North-East Independent Economic Review

Ian Mearns Excerpts

Thursday 5th September 2013 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

I congratulate my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) on securing this debate and the Backbench Business Committee on allowing it.

As my right hon. Friend said, the problem with the report is that it contains a lot of structures but very little action. It is action that we need now. The report has another fundamental problem, in that it divides the region artificially in half, talking about transport for the north part of the region. We are a small region, and one thing that we cannot do is put artificial barriers between parts of the north-east. People in my constituency work on Tyneside, in Durham and down on Teesside. That is one of the problems with the report.

The hon. Member for Hexham (Guy Opperman) said that he welcomed his involvement in the report. I say well done to him, because Labour MPs were certainly not asked for their involvement, although that did not surprise me at all, coming from Andrew Adonis. Indeed, he has come up with another structural solution, which is to have a mayor for the new LEP area. I do not think he could have come up with a more barmy idea, because it would do nothing to help the economic development of our region—not even the northern part of the north-east. Fundamentally, this Government do not believe in regional policy, so they have come up with two LEPs. They have no cash, but a nice report will be produced that will possibly gather dust, and also a lot of plaudits—that is certainly what I have seen over the years that I have been in the north-east.

A headline in the Newcastle Journal today, alongside a picture of Andrew Adonis’s smiling face, tells us that £1 billion is coming to the north-east. Only when we read the small print do we see what is really involved. It is £500 million of European money, but the real clincher is that it has to be matched by another £500 million, either from council money or from the private sector. That is a bit like someone winning a car on a quiz show, only to be told not only that it has no petrol in it but that they have to buy an engine for it as well.

It will be interesting to see where that other £500 million will come from, because local authorities are under a great deal of pressure. More than £200 million has been taken from the local authorities in the LEP area in only two years. Over the next financial quarter, Durham county council is going to lose £209 million. What are the Government doing with that money? They are giving it to their friends in the south of England. Let us look at the local authority cuts per head. Durham is losing £168.80. Wokingham is losing £26.53, and Surrey Heath—that place of real deprivation—is losing £24.54.

This Government have no regional policy at all; that is the problem. The report is fine when suggesting structures, but the fundamental problem is that there is no cash behind them. I pay real tribute to councils in the north-east, not just those in the northern part but those in Teesside as well. They have a long tradition—going back to well before the last regional development agency—of working with private industry and other sectors to help the north-east. Nissan came to the north-east because of the dynamism of those different sectors working together.

[Ian Mearns (Gateshead) (Lab)]

The fact that Newcastle airport exists in its present form is due to a partnership of seven local authorities working together to provide a regional airport for the northern part of the region. Local authorities have been engaging in such processes for decades.

[Mr Jones]

That is right. I used to be a director of Newcastle airport. It did a remarkable thing under the previous Conservative Government: when they stopped local authorities raising money, it paid for an expansion costing nearly £27 million out of its profits. It had the foresight to do that.

If we are looking to local authorities to provide that extra cash, we must remember that they are under a lot of pressure. The chair of the North Eastern LEP prides himself on having only a small team around him, as though that were some kind of badge of honour. I do not know how the hell he is going to deliver the process if he is going to rely on local authorities to provide that extra funding, because the cash just is not there. Every time a grant is made from the regional growth fund, we hear announcements of so many million pounds coming from the Government to the north-east, but the real sting in the tail is that we never hear how much the Government are taking away from the region, including the £200 million a year that was going to the RDA, and the £2 billion-plus that the Labour Government invested in the north-east over 13 years.

The Government also talk about skills. Well, fine; but this is the same Government who have cut back on Building Schools for the Future. In Durham, for example, only seven of the 25 BSF projects have survived. In Darlington, seven out of the eight projects were cancelled, and 14 out of 21 were cancelled in Sunderland. I say to the authors of the report that it is no good talking about school initiatives when there are schools in the north-east that are crumbling around people’s ears and have water leaking in through the roofs. It is very difficult for teachers to teach in those conditions. Lo and behold, Mr Speaker—I come back to my favourite place: Wokingham—guess how many BSF school projects were cancelled in Wokingham. Not one.

It is no good the Conservative Government, with the support of the Liberal Democrats, arguing that they are somehow supporting the north-east. They are deliberately doing things that take resources away from the region. Local government funding is being skewed in favour of the south-east, and the benefits changes will have a disproportionate impact on our area.

The report appears to give tentative support for High Speed 2, although it does not actually do so, because it admits that the north-east will benefit the least. That is true: HS2 will be a complete disaster for the north-east of England. We have heard about a wish list of transport projects—including a Teesside metro and others—if HS2 goes ahead, but I would say forget it, as that will not happen. What we need is real investment and increased capacity on the east coast main line. Back in 1980, the then British Rail did an experiment, clearing all traffic off the east coast main line. Journey times from Edinburgh to King’s Cross came down to three hours, and from Newcastle to just over two hours. That is what we have to do—invest in that, not in the vanity project for which this Government have fallen. It was dreamed up by Lord Adonis, who I do not think has ever been elected to anything—apart from when he was milk monitor at school.

I wish this report well, but I fear that it will raise expectations, without delivering. What business needs now and what young people in my constituency who face a long term of unemployment need now is action. They do want to hear structural arguments and they do not want a glossy report, which might well make the authors feel good and get them a lot of press coverage locally. What we want is action. We had action when we had the RDA, which could step in and rightly did so when the economic downturn came—not just to help individuals but to help businesses in the constituency. There is now no access to that at all, and some businesses in my constituency are certainly struggling as a result of the lack of investment from banks and other lending institutions.

--- Later in debate ---

[Ian Mearns (Gateshead) (Lab)]

Rather than going through the normal formalities and congratulations, I shall get straight on with my speech.

The north-east is not such a desolate place; in fact, it is a place of good news. We have heard the very good news this afternoon that Durham county cricket club now sits at the top of the county championship after defeating Sussex by 285 runs at the Riverside stadium. I was delighted to attend the fourth test match at the Riverside a few weeks ago when we had a good result and some excellent entertainment.

I am afraid that the north-east independent economic review was a lost opportunity as there appears to have been a lack of imagination and ambition, and of inspired and innovative ideas to build the north-east economy. The report sets out a north-east vision of “making, trading and exporting”, but I fear that it just encourages more of the same solutions that fell short of transforming our economy in the past.

There are many recommendations in the report, but mostly things that we as a region have been striving to achieve for many years. The problem is that it is a bit like extolling the virtues of apple pie without providing the means—the apples, the sugar, the flour, the heat and the rest of ingredients required—to produce the pie. It is all wishful thinking—

[Ian Swales]

Will the hon. Gentleman give way?

[Ian Mearns]

I am afraid that I will not.

There is no targeted support for key sectors such as tourism, advanced manufacturing and green energy, and no clear strategy for growth that recognises the enormous potential of the region and its people. Most importantly, there is no proposal for a co-ordinated strategic authority such as One North East, the former RDA, or for a Minister to lobby at the heart of government.

I completely support the recommendation to encourage foreign students to attend our universities to diversify the region, but it flies in the face of much of the Government’s policy on immigration and learning academies. The Government seem to disregard completely the fact that international students not only attend lectures, write essays and sit exams, but import money into local economies, create new enterprises, support work with local industry, and make vast academic, cultural and financial contributions to regions such as the north-east of England.

Another significant—if not the most significant—aspect of the report is transport. It is essential that the north-east’s links to national and international economies are improved, so I welcome proposals to pool funding from the various authorities to deliver a regional transport strategy, which would hopefully result in improved roads and rail, bus and metro services.

I use the word “hopefully” because funding is essential to achieve those aspirations, but I am not convinced that the Government are willing to put their hands in the coffers for the north-east to the extent that they are for other parts of the country. In response to that assumption, Ministers might say that I am over-sceptical, given the announced improvements to the A1 in my constituency at the Lobley hill pinch point. Although I am delighted by such overdue improvements, the region should not be settling for scraps from the table. We should be demanding the best and most effective transport systems that are on offer for other regions in the country, so let us consider spending per head on transport infrastructure projects by region.

A report published by the Institute for Public Policy Research in June called “Still on the wrong track” highlights the distinct disparities: the north-east receives only £5.01 per head of population whereas Londoners receive £770 a head. When thinking about national funding and taking into account the needs and special requirements of the capital, we might rationally determine that it should get twice, three times or five times the funding of other regions, but should it get 154 times the funding of a region such as the north-east? Such a thing is repeated year on year. If the roles were reversed, the screaming of London Members in the Chamber would be heard in Southend. I wonder how many Ministers have driven up the A1 north of Catterick and realised that it is no longer a motorway because it peters out into a dual carriageway with the occasional crawler lane as part of the motorway system.

Last month we heard about Government proposals to introduce fines for people hogging the middle lane on the motorway—chance would be a fine thing in the north-east of England. There is no middle lane because there are no three-lane roads; it is that bad. North of Newcastle, north of Morpeth, the road peters out into a single lane in each direction between Newcastle and Edinburgh. It is not good enough. The people of the north-east deserve better, not just from this Government, but from every Government.

Then we are being told that we will get investment from High Speed 2. In 20 to 30 years, that will deliver trains that will do the journey from London to Newcastle via Leeds 20 minutes faster than 20 years ago. In 40 to 50 years, we will have achieved a 20-minute decrease in the journey time to London. That is not good enough.

I emphasise that the report lacks ambition. My borough of Gateshead has largely been transformed in economic, environmental, cultural, architectural and educational terms in the last 30 years. How much more could we do if the whole region was given ambition and galvanised to make the sort of improvement that we in Gateshead have made? We need to do more and much more quickly.

[Several hon. Members]

rose—