Businesses (North of England)

Iain Wright Excerpts

Wednesday 14th January 2015 Westminster Hall

[Mr Iain Wright (Hartlepool) (Lab)]

What a pleasure it is to serve under your chairmanship again, Mrs Main, and I agree with what the hon. Member for Pudsey (Stuart Andrew) was saying: it is not grim up north—it’s great. It is a fantastic place and I think it has been really interesting in this debate to see how hon. Members can come together and really want to champion the north as an area.

I particularly thank the hon. Member for Macclesfield (David Rutley). We have discussed economic development matters before, and he has always provided consistent support for businesses in wanting to champion them in the House. I commend him for that, and he has done it again this afternoon. He said that Macclesfield is famous for silk, but for my generation, Macclesfield is famous for Joy Division and Ian Curtis. I would be more than happy to talk about them for the next 10 minutes, but I think economic development in the north is equally important.

Our past and our industrial legacy have been mentioned time and again. It is certainly true that industrialisation—the industrial revolution—started in the north. Just to keep hon. Members onside, let us be frank: it started in the north-east. The north-east, the north-west and Yorkshire and the Humber were drivers of innovation, entrepreneurialism and prosperity, and they offered a real counterpoint to the capital of London. Do not forget that London was the capital of the empire—the biggest city in the world—but it was not dominating or eclipsing the fantastic powerhouses of the north. We need to have the model that we had in the 19th century back in a modern, innovative 21st century economy, and this is about working together to make sure that happens. We want to see the north thrive and see the creation and expansion of highly skilled, well-paid jobs in businesses and industries that are innovative, highly productive and selling their goods and services to the rest of the world. I hope that the whole House can share that vision.

The hon. Gentleman and others have talked about devolution and governance of the north. All credit to the Minister; he is very knowledgeable and passionate about this matter. A key offer, which has been mentioned several times in the debate, is to ensure that the north can shape its own destiny. Why should we, as hon. Members, be going cap in hand to Whitehall officials—it is usually officials—who have no knowledge, frankly, of the north and no awareness of the nuances of how the dynamics of local economies work? Why can we not have the tools and powers to realise our potential and shape our own destiny?

Successive Governments have moved in that direction. This Government are continuing to do so, and the next Labour Government, in about 113 days, will be continuing it as well. The Leader of the Opposition has said that he wishes to devolve £4 billion of Whitehall spend directly to city and, crucially for the hon. Member for Macclesfield, to county regions, too. That is about double the sum proposed by the present Government. I am interested in what the Minister has to say about further devolution and further governance arrangements.

In many respects, governance can be a very theoretical issue. Something I admire about the hon. Member for Macclesfield and other hon. Members in this Chamber is their practicality. When we consider Government support for businesses, we have to think about practicalities. If I run a company in Macclesfield or Hartlepool, what does Government support actually do? How does it help me to grow my business? Where do I go? We have heard today about 636 different initiatives from the Government. The situation is far too complex. It is difficult to navigate and it changes far too often. All Governments are guilty of rebranding, of initiative-itis, of wanting to announce something. I can understand that, but we have to recognise that we need continuity, stability and long-termism in business policy to ensure that businesses know where to go, how they access support of different types and how they make sure that support grows and thrives.

Let me put my party political hat on now. The Government are particularly bad at tinkering. We have heard about the abolition of the regional development agencies early on in this Parliament, and a number of reasons were given for that abolition. Chiefly, one of them seemed to be, “The last lot brought them in. We have to get rid of them to effect change.” I do not think that is right, and it has been detrimental to the northern economy. There could be some great debate here, but I think it is recognised that the three RDAs of the north—One North East, Yorkshire Forward and the Northwest Regional Development Agency—worked pretty effectively in trying to regenerate their areas and provide economic development and support to businesses in the regions. The setting-up of their replacements—the LEPs—took a couple of years, and businesses were uncertain about what to do. A gap was left in support, so we have lost two or three years in which we could have really chased ahead in respect of economic growth in the regions.

[David Mowat (Warrington South) (Con)]

It is really unfair to say that the reason why the RDAs were abolished was that they were not invented by this Government. They were abolished because they were not focused enough on the north. We have heard that there was one in the south-east and one in London—that is not very regional. The fact remains that the Centre for Cities report states that between 1997 and 2008, for every 10 jobs generated in London, one was generated in the north. That is why the RDAs had to go.

[Mr Wright]

But why outright abolition rather than reform? I certainly could not justify the idea of a south-east regional development agency, but making sure that there could be reform while trying to have as much continuity as possible would have been best for business and providing Government support.

[Andrew Percy]

I have to correct the hon. Gentleman on the idea of a consensus that the RDAs were performing well. In the Humber, we felt strongly that the Yorkshire regional development agency was very much Leeds-focused, and it is fair to say that since the introduction of the Humber LEP, we have a real vision of what we want for our economy in terms of new renewable energies and a real drive to get to that. We did not have that under Yorkshire Forward.

[Mr Wright]

The hon. Gentleman makes an important point. If we are going to have true devolution to the north and a recognition that city regions can really power local economies, how do we ensure that areas that are peripheral to the centre of cities—[Interruption.] Let me finish, because this is an important point that affects my constituency, too. How do we ensure that those areas can really have change as well? For example, Newcastle will help to drive forward the north-east economy, and Middlesbrough, to some extent, will drive forward the north-east economy when it comes to Teesside. In Hartlepool, we have fantastic areas of specialism in respect of high-value manufacturing. The idea that we could be left behind is absolutely ridiculous, and other areas—other towns and rural villages—will have the same approach. Will the Minister respond to that? Given the city region model, how do we ensure that places such as Rochdale, Hartlepool and areas in the Peak district are not left behind? That is very important.

I want to mention a number of other things briefly in the time I have available. The hon. Member for Macclesfield and other hon. Members have mentioned connectivity, which is a really pressing point for the north. A couple of years ago, a report by the Institute for Public Policy Research showed that the gap in spending on transport in particular is very acute. On a per-capita basis, the spend in London is 500 times as much as for the north-east, 20 times as much as for the north-west and over 16 times as much as in Yorkshire and the Humber. If we are talking about the link between city regions and other outlying areas, connectivity—being able to get to the jobs and businesses of the future—is absolutely crucial. How will the Minister deal with that?

My hon. Friend the Member for Rochdale (Simon Danczuk) mentioned business rates, which is a really important matter that disproportionately affects businesses in the north. The situation needs to change. We welcome the Chancellor’s review of business rates and hope that recommendations will be brought forward. I hope that the Minister, in turn, will support what the Labour party has been doing in calling for a cut to business rates in 2015 and a freeze on them in 2016 to ensure that there is an absolute requirement and a recognition that business rates are a major cost for businesses and detracting from further growth and prosperity.

Access to finance was also mentioned and the attitude of the banks when it came to my hon. Friend. There is still a problem with access to finance, in having that transactional, often confrontational relationship between a bank and a business. Is the British Business Bank doing as much as it should? Do we have proper local knowledge to ensure that regional banks have the understanding and recognition of what a local economy requires? That is very important, and I hope that the Minister will have time to say something about how we ensure that we have responsive banking systems and financial arrangements in local areas.

I want to mention some hon. Members’ favourite subject—Europe. Is the Minister concerned about—

[Mr Nigel Evans]

Did we mention it?

[Mr Wright]

No, but it is hon. Members’ interest in certain areas. There is a concern that because the Commission does not recognise the governance arrangements of LEPs, millions of pounds are being lost or certainly delayed on their way to the regions. My own area of the north-east has the potential to be delayed to the tune of £724 million, and for the north-west the figure is £895 million.

[Mrs Anne Main (in the Chair)]

Order. I ask Mr Wright to let the Minister respond.

[Mr Wright]

Will the Minister respond—

[Mrs Anne Main (in the Chair)]

Order.

[Mr Wright]

And does he appreciate that the north is a fantastic place that has the potential to grow further?

[Mrs Anne Main (in the Chair)]

Order.

[The Minister for Universities, Science and Cities (Greg Clark)]

It is a great pleasure to serve under your chairmanship, Mrs Main, in what has been an excellent debate. Some of the remarks made by the hon. Member for Hartlepool (Mr Wright) were excellent, but some were not. Let me pick up the point about RDAs. My hon. Friend the Member for Warrington South (David Mowat) was right. The RDAs were not abolished because they were not invented by us; they were abolished because they did not work. During their existence, the north’s share—I am talking about the north-east, the north-west and the administrative region of Yorkshire and the Humber—shrank as a percentage of the national economy. The hon. Member for Hartlepool will know, having grown up on Teesside, as I did, that there was an accurate perception during all the years of the 1970s and into the ’80s that the strength of the Tees valley was often under the shadow of Newcastle, to the north. One of the great successes in the north-east has been the revival of the identity of the Tees valley through its very successful LEP, which is making great progress.

I join colleagues in congratulating my hon. Friend the Member for Macclesfield (David Rutley) on giving us the opportunity to have the debate, on his excellent speech and on his very kind words to me at the beginning.

The Government are committed to the creation of a northern powerhouse, and we have had an expression of the northern powerhouse in the number of Members at this debate: 17 Conservative Members with constituencies or affiliations with the north. I speak as a proud northerner, born and bred in Middlesbrough. I sometimes carry around with me a medallion that was struck in 1881 to commemorate the unveiling of a statue in Middlesbrough, erected by public subscription, to the first mayor of Middlesbrough and first Member of Parliament for Middlesbrough. He was an industrialist, an ironmaster; Bolckow was his name.

The reason why I often refer, as the hon. Member for Hartlepool did, to those times is that, as he will agree, there was no distinction then between industrial leadership and local leadership. There was an expectation that the people who would drive forward the local economy through their businesses would give of themselves, their time and their investments in helping to make those places successful. I hope that we will get back to the time when mayors of Middlesbrough and other great towns and cities around the country had statues erected to them by public subscription to thank them for their achievements. Certainly, that is the direction in which we are going; we need to give more power to the north.

What are the elements of what we need to do? One element is raising the long-term growth rate of the constituencies and communities in the north. As the hon. Gentleman and many other hon. Members said, the north drove the British economy at various times in our history. There is no reason why its growth rate should be below the national average. Our ambition must be to have it pulling the national average up, rather than being below it.

We need to continue the progress on raising the employment rate. We need to continue to address the need for investment in long-term transport infrastructure. One thing that has excited colleagues and constituents and representatives of all parties across the north is the vision for transport improvements, whether through the HS2 or HS3 connections that are being made.

The north-west is already, as my hon. Friend the Member for Macclesfield said, a global centre for outstanding scientific innovation. My hon. Friend the Member for Congleton (Fiona Bruce) made that point as well. It is also, as many hon. Members mentioned, a good place to live in, to work in and to visit. We need to celebrate and build on the quality of life in the north.

We need to ensure that the voices of people in the north acquire greater power and influence. It seems to me that the influence and the ability that Teesside has, and Middlesbrough in particular, to shape its own destiny was rather greater when decisions were made on the banks of the River Tees than when they came to be made on the banks of the Thames. I think that we need to revive that tradition.

Let me deal with some of the points that hon. Members made. Both Cheshire Members referred to the Square Kilometre Array. We are very proud of this asset. The heritage of Jodrell Bank in being at the leading edge of science is very important to us. I am due to meet the review panel for the SKA next month, and I will signal our wholehearted commitment to the project and to promoting Jodrell Bank as the rightful location for the SKA’s headquarters. I will take up with my ministerial colleagues the points made by my hon. Friend the Member for Congleton.

In the few minutes that I have in which to speak, I want to pay tribute to the leadership that my hon. Friend the Member for Macclesfield has given on the Alderley Park taskforce, which has been a phenomenal success. He will, I know, share the credit with the many local leaders, both in industry and in the local authority, who have worked together in just the way that he has described to create a prospering park with a great future. I am informed that, to date, the BioHub has attracted more than 70 biopharmaceutical companies, employing 281 staff. It is home to businesses that have been supported by some of the initiatives that many hon. Members have mentioned today. I place on the record my thanks to my hon. Friend and to all the other members of the Alderley Park taskforce for their efforts in building on this opportunity.

The common denominator of the remarks that have been made by hon. Members from right across the area —the 17 Conservative colleagues and our two Labour colleagues, who made important contributions, is that—

[Mr Iain Wright]

What about the Lib Dems?

[Greg Clark]

Well, at least two parties were represented here. We need to recognise that the prosperity of the country requires every part of the country to be firing on all cylinders. That is the common denominator of all the points that were made.

Local rivalries were on display in some of the remarks. Some rivalries are more friendly than others. I dare say that Middlesbrough and Hartlepool have also had their moments over the years.

--- Later in debate ---

[Mr Wright]

And still do.

[Greg Clark]

Indeed. That just underlines the point that no two places are alike. They may be close geographically, but they have different histories, different traditions, often different industries and different politics. If we try to subsume them all into an approach that gets them to fit in with a central Government view of how the world should be, we will suppress the very individuality and difference that gives them their energy and creative spark, so one thing that we have tried to do—with success, I think—is to work through, first, the city deals and then the growth deals, and we have replaced the regional development agencies, in which great cities such as Manchester and Liverpool lost their identity, as did counties such as Cumbria and Lancashire. By taking the RDAs away and giving voice to representatives of real places rather than administratively concocted places, we have begun to empower those places and, in addition, the various deals that we have done have all been proposed and made in the areas that they represent, and they gather strength from that.

This is the beginning of a process that will continue. My hon. Friend the Member for Pendle (Andrew Stephenson) has displayed his tenacity in the number of Ministers he has lured to his constituency. I need to declare in the Register of Members’ Financial Interests that a pint of Pride of Pendle might be waiting for me when I make—