Transport for the South East

Debate between Jesse Norman and Peter Kyle

Wednesday 25th April 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Transport (Jesse Norman)]

May I say what an adornment you are, Sir Henry, to the Chair in Westminster Hall, and may I congratulate my hon. Friend the Member for Bexhill and Battle (Huw Merriman) on securing this debate on the important issue of the sub-national transport body, Transport for the South East? As with everything else, my hon. Friend has been a vigorous, energetic and, if I may say so, effective campaigner. Indeed, as he gently reminded the House, this is the latest stage of his campaign to put this institution on the parliamentary map, and I salute him for that. In his speech he gave an excellent summary of the opportunities and challenges facing the region. This debate is timely given the run-up to the launch of the economic connectivity review for Transport for the South East on 8 May, which I understand will be a key milestone in its work towards developing a transport strategy for the region as a whole.

I will come in due course to the many constituency issues raised, but I will first follow my hon. Friend in placing the emphasis precisely where it should be, which is the regional potential of Transport for the South East—I think that is the original purpose of the debate. My Department and I have been impressed by the pace at which Transport for the South East has worked, despite its young age, and I pay tribute to Councillor Glazier who is sitting in the Public Gallery observing—and, I hope, approving—the proceedings of the work he has done and the leadership he has shown. At not even a year old, TfSE has built, and continues to build, partnerships across the region, and it speaks with an increasingly clear voice to Government about its priorities. I am sure that voice will make a real difference to local people in the south-east, and in due course to the country as a whole, since this is a principal engine of economic growth.

Local areas know their economies best, and the hon. Member for York Central (Rachael Maskell) was right to say—indeed, it is an ancient Tory principle—that power should be devolved and exercised wherever possible close to the people it affects. In part that is for informational reasons, because local councils will know what local priorities are, but those priorities must be balanced with national and regional priorities, and getting that balance right lies at the heart of good transport policy. Local areas will know how best to drive growth for the benefit of their residents, and it does not need saying that transport has a key role to play. As colleagues have said, transport unlocks housing and economic growth; it gets people where they want to go for work, education, or to access and enjoy public services.

Sub-national transport bodies are new organisations that speak with a single voice for their region. Contrary to there being too much centralisation, the hon. Lady seems to have forgotten that this Government have been significantly decentralising. Metro mayoralties are an important aspect of that, as are sub-national transport bodies, which allow us and local people to prioritise the transport interventions that will make the biggest difference to people in their areas and beyond.

STBs, as they are called—no clinic required here, Sir Henry—fill the current gap between local and national transport authorities, bringing a regional voice to Government investment decisions. When local areas come together to plan long-term infrastructure, they can deliver outputs that are greater than the sum of their parts. Using evidence and local knowledge, STBs will make the case to Government for the transport priorities that they believe will drive transformational growth. The Government are hearing those voices across the country, and those bodies—including Transport for the South East—have already submitted to the Department their priorities for the second road investment period. They are also engaging with our proposals for a new major road network that will benefit from dedicated funding from 2020.

On 1 April 2018, Transport for the North became England’s first sub-national transport body, and I was delighted to lay the statutory instrument for that in the House. Three other STBs are currently operating in shadow form across England, with ambitions to become statutory bodies in their own right: Midlands Connect, England’s Economic Heartland and, of course, Transport for the South East. TfSE is the youngest of those shadow bodies, but it has made impressive progress since its inaugural meeting in June last year. There are also proposals for STBs to emerge in other parts of the country, including the east of England and the south-west, and I and my colleagues watch those developments with interest.

We are seeking to work closely with all those bodies to support them as they establish their priorities, develop their own transport strategies, and submit proposals to Government to become statutory bodies. That should ensure they can continue to add value to transport decision making over the longer term, but I should be clear on what we look for in a successful sub-national transport body. We want it to have a strong rationale and a coherent economic geography, and to speak with one voice alongside its local authorities, local enterprise partnerships and, of course, local MPs. Where those things come together, STBs can be very powerful bodies, and my Department will take account of their views in our decision-making processes.

From the toil and woe that some hon. Members have told of in this debate, one might have thought that the south-east was an area in significant economic difficulty, rather than one of the richest parts of this country and indeed of Europe and the world. But, of course, with success come growing pains and strains. It is important to recognise that, and we do. However, as my hon. Friend the Member for Bexhill and Battle has stated, it is important to say that the south-east is a significant contributor to, and driver of, the UK economy as a whole. We will continue to support that process in Government.

It is also worth noting—a point well made by colleagues on both sides of the House—that there is no standardised, one-size-fits-all picture of unbroken economic success across the region. There are clear and important areas of deprivation that exist, especially in coastal communities, and we must attend to those no less than we must feed the flames of economic growth across the region as a whole. To reflect both, we have provided a boost to local economies across the whole south-east, with over £1.4 billion of local growth fund money allocated to local enterprise partnerships in the region to help to encourage economic growth and housing. A substantial portion of that money has been invested in transport projects.

In addition, the Government are investing £2.2 billion in major road schemes on the strategic road network in London and the south-east of England, and investing substantially in rail schemes such as Thameslink and Crossrail, which has been mentioned, and in transformational local schemes such as the £850 million improvement—I do not think we have any hon. Members from Berkshire here—to Reading station. The Department is also investing £1.2 billion to improve local transport through maintenance and small improvements, as well as large local schemes such as the £56 million towards the Combe Valley Way link road between Hastings and Bexhill, which has helped reduce congestion and supported growth in the area.

As my hon. Friend and Opposition Members have pointed out, the sub-region contains a number of ports and airports that are nationally significant, supporting not just the south-east but also London, the midlands and the north. TfSE and its members can play a major role in ensuring that the importance of those international gateways is fully understood and that they continue to support economic growth across the whole country. That role will become more important in the future, when we look to expand trade relationships with the world as we leave the European Union.

I know that TfSE has worked hard to establish itself, working alongside Government to identify investment priorities and to establish a robust evidence base that will feed into its own transport strategy. As I said, it has made a good amount of progress in a short time, and we are pleased to see it learning fast from those that have gone before it. My officials are working hard with its members to help them to sustain that pace. As TfSE develops its economic connectivity review, which will form part of the evidence base for the transport strategy, Department for Transport economists are providing support and advice to ensure it is able to fulfil its objectives and hopes.

[Peter Kyle]

The Minister’s Department is clearly doing a lot of work on this and is keen to see improvements in the metrics. What metrics will his Department use to judge whether the initiative is successful, and is his Department giving the right support?

[Jesse Norman]

We are seeking to support the sub-national transport bodies appropriately at each stage of their development. One thing that is misunderstood is that each of those entities is at a different stage of development. The classic example is Transport for London, which is very well established and now self-funding, with its own historical settlement from central Government. That is one thing. Transport for the North is substantially funded, with £10 million a year and a lot of extra money for ticketing and so on, but it is a much younger organisation, albeit we are seeking to build capacity and work with it as it gets bigger.

Fourth Industrial Revolution

Debate between Jesse Norman and Peter Kyle

Thursday 8th September 2016 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Jesse Norman)]

It is a pleasure to speak with you in the Chair, Mr Deputy Speaker. I congratulate my hon. Friend the Member for Havant (Mr Mak) and the hon. Member for Hove (Peter Kyle) on securing a debate on this very important topic.

According to the World Economic Forum, the fourth industrial revolution is characterised by a range of new technologies that are fusing the physical, digital and biological worlds. As my hon. Friend reminded us, it has, they say, the potential to transform and to integrate products and services to reshape radically the way in which things are made, the factories in which we make them, and the ever more personal and customised uses to which they are put. This can take many forms, be they new web applications, micro robots, peer-to-peer services, advanced manufacturing, personalised medicines and cyber-medical technologies. They, in turn, can be leveraged by big data, and better and more widespread digital connectivity.

I want to speak briefly about what I think the fourth industrial revolution is or might be, why it matters and what the UK is doing to promote these developments. Let me start by saying that I am quite sceptical about the language of the fourth industrial revolution. I share some of the scepticism of my hon. Friend the Member for Wells (James Heappey). Voltaire once rather sardonically remarked that the Holy Roman empire was neither holy nor Roman nor an empire. I worry that the fourth industrial revolution is neither the fourth nor particularly industrial, and not a revolution.

The natures and causes of the original industrial revolution are still, may I remind the House, rather contested. Was it the result of access to coal and high thermic value coal in particular? Was it the result of spreading trade? Was it the result of the bourgeois virtues of thrift and hard work, of tolerance and openness to other countries, or of science and technology? These are still contested matters among historians. What we can say is that it was based on steam, and that something like 150 years later there was one based on electricity.

Where does that leave us now? I think we need to go to the fons et origo, the foundation of all economic discussion: Adam Smith. I was particularly glad that the hon. Member for Inverclyde (Ronnie Cowan) highlighted the importance of Glasgow, since Smith was Glasgow University’s greatest professor at a time when it was, along with other Scottish universities, one of the greatest universities in the world. Smith was wise on many fronts. He was, alongside David Hume, a Unionist above all. He said:

“The Union was a measure from which infinite good has been derived”

to Scotland. He was wise in economics, by pointing to the importance of the division of labour. He pointed out in particular that the capacity for specialisation was limited by the size of the market. He said that we did not get porters in villages. These days we might say that we do not get Uber in towns—the market simply is not big enough.

I would suggest that change today has been powered by the same things it has always been powered by: bigger markets; technological innovation; better materials and access to materials; and, above all, the human appetite for risk and the questing nature of the human imagination. It was one my predecessors, Lord Willetts, who pointed out the eight technologies on which the previous Government founded their industrial strategy, ranging from satellites to agri-science. I think that that marks a better approach to thinking about these issues than talking airily in terms of revolutions.

There is a contrary view, which has been very well articulated by Robert Gordon in his book “The Rise and Fall of American Growth”. He argued that there was a golden century of innovation between 1870 and 1970, a time of genuine transformation through innovative technologies. As John Kay has said, someone who was born when Benjamin Disraeli was Prime Minister and lived to see Edward Heath would have witnessed horse-drawn transport give way to cars and aircraft, medical services that were non-existent replaced by cures for infectious diseases, as well as the introduction of electric light, indoor plumbing and colour television. Each of them was a transformative technology. Paul Volcker has pointed out that the greatest technological change of the past few decades in finance has been the ATM. Anyone who knows anything about finance has a great deal of sympathy with that viewpoint.

These technologies reshape. Gordon’s suggestion is that the capacity for transformative innovation has slowed. We have upgrades but we do not have the same life-transforming breakthroughs—breakthroughs such as the washing machine, which even more perhaps than the internet has shaped people’s lives—and the result is low growth and low productivity. I do not share that pessimism; for me, the things that matter are imagination, energy, the capacity for risk and the ability to work.

At this point, I should declare an interest by mentioning two projects with which I have been associated. One is the New Model in Technology & Engineering, which will be the first wholly new university for three decades. It will be based in Hereford, and is creating a curriculum along the lines of liberal engineering, tying the liberal imagination of the arts and sciences to the engineering discipline required to create genuine innovation. Its approach will be problem-based rather than curricular, and students will be taught in three-week blocks rather than attending specific lectures. There will be a 46-week curriculum. The university has links with Olin College in America, and with the universities of Warwick and Bristol in this country. It is not just a very important local institution in embryo, but a potentially national—disruptively national—institution in higher education, and I think that it will do an enormous amount to assist the technologies about which we have talked today.

The other project is, if anything, even more personal. It is a not-for-profit car that my father has designed—a flat-pack vehicle. Even you, Mr Deputy Speaker, with your astonishing breadth of understanding and knowledge, may be surprised to learn that the vehicle can be assembled by three people in a day. It costs a third of the price of a luxury 4x4, and it carries three times the weight. Its target price is under £20,000. It is astonishingly simple, and, of course, achieving such simplicity requires terrific design and terrific engineering. What the project shows is that great innovation does not require high technology; it can come through simplification, or a sense of the possibility that simplification can change manufacturing processes. This is a vehicle that has potentially revolutionary implications for developing countries.

Let me now deal with our own situation more widely. My hon. Friend the Member for Havant rightly highlighted the importance of policies that support enterprise, as did the hon. Member for Stoke-on-Trent North (Ruth Smeeth), and I very much share that view, but manufacturing companies in this country are overwhelmingly employers of 50 people or fewer, and those small firms account for more than 50% of manufacturing employment. Small and medium-sized enterprises will be the lifeblood of change over the next few decades, as they are today, because they are versatile in their manufacturing and light on their feet. They are also able to respond quickly as customers demand more customised, bespoke and niche products, using new materials and revolutionary production techniques such as 3D printing, intelligent machines and sophisticated computer design.

I hope that Members are already aware of Innovate UK, which brings together entrepreneurs and innovators with great ideas. It runs funding competitions to identify the strongest opportunities, and connects with the best partners to get their products market-ready, be they digital or solid-state. The High Value Manufacturing catapult, enabled by Innovate UK, helps small manufacturers to adopt and use those technologies. In its first five years of operation, about £300 million has been invested in high-value manufacturing by that means. Over the past year, the HVM Catapult has worked with more than 1,650 private sector clients on more than 1,300 projects and 1,800 small and medium-sized enterprise engagements. It has the right equipment to support the adoption of advanced technologies. Its use of virtual modelling enables businesses to understand what technology could do for them, and to plan and remove risks. Through Innovate UK, we are supporting the £9 million CityVerve internet of things smart city demonstrator in Manchester. The Future Cities catapult is collaborating with Microsoft and Guide Dogs for the Blind to develop tools to make moving through cities easier and more enjoyable for partially sighted people.

Those are just some of the very interesting collaborations that this model of support between the private and public sectors is operating and offering. It is a virtuous circle, and the Government want it to be replicated many times. We need to increase awareness of and access to these catapults. We need to increase the number of catapults so that more small businesses can test out how to transform what they do and open up new market opportunities.

[Peter Kyle]

I cannot help but make the observation that only someone who has never shopped at Ikea would ever think it was possible to buy a flat-pack car and assemble it in a day.

Catapult centres are a fantastic idea. Does the Minister think there is merit in linking them more to some of the industrial materials, products and services that are being developed in parts of the heartlands that my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) mentioned?

[Jesse Norman]

I very much take the point. There is only one way to think of this flat-pack car: it is the product of three years’ development by the former chief designer at McLaren. That is the only way one could get a vehicle that would meet the criteria set out by the hon. Gentleman. On the issue of linking to industry, he is right. One of the things that is interesting about catapults is that they have proved to be quite flexible. There is no reason why that flexibility, as they grow in number and extend themselves, cannot be used to create even closer links. As he knows, there is what Lord Willetts used to call a “valley of death” between research and development. The tie-in to employers in education and to businesses in development is vital to stop that problem.

I thank colleagues and congratulate them on the debate, which has been extremely wise and intelligent. The Government want to be at the forefront of the changes that are being discussed here—the dramatic transformations in the landscape of our industry and commerce. We want to lead this revolution—whether it be the third or the fourth—as we led the first, and we plan to do so through the new Department for Business, Energy and Industrial Strategy and the industrial strategy, which will be unveiled in the next few months.