Levelling-up Agenda: Tees Valley

Alex Cunningham Excerpts

Wednesday 25th November 2020 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

I beg to move,

That this House has considered the Government’s levelling up agenda and Tees Valley. 

It is a pleasure to serve under your chairmanship—for the first time, I believe, Mrs Cummins. It is good to see so many people interested in our debate this afternoon, particularly my neighbouring MPs, my hon. Friends the Members for Middlesbrough (Andy McDonald), and for Hartlepool (Mike Hill).

We have all grown weary of hearing about how unprecedented these times are, so I hope Members will indulge me in a short trip down memory lane. Nearly 10 years ago, I spoke in a near-identical Westminster Hall debate on the topic of regional development in the north-east. I said:

“We wait to see whether there will be a Budget for real growth, backed by substantial resources when the Chancellor stands up tomorrow. Resources must be the key. A jobless recovery would be a disaster for our region, and without growth there will not be enough new jobs… I hope that they have finally realised that without a genuine plan for growth and real resources, the economy will continue to be sluggish.”—[Official Report, 22 March 2011; Vol. 525, c. 223-224WH.]

Well, the Government’s buzzwords may have changed, but after a decade, what strikes me is just how precedented and familiar this situation is. A scene of long-term under- funding of the Tees Valley has meant that unemployment there is still far higher than the national average. Health inequalities have widened, and the number of families in poverty has increased. Unless the Government take serious action soon, we will once again be in the dire situation where our communities are made to pay the price of a Tory Government’s failings. 

The toxic combination of Brexit, the pandemic, and Tory incompetence has been catastrophic for our area. Last month it was announced that the UK unemployment rate has surged to its highest level in over three years, now at 4.5%. In the north-east, the unemployment rate has soared to 6.6%—the worst in the UK. The region now has the highest unemployment rate, the lowest employment rate and the lowest average hours worked of all British regions. The Chancellor said this afternoon that an economic emergency had “only just begun”. Well, tell that to our constituents, whose economy has been neglected for the last decade. The numbers have been getting worse for years in our region, since long before the pandemic, as a result of Tory neglect.

At the end of his announcement, the Chancellor dangled a new twinkling pot of money in front of our noses: a levelling-up fund. But we do not need more wasteful bidding processes that pit deprived communities against each other for scraps. Now more than ever, we need a serious and concerted effort to bring the Tees Valley in line with the rest of the UK. You do not have to take just my word for it, Mrs Cummins. WPI Strategy has created the levelling-up index, and in its analysis, six of the seven Tees constituencies are marked as priorities. Middlesbrough is the constituency second most in need of levelling up in the whole of the UK, with Hartlepool sixth. My constituency of Stockton North comes in 14th. In six out of seven of the Tees constituencies, deprivation soars above the national average, climbing to 50% above the UK average in Redcar, 52% in Stockton North, and a startling 110% in Middlesbrough.

For the Tees Valley, levelling up means job creation, and I welcome today’s news of a new power plant to be built at the port. However, while the unemployment benefit claimant rate across the UK is 6.3%, across the Tees Valley it is 8%, and it rises as high as 12% in Middlesbrough. There have been 12,565 extra jobs lost since March across the Tees Valley, and we are haemorrhaging more each day. Last week OSB, a major monopile supplier in my constituency that has been active in offshore wind since 2015, announced that it is closing down at the end of the month because it has not got enough orders. This is happening while the biggest wind farm in the world, Dogger Bank, is being constructed in British territorial waters. What benefit is that bringing to the Tees Valley? Just last week, on the eve of the Prime Minister’s green economy announcement, news came that all—yes, all—the monopiles and transition pieces for Dogger Bank wind farm will be manufactured in Holland and Belgium.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The hon. Gentleman makes a fair point, but is he aware that the Government have said that with future subsidy regimes around offshore wind, there will be a requirement for a higher percentage of the wind turbine parts to be made by UK manufacturers?

[Alex Cunningham]

That is great news, but that is jam tomorrow. We definitely need jam today.

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

Does the hon. Gentleman realise that public procurement rules can change only after Brexit? This is a very good example of why the decision that he described moments ago as toxic, and which his own constituents overwhelmingly supported, was of course the right one.

[Alex Cunningham]

Again, we get jam tomorrow. It is all about jam tomorrow—something that is going to happen in three or five years’ time.

[Andy McDonald (Middlesbrough) (Lab)]

Can we just nail this business about state aid? It was pleaded for in Redcar. We can do that. This is a critically important point: the Tory Government decided that they would sit on their hands and let 9,000 jobs go down the pan. Do not kid me that suddenly there will be this conversion to intervention in our economy—that is absolute nonsense. The French did it; the Germans did it; the Italians did it; and the British Government sat on their hands, and we lost jobs.

[Alex Cunningham]

My hon. Friend does not need an answer from me on that point. Why has our area lost out? Where was the Tees Tory Mayor when the orders were being handed out? He was nowhere to be seen.

No doubt some will claim that jobs have been boosted in the area, but it is going to take a few more media pictures of the Mayor in a hard hat to convince me of that. The cost per job created in the Tees Valley Combined Authority area is calculated at £96,093. That means that for every job created in the last three years, the Mayor has spent nearly a hundred grand. How on earth is an approach like that going to deliver the sustainable job growth our region so desperately needs? The figures are astronomical. We urgently need a fully independent audit of exactly where the millions of pounds of taxpayer money have gone.

[Mr Simon Clarke]

Will the hon. Gentleman give way?

[Alex Cunningham]

I will not at the moment. Even if we put aside the costs, the number of jobs that have been announced barely scrape the sides of the black hole of unemployment in the Tees Valley. For every job announced in the last three years, five have been lost in the last seven months. Sadly, we cannot even get the Mayor to tell us whether those jobs are being filled, or even where they are.

The Tees Valley’s gross value added per hour worked, an indicator of productivity, continues to lag 9.1% behind the UK average. On top of that, research by iwoca has shown that businesses in the north-east have been particularly hard hit by the pandemic. As a result, the region is forecast to lose 11.7% gross value added in 2020. That will wipe out all the economic growth in the north-east since 2004. We will be back to where we were 16 years ago.

Opportunities presented by the possibilities of carbon capture and storage, a freeport and civil service relocation may be part of the answer, but they are simply not enough. I welcome incentivising businesses to come to the Tees Valley, but it will not be much comfort to local businesses that fall outside the free port area and are anxious about the potential loss of EU trade and new tariffs.

This is not just about jobs. While I am all for planning for the Tees Valley’s future, the impact of Brexit and the pandemic is felt by our communities now. A 10-year plan is no good to my constituents, who contact me worried about how they are going to pay their bills this month. Last month, statistics released by the End Child Poverty coalition showed that the north-east has seen the biggest rise in child poverty in the UK. In my constituency, the proportion of children living in poverty has risen to 34%; in others in the Tees Valley, the figure is higher still. It is a tragedy and a scandal.

In Stockton North, 3,109 families with children received universal credit in May 2020, and 1,700 families with children received working tax credit. Behind those numbers, there are thousands of living, breathing children, plunged below the breadline as a result of having poorly paid jobs—or no jobs at all in their family. I am deeply disappointed that today the Chancellor has not listened to calls to retain the increases in universal credit and working tax credit, so that families with children could keep that small but vital economic support. Across the Tees Valley, 79,000 families are affected. This is a Government who would rather spend millions on the festival of Brexit than bring children out of poverty by retaining even small benefit increases, or than feed them during all school holidays. This is not levelling up; it is grinding down.

We all know that where economic inequality thrives, so do health inequalities. Stockton-on-Tees is often used as a case study to highlight health inequalities in the UK. Men who live in the town centre are expected to live 18 years fewer than their peers just a couple of miles down the road. I have lost count of the number of times I have heard Tory Ministers promise to tackle these worrying inequalities, but nothing has happened. The people of Stockton were promised a new hospital building, but 10 years later, it is yet to materialise. We just get occasional scraps that do nothing to plug the gap.

The Health Secretary visited the University Hospital of North Tees recently. I prayed he was going to announce its replacement, as I knew a statement was coming up within a few days. The statement came, but North Tees was not on the Health Secretary’s list. Surely any commitment to levelling up the Tees Valley must have addressing health inequalities at the core of its mission, and a new hospital has a major role to play in that.

A proper levelling-up agenda would be such a boon for Teessiders, but while the Tories claim that that agenda is already under way in the Tees Valley, there are serious obstacles that will prevent its delivery. Just last week, the think-tank Demos published a new report, “Achieving Levelling-Up: The Structures and Processes Needed”. It concludes that while levelling up is possible,

“there is zero chance of achieving it without…changes to the current system”

of devolved politics. One barrier it identifies is that the work of local enterprise partnerships and combined authorities is largely invisible, making real accountability to the public impossible.

The situation in the Tees Valley Combined Authority area is much more concerning than that, because the Tory Administration are not just invisible in terms of accountability, but are actively obstructing proper scrutiny. The Mayor has created a web of different companies and organisations through which he spends public money, but is shielded from vital public scrutiny. There are even reports that donors to his campaign have been appointed to significant positions in those companies and organisations. Decisions are often made outside formal meetings, through a complex network of political and business relationships and friendships, informed by advice from expensive consultants.

[Mr Clarke]

Will the hon. Gentleman give way?

[Alex Cunningham]

I will not at the moment. This is a chumocracy on a local scale that mirrors the widespread and despicable cronyism we have seen play out on the national stage in the Government’s constant privatisation of the response to the pandemic. It is shameful cronyism that I am worried will bear more fruit in the administration of any Tory levelling-up fund. If the management of the £3.6 billion towns fund is anything to go by, we have serious reason for concern. Billingham, in my constituency, was deemed more in need of support than towns in Tory MPs’ patches, including a town in the Secretary of State’s constituency, which was 270th on the list, but Billingham missed out and the Secretary of State’s constituency did not.

It is clear from the Chancellor’s announcement today that the Government are not going to invest the money that the Tees Valley needs to overcome the destabilising impact of Brexit and the pandemic on our communities and industries. While he splurges on whizzy defence gadgets and Brexit festival guff, public sector pay and benefits are largely frozen. These freezes will actively discourage the growth that we need in the Tees Valley, and they will level down, not up.

Locally, the Tory combined authority is the one public body in the Tees Valley with money to spend, but despite that, there is no comprehensive support package for our constituents. Instead, there is the £1 million Houchen gate—£1 million of taxpayers’ money that could have done so much good, wasted on a gate. The Mayor bought the loss-making airport for about £80 million, but he has secured a few flights; some people will be grateful for that. I heard one person say today, “What use is it being able to get on a flight to Alicante when local people still can’t get a bus home after 7pm?”.

[Mr Clarke]

Clearly, the Labour party opposed the rescue of Teesside international airport; it is probably the only example I can recall of the Labour party opposing taking something into public ownership. Is the hon. Gentleman still saying today that it was the wrong decision? I think people across Teesside would be amazed by that.

[Alex Cunningham]

Personally, I am still a little surprised that it ever happened. Labour-led authorities at that time supported the purchase of the airport. The Mayor was elected on the promise that he would buy the airport; it was in his manifesto and others facilitated his doing it. He is the person who will have to bear the brunt of the problems that we will face in the future, including the many millions of pounds that we are going to lose, year on year.

[Andy McDonald]

Does my hon. Friend agree that it might assist us if the various companies that have fallen under the umbrella of this organisation voluntarily agreed to be subject to the Freedom of Information Act 2000? What we have here is a raft of public money, and a public body, put beyond the gaze of the public. Does he agree that that does not help scrutiny and transparency?

[Alex Cunningham]

Most certainly. I cannot understand why anybody wants to hide where the public money has been spent. I know that there are different people involved in all these different companies. I would like to know what their agenda is. Is it the agenda of the people of the Tees Valley?

The failure of the Government, both nationally and locally, angers and saddens me. The Tees Valley is fit to burst with potential. We are ripe and ready to be levelled up; we are calling out for it. We have the potential to exploit the amazing opportunities for green industry, including carbon capture and storage. We have a high skill base, tight-knit communities and local authorities that, despite political changes, have a track record of working together, and achieving great things when they do. Sometimes, local Tories try to claim that Labour politicians are talking down Teesside.

[Mr Simon Clarke]

That is exactly what is happening today.

[Alex Cunningham]

I almost have to laugh. Talking down Teesside? It is the greatest honour of my life to represent the amazing and diverse citizens of Stockton North, and to champion the vibrant history and culture of the Tees Valley. The real problem is that for the past 10 years, the Tories have been booting down Teesside. Their mind-boggling incompetence in handling the covid crisis is yet another catastrophic kick to the region. Pointing out the heartbreaking inequalities that affect our constituents is not talking down our area. It is standing up for our area in the face of a national Conservative Government who have neglected the north-east for years. The Tees economy is on the cliff edge of a hard Brexit, and the lack of investment and post-pandemic rebuilding will push it into the abyss.

The North East England chamber of commerce policy director, Jonathan Walker, got it exactly right when he said:

“The human, social and economic cost of this is appalling. Levelling up has to mean more than just shiny projects. It must mean giving young people in our region the same life chances as they’d get in other parts of the country.”

He came out with another statement today; he said that the Chancellor’s announcement today was a missed opportunity:

“On the face of it a levelling-up fund sounds good but it is far too small in scale and ambition to be effective.”

I want our young people to get the benefits, but sadly I see no prospect of them getting the support they need. There are plenty of these shiny projects, but the absence of substance breaks my heart, because they could have so much more. Our constituents deserve better than this. They need better than this.

I appeal to the Minister to stress to his colleagues the need for true levelling up; for help sustaining jobs and creating new ones; to be open, honest and transparent when dealing with public money; to end the health inequalities that continue to blight our communities; and, perhaps above all, to give our young people real hope that they can have the careers they want and a future they can look forward to. Let us make the expression “levelling up” more than a cliché. Let us make it a demonstration of action.

[Judith Cummins (in the Chair)]

I ask Back Benchers to keep within five minutes to start with. I am planning to call Front Benchers at around 5.15 pm. Simon Clarke.

--- Later in debate ---

[Mr Clarke]

We do, actually, and we have defended the lowest paid in today’s statement, but it is very important to note that in the end we need to have sustainable private sector-led growth in the Tees Valley and that was not what was delivered under the last Labour Government. What we need to see is growth, and how will that growth be delivered? There are five key aspects to that.

The first is the regeneration of the former SSI steelworks site at Redcar, supported by £233 million from the Government. It is the largest redevelopment project in the United Kingdom. What will go there? In February, I had the pleasure of speaking at the launch of Net Zero Teesside at the Riverside stadium. As we heard last week, carbon capture, usage and storage will be at the heart of the Government’s green industrial revolution. It is backed by £1 billion of Government investment, and the Tees and the Humber CCS clusters—

[Alex Cunningham]

Will the hon. Gentleman give way?

[Mr Clarke]

I will not, because of lack of time.

This is an important part of that piece. CCS will sit alongside other clean energy projects, including the national hydrogen transport hub and the offshore wind industry. The hon. Gentleman said that there is no good coming to the area from it. An application is being made for the new £90 million quay at South Bank, which will create hundreds of jobs. It is all set to be built next year.

The second feature of our vision for Teesside is, of course, a freeport. Despite Labour doing everything it could to stop Brexit—which is the reason why Teesside is now represented by more Government than Labour MPs—we will leave the transition period and regain full national independence on 1 January. Freeports are one of the best examples of how we can drive growth and jobs. [Interruption.] Some of my colleagues are having to self-isolate, but if Members look at the electoral geography of Teesside, they may notice that it has changed.

The third aspect of our plan is, of course, an infrastructure revolution. It cannot be overstated how important it is that the Mayor saved our airport in the teeth of the hon. Gentleman’s opposition and that of his colleagues. We have had the announcement today of the new flights to Alicante and Majorca—something that both his constituents and mine will enjoy next summer. That is on top of the new service to London Heathrow, the UK’s global transport hub, and the multimillion-pound regeneration of Middlesbrough station and Darlington station.

Of course, the fourth strand of levelling up comes in the form of skills. The Government have already committed £450 million to the Tees Valley Combined Authority’s plans to give young people access to skills training, introduce high-quality broadband and overcome barriers to work. My right hon. Friend the Chancellor of the Exchequer’s kickstart scheme, part of the emergency response to coronavirus, has already surpassed 500 jobs for local 16 to 24-year-olds, with applications still open.

The fifth and final element of levelling up is, of course, direct investment through the £3.6 billion towns fund. Middlesbrough, Redcar, Thornaby and Hartlepool are all awaiting the outcome of their bids. Darlington has already had £22.7 million from the fund. And that comes on top of bids to the future high streets fund, which I hope will benefit both Middlesbrough and Loftus.

We all know that levelling up is the task of at least a decade. None of this will be achieved easily. None of it comes simply. But it is happening precisely because we have confidence in Teesside, in the people of Teesside and in the future of Teesside. Rather than talking it down, we talk it up, and that is being rewarded for the people of the area, who see hope, growth, jobs and optimism. They see that from the Government side of the House, from the Conservatives, and long may it continue.

--- Later in debate ---

[Alex Cunningham]

I am grateful to everyone who has taken part in this robust debate. I am pleased that the Minister at least recognises that we are here because we believe in our areas; we are not talking them down. We believe in them, and we are speaking up for them. I appreciate the fact that he is now nodding.

I have 20 seconds left, so as for the Minister’s answers: no new hospitals, and no reference to health at all. I have one final point to repeat: five jobs have been lost in the past seven months for every job created in the past three years. We need to do much, much better for the Tees Valley.