Levelling-up Agenda

Bob Seely Excerpts

Tuesday 15th June 2021 Westminster Hall

[Bob Seely (Isle of Wight) (Con)]

I beg to move,

That this House has considered the levelling up agenda.

It is a pleasure to serve under your chairmanship, Mrs Miller. I am delighted to see the Financial Secretary to the Treasury, my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), and I thank other hon. Members for being part of this debate. I am happy to forgo my summing-up at the end to get as many folks in for as long as possible, but I would like to talk for 10 to 12 minutes now to outline some arguments.

I have two key points to make to the Minister and I will come straight to them. On the immediate issue, the Isle of Wight Council and I, working together, are putting in what we believe is a very strong bid for a development in East Cowes. I am keen that it reaches receptive ears in Government and among Ministers.

Secondly, I would like to talk more broadly about the levelling-up agenda for the Island and ask the Government to work with us—and even to use the Island as a model, a mini region, to see what a strategic cross-Government agenda could look like. I am most concerned to talk to the Minister about the extent to which the Treasury is leading cross-Government work, rather than the Cabinet Office, and how we are developing cross-Government, coherent integrated policy making.

However, if there is one critical element that I want to leave with the Minister today, it is that the levelling-up agenda for the Isle of Wight implies many things. That includes not only economic development, important as that is, but training and skills, education, which is critical, health outcomes, greater environmental protection, housing and planning. Effectively, we want a strategic road map for the next 50 years that has more to offer the Island than we have had in the past 50 years.

[Sir Edward Leigh in the Chair]

“Levelling up” seems a fancy phrase for regional policy—for taking wealth or economic development out of the south-east and trying to spread it around the country as much as possible. According to the Institute for Fiscal Studies, ours is one of the most unequal countries in the G7 developed nations, which is pretty scandalous.

Specifically on the Island, for nearly two decades we have been making the case for a more assertive regional assistance programme. In 2002, our GDP, our local economy, was 60% of that in the south-east. Things have improved in the past two decades and it is now 66%, but we are poorer than elsewhere in the south-east. Our educational achievements are lower, and our health outcomes worse.

The Island has a unique identity, which those of us who live there are incredibly proud of—frankly, we love it—but there is a downside: the economic impact of dislocation and diseconomies of scale, specific to an island. In other areas of the UK, people can be physical islands, cut off, as we have seen with folks in Hartlepool and other places. That is why the attractiveness of the hopeful levelling-up agenda post Brexit rightly has such a hold on many people. What we must do is deliver on that agenda.

The levelling-up agenda, done right, is one of great hope and potential prosperity for this country. If it is done wrong, we will be letting down millions of people throughout the United Kingdom.

I want to make another point. According to all our statistics, the Isle of Wight should be in tier 1—frankly, we should be two constituencies in tier 1. My electorate is double the size of that of the average constituency in the United Kingdom and we are going to be two constituencies in three years’ time anyway, after the Boundary Commission changes. I am slightly concerned that we are one constituency in tier 2 at the moment. I think our case merits a higher priority.

I come to our bid. The bid going in this week is in relation to a series of buildings in East Cowes that we wish to transform. The purpose is to grow the number of high-paid jobs in marine, but also in the tidal, wind and offshore renewable sectors. Our bid will enable us to develop that cluster of excellence further and ensure that East Cowes continues to grow as a shipbuilding composite and green tech hub for the United Kingdom as a whole.

I would welcome a ministerial visit to East Cowes. My right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) visited during the campaign before he became Prime Minister; many people remember the picture that he had taken in front of the world’s largest Union Jack—on the Isle of Wight: where else? We would equally welcome another ministerial visit to see the excellent work being done there.

This is part of a wider agenda, which I want to turn to. The council is new and we are going to work together. It is not Conservative any longer, which is a shame, but we will work closely together and I know we will have a successful relationship. The council and I are not thinking about the next two to five years, but the next five to 25 years, because we want to see a different future for the Island. That has to be primarily around the regeneration of our town centres using the levelling-up and shared prosperity fund bids.

Our regeneration approach, especially after covid, will be focused primarily on Newport. The town centre has a lot of empty shops and Newport harbour is ripe for development as a regeneration hub. As part of that, we want high-quality new house building for Islanders in sensitive numbers to drive regeneration. We need to bring back young people and housing into the town centre to drive economic growth and to provide employment, for start-up companies, for leisure and for higher education facilities, which I will come to. We need space for start-ups and, potentially, a new railway station, depending on how the rejuvenation of the branch-line project goes. If there was a single long-term item that I would interest the Minister in after the East Cowes project, it would be the regeneration of Newport to drive the Island’s economy.

This is linked to many other things, as I am sure the Minister can imagine. We need to continue to develop higher education on the Island. The education revolution that transformed Bournemouth, Brighton, Portsmouth and Southampton has, scandalously, completely passed us by. Only 23% of Islanders go into higher education, compared with nearly 40% of Londoners. That is unacceptable.

Millions have been pledged by the Department for Education—I thank the Ministers for this—to help rebuild the Isle of Wight College. Under the excellent leadership of Debbie Lavin, the college is doing great work aligning with mainland colleges to be able to offer richer and better vocational courses, as well as degree courses. We are getting there in higher education, but more needs to be done.

Regenerating our towns also means that we can protect our landscape much more. We need our landscape—not only for our quality of life, but because it is a critical part of our visitor economy. Our landscape has specific economic as well as emotional and psychological value over and above a competitive price for low-density greenfield housing.

For 50 years, we have not built for Islanders. That situation needs to stop. As part of any levelling-up plan for the Island, we need greater landscape protection and a policy of building for Islanders. That means exceptional circumstance and, preferably, opting out of national targets. We think that the best way to give long-term protection to the Island, depending on what happens with the Government’s landscape review, is for it to have a new designation—a new template to work with Government: to become an “island park”. That could involve marine protection and landscape protection, maybe up to the level of being an area of outstanding natural beauty, perhaps with some opt-out for economic development.

We should work on a new template, and it can be a template for the UK. We can start in England with the Scilly Isles and the Isle of Wight; in Wales, there is Anglesey; and many Scottish islands could benefit from a similar shared model, although I note that Scotland has the special islands needs allowance. I wish we had that in England.

More can be done, but I am trying to show that economic development and educational aspiration need to go hand in hand with other things to ensure that when we regenerate, we do so in an intelligent, sensitive, long-term way that develops our people and gives them greater aspiration, greater hope for the future, greater education and greater work opportunities, while also protecting our landscape for us and our nation in perpetuity, but also as a critical part of our visitor economy.

I am aware of the time; I will begin to wind up so that others can come in. I will be seeking separate debates on the progress of the island deal. We have made some progress on that, but we need to do more. I stress that there are additional costs to providing public services on an island, and those are not in dispute. I am delighted that the fair funding formula—championed by my right hon. Friend the Member for Richmond (Yorks), now Chancellor, whom I thank for his excellent work—contains an admission that additional costs are involved in providing local government services.

That same argument is still being played out in the field of health, specifically for the 12 universally small hospitals in England—and St Mary’s on the Isle of Wight is the most unique universally small hospital, because it is on an island; by definition, it cannot grow in any conceivable way. The population is about half of what a district general hospital normally requires for the tariff regime that currently operates within the NHS. I will also have a separate debate on ferries, which is far too big a topic just for here; likewise for agriculture.

Finally, I leave a single idea in the mind of the Minister: regeneration—levelling up, the shared prosperity regional agenda—is, for us, about a lot of things. Fundamentally, it is about making sure that our future is better than our past. It is about focusing on development, education, wellbeing and health, but doing so sensitively and intelligently while preserving our environment. As I say, done right, levelling up can be transformative. I very much hope that I can work with the Minister on a coherent, cross-Government approach for the Island in a way that can help us all nationally as well.

[Several hon. Members rose—]

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[Tim Farron (Westmorland and Lonsdale) (LD)]

It is a huge pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Isle of Wight (Bob Seely) on leading this important debate.

Levelling up is a concept that I strongly support. For it to work, we have to identify disadvantage and take action to tackle it. There is a lot that I could ask the Minister to consider today, but he will be delighted to hear that what I am asking for will not cost very much money and could be absolutely transformational in much of rural Britain.

Over the last 15 months of the covid crisis, a housing crisis in areas such as mine in the lakes and dales of Cumbria has turned from crisis to catastrophe. Members who have been monitoring the housing market will have noticed things similar to what has happened in my communities. We have seen an increase in the number of holiday lets in my constituency of 32%. From talking to dozens of estate agents across the county, I know that the proportion of houses purchased during this period that are going into the second-home market is anything from 40% to 80%. At the beginning of the crisis South Lakeland had an average household income of £26,000 and an average house price of £250,000, which shows a serious problem from the start. That problem has been massively exacerbated during this time.

What does that mean for our communities? Hospitality and tourism are critical to our economy and I am proud to stand behind them, but people involved in that industry know that vibrant communities are vital to the survival and strength of the lakes, the dales and the rest of Cumbria. The increasing proportion of homes in the second-home or holiday-let market means no permanent population. No permanent population means no kids at the local school, so the school closes. It means the loss of the post office, the pub and bus services. We end up with beautiful places that are empty. We must surely recognise that as utterly unacceptable.

I have provided some top-line statistics, but on an anecdotal level, people who pay £600 a month for a flat in a lakeland village are being kicked out so that the landlord can charge £1,000 a week for a holiday let. That is happening, and many people are calling it the lakeland clearances. Extreme circumstances require drastic responses if we are to level up here and not leave rural Britain behind.

I am pleased that the Government are closing the loophole that allows people to pretend that second homes are holiday lets, when they are not, and so avoid paying tax. That is a good thing. The Government, however, must accept some responsibility for the stamp duty holiday fuelling this crisis to a large degree, leading to a huge spike in purchases.

The really important thing for the Government to do is to change planning law. They need to ensure that holiday lets and second homes are distinct categories of planning use, so that local authorities can say that there are enough homes of that sort in the community and, therefore, protect it.

[Bob Seely]

I agree wholeheartedly. Is the hon. Gentleman aware that on the Isle of Wight, although there are not that many second homes on the Island as a whole, in some communities 80% of villages are second homes? It is a thoroughly excellent idea to require change of use for a second home or holiday let.

[Tim Farron]

That is a free measure the Government could take to have real power. I am grateful to the hon. Gentleman for his intervention.

The Welsh Government have given local authorities the power to increase council tax on second homes. The right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) talked about Gwynedd, which has been able to double the council tax on second-home owners in those areas. What has that done? It has provided a disincentive in some areas for excessive second-home ownership. It has also led to revenue that can be spent on supporting schools, post offices, buses and other local services, which are losing resource because of the lack of a permanent population. I call on the Minister to do something free but powerful.

Extreme circumstances that come about quickly require a response equally extreme and quick. If the Government are not to get a reputation for taking their eye off rural Britain and leaving rural communities behind—for example, leaving areas such as mine in level three for levelling up—they need to act, not in autumn or winter, but before the summer, to save my communities from the new clearances.

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[The Financial Secretary to the Treasury (Jesse Norman)]

It is a pleasure to serve under your chairmanship, Sir Edward, as it was to serve under your predecessor, the right hon. Member for Basingstoke (Mrs Miller), when she was in the Chair. I thank her very much for stepping into the breach.

I congratulate my hon. Friend the Member for Isle of Wight (Bob Seely) on securing this debate. It is testimony to the importance of the issue and the breadth of the debate that he has created that so many colleagues have made interventions and speeches today—and very welcome they were, too. I am replying for the Government on behalf of the Exchequer Secretary.

My hon. Friend is right that this is a very important public issue. It has been the mission of this Government to seek to overcome geographical disparities—disparities of prosperity and of opportunity—and to do so through what we have called levelling up.

By and large, this has been a very good debate and generally good mannered. I think everyone would acknowledge that it has been a bit of a gallop, given the number of speeches, but that is testimony to the huge interest in the topic. I congratulate colleagues who have passed the conversational baton seamlessly from one to another on the vigorous and effective way in which they have put on the public record their own local concerns. I will talk a little about the wider agenda before turning to some of those contributions.

It is plain that the Government believe in the substance and the importance of levelling up. What does that mean? It will mean different things in different places, but the core idea is that everyone should have access to good jobs, good wages and good economic prospects, wherever they live, whether that be in Barnet, Birmingham, Bolton, Bristol or, indeed, Bembridge.

It is built into the energy of our society that at different parts of their lives many people will want to move to different parts of the country to seek work and opportunities, but some may not wish to do so and many will not. We want people to be able to take pride in their local areas and to see them as vibrant, exciting places to live their lives and build their livelihoods. That is at the heart of levelling up and that is why the Government announced a series of significant policy measures designed to begin a longer-term process of redressing geographical imbalances.

Those measures include, as has rightly been touched on, freeports, which are going to be an important catalyst for regional economic growth. We want them to be magnets for innovative businesses, to provide a platform to generate the greater prosperity that will revitalise each area, and to create great jobs and great economic growth.

At the Budget, the Government announced the locations of eight freeports across England, ranging from Teesside in the north-east, to the Solent, close to the constituency of my hon. Friend the Member for Isle of Wight. That is a potentially very significant intervention, but they are only one part of a wider picture, which is, of course, infrastructure.

Last year we published a national infrastructure strategy that contemplates £600 billion-worth of investment over the next few years—half from the private sector, half from the public sector. Very high levels of capital investment are already being made in many different areas up and down the country, including in roads, through the road investment strategy, in railway, through High Speed 2 and other works, and in many other modes of transport and activities. The transforming cities fund has done a huge amount to support cycling, walking and greener transport across the country.

That investment also includes the towns fund. One or two colleagues have been rather dismissive of the towns fund, and wrongly so. One cannot say that there has been inadequate transparency but then grumble when the details of the fund and the methodology by which the selections were made have been put on the internet for all to review or interrogate. The fund itself is turning out to be a remarkably effective and interesting way to build a holistic local platform for economic growth, because it is not something that can be dominated by local authorities. It requires voluntary and private sector leadership to work with local authorities and, in doing so, bring the best ideas to the table, build long-term pipelines, pump-primed with public money, that will, certainly in many cases, last for years. It is going to prove to have been a very important intervention.

It goes a long way, picking up the point made by the hon. Member for Westmorland and Lonsdale (Tim Farron) on the importance of supporting rural areas. I come from a rural area myself, in Herefordshire, and I am keenly aware of that. He will be aware that although many of the effects of covid will be, in some respects, negative, they will also be positive effects. People will move out of cities, often at earlier points in their lives, to conduct effective and successful careers, no longer fettered by geography as they might have been, adding new energy and vibrancy to areas that are already vibrant. That is another good thing, in many ways.

We are working on the creation of the new UK infrastructure bank, which will be an important intervention. We will announce its launch soon, but many details are already available for colleagues to look at on the internet. It is designed to act as a cornerstone investor for infrastructure projects, to partner with the private sector and local government to develop major infrastructure projects, with the twin goals of green growth and levelling up.

The bank will act across Government as a place to pool expertise, so that people can pick up the phone and get a cross-governmental view about how projects should be financed, which will itself be very important. It will prep and prepare important development work in sectors of green economic growth that we have not yet seen—for example, hydrogen for powering the next generation of transport or potentially for home heating, carbon capture and storage, and the like. About a third of the initial £12 billion in funding for the new UK infrastructure bank will be earmarked for local and mayoral authorities, which will make a huge difference. If we can, as we anticipate, then crowd in private sector investment, that will make a remarkable difference.

It is important not to talk about levelling up without mentioning some of the most important aspects of it, which are to do with skills and training. The Chamber will know about the work we have done on the lifetime skills guarantee, on employer-led skills retraining and on apprenticeships. They all point to a holistic approach, designed to tie skills and infrastructure together, with a local perspective that brings a fuller understanding of local needs to bear.

[Bob Seely]

I thank the Minister for his extensive response. That brings to the fore one of the problems here. When he stood up, he said he would answer to the Exchequer section or the economic section, but who is leading? How are Government going to deal with a coherent, integrated approach that brings in everything from landscape protection to stamp duty for second home owners, to the skills and education agenda, to immediate economic progress? Who is dealing with that?

[Jesse Norman]

Of course, my hon. Friend is right to point to this. In many cases, the core is going to be effective local leadership that brings the different elements together. As a Member of Parliament, he knows that the stronger towns fund has shown that energy can be brought in. For example, the Ministry of Housing, Communities and Local Government can have a view on the housing aspect of a stronger towns fund bid, and what expertise and expectation will be there. The same is true of other aspects of Government. It may be a bid with a heavy environmental component or a heavy transport component.

Government also need to be joined up. At the Treasury, I lead on the national infrastructure but on levelling up specifically it is the Exchequer Secretary to the Treasury, my hon. Friend the Member for Saffron Walden (Kemi Badenoch), who leads—she would be here under normal circumstances, but she is in Committee at the moment. However, she and I work closely on this issue, as my hon. Friend the Member for Isle of Wight would imagine.

I turn to some of the points that have been made. My hon. Friend the Member for Isle of Wight rightly highlighted aspects of his own bid, including East Cowes and Newport. I could not hear him talk about the development of the Isle of Wight without thinking about my own uncle Desmond, one of the founders of Britten-Norman, who designed the aircraft whose wings came off in “Spectre,” the James Bond movie, and that went skiing as a result, which was built on the Isle of Wight. Indeed, he was one of the developers of the first hovercraft, the Cushioncraft. I am well aware of the technology and the genius of the Islanders and the espoused Islanders, one of whom Desmond certainly was.

The hon. Member for Barnsley East (Stephanie Peacock) mentioned the importance of local authorities. She is right about that. They have been a very important part of stronger towns fund bids. It is quite interesting when local opinion is surveyed about the public services delivered locally. Whatever one may think about the local authority funding settlement, which was very generous in the past year and before that in many cases, it has not led to a perceived reduction in public services—quite the opposite. In many local areas, public services are regarded as having gone up in quality over the past 10 years.

My hon. Friend the Member for Waveney (Peter Aldous) talked about skills. He was absolutely right and I thank him for that. My right hon. Friend the Member for Basingstoke talked about the importance of women and gender equality. That was absolutely right and I salute what she said, because that is an important part of levelling up. There is some wonderful evidence from India, where they looked at the effect of women mayors and leaders in villages. It turns out that, based on the regressions that economists have done, women leaders in those contexts have been more co-operative, more effective and less prone to forms of corruption than their male alternatives. That is an important lesson that we will reflect on.

The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) invited Ministers to bed and breakfast —a very fine offer that will receive deep consideration in the Treasury—for which I thank him very much indeed. My hon. Friend the Member for Somerton and Frome (David Warburton) reminded us that Stonehenge would never have been built if they had to drag the stones down the A303. I fully concur, having been more or less parked outside Stonehenge, as have many others.

My hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) talked about the bid that he is putting in for the levelling-up fund. I congratulate him on that and encourage all Members to do that, because the levelling-up funding will be a very important national initiative. I have touched on the remarks of the hon. Member for Westmorland and Lonsdale. I am glad he mentioned cutting out the loophole on holiday lets, because that was important. I hope he also noticed the speed with which we acted on that, because the tax process is never an instant thing, but we have moved as quickly as we could, given the circumstances, to try to address the issue. Obviously, it has become particularly important in the context of covid.

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[Jesse Norman]

I think I have 30 seconds before we get to that point.

[Bob Seely]

I am very happy not to speak again.

[Jesse Norman]

I will end in 26 seconds to allow my hon. Friend plenty of time to speak.

I want to engage quickly with the points made by Opposition Members. It is not paternalistic of the UK Government to wish to take a view and to support people up and down the country. It is not paternalistic of the UK Government to offer enormous support for the devolved Administrations on an agreed basis, as we have done in a time of crisis. It is non paternalistic for this country’s collective resilience to have seen Scotland through three periods of crisis in the last 15 years: the financial crisis of 2008, the fall of the oil price and most lately in covid, which might have had disastrous effects but for our collective resilience.

In answer to the hon. Member for Ealing North (James Murray) quickly, it is not appropriate for me to accuse another Member of Parliament of hypocrisy, but I remind him that this Government are raising corporation tax from 19% to 25%. On 24 February, he himself said, in relation to the Budget and the question of corporation tax, that

“we don’t want to see tax rises—this is not the time to do that”.

I do not think he is in any position to lecture the Government about corporation tax.

[Bob Seely]

I thank everyone for taking part in the debate. I thank the Minister for his eloquent and detailed responses, and I thank you, Sir Edward, and my right hon. Member for Basingstoke (Mrs Miller), for your chairmanship.

[Sir Edward Leigh (in the Chair)]

Thank you for a very good debate on the levelling-up fund—I wish that Gainsborough could get some levelling-up fund too, but that is not for me to say.

Question put and agreed to.

Resolved,

That this House has considered the levelling up agenda.