Private Rented Sector
Debate between Graham P Jones and Mark Prisk(10 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Mark Prisk (Hertford and Stortford) (Con)
May I draw the House’s attention to my entry in the Register of Members’ Financial Interests?
Let me start by saying that I strongly believe in both a bigger and better private rented sector. As with the housing market as a whole, as we heard from the right hon. Member for Holborn and St Pancras (Frank Dobson), we need more homes in this sector and more homes to rent. That means securing substantial private investment into the sector, for the long term. As the Select Committee found, increasing supply is good not only for the market as a whole, but for tenants, as it gives them, finally, the opportunity to choose and that helps us to make sure that bad and mediocre landlords raise their game. Therefore, the argument for increasing supply is not just an economic one; it is a social argument on behalf of the existing tenants in the marketplace. That is why the Government were right in taking on and fully implementing the findings of the Montague report.
The hon. Member for Wolverhampton North East (Emma Reynolds) asked what the Government were doing to get institutional investors in, so I should mention the £1 billion Build to Rent fund and the up to £11 billion in housing guarantees. They are crucial, not just because they involve large sums, but because they are long-term commitments to a sector that needs them. May I say to my former colleagues on the Front Bench that we could speed up the due diligence process on the Build to Rent fund? I have raised the issue with Ministers before, but if we are to get these homes under construction, we might speed up that process. I am sure that the Minister replying to this debate will want to set out where the Homes and Communities Agency has got to on this, because I know he shares my ambition to get those homes under way.
The Labour party is in danger of cutting off the very investment it claims it wants. The hopeless muddle—I am being polite—around the announcements from its leader’s office on rents caused many investors real alarm. There are responsible long-term institutional investors who want to invest and provide the quality of home and the longer leases that the Labour party has rightly been calling for, but by muddling rent indexation with rent controls and by part of its leadership playing to the gallery, the Labour party has left a large question mark over its housing policy. If, heaven forfend, we were to find next May that we had a Labour Government, that party and its Front-Bench team—I think they know this, given their chuntering—would need to clear up the muddle or they simply would not get the necessary investment and therefore the necessary supply.
Labour’s policy for a national register of landlords is just a gimmick. As we have seen in Scotland, such a policy would have little, if any, impact on standards, but we would see a rise in rents. The Labour Government checked what a national register would cost: it would be £300 million. Who would pay it? Would it be the landlords? No, it would be the tenants.
Graham Jones
Does the hon. Gentleman understand how long it takes local authorities, including his, to find out who a private landlord is and how much money would be saved by knowing who the landlord was through a register?
Mr Prisk
There is a case for registers in individual local authorities but, as the Select Committee agreed, a national register applied on a rigid basis is not the answer.
On standards in the sector as a whole, there is a case for a more professional rented sector. As several hon. Members have said, a minority of landlords and letting agents provide what is, at best, a shoddy service; in some cases, they flout the law and in others they have a wanton disregard for tenants’ safety. More can be done, and I encourage the Minister to focus on houses in multiple occupation. That subsector is the source of some of the worst practices, as hon. Members may know from their constituents, and often people on the lowest incomes and students are caught in it. We have legal powers in place to deal with this, but perhaps a little elbow grease from Ministers, a little Whitehall direction, and a little support and encouragement from local councils could make a real difference. Let me highlight one aspect of this issue. We need to look not just at the urban, larger HMOs in places such as Headingley in Leeds, but at some of the smaller HMOs—the two-storey houses. I am talking about the ones where, as I have discovered in the fens, HMOs are serving seasonal workers and are very often the source of dreadful practices and wider criminality.
On the letting agents issue, which the Opposition have flagged up in their motion, I am proud that it is this Government who are giving tenants proper powers of redress. The ombudsman scheme, backed by a clear code of practice, is long overdue and it will enable us to start to drive up standards of service. Let me remind the House that when in government the Labour party spoke against and voted against those redress measures for tenants. This House needs to remind not only itself but tenants whom we serve that that is where the Labour party stood for 13 years—it refused to support additional redress for tenants—and the party should be ashamed of that record.
Labour’s proposals on banning fees are well intentioned, because we have seen some dreadful practices, but the measures do not deal with the root cause of the practice among letting agents; what they would do is help to tackle one symptom. As questioning from my hon. Friend the Member for Enfield North (Nick de Bois) highlighted, Labour’s proposals contain nothing to prevent agents from then charging the landlords instead, which will lead to higher rents. So, by the back door, a well-intentioned piece of legislation would lead to an unintended consequence that costs tenants more. It is a very familiar story with the Labour party. What we need is a sector-wide agreement, one that sets higher standards for the quality of the homes provided, the type of leases offered and the level of customer service that tenants can expect. That is the way forward. We want a comprehensive approach and not a quick fix.
We have a great opportunity to put in place permanently a genuine and stable private rented market. For too long, this House has tended to divide blue and red on the issue of tenure. It is, “Home ownership is perfect” or “Social housing is perfect.” We need to move on and recognise that we need more homes to rent, more subsidised homes to rent and more homes to own. Unless we focus on supply and play the game in terms of ensuring that the whole market works, we will fail. A modern economy needs a dynamic, open and competitive private rented sector, and it needs tenants who can rely on what is a professional standard. It should be a market in which the customer, and not the provider, leads.
We are, as a Government, making good progress. The policy direction is right, but I say to Members on both Front Benches that there is more that can be done.
Letting Agents
Debate between Graham P Jones and Mark Prisk(11 years, 9 months ago)
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The Minister for Housing (Mr Mark Prisk)
May I start by congratulating the hon. Member for Rotherham (Sarah Champion)? I think that this is the first time that she and I have been in a debate together; she is a new Member of the House. Not only was she able to secure an important debate, but she set out her argument. We will not always agree on the outcomes, but I think that we do agree on the challenge that faces this particular market. There is a strong element of market failure, as I have discussed in debate with the hon. Member for Birmingham, Erdington (Jack Dromey), who speaks for the Opposition on this matter.
This has been a useful debate, because there is a substantial question and substantial interest from a much wider group. Of course, the number of complaints may have risen because the market is substantially larger than it was, but it would be foolish to assume that that is the only reason and that is certainly not an assumption that I make or any other member of the Government makes, although I did particularly enjoy the idea that the only reason why the Labour Government did not do anything was that the Opposition spokesman did not make a strong enough argument. That is an entertaining argument. It does not quite wash. Nevertheless, I understand and I have a lot of time for the right hon. Member for Wentworth and Dearne (John Healey), which may be very damaging from the point of view of his own personal political future, but there we go.
Before I turn to the specific issues, I would like to set out briefly the context of the Government’s overall approach to the private rented sector, because people naturally have wanted to look beyond just the question of agents. People have talked about the question of supply, the interaction with the housing benefit elements and so on, but let me just look at the private rented sector particularly. As I said in the debate that we had only last month, we are very committed as a Government to ensuring that this is a bigger sector, but also a better sector—one that provides tenants with a genuinely good choice of decent, reasonably priced accommodation. We stand first and foremost on the basis that many—not all—of the problems that we have discussed today, including the difficulties that individual families and tenants have, are a consequence of years of under-supply.
The right hon. Member for Tottenham (Mr Lammy) gave us an interesting historical perspective, but I do not necessarily wish to go back to Dickens; we will stick with the past 25 years. What we have seen in the past 25 years—something on which we have agreed over many years—is that demand has substantially outstripped supply. As a result, the supply available to tenants, and the quality and standards of accommodation, have simply failed to keep up. That has inevitably led to a worsening of the way in which some letting agents operate.
Expanding the supply of rented homes lies at the heart of our strategy. That is why we have taken the radical step of establishing a debt guarantee scheme of up to £10 billion to encourage institutional investment in the sector.
Graham Jones
The Minister makes the case that there needs to be an increase in supply in the private rented sector. In my constituency in Hyndburn, we have nearly 3,000 empty properties, nearly all in the private rented sector. There is a complete over-supply, yet letting agents run rampant. His argument does not succeed in my constituency and in many constituencies like mine, where over-supply is not the answer.
Mr Prisk
We have a long-standing issue with long-term empty homes, of which there are 278,000. I am pleased to say that we saw a drop of 22,000 in the past full year, which is encouraging. We have put specific funds into our programme to bring those empty homes back into use. With respect, if I may say, it is a programme that we had to put in place, because it was not there when we came into office. The hon. Gentleman is right to highlight empty homes, but we are taking steps to change that.
Boosting supply is not only about financial support. We need to be careful to avoid excessive regulation that can deter the investment in supply that we all agree we need. If supply is stifled and if we go back to the bad old days of rent controls, we would actually see a stifling of investment and a shrinking of supply. The net result would be that tenants would have fewer properties to choose from and higher rents as well.
Oral Answers to Questions
Debate between Graham P Jones and Mark Prisk(11 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Prisk
Unlike the Opposition, we believe that credit-worthy council tenants should be able to buy their home. That is why this spring in England we will have directly contacted 95% of the eligible families. These people have rights. We will make sure that they can put them into practice.
Graham Jones (Hyndburn) (Lab)
I notice in the Minister’s answer the absence of like-for-like, one-for-one replacements. Can he clarify that and give the House information—or put it in the Library—about the number of right-to-buy properties that have been sold and the number that have been built as replacement units?
Private Rented Sector
Debate between Graham P Jones and Mark Prisk(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Prisk
I recognise that we have had a dysfunctional housing market, whether it be owner occupied or rented, for 15 or 20 years. Indeed, we saw the rate of house building drop substantially under the last Administration. This is something that has crossed Governments of both political persuasions; it then shows itself when some people are unable to transfer from one part of the market to the other. I take the point, but we need to recognise that this is a long-term challenge.
I said we wanted this to be a bigger sector, but we also want it to be a better sector, providing tenants with a good choice of decent, reasonably priced accommodation. It is true that the majority of privately rented homes fit that bill today, but it is not true of all of them. As constituency Members of Parliament, I am sure that we will all have come across individual, sometimes appalling, cases involving unfair charges, poor quality accommodation or, frankly, just shoddy service. I think we can agree on the need to improve the sector; the question is how.
As a Government, we believe that many of the current problems are a consequence of years of under-supply. Over the last 15 years, that gap between supply and demand has grown, especially after the crash of 2008. In some areas, as I said to the hon. Member for Easington (Grahame M. Morris), rates will have risen because there are not enough homes to meet the demand. The quality of accommodation, let alone the service, will have suffered when landlords who face little competition rent out their properties. Expanding the supply of rented homes lies at the heart of our strategy. That is why we have taken the radical step of establishing a debt guarantee scheme of up to £10 billion specifically to encourage institutional investment in the sector. Alongside that, we are putting in place a £200 million build to rent fund to kick-start innovative projects.
The new investment will not only boost supply but bring a different type of institutional landlord into the marketplace. This will bring much greater choice for tenants with regard to the type of property and facilities and indeed the terms of the tenancy. These institutional landlords will also bring a longer-term perspective, often of 25 or 30 years. That brings the opportunity for greater stability for tenants, and it also means that we as policy makers need to ensure that what we set is clear and consistent over that time frame.
Graham Jones (Hyndburn) (Lab)
Will the Minister applaud Labour-controlled Hyndburn borough council, which has brought in an institutional investor—a pension company—to refurbish some 200 properties in the Woodnook area in Accrington? It has featured extensively in the housing press, and was on “The One Show” last night.
Mr Prisk
We heard some details there, the most interesting of which was the admission that there would be a new cost of at least £300 million—all hon. Members will note that. Instead of having a national register that has the danger of being both toothless and highly expensive, we believe that enforcement can be closely focused and robustly applied using existing laws. We have heard about how local authorities have a number of powers to tackle these landlords, and I will give the hon. Gentleman a couple of examples.
In Southwark, 12 people were crammed into a flat above a café that had no fire protection and where the cooker was at the top of the only staircase out. Southwark council has used its powers, issued an emergency prohibition order, stopped the use of the flat as residential accommodation and brought in social services. In a similar case in Epsom and Ewell, someone was getting six tenants into an unsafe property, where he did not have the appropriate arrangements. He got a £20,000 fine and rightly so. I say to the hon. Gentleman that a national register sounds easy and simple, but he baulked at the thought last time around when in government—or his colleagues did. If we are really going to crack down on the rogues, we need to use the laws we have before trying to pass new legislation.
Graham Jones
Does the Minister think that every rented property should have double-glazing? As I understand it no legislation can enforce double-glazing in properties; if they are single-glazed, that is just the way it is.
Mr Prisk
For the Minister to decide at the Dispatch Box that every home owner and letting agent should now have to have double-glazing would be very unwise, as I am sure the hon. Gentleman understands. We want to ensure that a national register is identified as costly and, to be blunt, probably highly ineffective because the rogues will flout it, much as they do the current law. Enforcement is the key.
Oral Answers to Questions
Debate between Graham P Jones and Mark Prisk(13 years ago)
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Graham Jones (Hyndburn) (Lab)
What is the reason for the reversal of the decision on the Lancashire enterprise zones in September? In August a bid had been turned down, and job losses had been agreed by the Ministry of Defence in July. That sequence of events suggests that the MOD was not talking to BIS, and that BIS made a reckless decision in August which was overturned by the Treasury. Can the Minister explain?
BAE Systems (Lancashire)
Debate between Graham P Jones and Mark Prisk
Mr Prisk
I do not want to get ahead of myself on the broader issues, and I will come in a moment to the fact that we are in a 90-day consultation process and the company has to demonstrate a business case. The right hon. Gentleman and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) have made it very clear—rightly so, in my view—that the company has to make that case. I have said that to the work force, and I say it to Members throughout the House. Members, particularly those with the experience that the right hon. Gentleman has, are well placed to challenge that business case. The Government need to ensure that we strike a balance so that we are ready to act if, at the end of the 90 days, it turns out that we have the problems that he has described. I will not get drawn into the pros and cons now, because I will want to see the business case, as will the Secretary of State.
Before I was interrupted on that important point, I was about to put on record the fact that I want to extend my sympathy to all those affected by the announcement. The Government recognise, and I recognise, the human cost involved in such cuts, and how they affect individuals, families and communities. I fully recognise that BAE Systems is, as the hon. Member for Preston pointed out, one of the largest employers in Lancashire. I am acutely aware of the depth of the local impact that will affect many people.
I wish to address a number of issues that have been raised. First, the hon. Gentleman referred in his opening remarks to a letter that he had written to the Secretary of State. I have asked my officials to check, and we have no record of receiving such a letter on BAE. We have a record of a letter about supermarkets dated 4 October, but I assume that is not the one. Perhaps at the end of the debate he could give me a copy of the letter so that I can ensure that it goes to the Secretary of State.
There was quite a lot of party political discussion from the hon. Gentleman, implying that the Government have no interest in the manufacturing industry. I strongly refute that. He did not mention the changes to the tax law to ensure capital allowances, the improved investment in the manufacturing advisory service or the changes that we are making through the advanced manufacturing technology and innovation centre, alongside the other work we are doing on aerospace. I hope that we can get the party political banter out of the way and focus on the issue that affects his constituents, but I think he will understand that I am not prepared to ignore remarks suggesting that the Government do not take manufacturing seriously. We do, and I do.
I now turn to the causes of the problem, and some of the things that the Government intend to do and are already acting on. The company has advised us that the problem was caused principally by changes in key international programmes and the need to remain globally competitive at a time when defence spending in many nations is under huge pressure. We are all well aware that public finances are tight, and defence budgets are not immune. I think even the Opposition Front Benchers understand that. Although a decision of this nature is a commercial issue for the company, it is therefore absolutely right that the Government should do all they can to help those affected.
I have talked in the past few weeks to Members—including you, Mr Deputy Speaker, in your role representing your constituents—and they have all understood those concerns. I also had the opportunity to meet workers while I was in Manchester. I re-emphasise that I understand that during the 90-day consultation process, Members and workers will wish to challenge the business case, and rightly so. We will see what the outcome of that is. However, we must ensure that the Government have a plan in place if those redundancies are made, and I should like to set out the practical help available to hon. Members’ constituents.
The first step is to ensure that the Jobcentre Plus rapid response service is available. It has already offered access to Next Step one-to-one careers advice, which complements the support available from the company. I know from dealing with previous cases how valuable that practical help can be to individuals.
Secondly, and more broadly—this important question was raised by the hon. Member for Preston and my hon. Friend the Member for Fylde (Mark Menzies)—how do we ensure that our country does not lose those skills for good? That consideration is why, back in January, the Secretary of State and I established the talent retention team. The intention is that Government and industry ensure that we do not lose those key specialisms, whether in BAE or elsewhere. The team matches the skilled employees who are facing redundancy to vacancies in other companies. I can tell the House that so far, 200 UK companies have registered. Those who have signed up and are recruiting include Rolls-Royce, Siemens, Nissan and Airbus. I understand that several thousand jobs will be listed in the next month.
Although I appreciate that taking one of those jobs is not a straightforward decision—it might involve commuting or relocation—that system is important, because it will help us to avoid losing those key design, engineering and manufacturing jobs, which are important whether they are in Kingston upon Hull West and Hessle or in Lancashire, which is the subject of this debate.
The third question, which is just as important, is how we help local economies. On this subject, the Chancellor listened carefully, in particular to my hon. Friend the Member for Fylde, who argued that there needed to be a kick-start for the locality in addition to help for individuals. That is why last month the Government responded positively by inviting both the Lancashire and the Humber local enterprise partnerships to submit proposals for two new enterprise zones. They are important, because they provide real advantages for areas such as Warton and Salmesbury—and Brough, if I may stretch the geography of Lancashire temporarily.
Mr Prisk
I will get to E-Scan in a moment.
The business rate discount, the retention of the money for a 25-year period, the radical simplification of the planning system and the support to ensure superfast broadband are crucial to enterprise zones, but there are a couple of aspects of LEPs that I often feel are lost in some of the coverage—the use of tax increment finance to ensure the long-term viability of the zone, and the UKTI support for inward investment and trade opportunities. Given the civil and military nature of aerospace, we are looking to talk to both the Lancashire LEP and the Humber and Hull LEP about those two enhancement aspects, to see whether they can be a core part of the offer.
One hon. Member asked a question on Typhoon. The four Typhoon partner nations have decided to extend the programme, so that both domestic and export orders can be dealt with in a way that means we can sustain capacity. That means that the programme’s production has slowed; it has not been stopped. Clearly, we must agree that with all partner nations, because it is a partnership project.
On E-Scan radar, the point is that the Ministry of Defence and the industry are working on an assessment programme. Electronically scanned radar is on-the-edge technology. If we get this right, it will be Europe’s first and only second generation scanned radar. Therefore, we need to think about how it works. The reason why we are not committing on long-term development is that we need to see whether the assessment works in the first place. In my book, that is a sensible pattern to follow. Clearly, we would not have taken that first step had we not seen the opportunity. That is an important leap in capability for the Typhoon, and it could well mean that although there will be tighter pressure on the domestic Typhoon programme, there will be opportunities for better exports in the long term.
Let me now bring my remarks to a close. I want to assure Members and their constituents that the Government are determined to take all the necessary action both to support individuals and to ensure that the UK’s defence and manufacturing base can prosper over the long term.
Question put and agreed to.
Pennine Lancashire Local Enterprise Partnership
Debate between Graham P Jones and Mark PriskWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I congratulate the hon. Member for Hyndburn (Graham Jones) on securing the debate and thank those Members who have been able to contribute. Although normally only a Minister replies in such debates, I think that it has been useful to allow other Members to contribute in this one. It is clear that there are strongly held differing views, both within the House and among the people whom Members represent. In that context, I want to help and have a positive proposal, to which I will come in a moment.
For the Government, creating the right long-term economic framework, whether in Lancashire or elsewhere, is an extremely important issue, and one that we take very seriously. Having once worked in Lancashire, I know the economic strengths across the county. BAE Systems, for example, has a heavy presence in the hon. Gentleman’s constituency, and it also has operations across the county. There is also the nuclear industry and, as others have mentioned, the automotive and paint manufacturing industries.
We believe that Lancashire would benefit—I mean the economy of Lancashire, and there is a slight nuance there—from the focus on economic growth that we strongly feel LEPs would bring. On 28 October, we announced the first wave of successful partnerships. In fact, the 24 partnerships that have so far been cleared are diverse, have strong ambitions and are focused on the local priorities that they think matter. They are wide in their scope and imaginative in what they are trying to achieve. If we look at the 24 partnerships that have so far been cleared, we will see that they represent, outside of London, more than half England’s gross value added, 58% of the businesses and nearly 60% of the work force.
The point about LEPs is that they should enjoy broad discretion so that they can choose the priorities for action in response to local needs. A number of them are focusing on the need to remove barriers to growth, whether they relate to transport and planning, matching skills provision with employers’ needs or helping fledgling companies get off the ground.
As Members will know, we were unable on 28 October to clear every bid we received to become a partnership. Of the three bids we received from Lancashire, we judged that none were ready to proceed without further work. The area covered in what I will call the pan-Lancashire bid included Preston, Lancaster, South Ribble, Chorley and West Lancashire. The Fylde coast bid comprised Blackpool, Fylde and Wyre, and the Pennine Lancashire bid originally comprised the area including Blackburn, Pendle, Ribble Valley, Burnley, Hyndburn and Rossendale. We were impressed by the commitment and ambition demonstrated in all three proposals. As with some of the cleared bids, we saw that there was a real wish to look at how, in response to local need, economies could be diversified. There were strong merits to the bids.
Let me turn to the problems. As they originally stood, the three overlapping bids clearly competed and conflicted with one another. Before we could consider whether they should progress, we had to be confident about the structures, and ensure that they were right for the business community and the communities as a whole. Clearly, where there is strong local disagreement among the potential members of a partnership, the possibility of making that partnership last is sharply diminished. Therefore, it has been disappointing that there have been continuing disagreements across the county, not only in local government but among the business community.
However, I now understand that partners involved with the Lancashire bid and the Fylde coast bid have been having productive discussions about the possibility of joining forces in one partnership. I hope that their discussions reach a successful outcome. It would be progress, but the problem would remain: we would still have two bids in opposition to each another in Lancashire.
To be open with Members, and to allow them to see exactly what the principles are, let me return to the criteria with which we are working. The criteria we set were that every partnership had to demonstrate, first, that it encompasses a natural economic area; secondly, that it has the clear support of business; thirdly, that there is an ambitious approach to transforming the area—something that adds value; and, fourthly, that it has buy-in from the key councils in the designated area. Let me look at the two bids that we are debating in this Chamber today: the pan-Lancashire and Pennine Lancashire bids.
Graham Jones
Will the Minister accept that there is no such thing as pan-Lancashire when we talk about historic Lancashire? We are merging two concepts. Blackpool and Blackburn, particularly Blackburn, are totally resistant, and Blackburn is an equal partner in local government with Hyndburn. They work together effectively. If Blackburn withdraws—it is insisting that it will go with Manchester—there will be no pan-Lancashire solution. There is a Swiss cheese solution that covers the vast majority—12 out of 14—but there is not a 14 out of 14 solution. There is no pan-Lancashire solution.
Mr Prisk
I will not comment on the value of the groupings. They are the ones that came forward. If a group chooses to call itself pan-Lancashire, that is its judgment. Given that we have a pan-Lancashire and a Pennine Lancashire, I thought that it would be easier to use that shorthand so that we know what we are talking about.
On the first criterion, the pan-Lancashire bid represents a strong, functional economic area. On the second criterion, it is clear that the bid enjoys strong business support, particularly from larger employers, but the support is not unanimous. On the third point—this is the issue around ambition and added value—pan-Lancashire also scores well. It would deliver the critical mass needed for Lancashire to compete with the likes of Greater Manchester, Merseyside, and West Yorkshire, as my hon. Friend the Member for South Ribble (Lorraine Fullbrook) pointed out. It would enable a joint approach to be taken on key sectors such as manufacturing. In addition, it includes Central Lancashire and Lancaster universities, and its scale is sufficient to bring together adjacent areas, thereby better integrating transport and planning.
It is the fourth criterion—local government support—that is the root of the problem. Clearly, some councils falling within the geographical scope of the bid are not signed up to it.
Mr Prisk
I totally understand the right hon. Gentleman’s point, and I respect the fact that where one is seeking secure evidence, it is inevitably often easier and quicker for larger organisations to respond. We have been mindful of the fact that there may be smaller businesses, about which we do not have evidence, that may support one bid or the other. I am mindful of the danger of assuming that familiar names on a particular bid’s proposal somehow mean that the whole of the business community is unanimous. I am sensitive to that—it is an excellent point. That is why we try to make sure that once we receive bids, we dig beneath the proposals and get a better understanding of the genuine nature of the support or otherwise, so that we can make a value judgment. That allows me to turn to the Pennine Lancashire bid.
On the first criterion—the question of a functional economic area—it has a plausible claim. I understand that economic geography changes. One of the points about changing the regional development agencies is that, in many ways, some of their boundaries simply do not reflect the economies that we have today, which have changed dramatically in the past 10 or 12 years. We think that the Pennine Lancashire bid has a plausible claim to being a functional economic area.
However, its links with other parts of Lancashire and Greater Manchester mean that its economic self-containment is not quite as strong as Lancashire’s as a whole. There are pros and cons. The hon. Member for Hyndburn rightly made the point that a high proportion of people work in the area, but we also need to look at the potential long-term success of a partnership—we need to think about its connectivity. The debate is two-sided; nevertheless, it is true to say that there is a plausible argument and a plausible element to the first question on whether there is a functional economic area.
On the second issue, on the evidence that we have to date—I will come to how we might solve this in a moment—the Pennine Lancashire bid’s claim, in terms of business support, seems to be smaller than that of the pan-county bid. [Hon. Members: “Not true.”] I hope to offer hon. Members a solution to that in a moment.
There is support from local businesses, especially including small and medium-sized enterprises, and I am grateful to hon. Members who highlighted that so that we can make an informed judgment. I am acutely aware of the two different chambers of commerce. I shall not comment on the pros and cons of either, but the fact that historically they exist tells me something about the nature of the economic geography in the county—I do understand it.
On the third criterion, Pennine Lancashire argues that its bid would give it the freedom to build on already close links with Manchester. The evidence is that 17,000 workers travel south to Manchester, and a far smaller number into Preston. I understand the motorway network, and that one does not look west; people look south, if anything, and perhaps a little east. In addition, private sector jobs growth is expected to be focused on Manchester. That brings me back to a point I made earlier about self-containment and balance.
There is then the question of the added value that would come from a Pennine Lancashire bid. We are looking for additionality in the proposal. What is the extra element? That is one of the questions that we want resolved. Like the pan-Lancashire bid, this bid failed on the fourth question—the issue of local authority support—as several hon. Members pointed out.
I am mindful of the challenge. Overall, we feel that the pan-Lancashire bid has some strong elements, but that the Pennine Lancashire bid also has good arguments in its favour. Neither is without its flaws. Like many hon. Members, I am keen to bring the matter to a conclusion without undue delay, so the Government are today asking partners involved in the competing bids to submit revised proposals no later than 8 December. We will write to the proposers today. Any revised proposal needs to be backed up with clear and compelling evidence to support the arguments that it presents. I hope that that clearly spells out the Government’s position. We want a lasting partnership, and that means that the partners must agree. We cannot make that happen without there genuinely being such a wish. That is the key point.
Mr Prisk
I am running out of time, and I am mindful that I will be in trouble unless Mr Weir allows me to stretch beyond 5 o’clock, but I do not think that I can do that.
We want to make a prompt decision and allow both sides to put their evidence firmly. That will allow us to make a judgment on which should be cleared: one, two or neither. We will seek to make that decision if the evidence is presented to us.
Question put and agreed to.
Oral Answers to Questions
Debate between Graham P Jones and Mark Prisk(14 years ago)
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Graham Jones (Hyndburn) (Lab)
20. What estimate he has made of the number of people and businesses in (a) the north-east, (b) the south-west and (c) Lancashire which will not be covered by local enterprise partnerships following the implementation of his proposals for such partnerships.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
Overall, the 24 partnerships agreed to date cover the majority of businesses and the economy of England. In Lancashire, local disagreements have prevented a credible proposal from being made. As I mentioned in my response to an earlier question, 30% of the population is covered at the moment in the south-west, but I can now confirm to the House that we expect full coverage in the north-east.
Graham Jones
I thank the Minister for that reply. Does he accept that Lancashire county council’s LEP proposal is not a pan-Lancashire proposal, but a Swiss cheese proposal, designed to annex east Lancashire? The war of words, to which he has alluded, between the east and the west is extremely divisive. Will he come to a decision that reflects local interests, rather than those of what I see as the gang of six? The gang of four Maoists seemed to resolve such things rather more quickly, so will he come to a quick resolution regarding the east and west?
Mr Prisk
I am not sure that either the Swiss cheese metaphor or the Maoist metaphor worked well, but let me deal with the reality of the situation. Three conflicting proposals were made in Lancashire. At the moment, positive discussions are taking place about how those can be rationalised, and officials will continue to work with both business and civic leaders to find a sensible arrangement. I hope that the hon. Gentleman will play a positive role in that, so that we can move on.
North-West Economy
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The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I begin by congratulating the right hon. Member for Salford and Eccles (Hazel Blears) not only on securing the debate but on setting a constructive and positive tone on what is a complex issue. I think we all share the view that the north-west is a part of the country with a tremendous future and a great industrial past; the question is, how do we enhance and develop that? The debate has been not only constructive but thoughtful, and I shall do my best in the nine minutes I have to canter through some of the questions, so bear with me.
Like much of the country, the north-west has suffered from the recession, but we are beginning to see early signs of improvement. How do we help to shape and enable a prosperous economy that will be different from what we have known in the past? One of our opening statements was that we as a Government passionately believe in the need to ensure that—
Graham Jones (Hyndburn) (Lab)
I am concerned about the context of this debate, which the hon. Member for Wirral West (Esther McVey) touched on. Our region has many disadvantaged communities—in fact, one of the highest proportions in the country. Will the Minister specifically address the disadvantaged areas? His priority tends to be the west of the region, where the nuclear and defence industries are located, rather than the deprived areas. What will he do about those?
Mr Prisk
That is a long intervention, which is a shame because it has prevented me from tackling the broader question. The individual case cited by the hon. Gentleman is a classic example of the danger of the debate: we can all find an individual project that might have merit. The question is whether the gap has closed in 11 years, after spending £3.7 billion. The answer, sadly, is no, which is why we need change.
In answer to questions from those Members who spoke in the debate, I shall set out the key changes that we want to achieve. We need to forge effective partnerships between local business and civic leaders in our communities—and yes, that will mean formal, legal entities. We want greater democratic accountability in what will be vital forums in deciding local economic priorities. The partnerships must be equal between business and civic leaders, because that will help them better understand the needs of local people. In response to the question about universities, I see universities, too, as having an important role in those partnerships.
As several Members said, local economic development needs to be based on real economic areas. Sadly, the boundaries of many RDAs often relate more to the administrative priorities of Whitehall or Brussels than to the actual needs of local areas. I very much welcome what the right hon. Member for Salford and Eccles said about city regions and the various benefits and challenges. Clearly, they are not relevant in every part of England; nevertheless, they are an important dynamic to understand. We must ensure that the boundaries of the economic area that the partnership is seeking to enhance relate to the real economy of today. We need to reform the system by replacing RDAs if we are genuinely to strengthen the local economies of this and other areas.
Our objective is simple: to encourage strong local leadership and to promote economic growth, based on institutions that match the economic reality on the ground and that have the freedom, and therefore the diversity capability, to make a real impact.
I also welcome what the right hon. Member for Salford and Eccles said about the pilots. I am not familiar with the details that she gave, but I would be happy to have a look at them. Total Place has considerable merit as an approach to examining some of the underlying questions.
Mr Prisk
I will not because I have less than a minute left.
In drawing my thoughts to a brief conclusion, I apologise to hon. Members for having been unable to address all their questions. In my book, the north-west is an area with a genuine can-do spirit, as my hon. Friend the Member for Wirral West (Esther McVey) and others mentioned. We in government must therefore understand and enable that, rather than directing and tinkering. We need to ensure that businesses can prosper and grow, which means, yes, creating a new economic landscape. For a few weeks, the level of clarity and certainty might not be perfect, but we will set out our further plans over the coming weeks, and we look forward to dealing with the various requests appropriately and thoroughly.