Older Industrial Areas: Economic Disparities

Louise Haigh Excerpts

Thursday 25th June 2015 Westminster Hall

[Louise Haigh (Sheffield, Heeley) (Lab)]

I apologise, Mr Rosindell, for being slightly late for the debate. It is a privilege to serve under your chairmanship. I thank my hon. Friend the Member for Easington (Grahame M. Morris) for securing the debate. He has done much over the years to champion communities that have suffered decades of neglect and decline. I also congratulate the Industrial Communities Alliance, which has published an excellent report.

In my brief speech I shall share experiences from my neck of the woods in Sheffield—a beautiful city with a thriving cultural and music scene, a proud sporting heritage and a strong sense of its industrial and political history. I am sure that hon. Members will see similarities between its challenges and those that all former industrial communities face; the pattern is all too familiar.

Much was done in the 1980s to undermine the skills and extinguish the expertise that working-class men and women of my city built up over centuries. They led the world in forging steel, unmatched in brute strength and unrivalled in craft. Pockets of that skill remain in Sheffield. Companies and Governments from across the globe still flock to Sheffield Forgemasters in search of the best there is. Thirty-one thousand people are still employed in manufacturing in my city, in no small part thanks to the fantastic work being done by the former Member for Sheffield Central, Richard Caborn, and the Advanced Manufacturing Research Centre. However, there is no doubt that we are still scarred by the legacy of Thatcher—not only in my community, but, as we have heard, in communities across swathes of the country. The legacy of that Government and their most misguided industrial strategy casts a dark shadow.

The sanitised management-speak term “de-industrialisation” is shorthand for a set of complex issues, which we have heard about, and which my community faces to this day. Generations of families relied on the manufacturing base of Sheffield to make a living. Generally it was well paid, long-term skilled work. However, the legacy of decline is that those jobs have been replaced largely with low-paid work, if there is work at all. The figures bear that out. Wages have flatlined over three decades for all but the super-rich, and the number of people in low-paid work, barely able to afford the basics, has risen from 13% in the late 1970s to 21% today.

Even more alarmingly, the number of people who may not be low-paid now but who have experienced low pay in the past four years is at a shocking 33%—some 8 million people. That is the living, breathing legacy of industrial decline. It is what we mean when we talk about insecure work and low pay, and that is why Labour Members will continue to raise the subject time and again in this place and outside it.

The heart of the debate is about the make-up of the economy. The report by the Industrial Communities Alliance rightly highlights the fact that London and the south-east have pulled away from the rest of the country—not just during the current recovery, but in the past three decades. The trend towards de-industrialisation has gone hand in hand with the financialisation of the economy, which began with the deregulation of the financial system. We witnessed the all too real consequences of that in the 2008 crash: our communities, having been hit once in the 1980s, were forced to pay the price all over again. That will continue unless we fundamentally reform the economy, tackling the short-termist, risk-taking culture that continues apace in the City of London and Canary Wharf and redirecting investment towards the productive, high-skilled and green industries that we need to secure a sustainable future.

The short-termism of our economic system is a major factor in the failure of many communities to recover, as capital is driven towards sectors and activities that provide an immediate return rather than those that can build up jobs, productivity and growth in the long term. Because of that, we have a recovery that is anything but shared. For all the talk of a jobs miracle, in Sheffield there are still 6,000 fewer people in work than just before the crash. The Government have, unfortunately, learned nothing, and they seem determined to repeat the mistakes of the past—mistakes that, we admit, the last Labour Government made in failing to draw in the financial system and rebalance the economy.

Finally, we cannot have this discussion apart from the continuing debate about devolution. The Government’s much-vaunted strategy of pursuing a “northern powerhouse”, however welcome, should not be simplified into a focus on the great cities of Leeds and Manchester. If investment does not reach Sheffield, Copeland, Barnsley and Falkirk, it cannot be a success. Only today the Government have abandoned their plans to electrify the midland main line linking London to Sheffield. That will be incredibly disappointing to small businesses in my region. I welcome the findings in the Industrial Communities Alliance report about the need for the Government to put forward resources and tax breaks to encourage investment in manufacturing, research and development across older industrial communities; I and colleagues in Sheffield have been talking about that for some time.

It is evident from the debate that there is a determination to put an end to three decades of economic illiteracy, during which inequality has increased and opportunity has been stifled in communities throughout the country. Financial services continue to enjoy a boom while a rich seam of opportunity is overlooked in the older industrial communities that many Members represent. We need a strategy fit for the 21st century and this debate is a good place to start.

--- Later in debate ---

[Anna Soubry]

I am not sure whether the hon. Gentleman is saying that the investment in his constituency is considerable and great. I have read out the figures. They are substantial. As I have said, the money is part of a contract, so it relies on securing the features that I have identified. I am more than happy to respond to what the hon. Gentleman has said in more detail in a letter, or by meeting him. I would also like to meet his local enterprise partnership, because I strongly suspect that it might have a different view of the situation in his area from the one that he has given us today. The projects include, for example, NSK Bearings Ltd, which was awarded £3.45 million in round three to assist with business expansion. The award by the regional growth fund was part of a £19.9 million investment that helped to safeguard 265 jobs. Again, I hope the hon. Gentleman welcomes that.

It should also be noted that unemployment in the constituency of the hon. Member for Easington continues to fall. There are 6,400 more people in work today than in 2010. Those people would otherwise be at home and on benefits, but they now have the benefit of a job. I find it difficult to understand why hon. Members do not welcome the fact that people are going into the world of work. Surely it is better to be in a job than to be sat at home on the dole.

On the northern powerhouse, the hon. Member for Chesterfield seems to have forgotten that the Chancellor has represented the northern constituency of Tatton in Cheshire for many years, so the idea that he is new to the north of our country is nonsense. The northern powerhouse has not been imposed on northern councils. On the contrary, councils of all political persuasions—I give them full credit, especially the Labour-run councils in Liverpool and Manchester—have not only trumpeted the northern powerhouse, but led the way on its creation. I am concerned that hon. Members in this place are not supporting their colleagues in those great councils, who have come together and are championing the northern powerhouse.

[Louise Haigh]

Opposition Members are, of course, in favour of the northern powerhouse. We welcome the discussions on devolution, but they have to lead to resources and investment going to the north. Does the Minister not understand why we are sceptical about the northern powerhouse when there are announcements such as today’s on the scrapping of investment in the electrification of the route from London to Sheffield?

[Anna Soubry]

May I correct the hon. Lady? She said that investment has been scrapped and that the electrification of the midland main line had been abandoned, but she is absolutely wrong. [Interruption.] The hon. Lady is shaking her head, but I was in the Chamber when the Secretary of State for Transport made his announcement—I do not know whether the hon. Lady was there—and I heard exactly what he said. The process has been put on hold because of problems and failings in Network Rail. It has not been scrapped or abandoned. I remind the hon. Lady that in the 13 years of her party’s Government, 10 miles of rail were electrified in this country. We have not turned our back on investment; the £40 billion in railway improvements will continue.

Like the hon. Lady, I travel on the midland main line. Beeston station, in my constituency, lies on it. I assure her that the improvements that will be made to it mean that six more trains per hour will leave St Pancras. I am afraid that the hon. Lady is misleading people and her constituents when she says that the investment has been abandoned or scrapped.