Green Investment Bank

Graham Stringer Excerpts

Wednesday 1st February 2012 Commons Chamber

[Tony Lloyd (Manchester Central) (Lab)]

It is almost commonplace nowadays to say that the greening of our economy must take place, and must take place quickly. We know that a low-carbon economy offers not just challenges—although it certainly offers challenges—but enormous opportunities, and the success of the green investment bank is vital to that process.

I congratulate the Minister and his Department on an initiative which, as the Minister knows, has been welcomed across the country, if only in the locations where councils are making active bids. As I shall demonstrate, the level of support in Greater Manchester is such, and the quality of the Manchester bid is so strong, that had Manchester not submitted a bid, the Minister would probably have asked us to do so.

I can certainly say that the bid has the support of a number of people, including, obviously, my hon. Friends the Members for Blackley and Broughton (Graham Stringer) and for Bolton West (Julie Hilling), my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), my hon. Friends the Members for Stretford and Urmston (Kate Green) and for Stalybridge and Hyde (Jonathan Reynolds), and the hon. Member for Bury North (Mr Nuttall) on the Government Benches. It is important to say that the hon. Member for Altrincham and Sale West (Mr Brady), the chairman of the 1922 committee, has asked me to place on record his strong support for the Manchester bid.

Manchester has some strong positives when it comes to meeting the criteria that the Government have said are fundamental to the location of the green investment bank. It is always tempting for anyone from the north of England to take a position that does not always see London as the centre of the universe, possibly because it is not, but there are strong reasons why locating the bank in London would send the wrong signals about the type of economy that we want to build in the United Kingdom. That is not an anti-London statement, but a simple matter of practical fact.

We want to use the green investment bank to engineer investment, particularly in manufacturing, and we want to break the cycle of an investment system that has historically been quite hostile to manufacturing, and that is very much based round the London service ethos. People in parts of the north of England have said to me that it is difficult to get the merchant banks to take seriously investment outside the golden triangle of Oxbridge and London; we need to consider location as a key factor in that, particularly if we recognise that one of the roles of the green investment bank will be to overcome the traditional problems of market reluctance or, even worse, market failure. In that sense, a location outside London is important.

Of course, there are practical reasons why the Manchester bid would be better than anything that could possibly come from within London, but I repeat that this is not about pitting Manchester against London; historically, when that has happened, Manchester has normally won the intellectual arguments, if not the physical arguments that go with them.

The Government have laid down important criteria, one of which relates to the concept of connectivity. Of course, in the modern world, Manchester’s international airport is a tremendous asset, particularly when we consider that some 200 cities around the world are accessible from Manchester airport. I would not pretend that that competes with the southern regional airport system that includes Heathrow and Gatwick—of course it is possible to access more cities from them— but Manchester is only a short flight away from that London airport system. We also have very good train communications.

In the modern world, it may not be the physical transportation of people that matters, but the movement of information and, in that area, Manchester scores very highly, not simply against other non-London cities, but against London. Manchester already has one of the most advanced, competitive telecommunications and internet infrastructures in Europe, and it is the only UK city outside London with an international internet exchange. It is the only city in the UK including London to offer next-generation broadband, with fibre to premises allowing remarkable speeds in a true open-access network. BT has completed a £575 million investment programme that places Manchester 10 years ahead of other UK cities, in terms of access to digital communication. Those are the types of connections that the world of today—and the world of tomorrow—will demand.

As for the requirement for adequate office space and energy-efficient offices, the modern offices in Spinningfields, the Co-operative Bank area and Piccadilly place are already the rival of any in the country. Such offices are easily available in Manchester, and are being built to the very highest environmental standards. I think that it is true to say that we have more office space that hits the highest levels of environmental efficiency than other cities outside London.

Manchester has huge and growing business, financial and professional services sectors; 250,000 people already work in those sectors, 50,000 of them in finance, insurance and banking. Of course, Manchester also has a powerful transaction ecosystem—one of the criteria that the Department for Business, Innovation and Skills specified was necessary for a successful bid. We have the Manchester Private Equity Group, and a financial and banking system that is already well used to operating in a transaction ecosystem. Of course, Manchester scores very highly in its cost-effectiveness as a location.

[Graham Stringer (Blackley and Broughton) (Lab)]

My hon. Friend is making a splendid and excellent speech, which I am sure the Minister will not be able to resist. May I just add two details that might aid him? First, Manchester airport has more destinations than Heathrow and, secondly, banks thrive better where there are other banks and Manchester is undoubtedly the second financial centre in this country.

[Tony Lloyd]

My hon. Friend probably knows more about transportation—and particularly air transportation —than almost any hon. Member and he is right about the position of Manchester airport. That is a very important plus, because Manchester airport, by definition, is down the road from the thriving city centre. The growing efficiency of our local transportation system means that it is easily accessible by anybody who comes to the city.

My hon. Friend’s second point is absolutely right, too. The strength of Manchester’s banking system is really important and, in that light, I want to mention the quite recent move by the Bank of New York Mellon, which invested in the city centre. The bank took a decision to come to Manchester some six years ago. Before it first came, it scoured the country in a manner that was very similar to the process that is going ahead for the green investment bank and it considered very similar criteria for the location of its new investment in Britain. At the time, the investment covered a couple of hundred people, who were easily found. They were people of the highest quality, of course, because BNY Mellon was not going to set up without people of both expertise and competence, given that those people would be dealing with the bank’s UK clients. Those people were recruited from the Manchester labour market, because the existence of the banking system mentioned by my hon. Friend the Member for Blackley and Broughton meant that that labour pool was easily available.

BNY Mellon has found that as it has expanded—it has expanded very quickly in six years and now employs more than 1,000 people—it has been able to expand its pool of labour precisely because of that nexus of people in the banking and financial services sector who were readily available. In particular—I hope that the Minister will pay particular attention to this point—the fact that people had the skills and were in the professions that the bank was looking for meant that, as the labour force increased, that had a non-inflationary impact on the bank and on the local labour market. That is an important factor to consider in the location of the green investment bank.

I am aware that the hon. Member for Bury North wants to show that support for this bid is felt strongly across the normal partisan political divides in the House, so I shall conclude. The bid is supported by people from all political parties and by people from all backgrounds, by business, the trade unions and local authorities, and by all those who make up the firmament of modern Manchester and modern Greater Manchester.

I understand that the Minister will be able to say very little tonight because of his almost quasi-judicial position, but I hope he will go away and reflect on the strong case for the Manchester bid. It is a powerful bid from a city that is used to such innovation and from a city that has demonstrated in the past its capacity to work practically, not ideologically. That has seen the city transformed over the 20 years since my hon. Friend the Member for Blackley and Broughton was leader of the city council. Manchester, in transforming itself, has demonstrated the old adage that what Manchester thinks today, the rest of the world does tomorrow. If we are to make this bank a success, let us begin to think that thought in Manchester and ensure that it is a success.