Older Industrial Areas: Economic Disparities

Grahame Morris Excerpts

Thursday 25th June 2015 Westminster Hall

[Grahame M. Morris (Easington) (Lab)]

I beg to move,

That this House has considered economic disparities in older industrial areas.

It is a pleasure to serve under your chairmanship for the first time in this Session of the new Parliament, Mr Rosindell.

I take this opportunity to thank the Chairman of Ways and Means, who I understand has allocated the time for this important debate. It is significant not only to my constituents and other people living in some of the older industrial areas in England, but to people in similar areas in Scotland and Wales.

Older industrial areas make up a substantial part of Britain. According to the definition used in the report that I will refer to extensively, 96 of the districts in England, Scotland and Wales account for 30% of the population of Great Britain, and these areas have been hard hit by many years of job losses. I place on record my thanks to the Industrial Communities Alliance for helping me to prepare for today’s debate, and for its informative report, “Whose Recovery?”, which shows how the upturn in economic growth is leaving older industrial areas behind.

I draw the Minister’s attention both to that report and to early-day motion 171, “Industrial Communities Alliance report on the Economic Disparities in Older Industrial Areas”. That was tabled only yesterday, but it has already attracted more than 30 signatures.

The report provides an insight into the challenges faced by former industrial communities in the English regions, Scotland and Wales. It shows that the economic gap between London and former industrial communities continues to widen, not only during difficult economic periods, such as the one that we experienced after the global financial crisis in 2008, but throughout the recession, and even today, as the UK returns to modest growth.

I hope that during this debate the Minister will provide more details regarding the northern powerhouse initiative, which is of special interest to my constituents. In particular, will it be tasked with reducing the immense economic disparities between the north-east and London and the south-east? I welcome the Prime Minister and the Chancellor’s intention to create a northern powerhouse, but I must point out that good intentions will not get us very far. We need the political rhetoric to be translated into practical policies and targeted support for the poorest regional economies.

We need a strong voice in Cabinet as an advocate for our regions. I fear that such a voice is missing, particularly when I read comments by newly appointed Ministers, such as the Secretary of State for Communities and Local Government, who questions the existence of the widening economic inequalities between the regions and London, despite the fact that the evidence is absolutely clear and presented very concisely in the report that I have referred to. The first step on the road to recovery is acknowledgement of the problem.

That problem has been evident in the lack of support for my area, and in particular the lack of support from the DCLG for Durham County Council, which is my local authority. The rhetoric about the northern powerhouse has not been reflected in the council’s budget allocation, which has been cut by £250 million—40% of its total budget. That situation is mirrored in other local authorities, where there are huge pressures, in other older industrial areas in England, Scotland and Wales. They are experiencing similar problems to those in my area. That reduction in the council’s budget is despite the fact it is providing services and support to some of the most deprived communities in the country, including some in my own constituency of Easington.

The lack of support for the council is not only felt in terms of budget cuts. The recently published County Durham plan outlined ambitious targets to create 30,000 new jobs, build 31,000 new homes and create 500 hectares of space for business, warehouses and office development by 2030. Indeed, the scope of Durham County Council’s ambition has been welcomed by the local business community, and I also welcome it as we seek to promote economic development and prosperity in my constituency and throughout County Durham and the north-east.

However, the plan was dismissed by the Planning Inspectorate for being too ambitious and, despite our best efforts, Ministers refused to intervene to support its bold proposals. We had a debate here in Westminster Hall in the last Parliament on this subject, but it was not until Durham County Council filed legal papers with the High Court for a judicial review that the Government listened and became involved in the issue. My current understanding—perhaps the Minister can give an update on events—is that there is a 30-day stay to Court proceedings, but I am disappointed that the only way to get the Government to engage in economic development plans in County Durham seems to be to seek legal redress, which could have been avoided altogether if the Minister for Housing and Planning, who responded to that debate on 3 March, had been more forthcoming when we originally discussed the matter.

The report, “Whose Recovery?”, by the Industrial Communities Alliance found that the economic upturn since the recession had been much weaker in Britain’s older industrial areas than in London and the south-east. Whereas the number of jobs in London and the south-east was 540,000 higher at the end of 2013 than in 2009, in the older industrial areas the number of jobs was 70,000 lower. Similarly, the rate of growth in private sector employment in older industrial Britain during this period was just a 10th of the rate in London and the south-east.

When I am sitting in the main Chamber and listening to Government Members reciting examples of economic success and private sector employment, I often think that that is not reflected in the area that I represent, or indeed in many of the other older industrial areas, and part of the purpose of this debate is to draw these inequalities and problems to the attention of Government, to hold them to account, and to seek some redress.

Between 2010 and 2014, employment in older industrial areas rose by 230,000, or 2.9%, but during the same period employment in London and the south-east rose by 440,000, or 5.8%. When we look a little deeper at the figures, we see that there is not only a widening gap between the total number of jobs but a higher reliance on part-time work in the older industrial areas. In London and the south-east, virtually all the job growth since 2010 has been in full-time employment. By contrast, in the older industrial areas such as mine, almost a fifth of the increase in jobs has been in part-time jobs. In London and the south-east, the ratio between new full-time jobs and new part-time jobs is 16:1; in areas such as mine, in the older industrial areas in Britain, the ratio is just 4:1, so there is a considerable difference.

Another feature of job growth in older industrial areas has been the rapid rise in the number of people who are self-employed, which accounted for almost 40% of the increase in employment. An impartial observer might think that is a good thing, but I will drill down into this figure. A rising level of self-employment can be an indication of a vibrant economy, but it can also mask fundamental weaknesses in the labour market. This seems to have been confirmed by evidence gathered by the Department for Business, Innovation and Skills, in its self-employment evidence base, which found that in the south a higher proportion of the self-employed are in professional and higher-skilled occupations, whereas in much of the rest of the country, particularly the older industrial areas, more people are self-employed in elementary or low-skill occupations.

I am concerned that self-employment in older industrial areas, along with the expansion of zero-hours contracts, is creating a low-wage, insecure economy that is leading to the further casualisation of the labour market. Disparities in regional economies are deep rooted. In its report, “Northern prosperity is national prosperity”, the Institute for Public Policy Research North noted that

“regional inequalities date back nearly 150 years”—

this is not a new phenomenon—but

“despite some narrowing of the disparities between north and south in the post-war period, since 1985 the UK has had a higher rate of regional divergence than France, Germany, Italy and even the United States.”

It suggests that regional inequalities and disparities, far from being addressed, as they have been in many of our competitor countries in the European Union and in the United States, are getting worse in the United Kingdom.

We have allowed the north and south to pull apart. We should all be concerned about this, because it has led not only to an economic loss but to a loss of life chances for people in the poorest economies, in terms of education, health and income. I say respectfully to the Minister and the Government that there is also an impact on quality of life in London and the south-east, due to overcrowding and congestion.

Addressing the regional economic gap would provide significant benefits for the national economy. Halving the gap between the north and the national average would increase national economic output by £41 billion. If we are to achieve these gains, we need real commitments from the Government, but these are lacking.

I have some figures on transport investment that highlight the problems that we face. IPPR North found huge disparity between infrastructure spending in London and the north-east. London receives £5,426 per resident in capital investment, compared with just £223 per resident in the north-east; and a single project, Crossrail, is earmarked to receive nine times more funding than all the rail projects from the north’s three regions combined.

We are told of the benefits and economic importance of new projects such as High Speed 2, but I suspect that these will have little impact on vast areas of the north. The north-east has been entirely overlooked, with the line ending at Leeds—which many of us who live in the real north believe, with all due respect, is actually in the midlands. We think HS2 will offer little practical benefit to the north-east or my constituents. It may have the opposite effect. A Network Rail consultation document suggested that the benefits to my constituents would be a cut in journey times from Durham to London of just 11 minutes by 2033, with the loss of direct services to the capital and slower journey times to major Scottish cities. At a cost ranging between £50 billion and £80 billion, I can think of few policies that are so expensive and likely to deliver so little to my community. A tiny shift in spending to constituencies like mine in east Durham would have a transformative impact on our transport infrastructure, as we seek to achieve our aim to improve connectivity to major lines and increase rail services.

In my constituency, I continue to work towards a new rail station at Horden, on the Seaview site. If the Government had shown the same commitment to my area as they do to London, I could press for an integrated public transport system, the extension of Tyne and Wear Metro and improvements to our bus network, which would expand access to a wider labour market for residents. There would be huge economic benefits to the area locally and to the wider economy.

Another matter of great importance in my constituency is housing. Other hon. Members wish to speak, so I will say less about this than I intended. The villages and towns that make up my constituency were established specifically to serve local collieries in this coalmining area. The mines have gone, but investment to transform and redevelop the local communities has not followed. This is as true in terms of infrastructure spending on transport and economic development as it is in respect of housing. These issues have recently come to a head in the villages of Horden and Blackhall, following a series of problems experienced by Accent homes, a registered social landlord with properties in these villages. This situation was the subject of an Adjournment debate just before the old Parliament was dissolved. Accent cited the introduction of the bedroom tax as a cause of the fall in demand for its properties. As tenants vacated their Accent properties, the housing associations decided not to let them but to board them up.

It is soul-destroying to watch your community suffer. I invite the Minister and any of her colleagues to Horden and Blackhall to see at first hand the situation in the numbered streets as these properties fall into decay and disrepair. Many former tenants have vacated the area. Homeowners are trapped, unable to sell their property as there is no demand, and they have to live on streets with boarded-up properties, which are a target for antisocial behaviour, vandalism and crime. This situation is replicated elsewhere in the constituency, particularly in areas where private landlords have bought up properties at low cost and are seeking a return, mostly at the taxpayers’ expense, funded through the housing benefit system.

Local residents do not accept the situation. I commend the work of the Horden residents’ association, which has been engaged in meetings and discussions with Accent housing, the Homes and Communities Agency and the Coalfields Regeneration Trust, and other private and public sector partners and agencies, to find a way forward. Local councillors do not accept the situation, but the cuts to local authority budgets and the lack of any national housing regeneration fund is holding back the redevelopment of east Durham. This is disappointing, particularly given the level of funding that is available but seems to be diverted almost exclusively towards London and the south-east.

There is immense potential for redevelopment in older industrial areas, including my own in the north-east, especially as the properties that I mentioned are located in an area of immense natural beauty bordering the award-winning east Durham heritage coast—a newly declared nature reserve—and tracking one of the first stretches of the England coast path. These areas of natural beauty are at the forefront of our efforts to promote leisure and tourism on the east Durham heritage coast, but the Minister must accept that these efforts will continue to be hampered due to the deteriorating situation in the villages. Poor, derelict housing will also undermine our efforts to bring forward economic development, which is the only way to create jobs. We need to ensure that local people have skills and training and that those who acquire skills are not forced to move away from the region to find work.

We need to deliver a complete package of housing, transport investment and education if we are to attract new business and industries that will sustain our communities in the future and bring forward the economic development that is needed to narrow the wealth gap between the regions and London. We need a redistribution of economic activity to provide a new purpose for communities such as the ones I represent in east Durham, which have lost their core industry over the past 30 years.

We have had some recent successes. Only last weekend, I was delighted to attend a groundbreaking—a ceremony to mark the start of work on Dalton Park phase 2, which is a £45 million investment that we hope will deliver up to 1,000 new jobs in my constituency— 500 during the construction phase. The new retail and leisure facilities will be very welcome in east Durham and the wider region, after nearly two decades of campaigning by the local community, supported by the local council, to secure the investment.

We need greater economic diversification in east Durham and to grasp all of the opportunities available. We need new industries to sustain my constituency in the future. There is a rare opportunity in Easington to secure significant private sector investment for the proposed centre for creative excellence to be built on the east Durham heritage coast. The project would deliver more than £200 million of private sector investment and could create 2,000 jobs and training opportunities in a ready-made global film and media communications market. Our regional development agency, One North East, was supporting the project until it was abolished. I sought to discuss the importance of that project with Ministers in the previous Parliament, but I am afraid that I received little support from the Government.

In view of the Government’s conversion to a northern powerhouse, I will welcome the Minister’s input on any direct support that they are prepared to offer to that unique and potentially transformative project in my constituency. Unfortunately, I am yet to witness the positive impact of my local enterprise partnership, and the Government’s other flagship policy designed to support business development, the regional growth fund, which I feel has a misleading name. It should be called a national growth fund, since it is open to all regions. Widening economic disparities between the various regions, especially between the older industrial regions and London and the south-east, are proof of that fund’s failure. That is why I advocate direct Government intervention for the centre for creative excellence.

If the northern powerhouse is anything other than rhetoric, we need a real development fund that is targeted specifically at weaker regional economies to bring in developments such as the one in my constituency and to address the employment and skills imbalance between the regions. There is a moral duty on the Government to close the gap and address regional inequalities that damage our national economy and leave generations of people in the poorest economies behind, as well as reducing their life chances. There are development opportunities if the Government want to seize them.

The modest return to growth in the last quarter has not been a recovery for all. In older industrial communities, the recovery is in fact reinforcing existing economic divides. If we are to rebalance the economy and deliver a sustainable recovery, the Government need to back up the rhetoric. We need to ensure that the same level of resources and development that is directed towards London and the south-east is targeted at the weakest regional economies. Delivering those practical policies would give us an opportunity to narrow the economic gap and deliver much-needed jobs and growth to the former industrial communities that have been ignored by the Government for too long.

I have made a number of practical suggestions, and I hope that the Minister will reflect on them. They are opportunities to take forward the Government’s vision of a northern powerhouse in a practical, meaningful way that would benefit the region. I will be interested to hear her comments on my proposals.

--- Later in debate ---

[Toby Perkins (Chesterfield) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Rosindell, for what I think is the first time. I congratulate my hon. Friend the Member for Easington (Grahame M. Morris) on securing the debate and on his extensive and incredibly important contribution. As we have heard in the other contributions in what has been a one-sided debate, the issues that he raises about his community are felt in many other communities in older industrial areas.

My hon. Friend quoted extensively from the Industrial Communities Alliance report. That is an important piece of work by a very important organisation that ensures that these issues are brought before the Government and that the Government are forced to consider the legacy that exists in our older industrial areas and cannot close their eyes to the poverty and deprivation that have resulted particularly from the collapse of the mining industry, but also from post-industrialisation—the attack on the manufacturing sector that happened, as others have said, under the Conservative Governments of 1979 to 1997. Therefore, the work of the Industrial Communities Alliance is incredibly important, and my hon. Friend reflected its report very well.

My hon. Friend spoke many times about the northern powerhouse and whether that was a real thing or simply a chimera—an illusion—or possibly just a press release. I think that he is on to something there. We have all seen in the past few months the Chancellor of the Exchequer suddenly discovering the north after many years of policies that have made life in northern communities much more difficult. I am talking about huge cuts to local government in the north and the huge increase in inequality that we saw under the previous Government. Suddenly, he arrived in his hard hat and high-visibility vest and announced that we had a northern powerhouse or, if not, he was going to create one.

[Grahame M. Morris]

This is a very important issue, worthy of the Government’s full attention, not just a photo opportunity with a brightly coloured jacket pre- election. As my hon. Friends have said, many of the problems faced by coal closure areas, such as mine, are multifaceted. The legacy is not just joblessness, but an environment impact, derelict land, substandard former colliery housing, despoliation and ill health. It requires the Government to take a co-ordinated approach, beginning with a recognition of the particular problems of not just coalmining areas, but steel areas, textile areas and, indeed, many of the old industrial areas that face similar problems.

[Toby Perkins]

I could not agree more. My hon. Friend’s contribution was speaking to many of the partnership approaches that were taken under the last Government. These problems are complex. He is absolutely right to talk about the combination of poverty, historical benefit dependency and ill health that results from what people have put their bodies through while working in heavy industry and from the link, which other hon. Members referred to, between poverty and ill health more generally.

A co-ordinated approach and a Government who take the situation seriously are required. The Government must prioritise the regeneration of our industrial areas and recognise that the situation is not easily resolved. The situation cannot be resolved with a press release or a photo opportunity; substantial partnership and cross-agency work between all organisations—central Government, local government, the business community, the voluntary sector and health authorities—over a considerable period is required to alleviate the situation.

My hon. Friend will be aware that my constituency of Chesterfield features in the Industrial Communities Alliance report. The area had a significant history of coalmining and manufacturing, much of which has now gone. Chesterfield was once a town in which five or six employers employed 3,000 or 4,000 people each; and now it is a town in which 3,000 or 4,000 employers employ five or six people each. The changing face of our economy poses significant challenges, including inequality.

[Grahame M. Morris]

I take issue with my hon. Friend’s suggestion that we have had a long-term dependence on benefits. Historically, Easington had a long tradition of almost full employment when the pits were working. We are in our current predicament because of the difficulty of attracting inward investment due to the complexity of the problems, which are compounded by various aspects of Government policy, including this week’s announcement of a £200 million cut in public health funding. Indeed, £3.5 million will be cut from Durham County Council’s budgets. That funding is used to address the long-term issues of ill health and poor diet in some of the poorest communities. The Government need to end their short-term approach and take the long-term, co-ordinated approach needed to address the problems in Chesterfield, Easington, Neath, Sheffield, Glasgow and all older industrial areas.

[Toby Perkins]

I agree with my hon. Friend. I am referring to what happened in such areas, particularly after the closure of the coalmines and manufacturing sector. The irony of the Government’s approach to welfare—they suggest that there is a group of people who want to live on welfare—is that that was precisely Mrs Thatcher’s approach when she shut all the pits. She went to all these people, shut down entire communities and threw them out of work. She put huge numbers of people on incapacity benefit and parked them there for a long time. Inasmuch as there was a history of welfare dependency, it was Mrs Thatcher who caused it, and my hon. Friend is right to clarify that point.

My hon. Friend also spoke about local enterprise partnerships, and I will speak in more detail about their role and the previous role of regional development agencies and how the Government’s decisions prevented them from being as effective as they could have been, particularly when their help was really needed. He raised a couple of issues that I want to explore. He talked about the insecurity that goes with the increase in self-employment. I was self-employed for six years before first coming to Parliament, and I know that self-employment is an insecure line of work, but we should be encouraging self-employment, which is a great thing. Simultaneously, we must recognise that some people set up their own businesses because there are no other options. Self-employment is sometimes a sign of a local economy’s weakness; and at other times self-employment should be welcomed. It is important to recognise such insecurity in the workplace. He may also have been referring to bogus self-employment. Some people who appear to the majority of us to be self-employed are actually in insecure employment.

[Grahame M. Morris]

My hon. Friend is being generous in giving way. It is important to challenge the accepted logic that an increase in self-employment is necessarily a good thing. We need to consider where it is happening. The Union of Construction, Allied Trades and Technicians and other trade unions that organise in the construction sector are concerned about the increase in casualisation and the use of umbrella companies by unscrupulous employers to decrease job security and drive down terms, wages and conditions on building sites, and there are other such examples. A number of people who were directly employed in the offshore industry are now classed as self-employed not by choice but because they have been forced down that route. Self-employment is not necessarily a positive thing for local economies. I accept that we want to encourage small businesses to grow and to take on employees, but that does not necessarily translate in the figures that have been quoted on the growth in self-employment in areas such as mine.

[Toby Perkins]

This is a multifaceted issue. I feel like I have been responding to my hon. Friend’s speech for longer than it took him to deliver it, so I will move on. [Interruption.] He rightly says that we have a bit of time.

There were other important contributions. The hon. Member for Glasgow Central (Alison Thewliss) reflected on the extent to which industrial jobs have gone from her constituency. Like my hon. Friend the Member for Sheffield, Heeley (Louise Haigh), she represents a city that has seen huge regeneration and positive change, but there is still the legacy of industrial decline in such older industrial communities. When listening to the hon. Member for Glasgow Central, I was struck by the similarity between the experiences of her constituents and the experiences described by other hon. Members. After hearing Glasgow and Sheffield Members reflecting on the challenges in their cities and hearing my hon. Friends the Members for Easington and for Neath (Christina Rees) talk about the impact on former mining communities like mine in Chesterfield, I am struck that there is a lot more that links us than divides us in the industrial areas of England, Scotland and Wales. We should consider that as we think more broadly about the direction in which our country is going. A huge number of issues affect us all. We have shared experiences and new opportunities, but we have also endured and shared painful legacies.

My hon. Friend the Member for Sheffield, Heeley said that the legacy of Mrs Thatcher has cast a dark shadow over older industrial areas, and she reflected on the importance of rebalancing our economy. My hon. Friend the Member for Neath said that the scar of mine closures is still felt today, and she spoke powerfully about the impact of ill health and its link with poverty. She also made an important point about the impact of spending cuts on local government and the knock-on impact on the voluntary sector. We all know that, over many years, the voluntary sector was incredibly powerful and important in the Labour Government’s approach to regeneration. Ironically, a Conservative Government who came to power promising us a big society and a revolution in the voluntary sector have achieved the absolute opposite: a weakened voluntary sector that is unable to pick up the pieces in many of the ways that it did previously.

Many issues raised in the report, complex and long-standing as they are, were being addressed under the Labour Government. We saw huge regeneration of our great cities. On the motorway in my area we have the new junction 29A, which is still known as “Skinner’s junction” after the campaigning of my hon. Friend the Member for Bolsover (Mr Skinner), and next to it is a huge new industrial estate. The Industrial Communities Alliance report says that there are 4,900 extra jobs in Bolsover, which is one of the most successful older industrial areas in terms of employment growth precisely because the Labour Government made the decision to invest in such communities. So we can get results if we invest. The Coalfields Regeneration Trust did so much work and was strongly supported by the Labour Government.

The Labour Government made huge investments in health promotion, which my hon. Friend the Member for Easington mentioned, and recognised the massive challenges that face older industrial communities. We recently saw the announcement of a £200 million cut in health promotion, which will have a significant impact. The powerful contributions to today’s debate have expressed the importance of this issue.

In terms of earned income, the United Kingdom is the fourth most unequal of the 30 countries in the OECD; only the USA, Israel and Mexico are more unequal than we are. My right hon. Friend the Member for Doncaster North (Edward Miliband) was absolutely right to say that inequality is one of the huge challenges facing our country, although not only our country. The Labour party will give considerable thought to it over the next five years as we attempt to put together a programme that can again win the support of the British people.

Income is spread unequally across the UK’s regions and nations. The average household income in London is massively higher than in the north-east. In addition to income, overall wealth is unevenly spread across the UK—the average household in the south-east has almost twice as much wealth as an average household in Scotland—and different regions of the country have a different percentage share of UK gross disposable household income: London and the south-east have 32%, and the north-east has just 3.5%. Those disparities exist. It is important to recognise that poverty is not the preserve of the north. Areas throughout our country face substantial challenges: for example, Cornwall, which we might have expected to be represented here. None the less, a specific challenge faces the older industrial areas, and it is important to reflect that.

Many Members have discussed why we are in this position. There are three or four key reasons. The first is the failure to invest in retraining and vocational skills for the forgotten 50%, leaving people in the older industrial areas vulnerable to falling into a life of low pay. Far too many people in the UK today do a hard day’s work and still live in poverty and visit the food bank on the way home. The Prime Minister continually tells us that a job is the route out of poverty, but increasingly, people in poverty are also in work. Under this Government, work alone no longer pays enough to allow people the dignity of being able to feed their family.

More than 5 million people are now in low-paid jobs, and more than 250,000 are estimated to earn less than the national minimum wage. The problem of low pay has got significantly worse under this Government. Not only has the national minimum wage fallen in real terms since 2010; the official figures show that without action to tackle low wages, spending on tax credits for people in work is set to rise by an estimated £2.5 billion over the course of this Parliament. Only this Government could think that the response to that environment of low pay, and to all those people who work hard all week and still do not have enough money at the end of it to put food on their table for their kids, is to cut tax credits.

What an appalling legacy this Government will leave in terms of that increase in child poverty. We already hear that this Government are thinking of repealing the Child Poverty Act 2010, so that they will no longer be held to account for that increase in child poverty, but in communities throughout our country, people sitting around the kitchen table know the reality of life under this Government.

There has been a huge increase in the productivity gap. Professor Van Reenen, head of the Centre for Economic Performance at the London School of Economics, has said:

“By Thursday lunchtime the other”

major countries in Europe

“have produced as much as it takes us to produce by Friday afternoon… So basically, we could take every Friday off if we could be as productive as those other countries and earn the same amount of money.”

The productivity challenge is partly linked to the lack of investment and the short-termism that other colleagues have mentioned. For too long, the British economy has taken a short-term approach to matters of research and development. There are far fewer people involved in R and D in this country than in many of our European competitors. Likewise, although we have waited an age for a final decision on a new runway for London, Charles de Gaulle airport outside Paris has had four runways for years. There are many reasons why the endemic challenges in the older industrial areas have not been addressed.

The Government are exacerbating problems. The policies of a truly one nation Government would help overcome regional disparities, but as my hon. Friend the Member for Easington discussed, spending on infrastructure increases such disparities. Spending per head on London is 24 times higher than on the north-east of England. He quoted statistics that bear repeating; I also have them. The amount spent on Crossrail alone is nine times more than the amount earmarked for rail projects in the whole of Yorkshire, the north-east and the north-west.

There is a substantial gap in the ability of businesses in older industrial areas to access finance. The access to finance market is much less competitive there, so the amount of money lent by the banking sector to our businesses is substantially different depending on location: £2,647 per head of population was lent to businesses in London, but less than half that was lent to businesses in the north-east and the east midlands. Entrepreneurs in areas with huge growth potential are crying out for support but finding that, unless they live in an area that is already coping better than most with the post-crash world, the Government’s door is shut to them.

My hon. Friend the Member for Easington referred to the closure of One North East and the local enterprise partnership’s ineffectiveness in his case. Many local enterprise partnerships are working hard to make a contribution, but it was a strange decision at a time when the economy was desperate for growth—we should remember that we already had growth then, in 2010 at the end of the last Government, but we still needed a great deal more—for the Government to shut the regional development agencies and set up those fledgling agencies with limited resources and an unclear role. They have all attempted to the best of their ability to find a role, but they have been inconsistent in their ability to do so. Only now, five years after they were desperately needed, are some of them starting to come to fruition. That is another Government measure that has had a negative impact.

Strengthening local enterprise partnerships so they can provide greater capacity and stronger services is an important part of the solution, as is strengthening local authorities. We welcome steps to strengthen the combined authority in Greater Manchester, but we want more combined authorities to tackle the chronic problems of poor skills, infrastructure and economic development. We need reform of our business rate system, which has worked against business development in older industrial areas. If we had had the business rate re-evaluation counselled by the last Government, business rate bills for people in my hon. Friend’s constituency would be hundreds if not thousands of pounds lower and business rate bills in central London would be higher. That would have made a big impact on our local communities.

We believe that local areas and local authorities should be supported where they are succeeding in attracting and supporting businesses by retaining more of the business rate revenue generated by growth to invest in building further success. We also need greater decentralisation of Government infrastructure, so that more Government money is spent in the older industrial areas.

We support a Government with a commitment to a high-wage, high-skill workforce; devolution to English city and county regions that puts local councils at the heart of building up the older industrial areas; dealing with the huge increase in the productivity fall under this Government; an access to finance system in which money goes to businesses in our older industrial areas; expanding the capacity and strength of the local enterprise partnerships; fair funding for local authorities in the poorest areas; and a reform of business rates that supports small businesses in our communities. That is the kind of programme that will start to support and improve our older industrial areas.

This debate has been important in putting the issues before the Government, but we need them to stop the rhetoric and start the action; if they did, our communities might get the support that they deserve.

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

It is a pleasure to serve under your chairmanship, Mr Rosindell.

I congratulate the hon. Member for Easington (Grahame M. Morris) on securing this important debate on economic disparities in the older industrial areas. I want to make it clear from the outset that the Government’s economic ambition is to create a fairer and more balanced economy by supporting policies that grow the economy as a whole and generate new jobs and higher wages for everybody.

The debate has been interesting. I must confess that, as I was listening to some of the speeches by Opposition Members, at times I thought I had stepped back in history and returned to my old student union days in the 1970s. I am slightly concerned about the memories of some hon. Members.

[Grahame M. Morris]

rose—

[Anna Soubry]

One moment. I have not even finished this particular insight. With few exceptions, Opposition Members all seem to have completely forgotten that for 13 years we had a Labour Government. They now complain about things that they might have put right—but did not—during the 13 years of Labour Government. The policies, notably towards the end of that Labour Government—a Government that failed to save and fix the roof when the sun was shining, and continued, as some now recognise, to overspend when the world economy had suffered a crash—exacerbated things.

[Grahame M. Morris]

Will the Minister give way?

[Anna Soubry]

Obviously, I will take interventions, but may I give some advice to hon. Members? If they do not learn from the experience of what happened in May, they will be out of office not only for five years, but for a generation.

[Grahame M. Morris]

I am familiar with the standard response that Labour is to blame, but my job as the Labour MP for Easington is to hold the Government to account. I have specific suggestions that would help my area and the areas represented by my hon. Friends who are suffering similar problems. For example, the Government’s policy on further education college funding has had a huge, negative impact on East Durham College, because it concentrates on apprenticeship training for young people and does not provide funding for older workers to retrain. Specific proposals are identified in the report. Without being disrespectful, rather than a lecture about what happened years ago, addressing the issues in the report, which we raised in the debate, would be really helpful.

[Anna Soubry]

Of course, I am going to deal in detail with the situation in the hon. Gentleman’s constituency and in the constituencies of all those who have spoken, with the exception of the hon. Member for Chesterfield (Toby Perkins). I am more than happy to write to him to tell him about the advances that have been made in the past five years in Chesterfield. I want to put this matter into context. I, too, have had to sit listening not only to a lecture, but to a rewriting of history that even the most red historians would struggle to produce.

I want to talk about the industrial communities in the alliance’s report. Since the beginning of the 1970s, UK cities have experienced an ongoing historical shift in economic orientation, driven on the one hand by a process of sustained de-industrialisation, as we have heard, and on the other by a progressive rise in service and tertiary activity. The report focuses on old industrial centres that have been slower to replace declining industries. Former industrial centres that have moved on, such as London—we often forget that London used to be a heavily industrial city, but it moved on—do not appear in the list. Therein lies an important point: there is nothing pre-ordained about past or current trends continuing into the future.

Over the past three decades, some cities have experienced positive shifts of direction, or positive turnarounds, in their differential growth paths. Oxford is an example, as are Brighton, Ipswich and London. I recognise—I am an east midlands MP, as is the hon. Member for Chesterfield—that those cities are in the south of England, and much will depend on how different older industrial centres are able to attract and develop the growth sectors of the future.

[Anna Soubry]

In a moment. I want to turn to the economy in Easington, because the hon. Member for Easington is a champion for his constituency. We have all witnessed tremendous technological change in our lifetimes. I am certainly old enough to say that, given that I come from Worksop in north Nottinghamshire where there was a coalmine. The whole town depended on the success or otherwise of the Manton colliery and surrounding collieries, so I am familiar with pits.

Industries that did not exist 20 years ago are now the most productive in the world. In the constituency of the hon. Member for Easington, this change has been more apparent than most. Since the closure of the dominant coalmine in 1993, the area has undergone a tremendous change. The legacy of coalmining is still being dealt with, but great progress has been made in remediating the industrial pollution, for example. The Durham coast, as the hon. Gentleman has told us, is now home to one of the most stunning coastal walks in the United Kingdom, with the Durham heritage coast highlighting the great natural, historical and geological interest of the area with dramatic views along the coastline and out across the North sea, framed by magnesian limestone cliffs. I have not been to the area, but I would love to go to the hon. Gentleman’s constituency, and I hope to arrange a visit.

A former slag heap is now the site of one of the country’s most dynamic retail centres, with more expansion about to start at Dalton Park.

My officials have provided me with a note about the regional growth fund’s investment in Easington. We might think from the hon. Gentleman’s speech that there had been no investment in his constituency. On the contrary, eight projects in Easington have been awarded a total of £13.4 million. They are contracted to lever in a further £81.6 million of private sector investment and to create or safeguard 1,189 jobs. I hope the hon. Gentleman will welcome such great investment of taxpayers’ money.

[Grahame M. Morris]

I congratulate the Minister on an excellent brief and on the description of the Durham heritage coast. It was absolutely perfect; I cannot fault it. The problem is that we are not able to access the coast because of the lack of transport infrastructure and railway halts. On the regional growth fund awards, much of that is linked to the automotive supply chain, so doubts about our continued membership of the European Union cause considerable concern. Yes, there are positive things in relation to support for businesses, but my concern is that they are not as comprehensive as the support and expertise given by One North East. The reorganisation, as always happens whether it is in local government or health, caused a huge hiatus and a delay in taking forward investment for projects that would have benefited the area considerably.

[Anna Soubry]

I am not sure whether the hon. Gentleman is saying that the investment in his constituency is considerable and great. I have read out the figures. They are substantial. As I have said, the money is part of a contract, so it relies on securing the features that I have identified. I am more than happy to respond to what the hon. Gentleman has said in more detail in a letter, or by meeting him. I would also like to meet his local enterprise partnership, because I strongly suspect that it might have a different view of the situation in his area from the one that he has given us today. The projects include, for example, NSK Bearings Ltd, which was awarded £3.45 million in round three to assist with business expansion. The award by the regional growth fund was part of a £19.9 million investment that helped to safeguard 265 jobs. Again, I hope the hon. Gentleman welcomes that.

It should also be noted that unemployment in the constituency of the hon. Member for Easington continues to fall. There are 6,400 more people in work today than in 2010. Those people would otherwise be at home and on benefits, but they now have the benefit of a job. I find it difficult to understand why hon. Members do not welcome the fact that people are going into the world of work. Surely it is better to be in a job than to be sat at home on the dole.

On the northern powerhouse, the hon. Member for Chesterfield seems to have forgotten that the Chancellor has represented the northern constituency of Tatton in Cheshire for many years, so the idea that he is new to the north of our country is nonsense. The northern powerhouse has not been imposed on northern councils. On the contrary, councils of all political persuasions—I give them full credit, especially the Labour-run councils in Liverpool and Manchester—have not only trumpeted the northern powerhouse, but led the way on its creation. I am concerned that hon. Members in this place are not supporting their colleagues in those great councils, who have come together and are championing the northern powerhouse.

--- Later in debate ---

[Grahame M. Morris]

I thank the Minister for her response, although I take issue with her geography and a number of the points she made.

I thank all Members who participated in the debate. In particular, I thank the hon. Member for Glasgow Central (Alison Thewliss) and my hon. Friends the Members for Sheffield, Heeley (Louise Haigh), for Neath (Christina Rees) and for Chesterfield (Toby Perkins) for their contributions. They highlighted some important issues about contaminated land, the need to address skill shortages, industrial decline and the need for diversity. They spoke about having a multi-agency approach, the importance of European funding and of our membership of the European Union, particularly for the automotive supply chain. There are many issues that require a co-ordinated approach from the Government, and I hope that the Minister will reflect on the report and the representations from the Industrial Communities Alliance, which has come forward with some solid proposals that will benefit areas such as Easington, Wales, Scotland and the other older industrial areas that need an impetus and initiative from the Government.

Question put and agreed to.

Resolved,

That this House has considered economic disparities in older industrial areas.