North-West Economy

Jonathan Reynolds Excerpts

Tuesday 20th July 2010 Westminster Hall

[Hazel Blears (Salford and Eccles) (Lab)]

I am delighted to have secured a debate on the future of the new economy in the north-west and to be joined by so many colleagues from both sides of the House. We will no doubt have a lively and interesting debate on an issue that is incredibly important for us and for our constituents, as well as for businesses, employers and employees in our areas.

We all know in our hearts that the new economy will be very different from the economy that we have seen over the past 20 or 30 years; it will certainly not be built simply on financial services or run in the south-east, with the engine of growth located in one particular part of the country. If it is to be successful, it will have to be driven by the regions, which have tremendous skill, expertise, depth of knowledge and creativity, as well as the ability to expand into new areas in which this country will have to be competitive if we are to continue to ensure that our people have the opportunities and skills that they desperately need. Nowhere is that truer than in the north-west, where we already have a fantastic base on which to build.

I want to concentrate on a number of issues, including digital media and the creative industries, about which my region has a great story to tell and which have a great future; the importance of green jobs, in particular some of the advanced manufacturing jobs; the emerging areas in the biosciences and the importance of research and development in building on innovation in our universities; and, finally, the construction industry, which is not always seen as a new industry, but is increasingly adapting to new innovations and construction techniques, which will give the north-west a significant competitive edge.

The creative industries are inevitably closest to my heart because of the establishment in Salford of MediaCityUK, which has emerged like a phoenix from the ground over the past couple of years. Anybody who visits Salford Quays cannot fail to be impressed by not only the buildings but the whole sense that a new city—a new metropolis—is being created in what was the Salford docks. It is difficult to believe that we now employ more people on Salford Quays than we did at the height of the docks’ success in the 1940s and 1950s. This is a tremendous success story, and when the current phase of development is completed, we should have 15,500 new jobs and £500 million of investment. That includes £450 million of private sector investment, which will have been levered as a result of the excellent work done by all the agencies involved. The current private-to-public investment ratio is about 4.5:1 so this is a big success story, and it is down to the work of the urban regeneration company, the city council and—I will say something about this later—the Northwest Regional Development Agency, whose work in recent years all of us have great cause to be thankful for.

In Manchester, we also have the Sharp project, which works with cutting-edge digital and creative media and provides jobs particularly for young people in the emerging industries around video games. I was disappointed that the Government decided in the Budget to take away the allowances and incentives for the video games industry. Just a few months ago, Salford received £1 million to pump-prime development of some of the tremendous emerging technology involved in video games, and it is a retrograde step to take that allowance away.

Digital and creative media currently account for 7.3% of GDP in the north-west. I absolutely believe that they are a growing sector and one in which we need to continue to invest. I make no apology for saying that I will bang on about MediaCityUK to every Minister I can because, in this instance, I do not really care where the investment comes from, as long as it keeps coming into Salford and helps my community.

The second area we need to concentrate on is advanced manufacturing, and I have no doubt that many of my colleagues will talk more about it. We are incredibly proud of the aerospace industry in the north-west, and we jeopardise at our peril the extensive high-level skills that have been developed in the industry over many years. The industry accounts for 12.9% of our GDP, giving the lie to the claim that manufacturing no longer really exists in this country.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I am grateful to my right hon. Friend for securing the debate and I am glad that she specifically mentioned manufacturing, which is still of huge importance to constituencies such as mine. Does she agree that one of the biggest concerns among manufacturers—certainly those I speak to—is what they perceive to be the Government’s lack of understanding about the relationship between the public and private sectors? Manufacturers in my constituency have clients across the world, but a key part of their business is supplying the public sector. The Government are ruthlessly cutting public sector procurement in the Budget, and manufacturers will be unable to drive the country out of recession and back into growth if they do not have the necessary support and stimulus from the Government.

[Hazel Blears]

My hon. Friend makes an extremely important point. The Government’s choice to take an extra £40 billion out of the economy—over and above what the Labour Government would have taken out to reduce the deficit—runs the severe danger of tipping us back into recession. All the independent forecasters say that the north-west is recovering, but that that recovery is tentative, and they do not expect to see full growth until 2013.

Advanced manufacturing jobs are also essential to the green agenda, but I am increasingly worried that, although we talk the talk about new green jobs to draw in investment, some of the action that is taken is almost in opposition to the need to invest in green jobs. At the end of last week, a report published by Innovas and commissioned by the Manchester Commission for the New Economy looked specifically at growth in green sectors. It said:

“Greater Manchester is a leader in the UK in carbon capture and storage technology, additional energy sources such as biofuels and contaminated land remediation. It is also strong in alternative fuels…and above average in wind energy, low carbon building technologies and energy management…Greater Manchester has the potential to be a world leader in low carbon building technologies”.

However, we have heard only this week of massive cuts in the funding to the green investment bank and in the proposed seedcorn funding to make sure that new jobs can be developed, particularly in manufacturing.

The final area that I want to mention is the biosciences. They are not new to Greater Manchester, but the rate of growth in the numbers of people working in research and development and in exploiting some of the technology that is increasingly coming from our universities is very encouraging, and I have no doubt that colleagues with more experience than me will make a contribution on the issue.

To attract all that investment and to keep doing so well, the north-west must have the right climate, and I emphasise to the Minister and other colleagues the importance of the city region. A consultation has been going on for the past couple of months—indeed, I think that it closed on Friday—about whether to confirm the statutory nature of the country’s first city region, which comprises the 10 local authorities in Greater Manchester. That is not just about moving governance around or about process; at its best, it should be about the devolution of planning skills, housing and transport from Whitehall to the city regions so that they can provide the right climate to draw in investment. There is no point addressing the skills gap if we do not have a decent housing offer, and there is no point trying to draw in investment if the planning system cannot get that investment on the ground and working as quickly as possible.

Despite their different political persuasions, the authorities in Greater Manchester have sat down and been very mature about agreeing—the Government will perhaps not like this phrase—to pool their sovereignty and work for the interests of the people of Greater Manchester, which is vital. On transport, for example, the chamber of commerce says that connectivity with the northern rail hub, the super-port at Liverpool and Manchester airport, which my colleagues will no doubt talk about, is key to our future prosperity.