Eric Ollerenshaw
Main Page: Eric Ollerenshaw (Conservative - Lancaster and Fleetwood)(12 years, 6 months ago)
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Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
It is nice to follow the hon. Member for Rochdale (Simon Danczuk). The regional growth fund must have got something right if there are majority of northern MPs here because the majority of the money has gone to the north, and that, in a sense, is where I want to start. First, however, I congratulate the hon. Member for Sheffield Stockbridge and Penistone (Angela Smith) on getting this debate and on the fight she has put up for her area.
I want to talk about the background of the north-south divide, which Opposition Members seem to forget. The division between the north and the south has been recognised by the Government and by Government Members from the north, but it is not clear whether the previous Government recognised it. In December 1999, former Prime Minister Tony Blair said the north-south divide was as myth and
“an over-simplistic explanation of the problems that regional economies face”.
One wonders where the problems did begin. To be fair, he told The Journal in Newcastle four months later that
“the North South divide exists, and I never said it doesn’t.”
Labour then set up regional development agencies in every region. Even at the time, some Labour Members criticised the fact that London had a regional development agency. At this point, I should declare an interest, having been a member of that RDA. I should tell the hon. Member for Stockbridge and Penistone that I never saw a great deal of transparency in the way that agency dealt with things, but perhaps that was because I was its minority Tory member.
I thought the point of RDAs was to deal with the north-south divide. However, my hon. Friend the Member for Wirral West (Esther McVey) has spoken about the relative decline of the north over the past 13 years. I want to give some figures to illustrate that. The latest figures I have for gross value added in the north—for what the north added to the national wealth—show that between 1995 and 2008, which is before the coalition Government took office, and with 100 being the average, the north-east saw a decline from 82.9 to 78.2, the north-west saw a decline from 90.2 to 86.4 and Yorkshire and the Humber saw a decline from 89 to 82.9.
If we go beneath that to the sub-region and look at my area, we see that Lancashire had a GVA of 88.7 in 1995, but that went down to 78.7 in the figures for 2008. That is a 10 point drop. What was the RDA doing if that was happening?
Tom Blenkinsop
What are the actual or nominal figures? What is this 82% of?
Eric Ollerenshaw
I am talking about a national average of 100 from 1995 to 2008. The hon. Gentleman’s area declined even further.
David Mowat
The point my hon. Friend is making extremely powerfully is that, in the last year of the previous Government, the north-south divide reached a peak for the previous three decades. That is extraordinary; it was brought about by the boom in the south-east and London, and it is a fact.
Eric Ollerenshaw
Let me move on.
I congratulate the Government on being among those who recognised that something needs to be done. Yes, the regional growth fund is not the biggest thing, and we want more to be done.
Eric Ollerenshaw
May I just continue a little further before I give way?
At the moment, however, we are learning as we are doing. I was here in May when some Members complained about the first round of bids. I suggested that it was following the old methods of the RDA in the north-west, and my hon. Friend the Member for Congleton (Fiona Bruce) has mentioned that, too. The areas prescribed were Greater Manchester and Merseyside—for obvious reasons, given European rules and all the rest of it; but there was a lack of actual support for good businesses in other areas, such as my own, which had the capacity to expand and take on more people. For example, Northern Tissue Group, with 150 employees—so it was not applying for the biggest grant—was denied a grant in the first round. I am pleased that in the second round it is still in discussions, and it looks as if it may well succeed.
Eric Ollerenshaw
I shall give way first to the hon. Lady, and then to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop).
Angela Smith
My constituency is Penistone and Stocksbridge, with an “s” in it. It is being misquoted all over the place.
Angela Smith
Is the hon. Gentleman really saying that the Government can do more for less—for two thirds less? Is he really saying that they can deliver more growth and rebalancing of the economy on a fund that is only one third of the original sum on the table?
Eric Ollerenshaw
There are a couple of things to say. My hon. Friend the Member for Wirral West has explained the economic circumstances, and I do not need to go through that again. However, as my hon. Friend the Member for Nuneaton (Mr Jones) keeps pointing out, the bureaucratic cost of the regional development agencies was something like £300 million, before any money got to any business through any due diligence process. We got rid of that, and what I regard as the success in round 2 is the fact that the companies in question are way beyond the normal areas, in Burnley, Wigan and as far as Carlisle and Cumbria—and I hope that my own part of Lancaster is part of that. That is a recognition of where success lies, and what we have learned from the mistakes of the regional development agencies.
[ Mrs Linda Riordan in the Chair]
Tom Blenkinsop
The hon. Gentleman is very generous with his time, and although we disagree, he is obviously fighting hard for his local patch. The only point I will make is about the regional growth fund and its significance in the north-south divide. I will go back to the nominal figures for how much was put into the north-east, for example. More, nominally, was going into the north-east. If the regional growth fund is such a great regional pot of cash, why is it less than the money that the Government are spending on mutualising the Post Office?
Eric Ollerenshaw
Yet again, because of the circumstance that we were left with by the previous Government. It seems we must go on repeating those figures. I think everyone understands—and that the hon. Gentleman knows it. I was not going to go into this—other hon. Members have mentioned it—but it is not just the regional growth fund that is relevant. There is also the national insurance contribution holiday for new start-ups, and the Localism Bill. Many Government Members believe that the Bill will equip local authorities to do a great deal more for themselves, and get through the sub-regional bureaucracy, which we have abolished, and do something for their areas. They are far more in the picture as to what is successful.
James Wharton
Opposition Members seem to think that the only money is Government money. Is not it the case that, because of careful targeting, funding through the regional growth fund is leveraging almost six times its own value in private investment, which is delivering the growth and investment that we need in our regional economies?
Eric Ollerenshaw
My hon. Friend makes the point about what we hope to get from the measures far better than me. All that I wanted to say to Opposition Members was what we have learned from the regional development agencies’ mistakes, their excessive bureaucracy and, in their last years, their failure to deal straightforwardly with business as business deals with things. Instead—
Eric Ollerenshaw
I am sorry; I must finish. I have only got a couple of minutes. Perhaps the hon. Gentlemen can intervene on other hon. Members.
Opposition Members talked about instructions from Whitehall, but I think, as a member of an RDA board, we got new instructions every month from Whitehall about where the money should go and on what it should be spent. There was no real discussion with straightforward business about what it wanted to do. I hope that what is happening now is the beginning of that approach.
I want to finish with certain questions to Ministers, as other hon. Members have done. We see what we are doing as a beginning. There is a huge north-south divide, and the Government seem to be learning while they are doing; but we have questions about where we go from here with growth funds, and in continuing to deal with the north-south divide, which has got worse in the past 13 years.
Mrs Linda Riordan (in the Chair)
I will call the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile) next, but perhaps he will keep his comments short, because I intend to call the shadow Minister at 12.10.