Economy: North-East England

Lord Patten Excerpts

Thursday 31st January 2013 Lords Chamber

[Lord Patten]

My Lords, in bringing fraternal regional greetings from the south-west to my Back-Bench colleagues on all sides in the north-east, I would like to say that in listening to my noble friend’s tip-top speech, and indeed the speech of the noble Lord, Lord Sawyer, I would like to reflect that there is no silver bullet of an infrastructure sort to help to solve the problems of the north-east. I should say that there is no bullet train which could individually solve the problems of the north-east. I do not believe that if we had HS3 and it was powering into Newcastle tomorrow it would of itself bring about a renaissance in the economy of the north-east.

I was greatly struck, when listening to some vox pop on the media when HS2 was announced coming from what people in the north-east would regard as their deep south—places like Nottingham and Derby—that they regarded one of the benefits of HS2 as being that they would get to London more quickly. Although I am in favour of infrastructure projects, though worried about the environment and capital cost, I believe that one of the effects of HS1 and HS2 will be to increase the dominance of London in the English and Welsh economies.

There was a book back in the 1940s or 1950s by a French scholar called Gravier, Paris and the French Desert. I do not think that high-speed rail will bring about the economic desertification of the UK, but it will do two things. First, it will increase the dominance of London, which is already slipping its moorings as a great global city and flying off into economic global space. Indeed, London would make a good, punchy city state; that might be part of some plot which the Mayor of London is thinking of bringing about. Secondly, having added to London’s dominance, it will not in itself necessarily bring any great blessings to the north-east. The north-east’s problems are of themselves and have to be solved on their own terms.

The noble Lord, Lord Sawyer, talked about the litany of problems in the north-east. I was refreshing my mind with the statistics. At first reading, they are pretty grim: highest unemployment levels, still; lowest employment levels; lowest household income; one in five children living in workless families, sometimes through generations; and I could go on with that. The other side of the story is that, extraordinarily enough, this small region has, as my noble friend Lord Bates, pointed out, been a great success in exporting, having the best ratio of goods to exports in relation to the regional economy of any region in the United Kingdom, measured by gross value added. There is obviously enormous vitality.

We have heard from my noble friend Lord Shipley what is going on, and from the noble Lord, Lord Sawyer, with his own particular beat, what is happening to the north-eastern economy. I suggest two areas in which we should look at the region solving its problems intra-regionally. First, there is connectivity, not to other dangerous places, like London, but connectivity within the region—Newcastle, Gateshead, Sunderland, Hartlepool, Middlesbrough and Durham—is in as great a state of grace as can be produced. I am a strong believer in that. I understand that, extraordinarily enough, no electrically powered train goes in and out of Middlesbrough.

That is not to say that the north-east is the only region which has these problems. When I travel up from the oppressed south-western region at the beginning of the working week and go back again, I sometimes sit in third world conditions on the route from Exeter to London, a substantial part of which is on one line. These problems are not unique to the north-east, but I am absolutely convinced that better intra-regional transport would get more results from infrastructural expenditure than, perhaps, even connectivity to the motorway—although I recognise that that is very important.

Secondly, my noble friend Lord Bates put his finger on it when he mentioned the importance of connectivity not through motorways and railways but through high- speed broadband. I genuinely welcome the contribution of £6 million to Newcastle, to make it a super-connected city, but it is easy to spend a bit here and a bit there. My judgment is that for probably £60 million, and certainly much less than £600 million, if the north-east offered itself as a Petri dish experiment, if there was that super-connectivity between every part of the north-east, within a year or so one would see the Korean effect. The spread of high-speed broadband in South Korea a few years ago has had a radical effect on productivity and has helped to transform the whole South Korean economy.

I greatly welcome the fact that the Minister is answering this debate. I urge him to take the comments from the debate to my right honourable friend the Chancellor of the Exchequer. It has been dominated by the Tory Benches, there having been three speakers here—no, I am sorry, four speakers. After the to-dos of last week, it is hard to say “my noble friend” so I shall say “my noble coalition partner”. Nevertheless, we feel strongly that more should be done in the north-east on the installation of broadband. The north-east does not have as strong a voice in the Palace of Westminster as it should do. I will stand corrected, but I do not think that in another place there is a coalition Government Minister who represents a north-eastern constituency; and I do not know of any Member of your Lordships’ House in the Government who lives in the north-east. So there is no voice. I am not saying that we should have regional Ministers all round the place, and a Minister for the south-west, or whatever. However, it is very important that the clear, balanced and stimulating voices of my noble friend Lord Bates, the noble Lord, Lord Sawyer, and my noble coalition partner Lord Shipley are listened to, because they represent areas in which the Government should be paying far more attention.