County Durham Plan

Helen Goodman Excerpts

Tuesday 3rd March 2015 Westminster Hall

[Phil Wilson]

I agree. My hon. Friend anticipates my next point, which is about job growth in the area. It is about not only attaining a 73% activity rate among people of working age, because if that continues and there is no jobs growth, the local economy will ultimately stagnate.

The inspector accepts the council’s methodology for developing population projections. The council wants to increase the participation rate in the economy, achieve an employment rate of 73% in County Durham by 2030 and create an additional 30,000 jobs. However, the inspector has come out against that. He predicted a lower rate of economic growth and the creation of only 18,000 jobs by 2030. However, Experian, which has done a lot of work on this issue for the county council, predicted the creation of something like 22,900 jobs, so the county council’s figure of 23,000 additional jobs is in line with that prediction. There is independent evidence to suggest that the county council is going in the right direction.

The one thing that the report misses out completely is Newton Aycliffe business park, which is now the biggest business park in the north-east of England and employs 8,000 or 9,000 people. There is no mention of it in the interim report. Hitachi is going to build a factory there, which will create 730 additional jobs. The county council has allocated something like 130 acres there for the anticipated job growth. The developers expect thousands of jobs to come to the business park, because Hitachi is acting as a catalyst and attracting manufacturers in other industries to the area. However, Newton Aycliffe was completely missed out of the interim report, which I find bizarre in the extreme.

What is Durham county council’s ambition? The County Durham plan is ambitious, inspirational and optimistic. It is full of confidence not only in the county council but in the people of County Durham. The history of Durham shows that the network of settlements in County Durham exists today because of the industrial revolution and the coal industry. We now need to diversify industry to sustain those local communities. That is why the county council wants an additional 31,000 houses to be built by 2030. It wants to set aside 399 acres of employment land and a further 41.5 acres of specific-use employment land. It wants a spatial strategy that seeks to fulfil the ambition of a thriving Durham city. Economic success will be delivered through the creation of jobs.

Let me give some background about why this issue is so fundamental to the people of County Durham and to industry in the area. Following the local government review several years ago, Durham county council made improving the economy its top priority. The local government review was a once-in-a-generation opportunity to bring together all partners to adopt an economic strategy to reverse Durham’s economic decline. The county has suffered from a decline in traditional industries, and the resulting increase in unemployment and lower skilled jobs has caused our brightest and best to move away to find economic prosperity elsewhere. To address that problem, the unitary council and its partners made the economy their top priority from day one. The council’s overarching priority is to improve the economic performance of County Durham. Through the County Durham partnership and the sustainable community strategy, it has recognised that better opportunities for employment mean better health and more choice in housing. To achieve that, it has recognised that a significant step change will be required. In the absence of economic investment, the size of the county’s working-age population will decline over the next 20 years, which is not in line with either the County Durham plan or the north-east’s aspirations. The focus on a thriving economy is not at the expense of other matters; indeed, developing a thriving economy will address many of the social issues present in the county.

County Durham’s pre-recession employment rate had been rising and was very close to the national average. Since the recession, the rate has been below the regional and national averages, although it has recovered significantly in recent months. To continue to close the employment rate gap and improve the county’s economic performance, the plan takes an approach that seeks to deal with the shrinking working-age population while trying to balance the needs of the economy and businesses in the county and wider region.

The targets are for 30,000 jobs and a 73% employment rate among people of working age. We also need to identify how many houses we need and how many acres of land need to be set aside for industry. Creating more and better jobs within the north-east economy is at the heart of the agenda for the North East combined authority and the North East local enterprise partnership, as well as for wider partners and investors, and—we believe—in line with the Government’s aspirations as laid out by the Chancellor of the Exchequer on Friday last week.

The inspector rejects the challenge presented by an ageing population and the associated implications for the prosperity of the county and the north-east. Addressing the job creation target is fundamental in the light of the projected reduction in the working-age population. The inspector’s report acknowledges that County Durham’s growth aspirations accord with regional economic aspirations. However, the inspector suggests that we are not working collaboratively to deliver these targets, which conflicts with the stated aim of the strategic plans in the area and the North East LEP, and the duty to co-operate, which is the Government’s recognised tool for cross-boundary discussions.

The inspector suggests, although without evidence, that the majority of the neighbouring authorities in the north-east are seeking similar aspirations to meet their objectively assessed needs, rather than seeking economic growth as suggested. We can draw out the inspector’s view of the county’s future from the assumptions outlined and observations made. Although none of those elements was articulated during the examination, the inspector’s vision becomes clear from a detailed reading of his report.

First, the inspector casts doubts on the shared economic ambitions of the local authorities within the North East LEP area, as agreed by the Government and outlined in the strategic economic plan. That is why it is fundamental for the Government to address this issue.

Secondly, the inspector’s vision for County Durham seeks to limit the county’s role within the wider regional economy. As someone from County Durham, I find that very hard to accept. He seeks to underplay Durham city’s established role and status within the wider region, in my view, and the council is clear that Durham residents will contribute towards the economic prosperity in the region. Durham residents will bring skills to our neighbours, working as part of a successful regional economy.

I turn to the economic impact of the alternative vision. In the absence of economic investment, the size of the county’s working-age population will decline over the next 20 years. The council’s approach seeks to deal with a shrinking working-age population, while trying to balance the needs of the economy and businesses in the county. The two measures of employment rate and labour force target work in tandem to support economic prosperity in Durham. In the context of an ageing population, an increase to a 73% participation rate would not in itself support economic growth in the economy. A participation rate of 73% as a single measure of success could be achieved in a stagnating or declining economy, as the size of the working-age population declines.

Although the inspector rejects the council’s approach, in his report, he goes some way towards setting out his own alternative economic vision. The inspector acknowledges that a 73% employment rate is within the realms of possibility but takes issue with the labour force target of 30,000 jobs. The preferred scenario that the inspector has come up with implies that only 18,500 jobs would be created over the plan period in County Durham. That is clearly not in line with the ambitions of either County Durham or the north-east and is contrary to most recent trends. The independent Experian forecast identifies that 22,900 jobs could be created in the county.

The inspector’s vision runs contrary to the region’s ambitions for growth. The labour force target is an established target for County Durham and addresses growth not only in the county, but in the wider region, recognising County Durham’s role in the wider economy, which is complementary to the role of other regional centres. For example, 40% of people who work at Nissan in Sunderland live in County Durham. The scenario suggested by the inspector implies only that some 18,000 jobs will be created, but the independent Experian forecast showed that 23,000 jobs can be created.

The report has implications for my constituency. For example, there would be a reduction in housing allocation in the village of Sedgefield. I know that there are issues there. There have been applications to increase the number of houses by 2,000. There is talk at the moment of housing developments of between 300 and 470 dwellings. Although at the moment, the County Durham plan seems to have been rejected by the planning inspector, it just leaves the door open for speculators to come along and start talking about developments in Sedgefield village that are not suitable. We could go back to a position in which developers who have thought of applications to increase the size of the village by 2,000 houses over a given time could come back in the absence of a strategic housing policy for the whole of the county.

The other issue is employment. The report neglects to mention the region’s biggest business park, which has been the generator and motivator for jobs. It also does not say very much about NETpark—the North East Technology Park—which is a science and innovation park that has recently received grants from the Government and the local growth fund. It has great potential, and I have seen the science park develop over the past 10 years. It now employs between 300 and 400 people and is based on a model in Durham-Raleigh, North Carolina. The business park there was set up in the 1950s and now employs tens of thousands of people. I am not suggesting that NETPark will get as big as that, but the model proves that that acts as a catalyst to attract high-value jobs.

[Helen Goodman (Bishop Auckland) (Lab)]

I am listening intently to and strongly agree with what my hon. Friend is saying about NETPark and Newton Aycliffe. Does he agree that the possibilities are really significant, because they are right next-door to Durham university and not far from Newcastle university, which are both excellent in the scientific and engineering fields?

[Phil Wilson]

I agree with my hon. Friend. It seems to me that the planning inspector is not taking into consideration the aspirations and ambition of the county and the potential for the county to go ahead and create high-value, strategic jobs that are important, not just to the economy of County Durham and for the region, but to the country. Last year, it was announced that the region’s first university technology college will be opened next year in Newton Aycliffe. We also want to see more apprentices for the area. For example, South West Durham Training in my constituency is doing very well. It is working closely with Hitachi to achieve greater numbers of apprentices.

None of this has been taken into consideration by the inspector, and I fundamentally believe that the reason why he has downgraded the economic forecasts for the number of jobs is ultimately that, if fewer houses are needed, there is less need to use the green belt. If there is any way that we can change the situation in relation to building on the green belt, then fine—perhaps we can talk about that in that six-month period—but from what I am being told, less than 4% of the green belt would be utilised for house building over the next 15 years. If the plan is to achieve the number of jobs that we require, that compromise is well worth considering.

Before I wind up, I want to give some quotes from business people up and down the north-east of England who support the County Durham plan. James Ramsbotham, the chief executive of the North East chamber of commerce, recently wrote to the Secretary of State for Communities and Local Government about this issue. He said:

“By creating an ambitious plan and vision for the future, Durham county council has made a clear statement that it is open for business; a statement that we fully support.

The inspector’s report, by ridiculing these ambitions, seeks to condemn the north-east to a future of low growth and aspiration. This flies in the face of the Government’s desire to stimulate growth in the north and to create a more sustainable, balanced economy. It also holds little regard for the current successes of County Durham businesses, many of which are world leaders in their sectors and are making considerable investments for the future.”

Sir John Hall said:

“It’s very, very, very, very, very, very important because it’s not just about the County Durham plan, it’s about the regeneration of the north-east and the County Durham plan is part of that. And here’s a council…when they spoke to a lot of us in the private sector when they were putting the plan together we said to them you’ve got to think outside the box now, you’ve got to take a lead, you’ve got to use the words enterprise and initiative. And this is what they’ve done and they’ve produced a plan which will put cranes on the skyline, which will bring money in from all these developments into all of the cultural side of the life in County Durham and they’ve been penalised for it. And we can’t let that happen. It’s too important for the region for Durham county council and the north-east. And in the business sector we support their efforts a hell of a lot, but…we’ve actually got to support them to get what we need: a rethink on this plan, but it’s very, very necessary, as I said, not just for Durham but for the north-east.”

He went on:

“We in the private sector will to work together to support the County Durham plan and its initiative”.

John Elliott of Ebac, a business in my constituency, said:

“The County Durham plan’s a good plan. We’ve got to be ambitious, we’ve got to move forward. County Durham’s always moved forward, we’ve got to keep doing it.”

Rory Gibson of Handelsbanken said:

“There’s a democratic decision here for me and it needs to be followed through. There’s absolutely excellent reasons why this plan has been put forward. It involves the council, it involves private sector, it’s the right thing for us to be doing, it’s looking forward, it’s thinking outside of the box and I think we need to give all our support to it.”

Harry Banks of the Banks Group, another well established County Durham firm, said:

“We see the role of the local authorities and Government to lay the platform for businesses to thrive and produce jobs and create employment. We felt that this plan was going a long way towards…that.”

Richard Bradley of Dyer Engineering said:

“Operating our business, we’ve had a business on that site for something like 37 years and we wouldn’t contemplate doing business anywhere else. We’re perfectly located to reach all of the UK and we have a fantastic, skilled workforce which…is in danger because of lack of investment, maybe even lack of a plan over the last 20, 30 years, which is why of course we’re behind the plan because we have to attract people, businesses into the region to ensure that we have the skills available for the next 50, 100, 200 years.”

Barbara Johnson of the Morritt said:

“for my business it’s going to bring people into the county and not just tourism, because the hotel is not just tourism; it’s very much based on business. And we’ve built a business up that is very interesting for the kind of people that this plan is going to encourage to come into the county”.

Geoff Hunton of Merchant Developments, which helped to attract Hitachi to Newton Aycliffe, said:

“We’ve been involved in Newton Aycliffe and the Hitachi project and we see it as working towards the future and Durham have been very supportive but also they’ve been very ambitious to look to the future and that’s the right way to move.”

Simon Henig, the leader of the county council, said of the inspector’s decision in The Journal on 27 February:

“He tells us that basically our jobs target should be lower. I still cannot see, looking at the plan, his justification for doing that. He just seemed to have plucked a sentence out of the air. Just one sentence on which the rest then turns because, obviously, if you have less jobs you don’t need so many houses or roads and so on. Effectively we have one inspector coming up from the south…saying ‘sorry, Durham, sorry north-east, I’m not going to allow you to have that target for jobs.’”

He continued:

“we are not talking about the next year or two. This is about the next 15 years and this is a very important document.”

Let us put that into context. At the same time that the inspector’s decision was made on the County Durham plan, the Chancellor and the Mayor of London made a statement on the future of London and what they wanted to see for the capital city. We all want to see a successful capital city, but it is interesting to note that, the day after the council received the decision, a six-point plan for London was announced that referenced no evidence or consultation. There is no suggestion that it comes with the support of business, residents or, indeed, developers, but it certainly does not lack ambition in terms of jobs and homes or the infrastructure required to get them.

That plan includes the ambition: to outpace New York’s growth; to create more than half a million extra jobs in London by 2020 by backing businesses; and to solve London’s acute housing problems, the No. 1 challenge facing the city, by building more than 400,000 new homes. The list goes on, which is fantastic. Why can we not have some of that for County Durham? We had to go through the strictures of the planning system, but that announcement did not require that.

I want to see a world-class capital city, but I also want to see a world-class region in the north-east of England. For too long, the people of the north-east suffered high levels of unemployment and deprivation. Some of those problems continue today and ultimately only the people of the north-east can solve them, with help from elsewhere.

Perhaps in the past, the people of County Durham have been cowed by the problems we faced. Now, the Labour-controlled council shows that we have the aspiration, ambition and confidence to move on from those days. We just want others to have the confidence in us; that is all we are asking for.

We are up for the job; we just want the tools to finish what we have started. That is why I call on the inspector’s final report to acknowledge that ambition, not to downplay the economic potential of County Durham, and let the plan go ahead. I ask the Minister to answer the two fundamental questions I asked at the beginning of my speech. We want the tools to do the job, because we believe in County Durham and we want to see it be a success.