Local Growth Deals

Debate between Greg Clark and Andy Sawford

Monday 7th July 2014 Commons Chamber

[Andy Sawford (Corby) (Lab/Co-op)]

I thank the Minister for advance sight of the statement. As ever, the right hon. Gentleman is courteous and constructive. That is part of the reason why he is respected by MPs in all parts of the House and by local authority leaders around the country, including in my own area. The problem is that the Minister is something of a lone voice in the Government, trying to convince his colleagues to help all the regions of the UK to fulfil their promise.

For today’s announcement to represent the kind of progress that we need, three tests must be met. First, does it represent a truly ambitious devolution of power and funding? Secondly, have local communities, their businesses and councils determined the priorities? Thirdly, are today’s announcements new—is this new or additional investment? Of course, we welcome any investment. The Minister knows that I have supported the local enterprise partnership bid in my area, and people across Northamptonshire will welcome the announcement about Silverstone. However, today’s announcement is too little, too late from a Government playing catch-up.

One of the first acts of this Government was the dogma-driven destruction of the regional development agencies, without providing a proper replacement. It was economic vandalism, pure and simple. What of the Government’s flagship regional growth fund, mired in chaos and delay, creating more losers than winners, leaving successful bidders waiting for two years to receive their money, and leaving hundreds of millions of pounds to gather dust? Sadly, after four years of this Government, it is little surprise that we have seen regional imbalances become starker and local areas held back.

Lord Heseltine’s seminal report, “No Stone Unturned”, promised much and raised the hopes of many, but today’s announcement shows that the Government are happy to leave plenty of stones unturned all over the country. Will the Minister say how much of the funding that Lord Heseltine’s report recommended should be devolved has been devolved to local areas, and by how much today’s announcement falls short? The Minister is making the most of today’s announcement—he is one of life’s optimists—but deep down, surely he knows that although it signals some progress, it falls well short of what is needed, not only in scale but in terms of how the Government have gone about this.

The second test is about who makes the decision. Today’s announcement is not real devolution; it is a list of centrally agreed projects. The criteria required shovel-ready schemes; local enterprise partnerships were given the nod on the understanding that schemes needed to be ready for next May, so that it looked like something was happening before the next election. Is it not time to move on from making these kinds of decisions in Whitehall, where local areas have to take part in a beauty parade so that Ministers can pick winners? Why not devolve the funds properly and let local areas decide the priorities? Why not let them make the decisions that are right for their economy, not just right for the Minister’s political timetable?

The third test is whether this is new money. The Minister claims to be announcing £2 billion today, but it turns out that £1.1 billion has already been committed to local transport projects. Some £267 million of this money still has not been allocated. Will the Minister confirm when it will be allocated? As for the £6 billion figure, most of that, as the Minister well knows, is money from local sources that we would try to bring forward anyway; certainly, Labour local authorities are in the lead in doing that. [Interruption.] Well, the Minister has agreed that combined authorities in Labour areas all around the country are trying to show real leadership. Will he confirm how many unsuccessful bids there have been, and tell the House what estimate he has made of the total cost, to both local authorities and businesses, of putting together those failed bids? Is he aware that small businesses in particular have been put off applying by the amount of bureaucracy, and by the requirement to pay the cost of due diligence up front? Many successful applicants have not proceeded for the same reasons. What steps is he taking to address that?

The Minister will be aware that the Leeds city region deal, which he personally signed, has been undermined by the Secretary of State’s announcement on referendums and precepts. Will the Minister reassure me that he will sort this mess out—a mess of the Government’s making—so that the Leeds transport fund can be properly established?

In contrast to today’s much-hyped but severely limited announcements from the Government, Labour has committed to devolving £30 billion of funding from Whitehall to city and council regions to spend on skills, housing, transport, and business support, and to giving combined authorities the power to receive 100% of additional business rates revenue generated by growth to support infrastructure and future economic development. Whereas this Government are failing to deliver for businesses and communities across the country, a Labour Government will step up and genuinely pass down power and resources to local areas.

[Greg Clark]

What a ray of sunshine the hon. Gentleman is! I am grateful for his warm words, but if he thinks that I am a lone voice, I do not know who he thinks the people behind me and opposite him are. It is some “lone voice” that delivers £6 billion of funding from central Government to our local economies. If that is a lone voice, it seems a pretty strong one.

Why is it that whenever Labour Front Benchers get the opportunity, they talk the regions down—I say this to the hon. Gentleman’s colleague on the Front Bench, the right hon. Member for Leeds Central (Hilary Benn), too—while their colleagues back in their constituencies are talking the regions up? Contrast the comments of the hon. Member for Corby (Andy Sawford) with those of Labour leaders right around the country. The Labour leader of Leeds city council said today that this was tremendous news. He said:

“We are glad that the government has now listened to our exceptionally strong case to put the financial power in our hands”,

and that the announcement

“could be truly transformational”.

Sir Albert Bore, the leader of Birmingham city council—I was with him in Birmingham this morning—said:

“This is great news for Birmingham.”

Joe Anderson, the mayor of Liverpool, said:

“This is great news for Liverpool.”

Sir Richard Leese, the long-standing leader of Manchester city council, has said that there has been more progress towards the devolution of powers to the core cities in the last three years of the coalition than during 13 years of Labour. The only “lone voice” is the increasingly lonely voice of Labour Front Benchers opposing the increasingly unanimous view that we should be devolving power around the country in the way that we are. I hope the hon. Gentleman will get with that, because we have confidence in our cities and it is no wonder that the cities are losing confidence in their representation from the Labour party.

The hon. Gentleman asked about the funding that we have provided. I made it clear in my statement that we have gone further than was originally proposed. We made it clear that only £1 billion of the £2 billion figure was competitively available, but we have gone further by allocating £6 billion because the scheme was oversubscribed by 3.5:1, which means that the quality of the proposals was so high that we thought it would be ridiculous to say, “Come back in a year’s time.” Why not give investors confidence to get on with projects now so that they can create jobs around the country?

It is worth saying that this is not just Government investment. For every £1 of Government investment there will be at least £2 of local investment as a result. The hon. Gentleman asked about Lord Heseltine’s view on the scheme. I was with Lord Heseltine this morning, and he has travelled with me around almost every one of the 39 local enterprise partnerships to negotiate the deals. He expresses himself to be “thrilled” with the ambition that we have set through the programme, which exceeds what he thought possible. He is delighted with the programme.

I have thought about the hon. Gentleman’s suggestion that we should go further. Of course we should go further, and the Chancellor has committed at least £2 billion a year, but at no point during the 13 years of the previous Government was any of this suggested. It is important that such things should be rigorously funded. I read the Adonis report, and the small print states that 100% of business rates should be devolved to the cities. Under my right hon. Friend the Secretary of State for Communities and Local Government, half of business rates are now given to local authorities, which again did not happen during 13 years under Labour. Of course, £11 billion goes to the Treasury, so how will that £11 billion be found? Is there a black hole? In fact, the small print of the Adonis report states:

“This should be revenue neutral to the Exchequer through offsetting reductions in government grants”

to councils. In other words, it is a swizz: £11 billion of grant cuts to councils to pay for the headline with which he came up.

The difference between the Government and the Opposition is that we act on our ambitions by taking money from central Government to invest in local government, rather than the other way around.

Oral Answers to Questions

Debate between Greg Clark and Andy Sawford

Tuesday 10th September 2013 Commons Chamber

[Greg Clark]

My hon. Friend is absolutely right. I pay tribute to him for doing his bit in an important cluster of manufacturing businesses in Stroud. He has invented and promoted the festival of manufacturing and engineering in Stroud, which will take place between 11 and 15 November, helping to give a further boost to the already successful companies in Gloucestershire.

[Andy Sawford (Corby) (Lab/Co-op)]

According to the Office for National Statistics, Corby is the manufacturing capital of the UK, but over the past three years our businesses have survived despite this Government’s policies not because of them. Will the Minister look again at the decision to pick winners in the boat-building industry and not to award money from the regional growth fund to my local firm, Fairline Boats?

[Greg Clark]

The hon. Gentleman is wrong in his assessment. He failed to say that the 13% collapse in manufacturing happened during the last three years of the previous Government. In the first three years of this Government, it has recovered. He mentioned the regional growth fund—paying tribute, I assume, to another successful intervention, which has helped firms such as JLR and will help others, including in the east midlands.

Financial Transaction Tax and Economic and Monetary Union

Debate between Greg Clark and Andy Sawford

Tuesday 18th June 2013 Commons Chamber

[Greg Clark]

I shall say more about stamp duty shortly, but I am sure the hon. Lady, who I am sure is a student of these matters, will be aware that it was agreed at Pittsburgh in 2009 that the International Monetary Fund should conduct a study to establish whether there was an international basis for proceeding. It conducted that study, and found that there was no such basis.

I hope that, given the international concern about the proposed tax, the House understands that we have no choice but to challenge it. Not only are there numerous problems with the design, but the proposal flagrantly disregards the position of those who choose not to participate.

The hon. Member for Nottingham East pointed out that the Chancellor had said that we had no objection to the principle of a financial transaction tax. Of course that is the case. How could we possibly have an objection to a financial transaction tax, given that we in the United Kingdom have had one since 1694? It is called stamp duty, and it is very different from the proposed design of this tax. It contains, for instance, an exemption for intermediaries to avoid the “cascade effect”, whereby at every stage of a transaction a tax racks up throughout the chain. That has a very negative impact on the costs faced by savers and companies. We have no objection to levelling the playing field with countries, including France, that have recently adopted stamp duty-type taxes of one sort or another, but other countries, particularly the United States, are far from being close to a consensus. If the hon. Gentleman has taken an interest in the matter, he will know that President Obama and his Administration have described this development as very troubling.

Of course Britain will play a leading role in promoting global standards when it comes to taxes, but I think the whole House would acknowledge that, in international negotiations, we should focus on what will give us a realistic chance of making a big difference to people, rather than choose to divert effort and negotiating capital into what, given the views of others, would be simply a gesture.

[Andy Sawford (Corby) (Lab/Co-op)]

The right hon. Gentleman is a fair-minded Minister when it comes to most matters on which I have dealt with him. I think he is right to say that it would be in the interests of this country to pursue a financial transaction tax—indeed, he has acknowledged that his party views it as such. Can he tell us how many times Ministers from our Government have made representations to the American Government on this matter, given the importance of financial services to both our economies?

[Greg Clark]

I am grateful to the hon. Gentleman for his kind words, but when we have a chance to participate in and lead international gatherings, we must decide where our negotiating capital or authority can best be deployed. The Prime Minister decided, correctly in my view, to pursue tax transparency at international level, through our leadership of the G8 and in other forums. I think that the hon. Gentleman, who is as fair-minded as he considers me to be, would be churlish not to acknowledge the considerable breakthrough achieved by the Prime Minister in recent months, and by the Chancellor before him in Mexico, in respect of tax transparency. I believe that that is an example of the palpable progress that even the Opposition should applaud.

Infrastructure

Debate between Greg Clark and Andy Sawford

Tuesday 12th February 2013 Commons Chamber

[Greg Clark]

The hon. Gentleman is a fair man. He will know that the plans to electrify the Great Western railway and the railways in the valleys represent an important investment—I am sure he would acknowledge that—and a big contribution to the economic revival of Wales. It is very important that they should do that.

The divergence between London and the south-east, and the rest of the country is not a record of which to be proud. In the most difficult of circumstances, this Government are having to find the money to build the infrastructure that should already have been put in place during these years of plenty, speeding Britain to recovery. By failing to control current spending in the good times, the legacy of the previous Labour Government was not just a record deficit, but an infrastructure backlog and reduced capital budgets to pay for it. We need to invest more in infrastructure. Nick Pearce, of Labour’s favourite think-tank, the Institute for Public Policy Research, has said that the

“cut…was a decision of the last Labour government which the Coalition inherited”.

We need to remember that successful infrastructure investment does not begin with the allocation of budgets, but with clear-sighted, strategic decision making.

Let me give just two examples of the way in which Labour, over 13 years, failed to address the strategic need for leadership on infrastructure, the first of which relates to roads. When Labour was first elected, John Prescott was appointed as Secretary of State and soon took charge of transport. One of his first actions was to cancel almost all approved road schemes, all across the country, including the dualling of the A21 in my constituency. The reason was not that the Government did not have the cash. I am pleased to say that my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) had left the economy in rude health and so they were in a good position. These road schemes were cancelled, along with many others, because John Prescott had fallen under the spell of a doctrine that said, “If you build more roads, they will only attract more traffic, so you should not build them in the first place.”

[Andy Sawford (Corby) (Lab/Co-op)]

As I have told the Minister before, Corby, in east Northamptonshire, is the most difficult place in the country for a young person to find work. The level of youth unemployment in my constituency has rocketed. Does he recognise how completely out of touch he looks to those young people when he talks about policy 15 years ago, whatever its rights and wrongs, rather than addressing the here and now? He talks about having the political will to take forward infrastructure projects. Was John Longworth wrong—I think he was right—when he said recently, speaking for the CBI, that this Government lack the political will to drive through infrastructure projects?

[Greg Clark]

The hon. Gentleman will know that infrastructure is particularly important to Corby, and the link road that is to be built there is very important to that. He will also know that the increase in youth unemployment of 17% that happened under the Government he supported has contributed to the situation he describes.

Let me address the point of strategic leadership. How can we have long-term leadership and long-term vision for the future of our country, when important economic contributions to success, such as road schemes, are cancelled? That lunacy persisted for years, as our roads became more congested, to the detriment of the environment as well as the economy. It was not until years had passed that that nonsense was recanted by Lord Prescott, the then Deputy Prime Minister, and we decided that, after all, more traffic required more and better roads.

Oral Answers to Questions

Debate between Greg Clark and Andy Sawford

Tuesday 29th January 2013 Commons Chamber

[Greg Clark]

I was in Wolverhampton recently, meeting business and civic leaders from the black country. The proposals to increase skills to help the advanced manufacturing sector in the area to expand are well under way, and I look forward to responding to the bid very soon.

[Andy Sawford (Corby) (Lab/Co-op)]

In opposition, the Chancellor was fond of quoting the Institute for Fiscal Studies in support of his policies. Does he accept the finding by the IFS that because of all the changes that he has made following his autumn statement, the average one-earner family with children will be £534 worse off by 2015?

Oral Answers to Questions

Debate between Greg Clark and Andy Sawford

Tuesday 11th December 2012 Commons Chamber

[Greg Clark]

My hon. Friend is absolutely right. That is why it is important for us to maintain the course, pay down the deficit and build confidence in the labour market. We know what happened under the previous Government: in their last two years, long-term youth unemployment doubled.

[Andy Sawford (Corby) (Lab/Co-op)]

Is the Minister aware that recent independent surveys show that Corby and east Northamptonshire is one of the most difficult places in the country for a young unemployed person trying to find work? I can tell him that I meet young people, day in, day out, who are desperately trying to find work, so will he look at the unique case for having an enterprise zone for Corby and east Northamptonshire, extending by one the number of enterprise zones that the Government have created?

[Greg Clark]

I welcome the hon. Gentleman to the Chamber. When he organised a day think tank, he and I had some very productive exchanges. I should be happy to meet him to discuss the situation in Corby, which is an enterprising town with the potential to create many jobs. As he will know, under the “city deals” system I am responsible for devolving powers to places throughout the country, and I am keen to receive more applications.