Esther McVey
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Esther McVey (Wirral West) (Con)
I congratulate the hon. Member for Penistone and Stocksbridge (Angela Smith) on bringing this timely debate to Westminster Hall. However, having listened to what has gone on, I think that we need to put the debate in context, so here goes. We have to look at the time when the coalition Government took office. We had the biggest deficit ever in peacetime history. We were paying £120 million in interest per day. Labour did too little, too late, and left us with a busted flush. The UK economy has grown by 0.5% in the third quarter of 2011, according to the Office for National Statistics.
Tom Blenkinsop
If, as the hon. Lady says, the economy was in such a bad situation when the coalition Government came to power, why did the Chancellor of the Exchequer predicate the deficit reduction plan on 3% growth? To date in 2011, we have growth of less than 1%, which has led to extra borrowing of £46 billion plus.
Esther McVey
No, the hon. Gentleman will find that his party left the economy in so bad a situation that we not only had to say, “You will live within your means and spend what you have,” but we had to provide a growth structure so that we could rebalance the economy.
Esther McVey
Not yet. Let me proceed to put the debate in context. Hon. Members talked about the regional development agencies. I will talk favourably about the Northwest Development Agency because the staff there are superb. I have worked with many of them and have a lot of time for them. However, let me give the statistics. From 1990 to 1999, annual growth was 1.7% in the north-west and 2.3% in the south-east—a gap of 0.6%. Between 2000 and 2008, average growth was 1.5% in the north-west and 2.1% in the south-east. We kept that gap of 0.6%, despite spending £3.7 billion over a decade.
Esther McVey
No, I will not. Therefore, we now have to ask how we will spend money better, how we will live within our means and how we will rebalance the economy. I talk as someone who had her own business for the last 14 years. I have set businesses up and sold them. I also set up the biggest business network for women in the north-west, involving more than 9,000 business ladies. I therefore like to see myself not only as a business woman, but as a pragmatist who knows that we can spend only what we have. That is what the coalition Government were facing.
I hope that I have set the debate in context. The regional growth fund was set up to create a fairer and more balanced economy, in which we are not so dependent on a narrow range of economic sectors and in which new business and economic opportunities are evenly shared across the regions and across industries. That is what we set out to achieve.
Angela Smith
The regional development agency Yorkshire Forward played an instrumental role in developing the UK’s first technology and innovation centre. We did not call it that. It is the advanced manufacturing research centre in Sheffield. That is now being lauded as the perfect example of where this country needs to go on investment in new technologies and design. Will the hon. Lady at least acknowledge that the RDAs had a very good and effective role in pulling together strategic investments and strategic design and innovation?
Esther McVey
I thank the hon. Lady for that intervention. As I said, I did not deal with Yorkshire Forward; I worked with the Northwest Development Agency and I congratulate the staff, who were excellent. I am saying that, despite spending £3.7 billion, what was meant to be done—rebalancing the economy—never happened. We are therefore asking how we can best deliver the money, how we can focus it and how we can ensure that it achieves its purpose.
Fiona Bruce
I, too, worked with the regional development agency in the north-west. What is particularly striking about the regional growth fund is that applications are succeeding from areas that, under the previous Government, were largely ignored when it came to business support. For years, business people in my constituency of Congleton have commented on the fact that although neighbouring areas—Staffordshire, for example—could obtain support, Cheshire was almost a desert. Now, we are seeing a difference. The Government are saying that there are areas across the country that need business support; and wherever they are, they are receiving it.
Esther McVey
I thank my hon. Friend for that intervention.
The purpose of the regional growth fund was to stimulate growth, secure jobs and increase the number of jobs. There was a consultation with the public: what did they think it would be best for the regional growth fund to do? The replies came back that they wanted flexibility and no duplication of funds. It was thought best that at least for stage 1—things will change over the next couple of years—there should be minimum bid thresholds of £1 million. It was also felt that guidance should be published. The first round allocated £2.7 billion, creating and safeguarding jobs. It created 27,000 jobs and a further 100,000 jobs in associated supply chains.
I want to talk specifically about Merseyside. In round 1, Pilkington’s in St Helens, Ames Goldsmith UK, Echo and Stobart were successful. I got in touch with Richard Butcher, Stobart Group deputy chief executive, to ask him about the regional growth fund. He says that the regional growth fund has been
“an important factor in Stobart Group’s commitment to the Halton region and will ensure the continued investment from us that the area needs to maintain economic regeneration and growth. The investment from Stobart, Prologis and Halton Borough Council has transformed the area and created many important new jobs—the support from the Regional Growth Fund will further enhance that regeneration.”
Stobart Group has already invested £100 million to date in the development of its Mersey multi-modal gateway logistics site in Widnes, but this new private-public partnership saw the regional growth fund as an ideal opportunity to push on with the development of a further 100 acres, eventually creating more than 5,000 additional jobs and £170 million in gross value added. With the £9 million received in round 1, it is moving forward on opening up 1 million square feet of warehousing space served by rail and road.
That is a perfect example of how the RGF can bring public and private bodies together to stimulate investment and boost the economy. Stobart illustrates the private partnership success and collaboration that has emerged from the RGF. It successfully forged a business partnership between itself, a road haulage operator, infrastructure developers Prologis and Halton borough council. As we know, the sum is always bigger than its parts. That example proves the case most effectively.
I want to refer to other significant developments. The regional growth fund was set up to make key links between private-private partnerships and private-public partnerships, and we are seeing that, but this is the start of a brand-new way of thinking. It is a way of focusing money that we have not seen before, and we will learn as we go along, so instead of the negativity that we have heard today—
Esther McVey
No, not just yet; I will in a second. When we talk in Westminster Hall about the confidence that business needs—we all know that that cannot really be defined but is necessary—it helps for all parties to give confidence to business.
Mr Edward Timpson (Crewe and Nantwich) (Con)
My hon. Friend has touched on the importance of business confidence. I am sure that as a fellow north-west MP, she will be pleased to hear that Bentley Motors in my constituency, which has already invested £1 billion in its Crewe plant, has secured money not only in the first round but in the second round of the regional growth fund—a further £3 million to boost its research and development. The company has said that that will not only secure the current jobs, but create more jobs in the local area. For the south Cheshire area and Crewe in particular, that is vital to ensuring that business confidence remains and that businesses can continue to invest in future.
Esther McVey
That is indeed vital. When we talk in the House and our words are taken down in Hansard and when people look at it on the internet, people must not just hear doom and gloom, because in reality many positive things are happening and they are coming from private industry.
Esther McVey
I will give way first to the hon. Member for Birmingham, Northfield (Richard Burden).
Richard Burden
The hon. Lady has said that she hopes that the Government will learn as they go along about how to deliver the RGF more effectively. Why does she believe that there have been delays? I am sure that businesses in her area are complaining about that quite a lot. There have been many delays in delivering money already promised. Why does she think that is?
Esther McVey
Let me correct that. I do not think that the RGF will be delivered more effectively, but that it will change along the way, as small and medium-sized enterprises link together and put in bids for £1 million. Everybody knows—I was slightly startled by some Members’ comments about this—that due diligence must be done and that money must be targeted at the right people. That is what people in business do—full stop. These things take some time.
Esther McVey
I will carry on, because I have nearly finished.
Thirty-four companies and other organisations across the north-west made successful bids in round 2. My hon. Friend the Member for Crewe and Nantwich (Mr Timpson) mentioned Bentley, but there is also the university of Liverpool, Pirelli Tyres Ltd, Northwest Aerospace Alliance, Sefton council and Liverpool Vision—the list goes on and on. There are 34 companies and other organisations in total, and they have benefited from some of this £3.3 billion, which is safeguarding jobs, as well as creating 37,000 new jobs, with a further 164,000 jobs in related supply chains and local economies.
Specifically on Merseyside, there is GETRAG FORD Transmissions in Knowsley, which has won support to expand capacity for the production of transmissions at the Halewood plant. Another development I would raise with the Minister is groups of SMEs bidding for £1 million. Last week, I brought a group from the Wirral Invest Network to Westminster to speak to him about how that could best be done. So, yes, the regional growth fund has done a tremendous job so far, against all the odds, but I would like it to be stepped up to help SMEs.