Employment (North-West)

David Mowat Excerpts

Wednesday 6th July 2011 Westminster Hall

[David Mowat (Warrington South) (Con)]

I, too, congratulate the hon. Member for Blackpool South (Mr Marsden) on securing the debate.

It is a pleasure to take part in a debate with the phrase “north-west” in the title, because there is a bit of a structural issue in this place about the treatment of the English regions vis-à-vis other parts of the country. We hear a great deal about Scotland, and we have Scottish questions. We also have Welsh questions and Northern Irish questions. However, we hear little about the English regions, which is why I am pleased to take part in the debate. In that regard, at least, people on both sides of the Chamber have more in common with the each other than not.

I want to talk first about how London-orientated our economy is. The gross value added of the north-west is approximately 60% of London’s, and no other major economy in western Europe or the US has a similar discrepancy. That is extremely serious for our constituents, because there is an assumption that anything world-class that happens in this country goes back down to London, and we need to do what we can as MPs to fight that. I will talk a little about some of the world-class enterprises that we have in the north-west, which we need to encourage.

I also want to talk about the public spending that Scotland gets vis-à-vis the English regions. Today’s debate is not the place to discuss the Barnett formula, but it is a fact that if my constituency was north of the border, and it had the same demographics and a similar needs profile, it would get about £1,600 a head more in public spending.

A small thing that happened a fortnight ago should give us all food for thought in the north-west. We have talked about the Mersey Gateway project, but another major bridge programme will take place just north of Edinburgh, when the Forth road bridge is replaced. That bridge will not be tolled, but ours will be, and it is increasingly difficult to understand why such discrepancies and differences can continue in the same country and still be defended.

I want to go back to the point about London. I will not make a party political speech, but the fact is that London has got away from the rest of the UK, including the north-west. That has got worse over the past decade. That was principally because of the financial services boom in London, which caused the rather frothy increase in GDP per head there, and we saw the reckoning that occurred. One of the reasons why the situation got worse—again, this is not a party political point, but one for both Front Benchers—is because two years ago, Government capital spending per head in London was three times what it was in the north-west. That level of discrepancy generated private sector jobs, affluence and all that went with it for London. I very much hope that the coalition will do what it can not to let that happen in the future.

Infrastructure is part of how the north-south divide—

[Hugh Bayley (in the Chair)]

Order. I remind the hon. Gentleman that the subject for debate is a narrow one. We are talking about career opportunities for young people in the north-west, not about the regional or national economy more generally.

[David Mowat]

My point is that the degree of affluence and gross domestic product that we can generate in the north-west translates to career opportunities. The reason why many of our young people come down to London to make their way is because there are not enough world-class organisations in the north-west. However, I will take your point, Mr Bayley, and move on to the changes in education and career opportunities that have occurred over the past 30 years.

The jobs that our young people need to do, whether or not they are in the north-west, are increasingly technology-based and technology-focused. Companies such as Google, Yahoo!, Facebook, Microsoft and Apple are all technology companies. Each has generated perhaps as many as 250,000 jobs in their immediate infrastructure. None of them are in the UK, let alone in the north-west. It is important that this country can compete on technology. One of the most striking things that has occurred over the past 30 years is that while we have increased the number of graduates by a factor of five—that applies to the north-west as well—we have fewer people studying engineering than we did 30 years ago. That is not a point for just the previous Government or the Government before that, because it is what has happened in our country. The consequence is that many of our young people cannot compete for high-technology jobs or in the expanding market in high-technology. That is a shocking failure—it is possibly one of the most dramatic failures in education policy in the past. I will be interested to hear the Minister’s response to that.

Finally, our economy will continue to be fairly focused on manufacturing. A unit of GDP generated from manufacturing uses more energy than a unit of GDP generated from services. It is important for the north-west economy, and therefore for the prospects of the young people in the north-west, that energy prices are kept competitive. I am interested to hear how the Minister addresses my concern, which is that this country is sleepwalking its way into having higher energy prices than any similar economy in Europe. That will bear down particularly hard on parts of the country where manufacturing, especially process manufacturing, is a significant feature.

[Hugh Bayley (in the Chair)]

I need to start the winding-up speeches at 3.35 pm at the latest.

--- Later in debate ---

[Bill Esterson (Sefton Central) (Lab)]

I add my congratulations to those given to my hon. Friend the Member for Blackpool South (Mr Marsden) on securing a very important debate. Given the good and positive discussions that we had in the Select Committee on Education some weeks ago on similar topics, I am looking forward to the Minister’s response.

I shall pick up the excellent points made by my neighbour in the Chamber today and in the north-west, my hon. Friend the Member for West Lancashire (Rosie Cooper), about rebalancing the economy geographically. It is absolutely crucial that we establish good employment prospects for young people, so that they stay in the region. We should do that through investment in the local economy. The abolition of the regional development agency has created a big problem in achieving that, but there are opportunities.

The port of Liverpool has been mentioned. Although the cruise terminal would be a welcome development, we need to go much further than that and provide opportunities for export through the sorts of hi-tech industry that hon. Members have mentioned. It is absolutely essential that we achieve that for the wider economy and for the future of young people.

[David Mowat]

The RDA has been mentioned in the previous two contributions. I do not deny that that organisation did a great deal of good in the north-west. However, if an organisation is given £3 billion a year to spend, that is what will happen. Does the hon. Gentleman accept that each job created by the RDA in the north-west, which was one of the better RDAs, cost £60,000? That is an awful lot of money, and we need to consider alternatives.

[Bill Esterson]

I am grateful for that intervention, because it ties in with two other issues that I was going to raise: the abolition of the future jobs fund and the phasing out of the young apprenticeship scheme. Both programmes are being phased out because of the high cost of success. The hon. Gentleman is making the same point about the RDA.