Humber Economy (Fiscal Support)

Diana Johnson Excerpts

Tuesday 27th November 2012 Westminster Hall

[Diana Johnson (Kingston upon Hull North) (Lab)]

I congratulate my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) on securing the debate and setting out, in his usual erudite way, an excellent analysis of the situation in the Humber, the possible solutions the Government should actively consider adopting and how they could secure the future of the Humber economy. I pay tribute to the contribution of the hon. Member for Cleethorpes (Martin Vickers). I am pleased that we will, I hope, have contributions from both banks of the Humber—north and south—because, to coin a phrase, we are all in it together.

I was particularly interested in what the hon. Gentleman said about tourism. People on the north and the south banks of the Humber see great potential in developing a tourism strategy. I particularly note the proposals in my home city of Hull for a Hockney gallery. The da Vinci drawings at the Ferens art gallery are attracting huge crowds, which is welcome. East Riding has the Yorkshire wolds, and the south bank obviously includes the traditional seaside resort of Cleethorpes, so there is much to recommend the area for tourism.

I shall focus my remarks on the proposals in Lord Heseltine’s report, “No Stone Unturned”. It has many sound recommendations for the Government, especially if they are serious about their commitment to rebalance the economy, and that means between the north and south, as well as the public and private sectors. The report points to what can be achieved in regeneration locally and regionally, if there is the will, the determination and a sustained effort for the long haul to make it happen. Lord Heseltine draws on his experience of the regeneration of areas such as Liverpool and London docklands. I want consider the regeneration of London docklands and compare it with Hull and the Humber area over the past 30 years. I know both areas well, having been a councillor in the docklands in the 1990s and a Hull Member of Parliament for the past seven years.

If Members will bear with me, I want to set out the context. In the 1980s, traditional employment in the docklands ended, which was paralleled with the decline of Humber-based industry in the Hull area. The divergence in fortunes of the two areas is particularly marked. Docklands has now had more than 30 years of determined regeneration, largely due to its proximity to the City of London, but clear lessons can be learned and applied to Hull and the Humber. Hull has had far less attention, tucked away in a corner of east Yorkshire. It has an excellent university and is home to such world-renowned companies as Smith and Nephew. We have the Deep—an outstanding museum quarter and one of the busiest port complexes and estuaries in the country.

There has been some regeneration and economic growth, but not nearly enough. I certainly do not want to be accused of talking down the area, but we must recognise that in recent years, as the hon. Member for Cleethorpes said, the Humber area has taken severe knocks. Under the current Government’s policies, Hull is now suffering a huge loss of local spending power. Public sector cuts have been deeper in Hull than in wealthy areas of the south. Hull city council has had a cut of £163.50 per head, compared with £2.70 per head for West Dorset district council, and only yesterday it announced more than 170 job losses. That has to be linked to announcements in the past month that 1,200 private sector jobs are going or are at risk, and the fact that 50 people are chasing every job vacancy in my constituency—the highest figure in the country. Social housing investment has been cut, and the £160 million Orchard Park housing scheme has been axed.

Against that background, what would be a successful regeneration strategy for Hull and the Humber? First, we need to attract private investment by having a clear plan of what we want to achieve and by signing up all key stakeholders. It is interesting that the Government and the London Docklands development corporation courted Canary Wharf investors Olympia and York and others in the 1980s. There was a clear plan for developing a centre for banks, finance, the media and legal and support services, and measures were put in place, while the plan was also encouraged by big tax incentives.

What is the plan for Hull and the Humber? As we have already heard, the Humber LEP has recognised renewables as a key area for economic growth. Hull’s geographical position is its great strength, with its proximity to the North sea and the largest offshore wind farms in the world. The North sea has been described as the Saudi Arabia of renewables, and the Humber area has the potential to be a world centre of excellence for renewables. As hon. Members have already said, potential green energy investors have identified Hull and the Humber as their preferred location, but such investors need long-term reassurance that the coalition is committed to renewables and has a coherent energy policy across the whole Government.

There is serious international competition for the new green energy jobs. If companies such as Siemens do not come to Hull, they will be lost to the UK altogether. This is about potential growth not only for the Humber but for the whole UK economy. The coalition needs to be as interested in attracting Siemens and green jobs to Hull as it is in attracting jobs that benefit Surrey or London. Although various big tax incentives were offered to investors in London docklands, MPs in our region have had to fight off plans to introduce the caravan tax on an existing industry and to fight for enterprise zones to attract future industries to the area. We are still waiting to see the effectiveness of such enterprise zones.

My second point is about the importance of local decision making. Lord Heseltine has stated that LEPs need to be more powerful and better funded—more like Labour’s regional development agencies, possibly. The role of city region status has already been raised, and I hope that we all support an approach that ensures money is best allocated and spent at the sub-regional level. I support the suggestion of my right hon. Friend the Member for Kingston upon Hull West and Hessle about the use of pilot schemes to deliver at that local level, and the Humber area would be ideal for such a pilot.

Questions still have to be answered about the impact and value for money of some of the Government’s policies—for instance, of the regional growth fund and its ability quickly and effectively to provide support on the ground in places such as Hull and the Humber. As we know, the green investment bank is to be located in the two already prosperous financial centres of London and Edinburgh. Might it not be possible to establish a branch on the bank of the Humber, either in Hull or somewhere in the Humber area? That would establish a formal link between the bank and opportunities involving renewables and the Green Port Hull development.

Thirdly, transport infrastructure is a vital part of any successful regeneration policy. London had the docklands light railway, the Jubilee line extension, London City airport and so on. In Hull, we have Hull Trains’ daily train service to the capital, a new transport interchange, a local airport and, of course, the important reduction in Humber bridge tolls. Although we have had good news about the A160, major investment is still needed for the A63 upgrade. If Hull is to reach its fullest potential, we need rail electrification all the way to Hull and not for that to stop, rather bizarrely, at Selby.

My fourth point is about the important role of education and training. Docklands showed that, with initiatives such as SkillsNET, we need actively to equip local youngsters and others for them to get the jobs of the future; that cannot just be left to chance. In Hull, we have three excellent colleges, with fantastic records of providing lifelong education, particularly for people returning to education in their 20s, but 2012 has seen the withdrawal of funding for the Humber Education Business Partnership, the removal of comprehensive careers advice in schools, the axing of the education maintenance allowance and cuts in university and science funding. University of Hull applications have fallen by 18% this year. There now needs to be not only a stronger national strategy, but a local one for vocational skills relevant to the green jobs of the future that we hope to attract locally. I pay tribute to my hon. Friend the Member for Scunthorpe (Nic Dakin) for the work that he has done on that with the LEP.

In conclusion, London docklands had a long-term effort to attract big employers in the skilled industries of the future, which boosted spending power and created further employment and a broad-based local economy resilient enough to weather the credit crunch of 2008-09. Meanwhile, Hull has continued to lose skilled and other jobs. Unfortunately, that has accelerated since 2010. My right hon. Friend the Member for Kingston upon Hull West and Hessle has stated that we will work constructively with the Government to use LEPs and city region applications to help regenerate the sub-region. However, what is also utterly true is that we cannot create a vibrant, resilient and prosperous local economy for Hull and the Humber around Starbucks, McDonald’s and Cash Converters, with people in low-paid jobs often now being forced to go to charities or food banks to feed their families. We need a strong, focused regeneration plan that links transport, education and local decision making for our region of Hull and the Humber to have the future that it deserves.