Regional Development (North-East)

Ian Swales Excerpts

Tuesday 22nd March 2011 Westminster Hall

[Ian Swales (Redcar) (LD)]

I congratulate my hon. neighbour—as I suppose I should call him—the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing the debate and on his powerful and very well-researched speech. He has done excellent work.

As we know, the north-east economy is largely founded on the historic industries of coal mining, ship building and steel manufacture. For decades, we have had issues with both the run-down of those industries and the run-down of employment in those industries, even those that continue. Although the news of the revival of the steel industry is very welcome in my constituency, I do not think it will employ 10,000-plus people again, which it did not so long ago. There has been a long history of assistance being given to the north-east in relation to various coal and steel closure areas and regional development grants. In the 1980s, I remember filling in the forms for regional development grants in a former life. There has been a long history of needing to do something about the north-east, and various Governments have continued that.

I accept the points made about the RDA. RDAs around the country have had patchy success. However, I think that even the other RDAs would recognise that One NorthEast was probably the best and most successful. I pay tribute to the former Minister for the North East, the right hon. Member for Newcastle upon Tyne East (Mr Brown), for his passion and advocacy both of RDAs and the region. Something we should all recognise in this place is that what divides us politically is far less than what joins us when it comes to regional issues.

The RDA did good work but, as I said in the recent debate in the House led by the right hon. Member for Newcastle upon Tyne East, we need to consider the study done last year by Experian and the BBC. They looked at 324 areas in the country in terms of economic strength and rated Hartlepool as 314th, Redcar and Cleveland as 319th and Middlesbrough last at 324th. Whatever else has happened, we have not driven the Teesside area up the economic league. The only time we had any significant urban renewal in Teesside was from 1987 to 1998, when we had Hartlepool marina, Stockton riverside and university campus, Teesside barrage and waterpark, Teesside retail and leisure park, and Middlesbrough riverside. That was the period of the flawed but, nevertheless, energetic and focused Teesside development corporation, which was scrapped by the Labour Government when they came to power. Much less has happened since in that regard.

I shall turn to transport. The Tees valley is the birth place of passenger railways. If someone were to ask in a pub quiz where the first passenger railway was, most people would say that it was Stockton to Darlington, which runs along the Tees valley. So where are we today with our railways? We still have a railway that runs from Darlington, almost touches Stockton and goes all the way through to Saltburn. It passes very close to the Riverside stadium, but does not stop there; it passes very close to Teesside retail and leisure park, but does not stop there; and it passes within half a mile of Teesside airport, but does not stop there. Is there another airport in the country that has virtually no public transport? The failure to even allow a railway that already exists close to Teesside airport to be part of the transport structure in the area shows that there is an awful lot to do. Middlesbrough is the largest town in the country without a direct link to London, which is another example of what is left to do. We have some real issues to deal with and real work left to do.

In business, I always used to say that one could tell whether a committee was any use, first, by how it was formed—did it form itself?—and, secondly, whether people attended it. Teesside Valley Unlimited formed itself as a private-sector led, private-public partnership about five years ago, because of the perceived needs of the Tees valley and the difficulties there. It is no surprise that that organisation was very quick out of the traps when it saw the opportunity to have a local enterprise partnership for the area. I know that that enraged some people further north and that it was felt to be a fragmentation of effort that may lead to outcomes that are not as good.

[Alex Cunningham]

I have always been a one region person. Although I congratulate the people of Tees valley on putting together the first LEP in the region, does the hon. Gentleman not agree that it is important that the north-east—the smallest region in the country—works closely together and has a tremendous partnership with our local authorities and other organisations in order to drive the region forward? We should not simply try to plough our own furrow, as some people would have us do.

[Ian Swales]

I was about to come on to that matter. I thank the hon. Gentleman for his question. Absolutely, we need one regional voice on a number of issues. This Government perhaps differ from the previous Government in that we do not see the need for such an approach to be prescribed in detail for every region. I hope that the existing structures can make decisions, create what they think they need and make it work. If there are two LEPs in an area, the Government are not prescribing that they cannot talk to each other and say, “Okay, let’s jointly work on this.” A good example is European funding. The Government have already decided to retain a regional focus for European funding, because that is what is necessary.

[Tom Blenkinsop]

The hon. Gentleman is an excellent advocate for the region, and it has been a pleasure working with him on getting steel back to Teesside. However, there are some fundamental problems with the LEP structure. Let us consider, for example, Hitachi. As he has rightly mentioned, that is a great success story for the region. How will small and medium-sized enterprises in the Tees Valley LEP that want to grow around Hitachi, which is not in the Tees Valley LEP, interact with the new LEP, the North East Economic Partnership and the other structures?

[Ian Swales]

I thank the hon. Gentleman for mentioning that. Not everything happens through Government agencies. Business is business. If I were running a business, or if I wanted to run a business in the Tees valley, and I knew that a train manufacturing facility was being set up 10 miles away, I would not need a Government agency to lead me to talk to people and make things happen. We have suffered from the idea that people wait to be told what to do, and that is a good example.

[Tom Blenkinsop]

That still does not answer my point. If an SME wants to get regional growth fund funding, which LEPs does it talk to? Does it talk to both? Does it also talk to the NEEP, or does it talk to the Department for Business, Innovation and Skills and the Treasury directly? It seems that the need for further meetings will increase, rather than decrease.

[Ian Swales]

Okay. I will be more specific for the hon. Gentleman. Clearly, if a business wants to base itself in the Tees valley and has customers—wherever they are—it should talk to the Tees Valley LEP. If those customers happen to be in the region, that is fine. I do not see a problem with that. As I have said, there is no law that states people cannot talk to each other.

An almost religious adherence to the regions has had some benefits, but it has also created some problems. In 2004, the people of the north-east firmly rejected the idea of regional government. Some of us regretted that more than others, but the decision was absolutely overwhelming—not just from the fringes of the north-east but from the heartlands of Tyneside and Wearside.

[Ian Mearns (Gateshead) (Lab)]

I welcome the hon. Gentleman’s point, but I think that he accepts that if he wanted to put together a worse set of circumstances to get a yes vote, it probably could not be done. Does he agree with that?

[Ian Swales]

Absolutely. One issue was whether central Government were prepared to release enough powers. I remember reading the document and being unimpressed by such statements as the “power to advise Ministers”, which did not strike me as a particularly powerful power, so I agree with that. Regionalisation, however, has had some impacts—I will come on to wider issues in a moment—on the Tees valley. For example, our area, which contains 750,000 people, has been deemed unable to run our own ambulance service, which has been moved out of the area. The fire service was about to be moved, and an attempt was made to try to get the police to merge with another organisation. We need to stand up strongly for what is a very natural, large area of population, and, sadly, regionalisation has not always helped.

[Mr Edward Leigh in the Chair]

I am not a “little Teessider”—my wife comes from Stanley, which is quite a bit further north. My right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) would not let me get through this debate without mentioning the dualling of the A1. Just in case hon. Members did not think that was going to happen, it has happened. [Interruption.] Sorry, the dualling has not happened. I have mentioned it on behalf of my right hon. Friend. It would be great if that dualling were to happen. I recognise that the north-east has a lot of coherence, though it seems a long way from the end of my constituency to the north of my right hon. Friend’s constituency.

The north-east has a lot of strengths. In many cases, we can work together. In other cases, it is not appropriate to work together. There are enormous strengths in terms of industrial background and the conversion of people and industries in those historic sectors to doing new things. We have people who are highly skilled, as the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) has said. We already show, particularly through process industries and other manufacturing, that we can make and export things, and I know that the Government are very keen to see that happen.

On rebalancing the economy—yes, the process is redistributive, but as the hon. Member for Hexham (Guy Opperman) has said, what is it redistributing?—we know that the country has a huge economic problem at the moment. I welcome mechanisms such as the regional growth fund, but we have a massive issue in terms of small and medium-sized enterprises. I hope that the Minister will respond specifically to this point: 97% of the grants given out by One NorthEast were less than £1 million. That £1 million threshold has to be very short-term. If the board of the regional growth fund cannot consider hundreds and hundreds of projects, then we need a programme mechanism beneath that board.

[Ian Mearns]

It has been estimated in some quarters that the potential growth in supply chain jobs from the Hitachi development is as much as 7,000 jobs. There is very little chance, however, of 7,000 supply chain jobs in the north-east of England coming from the SME sector, if there is not much more flexibility in the distribution of the regional growth fund and in grants that are fit for the SME sector. At the moment, such grants are out of reach for many businesses.

[Ian Swales]

I welcome that intervention, which powerfully supports the point that I was just making. I hope that the Minister will respond to that point.

I would just like to mention two other issues that the Minister could perhaps touch on. One issue relates to energy prices.

[Mr Edward Leigh (in the Chair)]

Order. I hope to start the winding-up speeches at 10 minutes past 12, and the hon. Member for Stockton North (Alex Cunningham) wants to come in. Perhaps the hon. Gentleman will bring his remarks to a close.

[Ian Swales]

I will do that, Mr Leigh.

Energy pricing has already been mentioned by the hon. Member for Middlesbrough South and East Cleveland. I also want to press the Government on the Infrastructure Planning Commission. We have a large project in my constituency at the moment that must divide itself, completely artificially, in two. Part of the project is supposedly covered by the Infrastructure Planning Commission and part of it will be approved by the local authority. It is costing the business a fortune to fight two planning processes.

I will draw my remarks to a close now. Again, I congratulate the hon. Member for Middlesbrough South and East Cleveland. As I have said, there is a lot more that joins us on these issues than that separates us.