North of England: Economic Support

Dan Jarvis Excerpts

Wednesday 11th November 2020 Westminster Hall

[Dan Jarvis (Barnsley Central) (Lab)]

I beg to move,

That this House has considered support for the economy in the north of England.

It is a great pleasure to serve under your chairship, Mr Efford. I declare an interest as a metro Mayor.

Today’s debate takes place amid an unprecedented economic crisis affecting the whole country, but covid has only reinforced an argument that was already undeniable. We need to level up the north—not by tinkering at the margins, but through a full-scale transformation; not just for the sake of the north, but for the sake of the whole country. The question is, of course, whether the Government will make it happen.

Covid has hit the north hard. We have a disproportionate number of cases and hospitalisations, and the pandemic has affected deprived areas more—and the north still has far too many deprived areas. Our economy has been equally exposed. In South Yorkshire, the level of people claiming unemployment-related benefits is now higher than at any time since the mid-1990s, when we were in the aftermath of the pit closures. We risk undoing a quarter of a century of painful progress. The brutal reality is that the north is now on course for levelling down, not levelling up.

Meanwhile, the issues that made the case for levelling up in the first place have not gone away. The UK has the worst regional inequality of any comparable nation. We have unacceptably unequal education and health outcomes. Many northern council areas are among the most left behind in the UK. In the five years following the launch of the northern powerhouse, the number of our children living in poverty went up by one third, to 800,000.

Policy choices have made, or threaten to make, the situation worse. Planned cuts to universal credit could leave one in three working-age households in the north £1,000 a year worse off. Under austerity, public spending fell by £3.6 billion in the north, even as it rose by £4.7 billion in the south-east and the south-west.

Therefore the need for levelling up is clear, but there is a flipside to all this—the great potential and the strengths that make the positive argument for levelling up. We are still the heartland of British industry. South Yorkshire, for example, has amazing companies such as ITM Power, helping to build a hydrogen-fuelled clean energy revolution, and Magtec, developing contactless magnetic gears for wind turbines. Those enterprises reflect the north’s storied history of manufacturing prowess, but we also have huge strengths in culture, sport and tourism; incredible natural beauty; and world-class universities with fantastic strengths in research and skills. Together, we really can create a better economy, not just for our regions but for the whole UK, and help to drive the transformations that we all badly want to see. It is estimated that if we do rebalance national investment, that could add £97 billion to our economy by 2050.

However, we have not just shown our potential; we have also shown that we can use it. We can do our bit if we are given the tools; as the only MP with the somewhat unusual privilege of also being a metro Mayor, I know that at first hand. Since I became the Mayor in 2018, we have created or protected 15,000 jobs in South Yorkshire; our pioneering Working Win programme has helped 6,000 people with health conditions who want to get back to work; we have leveraged £319 million of investment and awarded more than £100 million for regeneration and redevelopment; and we have just committed £5.5 million of our own funds to kickstart nine flood prevention projects. We are putting our skin in the game and laying down a challenge for the Government to do their part, rather than waiting for them to take the initiative. I can safely say that we stand ready to be levelled up, and I know that my counterparts across both sides of the political divide in the north would say the same.

We are not coming to this debate today with a begging bowl: we have the need and the potential, and we have shown that we are ready. The north, perhaps more than anywhere, is where we will do the job of building a better Britain for all of us. What we are asking for is the tools to get on with that job, but we have not received them yet.

We have been quite successful recently in attracting funds into South Yorkshire, but none of that money, apart from the £30 million of gainshare that we are getting following our devolution deal, represents new resources specifically targeted at South Yorkshire, the north or even disadvantaged areas more widely. These are existing funds that have come under our control, such as the adult education budget; or a share of national funds that we have been allocated or successfully bid for on the same basis as any other region, such as the Transforming Cities fund. Do not get me wrong—it is hugely important that that money is being spent under local control and we are grateful for it, but this is not levelling up.

There is a similar picture across the north. There are a few exceptions. The towns fund is perhaps the most obvious, but it leaves out hundreds of very deprived towns in favour of some wealthier areas, and it is only a one-off £3.6 billion fund spread across the whole country. I would be grateful if the Minister could confirm today how much new money the Government have put into levelling up since they took office, because the overall picture is one of tinkering and not transforming.

An indication of what we need is the UK2070 Commission’s recommendation: to triple the new UK shared prosperity fund to £15 billion a year for 20 years, which would be a total of £200 billion of new funding. That is for all deprived areas, but it shows the scale that we should be talking about. The moment to do that was at the comprehensive spending review, but in the current crisis is understandable that the Government are carrying out a more modest one-year review instead. However, that must not become an excuse to delay the transformative investment we need if levelling up is really to mean something.

Already, over two thirds of northerners believe that the Government will not follow through on levelling up; that is a concern that the 55 Conservative MPs who wrote to the Prime Minister last month—we will hear from one of them in a moment—seem to share. We all have an interest in proving those fears wrong, and here is where I think we need to start.

In the short term, we need better covid emergency support, including adequate funding for hard-pressed local authorities, but the key issue is that the reduced spending review should retain real ambition. First, it must extend the local growth fund, which expires in March. The LGF has been absolutely critical in generating jobs, investment and regeneration, and it would be great to hear a commitment to extend it from the Minister today. However, LGF renewal is only enough for us to stand still. For transformation, we need something much more like a new deal for the north.

In my patch, we think that that would look like our renewal action plan, which calls for funding and powers to expand kickstart and apprenticeship schemes, begin a massive investment in infrastructure and decarbonisation, increase active travel and plant millions of trees. Will the Minister confirm today what plans the Government have for investment at this transformational scale across the north?

Transport will be especially key. Northern Powerhouse Rail is often presented as the infrastructure that will be at the heart of levelling up, but there are growing fears that critical parts of it could be delayed, along with the north-east leg of High Speed 2. It is hard to overstate how damaging that would be for the levelling-up agenda.

Lastly, the Government should make some critical structural changes, especially reforming the Green Book to reduce the in-built bias towards more affluent areas in Government investment decisions and following through on proposals to move significant parts of the civil service. Perhaps the Minister could update us on that today. Of course, beyond the spending review, the new shared prosperity fund must also embed the same ambitions. Like the European Union funds that it replaces, it must be based heavily on need. It should be as devolved as practically possible. All this is not just about making the northern economy bigger; it is about making it better—more high-tech and more high value, more sustainable and more equitable.

My ambition for the north is for it to be stronger, greener and fairer. That should be our aim for the whole United Kingdom. Covid is not an obstacle to that, but an opportunity: there is a near-consensus on the need for spending to protect our economy. The question is whether that spending will serve a greater purpose. Crucially, the issue is about not just money but power—to be legitimate and effective, levelling up must be done with and by us, not to us. We need much more flexibility over how we spend the funds allocated to us, but we also need a more fundamental doubling down on devolution.

We have done a lot in South Yorkshire, but we have done it with modest powers and resources. We are still the most centralised large developed country in the world. That must change, not just to unleash our potential but to help address the disillusionment and division that is growing across our country and that threatens to break it up. The polls showing a majority of Scots expressing support for leaving the Union are only the most alarming symptom of a wider crisis of faith also visible in the north. For all our sakes, we must make levelling up part of a more ambitious vision for reform—one that lets people feel that they are taking back control and that they have a country, a United Kingdom, that they can believe in.

We are now at a moment of crisis, but also a moment of opportunity. There is an overwhelming case for us to rise to this moment with ambition—not just to give the north the means and the powers to rejuvenate our economy and our society, but to do so as part of a wider vision for a more prosperous, more equitable, more democratic United Kingdom. In the process, perhaps we can make this a transformative moment not just for the north but for the whole country.

[Several hon. Members rose—]

--- Later in debate ---

[Dan Jarvis]

I am acutely conscious that Members will want to observe the two-minute silence on Armistice Day, so I will be brief.

We have had a really constructive debate this morning. We have heard a range of articulate views from Members across the House. I think there is a clear consensus around the need to level up the north and to invest not just in our infrastructure, but in our people. I also think that there is a clear consensus that the time to do this is now.

The spending review in a couple of weeks’ time will be a major test of the Government’s commitment to level up the north. I hope that the Government take the opportunity to stop tinkering and start transforming. We in the north stand ready to be levelled up. Please do not let us down.

Question put and agreed to.

Resolved,

That this House has considered support for the economy in the north of England.