North-West Economy

Alison McGovern Excerpts

Tuesday 20th July 2010 Westminster Hall

[Hazel Blears]

My hon. Friend is right and has championed those ideas for a long time. The proposals are important because, without the infrastructure it will not be possible to draw in the investment that will provide jobs and prosperity, enabling Merseyside, Greater Manchester, Cheshire and the northern part of the region to prosper, and giving them proper connections. That is fundamental to what we are trying to achieve. If we can get support for the city region, it could be a model for other city regions in the future. I urge the Government to proceed with that.

Even when there is devolution of housing, transport and planning, the issue of skills continues to be a challenge, as it has been for many years. There is a big skills gap between young people’s qualifications and abilities and some of the new jobs on offer. Unless we close the gap there will continue to be generations of people without work. The north-west has the highest percentage of neighbourhoods—more than 20%—in the most deprived 10% in the country. We have more out-of-work benefit claimants than any other region: nearly 700,000 people are out of work and in receipt of Department for Work and Pensions benefits. That is about one in six of England’s workless population. We have 375,000 people who have been claiming out-of-work benefits for two years or more, with 308,000 of them claiming for incapacity. In addition, 9.3% of our working age population is in receipt of incapacity-related benefit. That is not just a waste for the economy but a waste of lives—of opportunities and life chances for many people.

One thing that we should do to ensure that the economy prospers is tackle the deep generational structural worklessness in some communities. I commend the pilots that are happening in Greater Manchester on connecting people to opportunity. They are a new way of doing business and have been designed and championed by Chris Marsh, who works for the urban regeneration company in Salford. He has been commissioned on behalf of all 10 authorities to consider how to drill down into the families where there is generational worklessness. The early results are extremely encouraging. He has adopted a system called Total Place in which all the agencies—health, police, regeneration, education and employment services—are brought together. Budgets are pooled, the same targets are agreed and there is the same evaluation. That means more efficiency; things are not done 10 times. Everyone is targeting the families with the most problems. It makes absolute common sense. The total public sector budget in Greater Manchester, across all the agencies, is £22 billion. No one can tell me that we cannot get some efficiencies and savings, but also better results, by bringing together such public sector resources under the Total Place scheme. The pilots, which are getting people back to work because every agency is involved in targeting the relevant families, are a huge success.

I want to ask some pointed questions about how we are to work in the future. The Northwest Regional Development Agency has been a success story by anyone’s measure. It is probably second to none in the way it has levered investment into the region. There has been great confusion about where the new Government want to go in relation to RDAs. The Business Secretary appeared to change his mind three times in the space of just one speech. I think that we now know that the Government intend to abolish RDAs, and many of us are very concerned about that, but we are not sure what is likely to take their place. Local authorities have been asked to consider setting up local employment partnerships with business. We are not sure at what level that will be, or how many clusters of local authorities will be involved. Will they follow the economic footprint, which is a matter of practical common sense, or will they be artificial structures that will not, in my view, work?

[Alison McGovern (Wirral South) (Lab)]

I wonder whether my right hon. Friend agrees with me that one of the most worrying things about the present situation in relation to the Northwest Regional Development Agency is the effect on the many relationships that have been built up around it. I have been going around my constituency talking to representatives of big business and smaller business—I was at Unilever yesterday. Local economic partnerships may be two years down the line, and that leaves a hiatus. Those relationships and the work that was being done are falling by the wayside.

[Hazel Blears]

My hon. Friend is right. In her relatively short time in the House she has made a tremendous contribution to highlighting those issues. She understands that in many cases business works on the basis of relationships, and that some long-established relationships are in danger of fracturing and disappearing in the interim. We need to get on with whatever is going to be done, and make sure that it is properly established.

It is important, too, as we proceed with the local economic partnerships, that when investment is drawn in local people should have the opportunity to get the jobs that are on offer. I urge the Minister to talk to his colleagues in the Department for Education. For those of us who were lucky enough to get Building Schools for the Future programmes in our constituencies—many of us did not, and are rightly angry about it—I want the contracts for those major public building projects to include apprenticeships and construction job opportunities for local people. My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) is right to say that 40 per cent. of the construction sector’s business depends on public sector projects. Many BSF programmes would have employed bricklayers, joiners and plasterers and those jobs are now lost to our economy.