven years longer in Ribble Valley than down the road in Blackpool. I can cite some numbers from Cumbria: the difference in life expectancy between the post-industrial Moss Bay ward of Workington and the rural Greystoke ward just outside Penrith is an amazing—a shocking— 19 years. On levels of educational attainment, the Prime Minister cited the difference between York and Doncaster, where 50% of adults in one city are graduates but only 25% are in the other—no prizes for guessing which, and on this occasion Ed Miliband cannot be to blame for that. But where is the plan to reverse these inequalities in outcomes?
One lacuna in the Prime Minister’s discourse which needs correcting is the absence of universities and the role they have played in leaning against the mighty winds of regional inequality in the last 30 years. They can do much more. I learned a thing or two when I was chair at Lancaster for seven years. Under the leadership of our pro-vice chancellor for engagement—our new Cross-Bench Member, the noble Baroness, Lady Black of Strome—we partnered with Cornwall’s remarkably successful Eden Project to devise a plan to bring Eden to the north, to Morecambe. That would be not just a visitor attraction, themed in this case on the wonders of the sky and seabed, but an inspiring educational experience as well as a centre of world-leading environmental research. It would create new jobs, from gatekeepers and cooks to technicians and scientists, which would all command respect. There is a plan there. All that is needed is for the Government to back it.
With support from the regional development fund of blessed memory, Lancaster also invested in a health innovation campus, where we can, for instance, work with health authorities in Blackpool—which has some of the worst health outcomes in Britain—using the university’s expertise in digital analysis of NHS patient records to improve patient and public health outcomes. That is not an investment in a new hospital; it is an investment in ways to keep people out of hospital.
University research generates innovations at the frontier of knowledge that stimulate new enterprise in the ecosystems that form around them. But the stranglehold of R&D funding of the south-east golden triangle must be broken. I congratulate the Government on locating the headquarters of their new National Cyber Force in Lancashire, which will enable it to draw on Lancaster’s excellence in cybersecurity. But the money has to come north from Oxbridge, and that will happen only if the Government deliver on their commitment to expand R&D spending from 1.8% to 2.4% of GDP—I hope they will.
When it comes to education in schools, the north and SNP Scotland have badly slipped behind London’s soaring standards. London now gets something like 60% of kids at 18 into university; in many northern towns, the figure struggles to get over 30%. We badly need a regionally tailored version of the Blair Government’s London Challenge, in which my noble friend Lord Adonis played such a transformative part.
In transforming young people’s expectations and opportunities, good-quality apprenticeships are as crucial as A-level grades. There is a national crisis in the declining availability of good apprenticeships, so why not create a 30% target for level 3 apprenticeships to stand alongside the 50% target for university entry? The levelling-up plan should ensure that every significant town in deprived regions has a further education college that is not a poor relation but an anchor institution that commands respect, has organic links to local business and offers clearly marked steps up a visible ladder of opportunity to foundation degrees and beyond.
The decline of the north has been with us for a century or more, following the horrors of the great depression of the 1930s. There was some success after the war, with the policies that Hugh Dalton introduced in wartime. But, since the 1980s, the regions—which now include large parts of the Midlands as well as the north—have had their economic heart torn out. In part, they were victims of inevitable technological change and the shift to a knowledge and service economy that goes right across Europe. The Germans managed to upskill their manufacturing, rather than destroy it as we did.
The social consequences of this have been profound. Take Barrow in Cumbria, for instance: it lost thousands of jobs in the shipyard in the 1980s, but the shipyard now enjoys a brilliant high-tech recovery, with many fewer jobs but much higher levels of skill. Yet too many families who suffered job losses in the 1980s have got stuck in the cycle of generational deprivation and worklessness, where a culture of low expectations makes a mockery of educational opportunity and where health and life expectancy are shockingly poor.
After 10 years of austerity, our public services are badly stretched in addressing these problems. They are too thin on the ground, too siloed, too focused on crisis, sticking too much to the rule book, too defensive and too resistant to change. To speak the language of new Labour: we need investment and reform at one and the same time.
In the 1980s, Margaret Thatcher argued that there was no alternative. Deindustrialisation was accompanied by radical change in UK labour markets, a shift to flexibility and a loss of trade union power, and this went along with a reassertion of short-termist shareholder capitalism, which discouraged long-term investment in technology and skills. Now the Prime Minister asserted, again, in his speech that
“no government has had the guts to tackle … the long-term structural weaknesses in the … economy”.
He has to recognise, however, that these weaknesses have been apparent since the 1980s, well before—in the Prime Minister’s rewriting of history—uncontrolled immigration became the sole structural problem. The truth is that immigration is not the cause of our structural weaknesses, and controlling immigration—whatever its merits—will not provide any kind of permanent solution to them
Mrs Thatcher did have a plan for the regions; it was called Europe’s single market, and it was very good at attracting inward investment—for instance, in the north-east, to get Nissan to come to Sunderland, which was crucial in the future. It also strengthened our position in financial services, and lots of jobs across Britain in places such as Leeds benefited from that. For the future, however, we shall have to address these structural problems with Brexit, as it were, tying one hand behind our back. That makes the need for a plan more urgent, not less.
The Labour Governments of 1997 to 2010 had many proud achievements to their credit and I am overjoyed that, at long last, my party is prepared to acknowledge them. Huge fiscal transfers were made to the regions, improving public services and raising children and pensioners out of poverty, but this did not prove a lasting change. After 2010, it was put into reverse by an austerity that bore more harshly on the poorest parts of the country. The fact is that the £20 cut in universal credit takes more spending power out of the regions than the levelling-up agenda is putting in.
Labour could have done better, however. We revived the northern cities through the regional development agencies—excellent—but there was weakness in the towns. It is not easy to put this right. The revival of a dynamic private sector when the heart of its local economy has been ripped out is a huge challenge. It requires powerful incentives for business relocation from the overcrowded south-east and possibly even stricter planning controls, as well as sustained support for indigenous new enterprise. It also requires an active national industrial policy, which I was privileged to help my noble friend Lord Mandelson with in 2008. At its heart today should be a green new deal that prioritises the transformation of our old industrial towns into exemplars of zero-carbon living, with the state offering the incentives and regulating the market, but the private sector doing the work and creating the skilled jobs.
But where now is the Government’s plan? We have lots of funds: the high streets fund, the towns fund, the levelling-up fund, the shared prosperity fund, the environment fund and even a bus improvement fund—the list goes on—for all of which local authorities have to make bids to Whitehall departments. It is London-based civil servants who recommend what should happen. Ministers consult their MPs—especially red wall Conservative MPs—about which splashes of new paint are likely to buy them the most votes. This puts the regions in the position of Oliver Twist, standing in the workhouse queue begging for whatever doles our London masters are prepared to spare us.
This top-down but fragmented approach is not a coherent regional policy. We need a coherent plan that, place by place, builds on existing economic strengths. We need a fresh start and I hope that Michael Gove, a man who prides himself on his radical thinking and intellectual strengths, will give us this. Key to that is, first, stronger local government structures, based on credible unitary authorities with elected mayors to offer accountable metropolitan and sub-regional leadership.
The second thing is a fair funding settlement for local authorities, based on transparent, independent assessment of needs, not the good fortune of a strong revenue base. The third is that local government and mayors must be trusted to draw up their own rolling plans for economic development and put in a single capital bid to central government to determine priorities.
Finally, we now have a unique opportunity to build a national consensus on levelling up—Boris Johnson has given us that. But high aspiration and lofty rhetoric are not good enough: we need a plan, and we need it now.
Lord Young of Cookham (Con)
My Lords, I very much welcome this debate, so ably moved by the noble Lord, Lord Liddle. Like him, I look forward to the maiden speech from the noble Viscount, Lord Stansgate. This debate is timely because it comes just before the imminent publication of the White Paper on levelling up. This is in fact the delayed White Paper on devolution, promised for September last year, which has now morphed into a White Paper on levelling up. I very much hope that this rebranding will not diminish the previous commitment to greater local autonomy. Devolution has clear centrifugal overtones: pushing powers out. Levelling up has connotations of a more centralised approach: how else can you make things level?
While we are all pretty clear what devolution means, there is no such clarity about levelling up. Like others in this debate, I have spent many hours on the doorstep listening to voters’ priorities: safer streets, better schools, more houses and shorter waiting lists. Nobody has ever said, “George, please level me up.” This is not to discount it as an objective, but just to say that it means different things to different people.
In the context of this debate, in his levelling-up speech on 15 July, the Prime Minister uttered two sentences which I hope will inspire the levelling-up White Paper. First, he said that
“for many decades, we have relentlessly crushed local leadership”.
The second sentence was:
“Come to us with a plan for strong, accountable leadership and we will give you the tools to change your area for the better”.
This afternoon, we should respond to that challenge and then hold him to those words.
I took further encouragement from the recent appointment of Neil O’Brien to the rebranded Department for Levelling Up. In his speech last Wednesday, which was overshadowed by another speech on the same day, he said:
“Boris Johnson put levelling up at the heart of his conference speech ... But what is it? The objectives of levelling up are clear. To empower local leaders and communities.”
That objective was reinforced by Bridget Rosewell, a member of the National Infrastructure Commission, who commented on a report that it issued last month. She said:
“Levelling up cannot be done from Whitehall. Every English town faces a different set of challenges and opportunities, and local leaders are best placed to develop strategies to address these.”
But we live in a highly centralised country. In a recent report on tax and devolution, the IfG said:
“The UK is an outlier by international standards. In 2014, every other G7 nation collected more taxes at either a local or regional level according to estimates by the Organisation for Economic Co-operation and Development.”
Our figure is about 5%, roughly half that of most other countries.
So, while other countries have national and local government, we have national government and local administration, and it is not working. The helpful Library brief for this debate shows that the UK has the highest regional inequalities of the 27 nations measured. I believe that part of the answer to the question posed by the noble Lord, Lord Liddle, in this debate about regional inequalities is to set regions free from central control and allow them to take greater responsibility for key decisions. Others will talk about devolution of power; I shall talk about devolution of money because, without freedom to raise and spend, and being accountable for those decisions, devolution of power is meaningless.
Let me give two examples of how the system is weighted against raising money locally. The Government have just increased national insurance contributions from 12% to 13.25%—an increase of more than 10%. Local government would not have been able to do that without holding a referendum first. There has been no such inhibition on the Government. Then take national taxation. Government income is buoyant. Without touching tax rates, economic growth and inflation swell the Government’s coffers year by year. Income tax, national insurance, inheritance tax and capital gains tax all rise without the Chancellor lifting a finger or incurring a single hostile headline. The OBR estimates that just freezing personal allowances—so-called “fiscal drag”—will be worth £8 billion a year to the Government by 2025-26.
Local government has no such advantage. The council tax base is fixed at 1990 levels, and if local government wants to raise more money, even to stay still in real terms, it has to raise tax rates, with all the aggravation that that entails. And, unlike income tax, council tax is regressive and the tax base is 30 years out of date. Would the Government raise income tax on the incomes of 1990?
I will irritate my noble friend the Minister once more by suggesting that tax bands should be revalued and that there should be two additional bands. However, my final suggestion is that, when we move from taxing fuel to road pricing, the revenue from road pricing—a buoyant source of revenue—should go to local, not central, government, which would give councils the independence and financial help that they need to deliver the autonomy that we all want to see.
The Lord Bishop of Durham
My Lords, I thank the noble Lord, Lord Liddle, for securing this debate, and am pleased to follow on from the noble Lord, Lord Young of Cookham. I, too, look forward to the maiden speech of the noble Viscount, Lord Stansgate.
Jubilee is a strong theme of our Judaeo-Christian tradition. Jubilee includes setting people free from the impacts of inequality. If levelling up is going to mean anything significant, it must tackle the inequalities that exist in our nation. It needs to be a kind of jubilee.
This week is Challenge Poverty Week. Child poverty is a very good measure of regional inequalities within England, as it is both an indicator of poverty and a perpetuator of it. Child poverty highlights the complexity of issues that cause it, including education and employment. It has lifelong impacts on children as they grow into adults and shape their communities. The recent report by Donald Hirsch for Loughborough University estimates that the cost of child poverty is £38 billion a year, a significant increase in the past five years.
We see far higher levels of child poverty in some places than others. It is not a simple divide of a wealthy London and an impoverished north. The Institute for Fiscal Studies reported in its Green Budget for 2020 that
“inequalities within regions are larger than the inequalities between regions.”
So, in Bethnal Green and Bow, 60% of children are in poverty. However, child poverty rates in the north-east rose more steeply than in any other region in the lead-up to the pandemic. In Bishop Auckland, where I live, child poverty has increased by 7% since 2015. In nearby Middlesbrough, the increase is 13.6%. Poverty is inextricably linked to the issue of inequalities of place, and it demands a measure of relative poverty if it is to be addressed properly. The Work and Pensions Committee has called for the Government to re-engage with the Social Metrics Commission and to look beyond a solely absolute measure of poverty, and I echo its conclusions. So, in considering levelling up, will Her Majesty’s Government commit to using the Social Metrics Commission assessment for measuring poverty to inform decision-making?
The compound impact of the two-child limit in universal credit, the cuts to the £20 uplift, the impending national insurance levy, and food and fuel inflation create an increasing threat of a growth in child poverty. So, along with groups such as the North East Child Poverty Commission, the Child Poverty Action Group, the Work and Pensions Committee and many more, I urge that a strategy is developed rapidly. I hope that we will hear soon that HMG will publish a proper child poverty reduction strategy.
Then there are health inequalities. Here I note the findings of the recent report from the Northern Health Science Alliance, A Year of Covid in the North. This research found that Covid mortality rates between March 2020 and 2021 were 17% higher in the north than in the rest of the country. The estimate is that this has cost the national economy £7.3 billion in lost productivity. Minor psychiatric disorders were also 10% higher in the north.
In considering levelling up, what are Her Majesty’s Government doing about the disparity in health inequalities across the nation? Throughout the pandemic, the average unemployment rate in the north was almost 20% higher than in the rest of the country. Furlough was good but it worked less well in the manufacturing and service sectors. Inward investment in infrastructure and higher skills work is one key area to help here. I highlight transport. The inequality between our capital city and the rest of the country can clearly be seen in the difference in government spending and the service provided. London has received nearly two and a half times the public spending received by the north, according to the IPPR.
Since the publication of the Northern Powerhouse strategy in 2016, local transport chiefs are still waiting for the integrated rail plan to make this transport investment a reality. Therefore, as part of the future planning, will the integrated rail plan be published and will it favour the most poorly served regions? I look also to foreign direct investment. The International Trade Committee has reported that FDI is unevenly distributed between the regions and, despite its importance as an instrument of levelling up, it is reinforcing the inequalities it is intended to correct. What will the Government do to address the inequalities of investment in the north?
We all recognise that tackling inequalities of place is a highly complex issue. The Government’s welcome and much needed levelling-up agenda will not succeed without a coherent, cost-effective and long-term regional strategy to tackle inequalities of place within England. We could have a jubilee.
Lord Shipley (LD)
My Lords, I declare my interest as a vice-president of the Local Government Association. It is a pleasure to follow the right reverend Prelate the Bishop of Durham and I look forward very much to the maiden speech of the noble Viscount, Lord Stansgate. I am grateful to the noble Lord, Lord Liddle, for enabling this debate; I share his sentiments. We still await the Government’s plans for levelling up and devolution, and I hope we get an update about that from the Minister when he replies.
This Motion is about levelling up. That levelling up cannot come at the expense of London. The Government have raised expectations. They have created a term—levelling up—which now has the status of a title in the Department for Levelling Up, Housing & Communities. It is hard to understand what authority this new department has over other Whitehall departments. Do its powers extend to managing the spending policies of the Department for Transport, the Department for Business, Energy and Industrial Strategy, the Department for Digital, Culture, Media and Sport, or any other government department, including the Treasury? I doubt it.
You cannot level up places without levelling up people, and you cannot level up people by increasing taxes on the low paid, such as the increase in national insurance for health and social care, and in council tax—around 5% per year is now forecast for several years. Add those regressive tax increases to the rising energy costs and rising cost of living generally, and it is hard to see how levelling up can work if the incomes of so many people will be lower.
Paragraph 235 of the coronavirus report published earlier this week, on the lessons learned, says of test and trace that,
“in short, implementation was too centralised when it ought to have been more decentralised”.
You could say that about many policy areas managed by Whitehall. We cannot run England out of London. England’s population is 56 million. We must decentralise and devolve, but the Government insist on running a hub-and-spoke model based on Whitehall holding financial power. Far too many funds are complex, requiring a bidding process which is expensive for local government to manage when resources are so tight. Financial control needs to be decentralised because levelling up is not just about some Whitehall jobs being relocated in England. The ambition should be that at least 50% of public spending is controlled at a regional or more local level.
There has been reference to the National Infrastructure Commission report produced a few weeks ago. It says that, to deliver greater regional equality, the Government should give more control over funding to local areas to help their levelling up. Rightly, it criticised the Government’s policy of ring-fencing pots of money and demanding bidding and competition. It said that we should move instead to five-year devolved budgets so that local areas can develop their own infrastructures strategies.
The National Infrastructure Commission is right, but missing from the debate on levelling up is, first, the need for local government to have greater powers over sources of taxation; it cannot all be about government block grant. Secondly, the private sector has to be prepared to invest more in those areas needing greater investment, because it cannot all be done with public money. Private sector companies have social responsibilities to places and should not think simply in terms of shareholder returns. It might help too if the Government looked at some of the rules around the investment of pension funds, which could be an additional source of investment funding if more pension fund money could be accessed.
Finally, one trend could prove helpful to levelling up, and it is the consequence of the current dislocation of our supply lines. We should actively promote reshoring more production so that we make more, produce more and consume more sustainably, thereby in turn creating more jobs in areas that need greater support.
Levelling up requires a place-by-place plan, helping education, skills and new industries, but that will happen only if local places are empowered to lead it.
Viscount Stansgate (Lab) (Maiden Speech)
My Lords, I rise today to make my maiden speech. I hope the House will allow me to record with appreciation what a warm welcome I have received from Members and staff alike on all sides of the House. I know I have much to learn from you all.
When I was very young, my grandfather told me that one of the characteristics of this House was the “almost intolerable good will”. I hope to benefit from some of that today, although I feel obliged to point out that the last time I made a public political speech as an elected member was 31 years ago across the river in the chamber at County Hall, and the Government of the day promptly abolished the body to which I made it.
In the time since then, I have dedicated my professional life to strengthening the links between science and Parliament. This has involved all the major events that science holds in the House, including the annual Parliamentary Links Day and the regular parliamentary affairs committee, which brings together scientists and engineers from all over the UK to discuss matters of mutual interest. In the course of doing so, I have worked with many of your Lordships right across the House. Time does not permit me to mention them all, but I would be a bit remiss if I did not mention at least the noble Lord, Lord Willis of Knaresborough, and the noble Baroness, Lady Blackwood, both of whom chaired the Select Committee on Science and Technology in another place; the noble Lords, Lord Broers and Lord Rees, from the Cross Benches; the noble Lords, Lord Willetts and Lord Lancaster; Lord Sainsbury of Turville, although he has now left the House; and my noble friend Lord Anderson of Swansea, all of whom have been such staunch supporters of science.
Overwhelmingly, this work has been done on a cross-party basis. Science should not be an overtly partisan area of public debate, but there are issues on which the Government really do need to take action. This brings me to today’s debate, and I thank my noble friend Lord Liddle for his excellent opening speech. As we talk about levelling up, which is apparently the Government’s central economic and political objective, let us make the case for the role that science and technology can play in tackling inequalities of place.
This country is rightly proud of its national academies. Indeed, only this week the president of the Royal Society wrote in the Times about the need to fund science properly. I support that. Indeed, a number of national bodies have also written to the Chancellor this week to express concern that, in effect, a cut may be on the way if the Government shelve their £22 billion commitment on R&D by 2024-25 in favour of a vaguer commitment stretching out to 2027.
We cannot be a science superpower unless and until the Government finance science and R&D properly. That means levelling up to the level of our competitors, and it is a very competitive world. The House will be familiar with the basic figures: the UK spends 1.7% of its GDP on science; the OECD average is about 2.5%; and countries such as the USA, France and China are spending far more. The Government’s announced commitment of a target of 2.4% by 2027 is very welcome but nowhere near being reached yet.
I welcome the appointment of the current Minister for Science and wish him well in view of the challenges ahead. The Secretary of State for BEIS last night addressed the Foundation for Science and Technology and talked about the UK Innovation Strategy. He said, if I may put it this way, broadly all the right things, but I just hope that the BEIS Secretary can secure the level of funding needed with the Chancellor—always assuming that they are still on speaking terms and “in discussions”.
We have in this country a wide range of scientific societies and organisations, all of which have expressed their concerns about the inequalities of place; for example, the Royal Society of Biology, the Nutrition Society, the Council for the Mathematical Sciences, the British Pharmacological Society, the Institute of Physics, the RSC, the Geological Society, the Royal Astronomical Society and many others. The House should take every opportunity to listen to what they have to say, especially as they have members from all over the country. That is why we should also listen to the persuasive argument of the Campaign for Science and Engineering, in its document The Power of Place, that the Government should use the UK shared prosperity fund to
“give greater emphasis towards supporting scientific research and innovation to tackle regional inequalities and promote UK-wide economic growth.”
As a major science country, which we are, and however proud we may be that we are punching above our weight, which we do, we cannot really be the science superpower that we aspire to be unless we make full use of the scientific expertise throughout the UK and unless the Government recognise the inequalities of place and really do more to end them.
We hold an annual STEM for Britain event here in Parliament, and every year it shows that there are brilliant early-career research scientists from every part of the UK. It is vital that they are funded, nurtured and encouraged, because not to do so would be a shocking waste of a diverse and talented science base. And besides, you can never be sure from where the next scientific breakthrough may come. You do not have to be a scientist to know that all the major challenges that the world faces—climate change, the biodiversity crisis, energy supply, food security, health or access to water—will depend on science and technology and engineering to help solve them.
The Covid crisis and the development of the vaccines has been a triumph for science, and the UK rightly takes its share of the credit, yet we live at a time when there is a discernible anti-science movement. If science is under attack, it is all the more important that Parliament and this House stand up for it. We need science now more than ever. I look forward to the Minister’s reply and commend my noble friend’s Motion to the House.
Lord Adonis (Lab)
My Lords, we have just listened to an outstandingly fluent, elegant and persuasive maiden speech, and it is a great privilege, on behalf of the House, to welcome my noble friend to the House. He comes from one of the greatest political families of modern Britain, and I am sure he will make a great contribution to Parliament, like his father, his grandfather —who he mentioned—and his brother, who we are delighted to see in the House too.
However, I first met my noble friend in a completely different context, when I was Minister for Schools and he was a director of the Royal Society of Chemistry. The occasion was shortly after the publication of Bill Bryson’s A Short History of Nearly Everything, which the society, with great foresight, paid to send to every state school in the country. Education is the greatest leveller up. My noble friend—inspired, I imagine, in no small part by his mother, who had a great passion for education—has taken this cause to heart. He will have a great opportunity to advance it here in the House and in Parliament.
We are of course all mindful of the peerage controversy so much associated with my noble friend’s father. On reading about it, I learned that the reason it came about was that his uncle, who had been expected to inherit the viscountcy, was tragically killed serving his country in the RAF during the war. One account that I read says:
“Michael was intending to enter the priesthood and had no objections to inheriting a peerage.”
I can assure my noble friend that it is no longer a requirement of the job—but there are ample opportunities for instruction from the right reverend Prelate and his colleagues, if he wishes to advance in that cause as well. My noble friend is extremely welcome to the House, and we look forward to hearing from him again soon.
I wish to address just one issue in respect of levelling up: HS2. Nothing is more important to levelling up this country than transforming its infrastructure, and the single biggest infrastructure project in the country at the moment, directly geared to levelling up, is HS2, which will transform the communications in this country between Greater London and the south-east, the Midlands and the north. The Minister knows a great deal about HS2. When he was leader of his local authority and I was Secretary of State for Transport, we talked about it a great deal. Indeed, we planned together the development of the Old Oak Common interchange station, which will bring HS2 in direct connection with Crossrail, which goes from east to west. The connectivity between those two will further transform the connections between the Midlands and northern cities and London.
I wish to ask the noble Lord about one specific issue: the decision that is widely known, though I do not think that it has yet been formally announced, to cancel the eastern leg of HS2. At the 11th hour, as it were, I implore the Minister to revisit that decision and speak to his friend the Prime Minister, with whom I know he has an extremely close relationship, to make the argument that, if the eastern leg of HS2 is cancelled, the whole future of levelling up half of the country—the eastern side—will be vitiated.
To understand the significance of the potential cancellation of the eastern leg of HS2, you just need to consider what will be the journey times between the major cities of the Midlands and the north and London after HS2, if it is not built. Birmingham to London would be half an hour, Manchester to London would be an hour, Leeds and Sheffield to London would be two hours, and Newcastle to London would be three hours. Where is all the investment and the new social activity in the country going to happen if, for the next few centuries—because we build railway lines to last centuries—that is the pattern of communications between the Midlands and the north of this country and the economic powerhouse of London, which will always continue to be so because it is our dominant city? It is absolutely essential that the eastern leg of HS2 proceeds.
Because we are a democratic community, with very powerful political spokespeople from the eastern side of the country, it is stark staring obvious that, if, by an act of great negligence, Her Majesty’s Government do not proceed with the eastern leg of HS2 now, when the leg to Manchester opens and there is a massive political controversy about the delayed journey times, much poorer communications, much lower capacity and lack of connectivity with Crossrail—because the Old Oak Common interchange will of course be available only to people coming from Birmingham and Manchester—the political campaign to build the eastern leg will be unrelenting. In a classic failure of planning, we will build the eastern leg of HS2 and it will go through to Sheffield, Leeds and Newcastle, but it will be done 30 or 40 years later than it should have been. In that interval, an enormous amount of damage will be done to the society and the economy in the east Midlands, Yorkshire and the north-east of the country and to the connectivity between Edinburgh—because the HS2 trains would go there—and London.
I implore the noble Lord, with the great influence that I know he holds with the Prime Minister, to urge him to revisit this decision, which could be the single most important decision that the Government make in terms of the long-term capacity to level up the north with the south of this country.
Baroness Valentine (CB)
Before I start, I should say that I support the noble Lord, Lord Adonis, on HS2. I have sat on the boards of Crossrail and HS2, but I cannot say it as passionately as the noble Lord just said it. I will talk about some of the issues associated with transport access to the east in my speech.
I am delighted that the noble Lord, Lord Liddle, has introduced this important debate. For the last four years, under the aegis of Business in the Community, I have been working in the so-called forgotten places. In that capacity, I bring business leaders to the table to discuss with local council and voluntary sector leaders what matters for their town. We start by discussing what the place stands for, what they are proud of and what an ambitious but deliverable long-term plan might look like. Importantly, this discussion has no money attached but is about facilitating a genuine conversation. Key is the neutral facilitator we employ who is full time in the place, building the trust which enables us to bring everyone together around a common vision.
We then start on a few actions. Bringing about lasting, transformative change takes time but it is crucial for motivation and learning to work together that the participants start working on delivering some early wins. This may sound straightforward but in places which feel left behind, the early days are tough: building credibility and a belief in change, while getting used to working across sectors where people have different outlooks and skills. None the less, it is the foundation for real, sustainable change. In Wisbech, residents can now be confident of being trained for local jobs because Anglian Water and its supply chain have for many years worked with local educational institutions to provide apprenticeships and improve standards in schools. From working in this way, Blackpool has the largest town deal in England, £39.5 million, and is showing real progress in education, housing and inward investment. So, what are the barriers?
First, a narrative of failure is often essential to attracting government or charitable funding but when you start to talk about the positives, you find that Blackpool is still a place of fresh air and fun, with 18 million tourists a year while Bradford, as the youngest city in the UK, is a melting pot of raw talent and has award-winning curries. Secondly, while creating local partnerships is tough, achieving joined-up national government is nigh on impossible. Blackpool has £300 million of committed investment from a company called Nikal, but needs the Treasury to fund moving the law courts off the site. Bradford, which is bigger than Liverpool or Bristol, has the worst rail connectivity of any major British city and needs a new railway station. I think Bradford would be a worthy winner of the DCMS “City of Culture” competition, for which it has just been longlisted. Wisbech needs the Government to pool funds to invest in the future Fens proposal, a strategic rather than piecemeal approach to climate adaptation.
What does this tell us about a proposed national strategy? First, any strategy needs to be long term and capable of surviving changes of political leadership, and implemented in a way which facilitates local leadership rather than providing one-size-fits-all Whitehall solutions. But even then, the old adage applies: no plan survives first contact with the enemy, so alongside the plan we need the Secretary of State for Levelling Up to champion these areas and bring all government departments, including the Treasury, to the table. We need a hit squad of motivated, caring, listening senior civil servants who are prepared to go out on a limb to achieve success for our deprived communities—people who can persuade across government and who will join local partnerships as full partners, alongside local government, business and the voluntary sector. If the new Department for Levelling Up can deliver all this, then perhaps we can reduce the UK’s regional inequalities.
Baroness Drake (Lab)
My Lords, I compliment my noble friend Lord Stansgate on his maiden speech. The Prime Minister has blamed previous Governments of all hues for lacking the guts to tackle regional inequalities, but politics cannot outrun economics indefinitely. The UK’s regional and subregional economic inequalities are major, increasing and far greater than exist in most other democratic advanced economies. Their origins go back to before the Second World War and are deep-rooted, entrenched and complex. They accelerated in the 1980s as the country transitioned into a service and knowledge-based economy.
In 2020, the Industrial Strategy Council published a research paper, UK Regional Productivity Differences: An Evidence Review, which confirmed the complexity of the challenge. In the forward, Andy Haldane, its chair, observed that
“reversing the cycle of stagnation is possible provided policy measures are large-scale, well-directed and long-lived.”
He added that
“none of these conditions has been satisfied”
but hoped that the report could
“help the Government in designing and implementing a policy response equal to that challenge.”
Reflecting on those criteria, “large-scale” means the inequalities cannot be fixed in five years, or even 10 years, or with insufficient funding or competitive bidding against criteria not necessarily reflective of geographical need. As the National Infrastructure Commission observes,
“Competing against other councils for multiple pots of cash creates a focus on the short term”
and “continuing uncertainty”. For many decades our productivity performance has been modest, and the major reason is the geographic problem. Geography is central to the solution, but in the UK we have so evidently not sufficiently addressed it. By comparison, Germany has been transferring about €70 billion a year for 30 consecutive years to level up the country internally.
Policies and resources need to be well directed. Increasingly informed commentary acknowledges that a new governance model is needed that is not just centralised on Westminster and Whitehall. The UK has one of the most centralised decision-making systems among OECD countries, but that brings inefficiencies when the UK is so economically imbalanced, resulting in national decisions made without a full understanding of their impact achieving different levels of success or impact, depending on geography. There needs to be greater decentralisation of decision-making and revenue collection, harnessing the understanding of need held by representatives, employers, universities and other key partners in different geographies.
Decentralising decision-making has to be backed by strong governance to ensure that it achieves what is necessary, and that will include building robust institutions, capacity and fiscal discipline in those geographies. Informed observers are also pressing the need to build a knowledge base of data, equivalent to that existing in many advanced economies, on the flow of public expenditure into regions, the quality and quantity of linked data and regional and sub-regional issues more generally. That could be utilised to make good policies, understand what works, measure evidence of success and define the need of a geography more objectively, mitigating the growing perception that the definition of need is becoming more political. I acknowledge the pioneering work the ONS is doing on its integrated data service.
Policies and strategic outcomes need to be long-lived, but that requires a broad consensus. Lack of policy continuity in the past and constant changes to institutions have contributed to regional inequalities persisting. The Government have announced a lot of funding initiatives, but it is unclear how they all co-ordinate. It is difficult to follow what flow of public expenditure will go to where, and for what. The Government have not provided the White Paper, the strategic plan, into which all those initiatives fit. We do not know the targets, the key milestones or the intended metrics for measuring success. We also do not have clarity on the governance model within which their plans will sit.
Finally, the decentralising of decision-making is extremely important, but it should be done in a way that does not prevent central government from discharging their role in directing and redistributing resources across the UK on the basis of need or common interest. We saw the importance of that central social role so clearly during the pandemic, and in response to large economic shocks such as in 2008.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a great pleasure to follow the noble Baroness, Lady Drake, and to note her telling comparison with the German example of spending, starting three decades ago from a place of far less division than we saw in England.
I join others in welcoming the noble Viscount, Lord Stansgate, to your Lordships’ House. It is lovely to see another champion of science in the House. I particularly note the noble Viscount’s background in biology, which far too often is a neglected area of science when shinier, glossier things get more attention.
I thank the noble Lord, Lord Liddle, for securing this debate. I particularly thank him for not using the term “levelling up” in the way in which it is set out, because I believe that levelling up is entirely the wrong direction of travel and the wrong aim to be looking at. It implies that we are trying to lift other parts of England up to the level of London and the south-east. But what have we got? The right reverend Prelate made some reference to this when he talked about child poverty. We have a London of rampant inequality, with 28% of people living in poverty. We have filthy air and a horrible standard of overcrowded housing. We have the area of the country with the highest proportion of the population with high levels of anxiety. We need—and I think the noble Lord, Lord Liddle, set out the points here—a coherent, cost-effective and long-term approach, which I suggest means that what we need to spread out around the country is security, health and hope. Those are lacking in every part of England, and indeed the UK.
Economic growth is often seen as the solution—“If we just have economic growth…”—but what we are actually talking about is a real rearrangement of society. We are not talking just about improved infrastructure, much as that is needed—as is not putting the wrong infrastructure in the wrong place—but I will not get into the regular debate that the noble Lord, Lord Adonis, and I have on the subject of HS2. What we are talking about, and many noble Lords have made this point, including the noble Lord, Lord Young of Cookham, who is not currently in his place, is that we need local control, local power and, as many noble Lords have said, local resources.
I disagree with the noble Lord, Lord Liddle, who said that elected mayors are the answer. Putting all the power and authority in the hands of one person is, I suggest, the wrong direction of travel. We should be looking towards full community involvement, from a Yorkshire parliament to a Cornwall assembly or parliament—different kinds of structures with far more power and resources shared around an entire region. However, ensuring that the money is in those regions and under their control is crucial. As many have said, we have to stop Whitehall doling out money.
We also have to stop the doling out of money for pilot projects. “We’ve got to try this, we’ve got to fund this for a year”—and then the money disappears. Even if it has been the most successful pilot ever recorded, it just sinks without trace. We need secure, long-term funding that is available to allow the growth and development of communities.
I said that economic growth and infrastructure will not give us anything like what we need. We need a focus on health and well-being. The noble Lord, Lord Liddle, said that we have to find ways to keep people out of hospital. I agree with that as a starting point but, much more, we need to ensure that people have healthy, active lives. That means everything from tackling food deserts to cleaning up air and water pollution. It means ensuring there are genuinely affordable energy-efficient, high-quality homes. It means walking and cycling facilities, and high-quality parks. It means restoration of the natural environment. All these things are much broader and will not be solved just by looking at the economy.
It is also about community structures. So many new developments are built without any community facilities at all—places for people to get together, such as halls or churches. Many older communities, cash-strapped local councils—and I declare here my position as vice-president of the LGA and the NALC—are being forced to sell off community facilities. Many places, even the pubs where people could get together, have closed down. In some poorer communities, the pubs are open only a couple of nights a week. We need an increase in social capital; this is an acute shortage in far too many communities in England.
Lord Wallace of Saltaire (LD)
My Lords, I have lived between London and West Yorkshire for 40 years, balancing two careers, family obligations and politics, and I have watched the inequalities between the south-east of England and the north widen. I have seen how the distribution of taxation and spending, under Labour as well as Conservative and coalition Governments, has reinforced the advantages of the south-east. For several years, we have paid significantly higher council tax on our house in Bradford than in Wandsworth, in spite of the sharp differences in income and wealth between these two local authorities.
This Government refuse to recognise that reducing regional inequalities cannot be achieved through central direction. As the noble Lord, Lord Young, and others said, local leadership has to be a central part—both political and business leadership. Powers and finance have to be returned to local government; local democracy must not be squeezed further or required to bid against others for limited pots of funding. I have to say to the Minister that Conservatives look to be hostile to local democracy.
Local enterprise and local business leadership are also important. That does not fit with the financial free-for-all in which successful local enterprises are taken over by distant private equity companies. Twenty-five years ago, Saltaire had two promising young electronics companies working out of the old textile mill; both were taken over by US multinationals. Their role in the local community shrank, as did the number of their employees. The innovation they created is now enriching California and Florida, rather than Yorkshire.
The largest enterprise based in Bradford, and in many ways the most socially responsible corporate actor in Bradford, has been Morrisons. Will its new owners care about contributing to the prosperity of West Yorkshire or providing local economic leadership? How will the Government nurture the growth and financial sustainability of locally owned enterprises across our country’s regions, since banks and private equity seem committed to taking their short-term profits and selling them to others abroad? That does not fit very well with the Government’s insistence that they represent national sovereignty and patriotism, and the liberal elite, whom they attack, does not.
My wife, alongside the noble Baroness, Lady Eaton, sits on the advisory board of a Bradford academy trust. She sees the dedication of teachers and the challenges they face with pupils from some of Bradford’s poorest estates and with the children of first-generation immigrants and refugees. Long-term investment in education spending, on the scale recently proposed to but rejected by the Government, is an essential part of any coherent strategy to reduce regional inequalities. That has to include the transformation of the funding and status of further education colleges to provide the technical skills and apprenticeship training that Michael Gove and others say they care about but have neglected so far.
Others have talked about the gap in the funding and provision of transport infrastructure. Across much of the north, the buses are infrequent and expensive and the trains old and crowded—where they exist. If you cannot get to work, you cannot work. There are too many industrial communities across the north without much local employment and without transport links to where there is employment.
We also need to pull the cities of the north closer together. HS3, the proposed new line for Leeds and Manchester via Bradford, would transform the region, bringing the trans-Pennine area together in the same way that London transport brings Greater London together. It would also provide, incidentally, extra freight possibilities, which would reduce the enormous number of trucks that drive between Liverpool and Hull across the M62. We are desperately short of freight paths in the north. The eastern leg of HS2, which is also essential, would link Sheffield. It takes one hour to get from Sheffield to Leeds in this network.
I hope the Minister recognises how much cynicism there is in the north about the Government’s promises of levelling up. We were sold the northern powerhouse, which did not seem to extend very far beyond Manchester. We have listened to Ministers rattle on about northern powerhouse rail, while giving the Oxford to Cambridge line much higher priority. We hear the Prime Minister make jokey speeches with catchy slogans, promising that he will work wonders and bring prosperity to everybody. But nothing much will change unless power and finance are returned from London to our regions, cities and towns, and the Government commit to sustained investment in education and training, and in public transport outside the south-east.
The Deputy Speaker (Lord Brougham and Vaux) (Con)
The noble Lord, Lord Campbell-Savours, is taking part remotely. I invite him to speak.
Lord Campbell-Savours (Lab) [V]
I congratulate my noble friend Lord Liddle on his brilliant contribution today. He is a rich voice in the House on behalf of our county through his membership of Cumbria County Council. He is certainly an eye and ear for many of us on wider Cumbrian issues. In his canter around the course on regional concerns, he has alluded to differential treatment by central government. I want to refer to one such area: council tax, and the findings in my most recent report on levels in Cumbria compared to the rest of the country—and also, the response of government to calls for reform.
The truth is that Cumbria is a victim of a system designed in the last century. It has become unfair, divisive, politically compromising and utterly indefensible. It is unfair in that it favours large swathes of southern England, in particular the London boroughs. For example, I compare Conservative Westminster with Conservative-controlled Carlisle. The annual charge in Westminster for council tax band A is £551, but it is £1,328 in Carlisle—nearly three times the rate. In Westminster, band B is £643 and in Carlisle it is £1,649. Band C is £735 in Westminster and £1,771 in Carlisle. Band D in Westminster is £827 and £1,992 in Carlisle. Band E is £1,011 in Westminster and £2,435 in Carlisle. Band F is £1,195 in Westminster, and in Carlisle it is £2,877. Band G is £1,379 in Westminster and £3,320 in Carlisle. Finally, band H is £1,665 in Westminster but £3,984 in Carlisle. Copeland, Allerdale, Eden, South Lakeland and Barrow-in-Furness are all even higher. Under such a system, a council house in Cumbria pays more in council tax than a £54 million house in London’s Mayfair.
The system is divisive if it is provoking resentment in areas unable to raise additional revenues to offset their costs. Unlike London, Cumbria lacks additional sources of revenue, such as city centre parking revenues and penalty charges, high commercial rate revenues, cross-borough services provisions and high-density apartment developments with lower public service costs. The wall of silence on council tax from Cumbria’s MPs, nearly all of whom are Conservative, is a problem. They know that to open up this discussion will upset their colleagues in the south, who feel that any reform will lead to increased council tax in the Conservative heartlands of southern England. We have in place a wall of silence, with ministerial denial and Cumbria’s MPs propping up the wall by a total refusal to engage in debate. All we hear is attacks from local MPs on council profligacy, and it is totally unfair.
When Michael Gove was appointed, I welcomed his face-up-to-the-issues, refreshing approach to public administration, but then he must have realised that council tax reform was a no-go area for Conservative Governments. Ever-increasing differentials between the richer boroughs in the south and an impoverished north are the Achilles heel of this Government, and Michael Gove will ultimately be measured by his failure to grasp this burning issue.
The noble Lord, Lord Young of Cookham, who clearly understands the scale and nature of the problem, has been courageous in his advocacy of banding reform. Contrast that with the heads-down, read-the-brief response of Ministers in both Houses. It is a clear indicator of the unease, embarrassment and impossibility of opening a real debate on the future of local government finance, and we need action now.
Finally, when Conservative councillors in the north are told by Conservative Government Ministers in the south that their councils need to be more efficient and cut waste and spending, they resent it. They are already cutting to the bone. The Government need to listen to the anguished call from their own people, and mine as well, for reform.
Lord Horam (Con)
My Lords, I too congratulate the noble Viscount, Lord Stansgate, on his maiden speech. It had all the fluency of his father, and that, as he may be aware, is the highest possible praise in terms of oratory.
It is a great pleasure to take part in a debate launched by my noble friend Lord Liddle—I can call him my noble friend—whose commitment to his Cumbrian roots is so manifest, including in being a councillor in Wigton. I too am a northerner: I was born in the village of Grimsargh, which is now part of the city of Preston, the administrative capital of Lancashire. Preston is known locally as “proud Preston”, and there are many proud industrial towns in that part of the world. There is Burnley, which at one stage had produced more cotton than any other town in the world, Blackburn, Nelson, Colne and Accrington. When I was growing up there in the 1940s and 1950s, there were textile mills, mines and steel and engineering works, and they were thriving. We believed in the north that essential goods such as textiles, steel and coal went south and, in return, we got trivial consumer goods such as pet foods. However, in the 1960s and the 1970s, all that changed as the mills and the mines disappeared, and Britain became a service economy based on a booming London and south-east.
Successive Governments, starting with Lord Hailsham with his rather risible flat cap, attempted to address this growing imbalance. Will the present effort fare any better? We do not know, but it certainly does not lack ambition. For a start, it has a good title. Despite some remarks we have heard during this debate, I think that “levelling up” has some flavour and guts about it, rather than “regional policy”, which had a rather dry-as-dust tone. More importantly, we have a Prime Minister who knows that his electoral fortune depends on delivering it because his 80-seat majority is composed of red wall constituencies in the north and Midlands. “Levelling up” is in the title of the Department for Levelling Up, Housing and Communities and, as has been said, we have a junior Minister in Neil O’Brien who has long proselytised for central policies in this area. We also have my noble friend the Minister who will reply to the debate today. Although born in the south, he has a good north country name. I can tell him that there are many Greenhalghs in Lancashire, and he should be proud of that.
We have a levelling-up fund, a community renewal fund, a shared prosperity fund, and free port and towns funds. We have the beginnings of effective localism in the shape of city mayors. Here I disagree with the noble Baroness, Lady Bennett, and agree with my noble friend Lord Liddle. Do not underestimate the power of a dynamic individual. Think Andy Street in the West Midlands, Ben Houchen in Teesside, and, going further back, what the Chamberlains did for Birmingham. All this can make a difference if properly handled. In my own area, we hope that Preston will combine with Chorley and South Ribble to make another city area.
I also think that levelling up will help the south. As the Prime Minister said when he was Mayor of London:
“Do we want the south-east of Britain, already the most densely populated major country in Europe, to resemble a giant suburbia?”
That is the way it is going and people do not like it. They are fed up with the endless housebuilding, the relentless congestion, the destruction of open country and the sense of overcrowding. Properly conducted, levelling up should help with this.
So should curbing the mass immigration that the Blair Labour Government instigated in recent years. Over 80% of our population growth has been down to immigration. I note that my noble friend is a Minister in both the Department for Levelling Up, Housing & Communities and the Home Office. I therefore hope he will point out to his colleagues in the Home Office that they could make a major contribution to his problems as a Housing Minister by reducing the too-high level of immigration we have had in recent years. If we did that, we would not need to build 300,000 houses a year; the blue wall seats would be just as happy as the red wall seats. I hope he will pursue this point between the two departments with all the vigour and energy of his Lancashire forebears.
Lord Davies of Brixton (Lab)
My Lords, I join in the congratulations to my noble friend Lord Stansgate. I wrote that it was an “excellent” maiden speech in my prepared notes, but we should change that to “outstanding”. It is such a pleasure to join him once again after our time working together on the late, lamented Inner London Education Authority. He will be a considerable asset to the House as someone who is clearly in command of his subject and who will stand up for science.
I also thank my noble friend Lord Liddle for initiating this important debate on a matter that is central to our country’s future. He has brought a necessary note of realism to this issue. I agree with his conclusions and one point I add, where I am sure he shares my concerns, is the need for greater involvement of trade unions in the process of renewal.
The approach of the Motion, in contrast to the bluster from the Prime Minister, is stark. The Prime Minister claims to have a policy—levelling up—but in truth all he has is a slogan in search of a policy. We all know this. I never thought I would say this, but I find support in that view from the Adam Smith Institute, the right-wing think tank. Commenting on the Prime Minister’s final speech at the Conservative Party conference, the Adam Smith Institute’s head of research, Matthew Lesh, said:
“The Prime Minister’s rhetoric was bombastic but vacuous and economically illiterate.”
I also agreed with the Adam Smith Institute when it said that:
“Levelling up so far consists of little more than listing regions and their local produce”,
and that the Prime Minister
“throws out impressive-sounding economic terms like ‘Pareto improvements’ to hide the fact that he lacks policies to drive growth.”
I do not agree with all the institute’s comments, but it went on to say that the Prime Minister’s policy
“was an agenda for levelling down to a centrally-planned, high-tax, low-productivity economy.”
We already have a low-productivity economy, and apart from the rhetoric there is nothing to suggest that the Government have got to grips with this issue. But when we come to the suggestion that the Prime Minister’s policies represent a move to a centrally planned, higher-tax economy, your Lordships might think that this is something I, as a socialist, might favour. Unfortunately not, at least not in the version presented to us by the Government. To the limited extent that there is a policy hiding behind a slogan, it consists of expecting water to run uphill—futile and ignorant.
Of course, as the Motion suggests, we need a coherent, cost-effective and long-term strategy. I have one note of caution, as mentioned by the right reverend Prelate the Bishop of Durham. Casting this as a regional issue runs the risk of ignoring the real problems we face in London. All human life is in London, from great wealth to extreme economic hardship. My noble friend Lord Campbell-Savours correctly mentioned the injustices of the rating system, but north Westminster encounters as great social problems as the north of England, and any policies instituted need to recognise that.
In conclusion, I end with another quote from the Adam Smith Institute:
“Shortages and rising prices simply cannot be blustered away with rhetoric about migrants. It’s reprehensible and wrong to claim that migrants make us poorer. There is no evidence that immigration lowers living standards for native workers. This dogwhistle shows that this government doesn’t care about pursuing evidence-based policies.”
In no area of policy is that more stark than the vacuum that fills the space which purports to be levelling up.
Baroness Blake of Leeds (Lab)
My Lords, I draw attention to my interests as laid out in the register. It gives me enormous pleasure to add my congratulations to my noble friend Lord Stansgate. I am thrilled that he is joining us in this House, I congratulate him on his excellent maiden speech, and note that his family has a long-standing history going back decades with the great city of Leeds, of which we are all very proud.
I add my sincere thanks to my noble friend Lord Liddle for initiating this very important and timely debate. I thank everyone for their well-informed and thoughtful contributions. I will not be able to do justice to all of them, but I reassure noble Lords that this agenda has been at the centre of my work as a local government leader for many years.
The backdrop to our discussions is the numerous reports, including from the IFS, that the UK, and in particular England, is the most geographically unequal country in the developed world. Our country is divided by several fault-lines. How can it be acceptable that the opportunities presented to young people depend almost entirely on where they grow up, and that the healthcare and jobs which they rely on throughout their lives are then determined by where they live? It is a colossal failure of government—and not one which can be resolved by a slogan. We must not fall into the trap of thinking that any of this is new. Report after report, especially over the past decade, has highlighted what this means: reduced life chances and opportunities and an increase in poverty—especially the scandal of in-work poverty— affecting families and many thousands of children and young people. It is estimated, for example, that almost a quarter of children living in Leeds are living in poverty and that, of those, 75% are living in a household where at least one adult works. I welcome the call from the right reverend Prelate for a child poverty reduction strategy.
Inequalities in health, as we have heard, have a disproportionate and devastating impact on women, with poor housing leading to the poor health outcomes so cruelly exposed by Covid. As we have heard, there is an enormous cost to the economy as well as huge personal cost. Take Blackpool, the archetypal seaside resort with an incredible history. In spite of its proud tradition and the ingenuity of local businesses, which drive the town to this day, around one in 10 of its people are unemployed and one in three children grow up in poverty. The fact is that the Government have failed Blackpool. They have done nothing to resolve or respond to these issues and through a decade of cuts have devastated the ability of local authorities to respond. The tragic consequence is that in Blackpool life expectancy is eight years less than the life expectancy of those born in the borough of Westminster, and the town has one of the highest rates of depression in England.
In part, this can be explained by the north-south divide across health conditions, incomes, political influence and the well-documented chasm of investment, whether investment in skills and education or much-needed and long-overdue investment in infrastructure. My noble friend Lord Stansgate highlighted the need for investment in research and development and my noble friend Lord Liddle emphasised the need for investment in FE. Given that northern cities have suffered spending cuts of 20% over the past decade, compared to 9% for cities in the east, south-east and south-west, excluding London, there is good reason to think that this Government’s policies have exacerbated this.
However, it is not always as simple as a straight north-south divide. In West Yorkshire, Bradford and Leeds are only eight miles apart, but as the Centre for Cities points out, there are enormous inequalities between the two. People in Leeds earn on average £561 a week, compared to £538 in Bradford. Double the proportion of people in Bradford have no qualifications in comparison to Leeds and when it comes to productivity, GDP per worker in Leeds is 13% higher than in Bradford. Regional inequalities, as we have heard, are complex and the root causes—lack of opportunities, public services and much more—are not exclusive to the north of England. West Wales is the poorest region in northern Europe. There are areas of intense deprivation across Cornwall and towns in Essex, such as Jaywick, have long been ignored by this Government. In short, the fault lines of regional inequality do not divide Britain evenly.
As my noble friend Lord Liddle points out in the title of this debate, what these communities all need is a strategy from this Government that is coherent, cost-effective and, above all, long-term. We need a whole-government approach, working across departments, locally driven, to look at the towns, villages and communities that need support. There can be no one-size-fits-all approach—that support must be tailored to address the obstacles and opportunities which each of these places face. It must also recognise that the people who know what these places need are the people who live and work in them. That means that the support given by this Government must be designed with those it is intended to help, led by strong local leadership, as identified by the noble Baroness, Lady Valentine.
It also means that support must be given, along with the devolution of powers and funding, to allow these towns, villages and cities to control their own future—and I mean real devolution, not the half-hearted, diluted model that we currently have. We need to see an end to the often obscene bidding rounds subjected on local areas for funding, as identified by my noble friend Lady Drake: we need devolution of funding as well as powers.
The truth, however, is that the so-called levelling up funding schemes do not come close to making up for a decade of government cuts. Investment in physical schemes is welcome, but we need investment in people and especially in preventive models to correct the current abject failure of social policy in this country. We need to look at the “invest to save” model and change the narrative from always talking about additional costs.
Over the past decade, councils have been cut by £15 billion. That is 773 libraries, 750 youth centres, 1,300 children’s centres and 700 council football pitches that have all been lost. In addition, as described so eloquently and passionately by my noble friend Lord Adonis, the Government have pushed back decisions, such as on the eastern leg of HS2. We are also extremely concerned about the rumours coming out about Northern Powerhouse Rail, particularly on the risk of Bradford not getting its deserved station. Throwing these decisions into the long grass can be just as damaging as a negative decision. The Government need to take account of the voices from across the north and the Midlands on the importance of these schemes.
Since 2017, schools in the most advantaged areas have had a funding increase, while those in the poorest communities have seen their funding fall further behind. With the Government’s decision to cut £20 a week from universal credit, more than 500,000 additional people, including 200,000 children, will be pushed into poverty. Surely one of the most damning pieces of evidence is that progress on increasing life expectancy for both men and women has now gone into reverse.
In summary, we have to ask: will we see action to address these matters in the long-awaited CSR? When will we have answers to what is meant by levelling up, and the White Paper to support it? I look forward to the Minister’s contribution following this to help us shed light on this crucial issue. I must say, I have a gift of a book for him—some essential reading from the author about the importance of the region of Yorkshire. I know that he will get enormous pleasure from looking into that in great detail.
This is an important agenda. Our towns, cities and villages need more than a slogan. They need real levelling up. Most importantly, I support my noble friend Lord Liddle’s call for a plan to support it.
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, I congratulate the noble Lord, Lord Liddle, on securing this debate. I am grateful to all noble Lords who contributed this afternoon. The debate has been passionate and well-informed, and I am glad that noble Lords share my commitment to reducing regional inequalities and levelling up the country.
I am grateful to my noble friend Lord Horam for mentioning my northern roots. I am of course delighted to come to a debate and receive a gift—I think that is a first for me, and probably the last time it will happen—to help me to learn about the glories of Yorkshire. However, my family comes from Lancashire. Interestingly enough, one of my childhood recollections is being taken by Uncle Harry to Blackpool to see the fairground attractions and then have fish and chips with him at the Lobster Pot, which I gather no longer exists. Blackpool is a great town; despite the points made about the deprivation there, we have to build on the positives and have the local leadership in Blackpool build on the many strengths of the place.
The UK is one of the best places in the world to live, study and work. We have thriving cities and towns, culture and sport, industry, research and community spirit. However, we know that too many parts of the United Kingdom are performing poorly and that gaps in economic performance have been widening over recent decades. The United Kingdom is now one of the most geographically unequal countries in the developed world.
At present, London and the south-east drive the UK’s economic performance. London alone is 32% more productive than the UK as a whole, while cities in the north and Midlands are below the UK average. These regional disparities in economic performance are linked with a whole host of other disadvantages which have a real impact on people’s day-to-day lives. They can lead to fewer opportunities, weakened civil society and poor social and health outcomes. These issues can be self-reinforcing and have led to the narrative that some places are left behind. That is why, despite the challenges of Covid-19, ensuring that the whole of the UK benefits from the same opportunities remains central to the Government’s agenda.
There is no single driver for the geographical disparities across the United Kingdom and no single methodology to measure the needs of local areas and communities. Of course, I take on board the need to look at how a policy is measured. I am sure that will feature in the policy analysis, so I thank the right reverend Prelate for raising the social commission’s work on poverty. Accordingly, levelling up is a multifaceted policy mission: a combination of improving health, education and skills, increasing jobs and growth, building stronger and safer communities, and improving infrastructure and connectivity. Levelling up will therefore require cross-government interventions, delivered over the long term, empowering local leaders and communities to seize their own destiny, boosting living standards, particularly where they are lower, spreading opportunity and improving public services, particularly where they are weak, and restoring local pride across the UK.
Therefore, as the Prime Minister set out in his speech on levelling up on 15 July, the Government will publish a levelling-up White Paper this year. That is where we will set out the plan that the noble Lord, Lord Liddle, has called for, detailing how we plan to level up the country through bold new policy interventions to improve livelihoods and opportunity in all parts of the UK. At the upcoming spending review, the Government will set out how we will build back better, delivering the priorities of the British people, unleashing the potential of places by improving outcomes across the UK where they lag, working closely with local leaders and strengthening the private sector where it is weak.
While the White Paper will outline our plan to drive forward this agenda, the Government have already rolled out major policy interventions to begin levelling up the UK, investing billions to support innovation, high-street improvement, public transport and digital connectivity. As set out at the spending review in 2020, the Government’s capital spending plans this year will total £100 billion—a £30 billion cash increase compared to 2019-20. This is part of the Government’s plan to deliver over £600 billion in gross public sector investment over the next five years, the highest sustained levels of public sector net investment as a proportion of GDP since the late 1970s.
While levelling up is a broad agenda that encompasses cross-government policy levers to address regional inequalities across a range of outcomes, my department has recently launched a range of policy programmes to support our local economies to level up. We have already made huge strides towards rebalancing the economy and empowering local government. This has been supported by the Government’s programme of devolution, one of the largest in recent decades, including nine mayoral devolution deals and one non-mayoral devolution deal in Cornwall, meaning that 41% of residents in England are now served by directly elected city region mayors, including 63% in the north.
Mayoral devolution has strengthened local leadership and institutions, devolving key powers over transport, planning, skills and funding away from Whitehall, so that they are exercised at the right level to make a difference for local communities. Mayors are already playing an incredibly powerful role in driving economic growth, improving public services and giving local areas a real voice in local government. This Government are committed to going further, by offering to negotiate devolution deals with county areas to give more parts of England the benefits of strong local leadership and the powers which have been given to mayoral combined authorities over recent years. We are also committed to deepening existing devolution settlements where appropriate, to further empower local leaders to level up their areas.
Meanwhile, our local growth funds enable places to fund their economic priorities and level up. The £4.8 billion levelling-up fund will invest in infrastructure that improves everyday life across the United Kingdom, including regenerating town centres and high streets, upgrading local transport and investing in cultural and heritage assets. The fund will operate UK-wide, extending the benefits of funding for priority local infrastructure across all regions and nations.
The Towns Fund contributes to the levelling-up agenda by driving the economic regeneration of towns to deliver long-term economic and productivity growth through land use, economic assets including cultural assets, skills and enterprise infrastructure, and connectivity. The UK community ownership fund will also empower communities to protect vital community assets in their area by providing funding to take ownership over them in support of the social well-being of local communities.
Meanwhile, the welcome back fund and reopening high streets safely fund support the levelling-up agenda by helping the businesses and communities that make our high streets and town centres successful. The UK community renewal fund is providing £220 million in additional funding to help places across the United Kingdom prepare for the introduction of the UK shared prosperity fund in 2022. That fund will contribute to the levelling-up agenda by creating opportunity across the UK in places most in need, such as ex-industrial areas, deprived towns, and rural and coastal communities, and for people who face labour market barriers.
Up to 10 new innovative freeports will be opened across the UK. Freeports contribute to realising the levelling-up agenda, bringing jobs, investment and prosperity to some of our most deprived communities across the four nations of the UK with targeted and effective support. Meanwhile devolution, city and growth deals totalling £320 million per annum accelerate economic growth in places across the UK.
It was a fair criticism from the noble Lord, Lord Liddle, and the noble Baroness, Lady Blake of Leeds, that we should not place small pots of money that people have to competitively bid for. It is quite an exercise to bid for funds, which is why we are seeking to consolidate funding into two large funds—the levelling-up fund for capital projects and the UK shared prosperity fund, which will grow to £1.5 billion for more revenue-based projects. It is important to consolidate funding and that is the move the Government are taking in that direction.
The noble Lord, Lord Liddle, and others, including the noble Lord, Lord Davies of Brixton, painted levelling up as simply a slogan without a plan or a long-term strategy. That was a little unfair. As I said, the White Paper is coming but my honourable friend Neil O’Brien and my right honourable friend the Secretary of State have been clear about defining the outcomes for levelling up: empowering local leaders and communities, growing the private sector, boosting living standards, spreading opportunity, improving public services and restoring local pride of place. Despite the challenges of Covid, we have moved ahead with multi-billion pound investments to transform the country’s prosperity and spread opportunity with better infrastructure, public services and access to skills to support good jobs in all parts of the UK.
The noble Baroness, Lady Valentine, gave an excellent speech on the importance of getting Whitehall to join up. That is a reasonable challenge. To be absolutely clear, at the spending review in 2020, we agreed provisional priority outcomes across all UK government departments, along with metrics for measuring progress against the outcomes I outlined for levelling up. Those provisional priority outcomes include the outcomes the Government seek to achieve as part of the levelling-up agenda. The Treasury and my new department, the Department for Levelling Up, Housing and Communities have outcomes related to levelling up. One of DLUHC’s priority outcomes is to:
“Raise productivity and empower places so that everyone across the country can benefit from levelling up.”
That has been agreed on a cross-cutting basis, with BEIS, DCMS, Defra, DfE, DfT, DIT, and DWP as non-leading contributing departments. The levelling-up White Paper will set out further detail on the outcomes and metrics for levelling up.
My noble friend Lord Young is very good at setting challenging questions. The Government are rightly committed to the devolution of power to people and places; I have talked about mayoral devolution. There was a fair challenge from my noble friend, the noble Lord, Lord Shipley—an experienced local government leader—and the noble Lord, Lord Wallace of Saltaire, about the need for reducing financial dependency on the centre. I am sure they would agree that it is important that we look at business rates, one of the core funding mechanisms for local government. There is a fundamental review of business rates because that clearly needs to change, given the shifts we have seen in the importance of offices as part of the local economy and the moves away from bricks and mortar as a determinant of the strength of a particular business. That is being carried out by the Treasury.
I am sure that local government reform of some description around council tax will happen, although it is not currently part of the Queen’s Speech. I am sure my noble friend will never cease to push for new bands of council tax and ways of looking at this, because it is some time since there was any reform of council tax.
I thank the right reverend Prelate the Bishop of Durham and the noble Lord, Lord Wallace of Saltaire, for testing the Government’s commitment to the north. We will continue supporting the north to level up and build back better from Covid. We are doing this with £319.7 million from the Getting Building Fund for a wide-ranging package of projects that will deliver growth for the local economy and support green recovery. As noble Lords know, there is the new UK Infrastructure Bank headquartered in Leeds, which I am sure the noble Lord and the noble Baroness, Lady Blake, will be delighted about. The freeports are very often located in our northern cities.
The noble Viscount, Lord Stansgate, gave an outstanding maiden speech—that is absolutely the right word for it. I really enjoyed it. As a son of an academic surgeon who spent all his life thinking about research to improve outcomes for patients, I know how important science and research are to the future of this country. All those points are well made and have to form part of the fabric of any ambition to level up the country. I point out that there was an unprecedented commitment at Budget to increase public investment in R&D to £22 billion by 2024-25. I am sure there are other measures in the area of science and technology that will drive forward further progress.
The noble Lord, Lord Adonis, is absolutely right: I have been a passionate proponent of HS2, because I could see the regenerative benefits of transportation. As he pointed out to me, where trains stop is often more important than the actual lines. The ability to regenerate very deprived areas is so important. In the borough I led for six years—I spent 16 years as a Hammersmith and Fulham councillor—there are areas of extreme deprivation. Old Oak and Park Royal is one of the most deprived communities in London, and the prospect of regeneration was great if you combined the benefits of Crossrail and HS2. I am delighted that we know that project is going ahead as quickly as practicable.
However, I am disappointed that we are seeing the escalating cost; the noble Lord can point out why. When we had those conversations back in 2008-09, when as a council leader I corralled him at Clapham Junction for the first time—he was very welcoming when in his pomp as a new Secretary of State—it was a £30 billion project. It is now more than £100 billion. In this country we need to learn how we can deliver big infrastructure at reasonable cost, because it is not sustainable to see these ballooning numbers around that sort of project.
I do not know the situation on the eastern leg. My understanding is that the integrated rail plan, for which I do not have a publication date—I apologise to the right reverend Prelate the Bishop of Durham—will soon outline exactly how major rail projects, including HS2 phase 2b and other transformational projects, will work to deliver the transport we need in the future. That date has not been set, so I cannot provide any more information on that.
I have been given a real-time update, and I can say that there are no plans at the moment to reform the council tax system, which, we know, is politically difficult. My noble friend was, of course, a Cabinet Minister in the Major Government. It is not easy to reform the council tax system, but I am sure that we will continue to look at this. It is important that we consider the fundamental review of business rates, at least as one way of thinking about how we can devolve money, and not just power, to make areas more financially independent.
I conclude by re-emphasising the importance that this Government place on reducing the regional inequalities in economic, social and environmental outcomes present across the United Kingdom. Both within my department and across government, we are already delivering a range of initiatives to level up the country. The upcoming levelling-up White Paper will set out further detail on our plan to reduce regional inequalities across the UK and level up the country.
The Lord Bishop of Durham
May I inquire about the child poverty reduction strategy, which I asked about?
Lord Greenhalgh (Con)
Once again, the right reverend Prelate raised the issue of child poverty and how we measure poverty. I will write to him on the specifics of the Government’s approach to addressing that matter and place a copy of that letter in the Library.
Lord Liddle (Lab)
My Lords, I first congratulate my noble friend Lord Stansgate on his maiden speech, which has been described as “outstanding” and “assured”. I also thought that what he had to say about the importance of science was very real. Some critical decisions for the Government are coming up in the spending round in October, and I very much hope that the enthusiasm that Dominic Cummings, to be fair to him, had for the science budget will continue to be reflected in the Government’s policy.
Secondly, I thank the noble Lord, Lord Greenhalgh, for his reply. We in the Lords often say, “Oh, it’s been an excellent debate”, but, actually, this has been an excellent debate. I thought that he tried to respond to it, in his own rumbustious style, and I am very grateful to him for that—
Lord Liddle (Lab)
It is; “rumbustious” is a real compliment. I thought that he tried to answer the points and displayed a certain sympathy with many of them.
For me, the key things that came out of this debate were, first, what my noble friend Lord Adonis said about HS2, which is one of the key decisions that will affect this country for decades to come. Who wants to add to the north/south divide in this country an east/west divide? That is a fundamental point.
Secondly, the noble Lord, Lord Young, and others talked about the need to reset central-local relations and think about local sources of revenue. We need to see that kind of thinking opened up again. For the department and Michael Gove, who leads it, these issues will come to the fore in the next few weeks. I hope that he reads what we have had to say in this debate in Hansard. I beg to move.