Older Industrial Areas: Economic Disparities

Christina Rees Excerpts

Thursday 25th June 2015 Westminster Hall

[Christina Rees (Neath) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I thank my hon. Friend the Member for Easington (Grahame M. Morris) for securing this important debate. I am pleased to have the opportunity to speak on this matter, which is of paramount importance to my constituents in Neath, a truly beautiful part of Wales.

The Neath constituency has a long and proud industrial heritage. However, since the beginning of the 1980s the British coal industry has lost more than 250,000 jobs. That finally signalled the end, after decades of decline, of the industry across most of the country. Unemployment soared and with it household incomes plummeted, taking with them aspirations and hope. The closure of the pits ripped the heart out of the valleys communities and left a scar that is still felt and seen today.

Prior to the global economic recession, there was some progress in generating new jobs in coalfield areas, but former coalmining areas continue to suffer from a legacy of unemployment. Current statistics show that many areas of the Neath constituency are well below the national average. The Office for National Statistics figure for the rate of economic activity for working-age people in Neath Port Talbot local authority area is 70.6%, but in the Dulais Valley the figure falls to just 35%—more or less a third.

Ill health is part and parcel of that legacy. Residents of coalfield areas across the UK report levels of ill health and limitations on day-to-day activities that are double those of the more prosperous region of south-east England, according to the Coalfields Regeneration Trust 2014 report, “The State of the Coalfields”. Neath Port Talbot as a whole has the highest percentage of respiratory illness, the second highest incidence of strokes and diabetes, the third highest incidence of obesity and the fifth highest death rate from chronic heart disease in Wales. As we know, there is a strong correlation between economic disadvantage and ill health, and that is clearly and sadly reflected in my constituency.

The combination of unemployment and poor health has led to a higher reliance on welfare benefits in many communities. The effect of the Welfare Reform Act 2012 is another blow to us, and we are braced for a further £12 billion of cuts yet to come from the Conservative Government, at which we are yet to see the fine detail. Although losses will widely vary depending on personal circumstances, it was estimated by the Welsh Government last year that the changes will constitute an annual loss of £500 per working-age adult in Wales. Neath Port Talbot is expected to be among the hardest hit in Wales, with losses closer to £600 per year per working-age adult. Likewise, a report from Sheffield Hallam University in 2014 identified the south Wales valleys, with their higher proportion of people reliant on benefits, as being hit harder by the reforms than anywhere in Britain. The valleys as a whole are expected to lose about £430 million a year when the reforms have come to full fruition. Those losses far exceed the flow of funding for economic development that the area receives from sources such as the European Union.

Large reductions in income have an obvious knock-on effect on local consumer spending, straining local businesses and communities and supporting fewer jobs in the local economy, with ensuing detrimental effects on our communities—a vicious cycle. Spending cuts have also affected many voluntary and community organisations and reduced the level of services delivered by local government.

Critically, the Sheffield Hallam report, despite the rather gloomy statistics, had some good news: regeneration does work and, prerecession, progress was clearly being made in the UK’s coalfield areas. Moreover, the report found that raising economic growth would deliver similar levels of savings for the UK Treasury, which is the impetus behind the welfare reforms. The anticipated savings for the Treasury of £1 billion a year once those reforms are implemented could be made with the creation of 100,000 new jobs, which would both reduce the number of people reliant on benefits and provide higher tax revenues.

Initially, the UK Government’s response to the collapse of the mining industry was poor, with token gestures that had little impact. In Wales, it was really only from the late 1980s, with the launch of “Community Investment: An Initiative for the Valleys” and the establishment in 1989 of the European regional development fund, alongside initiatives by the Welsh Development Agency, formed in 1976, that the momentum began to bear fruit. That has accelerated since 1997 with the establishment of the Welsh Assembly Government, who now have responsibility for regeneration and development. Since then, UK, Welsh and European funding, working in partnership with the third sector, has supported a series of initiatives aimed at regenerating the Welsh valleys. Efforts have rightly focused on retraining and the development of skills for the workforce and on diversifying the economy beyond traditional industries.

The Coalfields Regeneration Trust, created by the Labour Government of 1997 and working in Wales since 1999 with the support of Welsh and local government funding, has a mission to champion coalfield communities, generating resources to respond to their needs and delivering programmes that make a positive and lasting difference. In the past 14 years, it has invested more than £14 million in community regeneration in Wales, working with and within the community.

The partnership between the EU and the Welsh Government has been critical in regenerating the Neath constituency. The European regional development fund and the Welsh Government regional area programme, plus contributions from Cadw and the Heritage Lottery Fund, have funded the £9.2 million restoration of the Gwyn Hall in Neath town centre. That has re-established a centre for arts and culture in the locality, as well as providing much-needed employment. The £1.4 million renovation of the Victoria Gardens has also been funded. That beautiful and historic green space in the town centre provides residents and visitors with meeting and leisure opportunities—the opportunity to relax. The redevelopment of Neath town centre itself will encompass new retail units, 600-space multi-storey car parking and housing, including flats above shops that will provide the necessary increase in footfall for the shops and businesses in the locality.

In Neath, we have a very strong community spirit and social networks, but that is not enough. If we are to solve the complex economic and social legacy that our coalfield communities have inherited, financial support and targeted measures are needed. They must be designed in a collaborative spirit with the communities, not imposed.

Organisations such as the Bevan Foundation—an independent social justice think-tank in Wales—and the Industrial Communities Alliance have looked closely at these complex issues and identified a number of important factors. We are talking about measures such as low interest rates to encourage investment; rebalancing the economy towards industry and the regions; a more measured approach to deficit reduction; investing in infrastructure such as strategic transport links and fast broadband; and job creation programmes targeting those areas where need is greatest. Communities First, a Welsh Government programme, has invested in excess of £500 million in the poorest communities in Wales, working with communities on the design, development and delivery of community regeneration programmes and job creation.

As has been mentioned, key to our economic redevelopment has been European funding and the EU’s partnership with the Assembly in Wales, which has made and is making a real difference locally and demonstrates why, for my constituents in Neath, continued membership of the EU is critical. Through a collaborative, creative, constantly evolving and co-ordinated approach, it is possible to sow seeds of renewal and long-term recovery in our communities and to move towards a new model whereby we can provide opportunities for everyone, creating the vibrant, viable communities that we all want and deserve.