EU Structural Funds: Least Developed Regions

Alex Cunningham Excerpts

Wednesday 26th June 2019 Westminster Hall

[Derek Thomas]

My hon. Friend is absolutely right. As I say, we have heard nothing yet to suggest that the economy in Cornwall and on Scilly could not thrive. It is really important to MPs in Cornwall that we are part of the solution, not the problem. In July last year I set up a group that works with local business, Cornwall Council and people who already work with the most deprived and left behind in our communities. The group looks at the skills that a shared prosperity fund should deliver to enable people to get the well-paid, skilled jobs they want. The Chief Secretary to the Treasury, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), attended the first meeting and set out a Government commitment and invitation for us to engage in the process and help them to understand what was needed.

Outside this building today there are thousands of people demanding that we take urgent action on climate change, clean up our air and make our society healthier and fairer. Through the shared prosperity fund we can achieve exactly that, particularly in places such as Cornwall. The Committee on Climate Change recommendations set out the need for massive upskilling to give people the skills needed for research and innovation, so that we can decarbonise our environment and our economy and ensure that people are healthier, live in healthier homes and have better opportunities. Now is the right time to have this debate and create a vibrant, low-carbon economy with better health, better skills and better pay.

In our jobs and growth group we have looked at skills. Even with European funding, the real problem in Cornwall is that many communities and young people never feel they have the opportunity or the learning that they need.

[Alex Cunningham (Stockton North) (Lab)]

The hon. Gentleman has talked about young people, and I am sure he will share my anxiety about the future of the youth employment initiative, which is EU-funded. It helps to provide opportunities to young people who are not in employment, education or training. The Tees valley is one area that benefits from it at the moment. Does he share my anxiety about the fact that there is no clarity from the Government about the future of that funding?

[Derek Thomas]

I welcome that intervention, but I will continue with my point about the real problem for us in west Cornwall. Quite often, there are two options in Cornwall. One is to go away to university, which is much easier now because we have a university in Cornwall, in the constituency of my hon. Friend the Member for Truro and Falmouth (Sarah Newton). However, the vast majority of our young people leave Cornwall, in what we describe as a brain drain. The opportunities for those who are left behind are very limited. There is a real need to look at apprenticeships and how further education can be properly funded for the skills and jobs that we need for the future. I believe that Cornwall has a real opportunity to share in that, exploit it and thrive, and I believe that shared prosperity is the solution.

Our group has looked at the role of high streets, and Cornwall Council is running an inquiry into how to make high streets work. They are no longer just about shops; they are about an experience, and where people live. They are places to get support and advice, and they even include workplaces other than shops. Lots of work is being done in communities in all our constituencies in Cornwall on understanding high streets. That is not just so that we can say, “Government, give us money so we can spend it,” but because we want support to make local economies low carbon. We have great talent; now, we need great opportunity.

[Anna Turley (Redcar) (Lab/Co-op)]

It is a pleasure, as always, to serve under your chairmanship, Ms McDonagh. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this important and timely debate on the future of regional development spending.

I speak on behalf of my region, the Tees valley, which has been a net beneficiary of Britain’s EU membership. In fact, it has often been the case that EU regional development funding has better supported my region than our own Governments have done. In the current spending period, 2014 to 2020, the Tees Valley has been allocated £198.1 million of EU regional funding. Those funds have provided vital investment, including in research and development and innovation, boosting small and medium-sized businesses, helping to retrain and upskill the local workforce, and supporting our area’s transition to a low-carbon economy.

There has been funding for the youth employment initiative to help to tackle our youth unemployment, which is two and a half times the national average. However, that investment has simply not been enough to offset the damage wrought by the UK Government’s austerity agenda. According to analysis by Institute for Public Policy Research, £6.3 billion of public spending has been taken from the north under austerity, while the south has gained £3.2 billion. That austerity has caused the public sector workforce in the north-east to fall by almost a quarter, with a huge knock-on effect to local economies.

We still have pacer trains running on yet-to-be electrified lines, despite the promise of better upgrades, while billions of pounds are poured into London’s Crossrail. Many communities are no longer served by bus routes, as subsidies have been slashed. Meanwhile, the crisis at British Steel threatens to put another great British industry, deeply rooted in the north, out of action because Whitehall has failed to create the level playing field that the steel industry so desperately needs.

Our region would now be classed as a lesser developed region. The Conference of Peripheral Maritime Regions estimates that the region of Tees valley and Durham would be classified as a less developed region by the EU post 2020, putting us among the poorest regions in Europe and therefore entitling us to more money. That is absolutely shocking and demonstrates how regional inequality has skyrocketed under this Government.

At this crucial time when we need a greater share of regional development funding to give our area a boost, we do not yet know how the Government intend to allocate regional funding when EU policy no longer applies. The UK Government’s proposed UK shared prosperity fund is very light on detail. If their record is anything to go by—allocating money to the areas with the highest economic return, which typically are the areas that are already the wealthiest—my area could massively lose out again. If we were to remain EU members, the CPMR estimates that, based on current population numbers, the Tees valley would be entitled to more than £270 million between 2021 and 2027. That is money that we desperately need. That share of the pot reflects the huge regional inequalities across our country, and it would make a massive difference to growth in my region.

[Alex Cunningham]

The SSI site in my hon. Friend’s constituency is yet to see any real progress in development. That is all the more reason why we need a commitment to greater funding if we are to create jobs for people there and in my constituency, which is just across the Tees valley.

[Anna Turley]

I thank my hon. Friend and neighbour for that important intervention. He is right; there has still not been a single new job created at the SSI site in my constituency, which lost 3,000 jobs overnight in 2015. We have a plan for 20,000 jobs, but we need every bit of support and encouragement we can get to achieve that. It is not going to happen without looking more widely afield. My concern is that it will be local people that end up paying the cost of cleaning up that site.

Our share of the pot reflects the huge regional inequalities across our country and would make a massive difference to growth in my region. Ministers have indicated that regions should not lose out from the decision to leave the EU but, if current policy is anything to go by, yet again the Tees valley will be deprived of vital support

Recently we saw the launch of the Power Up The North campaign, led by our regional media and supported by politicians, businesses and people across our communities. I congratulate them on this great campaign. It is extremely powerful and is pushing back against the old idea that success in London and the City will automatically lead to a wave of wealth, spreading out across the country, and lift up areas like Teesside on a rising tide. We know that is not the case.

We have just had the fifth anniversary of the northern powerhouse, which was launched to great fanfare. I hoped it might be a turning point in relations and inequality in this country, but five years on it is clear that the concept has been a damp squib, achieving more as a political campaign rather than delivering real power to our region.

On Teesside we have proved that when we are given power and control we can do great things, such as supporting our people to retrain after the SSI closure through our local taskforce, and developing a local industrial masterplan for the South Tees Development Corporation. We have big ambitions for carbon capture, hydrogen power, and other clean industries, but the reality is that too often we are reliant on going cap in hand to the Government for funding. Now we are at risk of being in an even worse situation. Without better investment in the EU, the northern powerhouse will only ever be a soundbite that failed to deliver.