UK Shared Prosperity Fund

Debate between Chi Onwurah and Roberta Blackman-Woods

Thursday 5th September 2019 Commons Chamber

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

I congratulate the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) on securing this important debate. It builds on the important Westminster Hall debate that we held recently on this subject called by my hon. Friend the Member for Sheffield Central (Paul Blomfield). In that debate, we sought to elicit more information from the Government about how the shared prosperity fund would operate, and we also focused on the loss of EU funding and the impact it would have on regions classed by the EU as less developed. That is of particular importance to me because I represent a constituency in the north-east. We need to know what will happen about the shared prosperity fund.

Since that debate, however, we have heard very little from the Government about how things are going to proceed.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I thank my hon. Friend and neighbour for giving way and for her remarks. The UK is the most regionally unequal country in Europe and indeed the world in terms of how the economy is centralised around London. Does she share my concern that any fund administered from Whitehall will not meet the needs of regions such as ours—the north-east—or allow them to achieve their economic potential?

[Dr Blackman-Woods]

I absolutely agree. Indeed, we have pointed out in previous debates that, given what we know about regional inequality in this country, we do not trust this Government to use these funds to eradicate it.

As we have heard throughout this debate, we need a shared prosperity fund to replace the EU structural funds currently being paid to the UK regions through the European regional development fund and the European social fund. The total value to the UK of funding from these streams in the current funding round is £9.15 billion, or £1.3 billion per year, so we are talking substantial sums of money. There are also smaller pots of funding—the European maritime and fisheries fund, the LEADER programme, the youth employment initiative and so on—amounting to a further £100 million a year.

Although there are funding implications for the whole UK, our withdrawal from the EU and the loss of access to these funding streams is of particular importance to the regions of greatest need. If the UK were to remain in the EU, we would be due to receive significant additional funding in the next round. I am not sure that the Minister has taken this issue on board. It would be really good to hear him acknowledge what these regions would have got if we were staying in the EU. The three regions that are currently affected—Tees Valley and Durham, South Yorkshire and Lincolnshire—are on course to slip below the threshold of 75% of EU average GDP per head, which means they will qualify for extra funding. They would join the three regions already acknowledged—west Wales, the valleys and Cornwall—in receiving a much higher level of funding: about £135 million a year. As my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) said, the Government should be very concerned that these regions are facing such inequality and experiencing a need to develop their economies further. We really do want to hear from the Government how they are going to achieve that.

We want to hear from the Government about how the shared prosperity fund will operate and about timescales. We want to hear what they are doing to address the growing regional inequality in the UK. How do they see the shared prosperity fund sitting alongside local growth funds, for example? How will those funds interact with other funds that are available to support regional development? Are the Government giving themselves a timeframe in which to eradicate regional inequality? To date, we have not had enough information from the Government. Even at this late stage, we know very little about how the fund will operate. What sort of money are we talking about, and will it be disbursed in the same way as it has been under the EU? Will the Government take into account the regions in greatest need, or not?

I feel very strongly about this issue, as do other Members of Parliament in regions that very much need investment to help our economies to grow and to reach their full potential. These are amazing regions with huge skills and talents among the population. They all need development in digital and higher-level skills, so we need to use our universities and colleges to drive up that development. They need investment in renewable energy—particularly the north-east, which has wonderful expertise in this—and in pharmaceuticals. We need to upgrade the transport system. We must ensure that everyone in these regions can reach their potential and contribute to the future prosperity that we all want to see, particularly in the communities that need more support from this Government.

Budget Resolutions

Debate between Chi Onwurah and Roberta Blackman-Woods

Wednesday 31st October 2018 Commons Chamber

[Chi Onwurah]

Absolutely. The Conservative party initiated and promoted the reckless deregulation of our financial sector, which contributed significantly to the financial crisis, and then failed to manage the economy in such a way as to ensure sustained, significant growth. Under this Government, we have had half the historical level of growth.

The prognosis for growth is reflected in business investment, which is the lowest in the G7. We are the only major economy in which investment is falling. Our productivity is 15% lower than in other major economies, and it has not grown this slowly since the Napoleonic wars—there is an achievement. The average real wage growth since the second world war is 2.4% a year, but under the Conservatives, pay has fallen by 3% and the UK remains the most regionally unequal country in Europe.

We needed a big Budget to rebalance our economy and to provide the industrial strategy with the backing it needs to address the serious problems, but the Budget is deeply disappointing. We got an arbitrary announcement of more funding for the national productivity investment fund, but that will be in 2023, with no information on where the money will be allocated.

On research and development, we had another repackaging of money that was announced last year dressed up as additional funding when, in fact, of the £1.6 billion cited by the Government only £180 million, barely 10%, is new. Although we are pleased that there has been a marked increase in R&D expenditure, there is still no overarching strategy for its direction or for how the Government intend to meet their target of spending 2.4% of GDP on R&D. We are a world leader in science, but, let us be clear, the Government’s 2.4% target is average when it comes to R&D spend. Labour’s target is 3% to become one of the leading nations in R&D spend.

What little information there was in the Budget again focused on sexy high-tech areas like nuclear fusion and quantum mechanics. As an engineer, I understand the desire of the Prime Minister and the Secretary of State to be associated with sexy technologies, and it is of course a vital part of our industrial strategy to support the industries of the future, but the Secretary of State has repeatedly failed to recognise that supporting our biggest sectors to improve their productivity through technology and investment is so important.

Retail is one of the biggest employers outside the public sector, and it is facing a unique crisis. Over 100,000 jobs have been lost in the past three years, and over 25,000 shops stand empty. High streets are the centre of communities, and they should and can continue to be vibrant spaces of which communities are proud, but to achieve that we need proactive policies from the Government, as Labour have been demanding for months.

The Secretary of State has been a bit cheeky and stolen a number of Labour’s policies in this area. A register of empty properties, an adjustment to business rates and a high street taskforce were just some of the policy proposals in the conference speech of my hon. Friend the shadow Secretary of State. It would be churlish of me to demand our policies back, but that is where the consensus ends.

The Government’s overall package, “Our Plan for the High Street,” simply does not do enough. Business rates relief would not have saved a single House of Fraser or Debenhams—the vast majority of retail workers are employed in such shops. The British Retail Consortium has said that the Government

“must engage in more extensive business rates reform to help all retailers and their employees through this period of transformation.”

The CBI responded:

“Smaller businesses will be relieved by the support on Business Rates… But larger retailers and manufactures—and the millions they employ across the UK—will continue to suffer needlessly until there is a full, in-depth review.”

Yet the Budget contained no commitment to a review of business rates.

The future high streets fund is yet another fund allocated out of the national productivity investment fund, and there are no details of where the money will be targeted, who will be responsible for administering it or how quickly funds will be made available. The proposals for planning reform have missed the point. It seems that the Government’s idea to save our high streets is to turn them into non-high streets. Frankly, much more work is needed if we are to protect our high streets and the millions of workers who rely on them.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

My hon. Friend is making an excellent point about the high street. Does she agree that it is ridiculous of the Chancellor to ask that local authorities develop a plan for their high streets, which is something we support, while he is taking away the means for them to be able to plan for their high streets by introducing yet more permitted development?