Humber Economy (Fiscal Support)

Karl Turner Excerpts

Tuesday 27th November 2012 Westminster Hall

[Karl Turner (Kingston upon Hull East) (Lab)]

I can say with some certainty that it is always a pleasure to serve under your chairmanship, Mr Amess, because, although I am a relatively new Member of the House, I have served under your chairmanship on numerous occasions already.

I congratulate my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) on securing this important and timely debate. I am delighted that the Economic Secretary to the Treasury is here to respond, and I urge him to listen carefully to hon. Members’ remarks and, perhaps more importantly, to act on them. It is often said that, in government, the power is in the purse, and policies across every Department must have sign-off and approval from the Treasury.

Before I make my plea for bespoke, targeted financial support for the Humber region, I would like to give a flavour of where the economy in Hull is now. I hope to offer a snapshot of the reality on the ground for people living in east Hull—and, indeed, struggling to live there as a result, let us be clear, of Government policy, which is hitting them particularly hard.

In the good-natured spirit of the debate, however, let me first thank the Minister for the Government’s support on issues such as the Humber bridge tolls. The hon. Member for Brigg and Goole (Andrew Percy)—or Goole and Brigg, as he likes his constituency to be called—was very involved in the tolls campaign before, during and after the general election campaign; indeed, Members of Parliament from across the parties were involved in it. Similarly, I thank the Government for the £25 million in regional growth funding to help the Green Port project, although the money is slow in coming.

I acknowledge the promise of help with infrastructure projects such as that at Castle street involving the A63, which runs through Hull West and into east Hull. I want to press the Minister on the Government’s continued support for the project. My right hon. Friend the Member for Kingston upon Hull West and Hessle mentioned that the Under-Secretary of State for Transport, the hon. Member for Wimbledon (Stephen Hammond), has today cancelled, for the second time, his meeting with Hull MPs, which is particularly important given the concerns raised in this week’s British Chambers of Commerce report. Areas in east Hull have been awarded enterprise zone status, which offers businesses potential benefits, but all policies should be reviewed in terms of their outcomes, and I am sorry to say that the outcomes for the unemployed have failed Hull.

Much more targeted support is needed from the Government. The jobs crisis in Hull and the region more generally needs to be addressed as a matter of absolute urgency. It would be difficult to overstate just how desperate times are with regard to jobs in Hull. Forty people are chasing every job vacancy in my constituency, and those figures are replicated across the city. I suspect that the Minister will cite falling unemployment nationally as an indication that things are improving, and while I of course welcome any reduction, I reiterate the fact that that dip is not happening in east Hull or across the city. I fear that we may be seeing a generation of underemployed people—the working poor—who fall off the unemployment figures, but still live in real financial poverty.

Unemployment continues to rise every month in my constituency, but youth unemployment is of particular concern. Between 2001 and 2010, the number of people not in education, employment or training in Hull was reduced by 6%, from 17% to 11%. That was still far too high—we must be honest about that—but the figures were definitely heading in the right direction.

Previous reassurances from the Government that the private sector will pick up the slack resulting from cuts to public sector jobs are simply not borne out in the Humber region. The Chancellor’s promised rebalancing of the economy has failed in Hull, and long-established private companies are going bust or making significant redundancies every week. In recent weeks, job losses have been announced at BAE Systems, Seven Seas, Kimberley-Clark, McCain, Comet, Willerby Holiday Homes, Smith and Nephew, and Crown Paints, to name a few household names. Yesterday, Hull city council also announced a consultation on a further 171 potential job losses.

We are currently in a 90-day consultation process with Seven Seas, after which we may see 259 skilled jobs leave Hull. Seven Seas was established in Hull 73 years ago off the back of the fishing industry and the trade in cod liver oil. We are working with the business’s representatives in an attempt to persuade them not to leave the city just because, as they put it, the economy is failing them. Without a shadow of a doubt, they blame the Government’s economic policies for the firm’s failure and for the need to consider outsourcing production. Comet is another company that started in Hull a considerable time ago, and hundreds of people are praying that a buyer will come in to take over now that the company has gone into administration.

Let me mention some of the positives about the region, and particularly my city. My right hon. Friend said that the renewables sector and the Siemens investment could deliver for Hull what oil did for Aberdeen. The Siemens factory is expected to be built in 2014, with the berth built the following year. About 700 jobs will be created almost immediately, with thousands more following in the supply chain. It is crucial, therefore, that we get some certainty from the Government, because it is fair to say that we have had mixed messages from them in recent months. The Liberal Democrats swear that this is the greenest Government ever while the Treasury scraps subsidies to solar energy and gives tax cuts to offshore gas exploration. The Energy Secretary says that wind is wonderful, while having to slap down a junior Minister—the Minister of State, Department of Energy and Climate Change, the hon. Member for South Holland and The Deepings (Mr Hayes)—for stating that the Government have had enough of wind. We need absolute clarity from the Government if we are to secure this terribly important investment in the city.

My right hon. Friend touched on education, and Hull has some excellent educational establishments, of which Wilberforce college in my constituency is just one. However, organisations such as the Humber Education Business Partnership, which historically brought educational bodies and industrialists together, have lost Department for Education funding.

The LEP is an important factor, although I do not think that it provides as much support as the regional development agency. The Government should take recommendation 61 of the Heseltine report seriously, because it reinforces the fact that LEPs need more power and money to deliver for the areas they plan to provide for.

I want briefly to touch on the city deal. I welcome Hull’s opportunity to bid for city deal funding, and I hope the Humber bid is successful. The leader of Hull city council, Councillor Stephen Brady, is looking forward to working with public and private sector partners from across the Humber to develop a Humber city deal proposal. Hull needs targeted, bespoke support, and the city deal may go some way towards helping us to sort out the current economic downward spiral.

I also want briefly to address the issue of the A63 at Castle street. This week’s British Chambers of Commerce report said that just three out of 13 transport projects identified by the Government as crucial to economic growth have been given the go-ahead. I hope there is nothing sinister about the Under-Secretary of State for Transport cancelling appointments—and doing so, I have to say, at rather late notice. I really want to hammer home the point that the A63 at Castle street is crucial to the economy of Hull and the region.

--- Later in debate ---

[Sajid Javid]

I thank the right hon. Gentleman for that comment. I do not know why that meeting has been cancelled. I am sure that there is a constructive reason, but I will take his point to the Minister and ensure that he is aware of the strength of feeling on that issue.

[Karl Turner]

I can probably assist the Minister. I think that that Minister cancelled on one of those occasions because he was on holiday. Perhaps the Minister might want to visit Hull, to see the A63 and Castle street for himself. He would understand the need, if he did.

[Sajid Javid]

I do not know whether the hon. Gentleman is inviting me, but I would be happy to come to Hull. I love Hull. I have lots of friends there, and am happy to go and make some more.

It is only right that the Government protect the most challenging regions from public spending cuts, to the extent that they can. The formula grant in Humber was £609 per person in 2011-12, compared with an average of £372 across England and £190 in Richmond upon Thames. I am sure that Members will agree that that reflects, to a large extent, local needs.

The hon. Member for Great Grimsby rightly mentioned housing. I want to point to the Infrastructure (Financial Assistance) Bill, which has now received Royal Assent. Up to £10 billion of the £50 billion of guarantees are earmarked for housing spending, and if Members know sponsors of such projects in the region, I encourage them to make an application to the relevant Department to find out whether it is possible to take advantage of the guarantees.

In conclusion, I again thank the right hon. Member for Kingston upon Hull West and Hessle for securing this constructive debate, and I also thank all the Members who have taken part. I noted the right hon. Gentleman’s comments about the great Andrew Marvell, and if I understood him correctly, I think that he is basically telling the Government to get on with it. I think that it is fair to say that the Government have taken a lot of action, but I hear him loudly and clearly, and the Government will continue to take action and pay a great deal of attention to the region.