Pennine Lancashire Local Enterprise Partnership

Mark Prisk Excerpts

Wednesday 24th November 2010 Westminster Hall

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

I congratulate the hon. Member for Hyndburn (Graham Jones) on securing the debate and thank those Members who have been able to contribute. Although normally only a Minister replies in such debates, I think that it has been useful to allow other Members to contribute in this one. It is clear that there are strongly held differing views, both within the House and among the people whom Members represent. In that context, I want to help and have a positive proposal, to which I will come in a moment.

For the Government, creating the right long-term economic framework, whether in Lancashire or elsewhere, is an extremely important issue, and one that we take very seriously. Having once worked in Lancashire, I know the economic strengths across the county. BAE Systems, for example, has a heavy presence in the hon. Gentleman’s constituency, and it also has operations across the county. There is also the nuclear industry and, as others have mentioned, the automotive and paint manufacturing industries.

We believe that Lancashire would benefit—I mean the economy of Lancashire, and there is a slight nuance there—from the focus on economic growth that we strongly feel LEPs would bring. On 28 October, we announced the first wave of successful partnerships. In fact, the 24 partnerships that have so far been cleared are diverse, have strong ambitions and are focused on the local priorities that they think matter. They are wide in their scope and imaginative in what they are trying to achieve. If we look at the 24 partnerships that have so far been cleared, we will see that they represent, outside of London, more than half England’s gross value added, 58% of the businesses and nearly 60% of the work force.

The point about LEPs is that they should enjoy broad discretion so that they can choose the priorities for action in response to local needs. A number of them are focusing on the need to remove barriers to growth, whether they relate to transport and planning, matching skills provision with employers’ needs or helping fledgling companies get off the ground.

As Members will know, we were unable on 28 October to clear every bid we received to become a partnership. Of the three bids we received from Lancashire, we judged that none were ready to proceed without further work. The area covered in what I will call the pan-Lancashire bid included Preston, Lancaster, South Ribble, Chorley and West Lancashire. The Fylde coast bid comprised Blackpool, Fylde and Wyre, and the Pennine Lancashire bid originally comprised the area including Blackburn, Pendle, Ribble Valley, Burnley, Hyndburn and Rossendale. We were impressed by the commitment and ambition demonstrated in all three proposals. As with some of the cleared bids, we saw that there was a real wish to look at how, in response to local need, economies could be diversified. There were strong merits to the bids.

Let me turn to the problems. As they originally stood, the three overlapping bids clearly competed and conflicted with one another. Before we could consider whether they should progress, we had to be confident about the structures, and ensure that they were right for the business community and the communities as a whole. Clearly, where there is strong local disagreement among the potential members of a partnership, the possibility of making that partnership last is sharply diminished. Therefore, it has been disappointing that there have been continuing disagreements across the county, not only in local government but among the business community.

However, I now understand that partners involved with the Lancashire bid and the Fylde coast bid have been having productive discussions about the possibility of joining forces in one partnership. I hope that their discussions reach a successful outcome. It would be progress, but the problem would remain: we would still have two bids in opposition to each another in Lancashire.

To be open with Members, and to allow them to see exactly what the principles are, let me return to the criteria with which we are working. The criteria we set were that every partnership had to demonstrate, first, that it encompasses a natural economic area; secondly, that it has the clear support of business; thirdly, that there is an ambitious approach to transforming the area—something that adds value; and, fourthly, that it has buy-in from the key councils in the designated area. Let me look at the two bids that we are debating in this Chamber today: the pan-Lancashire and Pennine Lancashire bids.

[Graham Jones]

Will the Minister accept that there is no such thing as pan-Lancashire when we talk about historic Lancashire? We are merging two concepts. Blackpool and Blackburn, particularly Blackburn, are totally resistant, and Blackburn is an equal partner in local government with Hyndburn. They work together effectively. If Blackburn withdraws—it is insisting that it will go with Manchester—there will be no pan-Lancashire solution. There is a Swiss cheese solution that covers the vast majority—12 out of 14—but there is not a 14 out of 14 solution. There is no pan-Lancashire solution.

[Mr Prisk]

I will not comment on the value of the groupings. They are the ones that came forward. If a group chooses to call itself pan-Lancashire, that is its judgment. Given that we have a pan-Lancashire and a Pennine Lancashire, I thought that it would be easier to use that shorthand so that we know what we are talking about.

On the first criterion, the pan-Lancashire bid represents a strong, functional economic area. On the second criterion, it is clear that the bid enjoys strong business support, particularly from larger employers, but the support is not unanimous. On the third point—this is the issue around ambition and added value—pan-Lancashire also scores well. It would deliver the critical mass needed for Lancashire to compete with the likes of Greater Manchester, Merseyside, and West Yorkshire, as my hon. Friend the Member for South Ribble (Lorraine Fullbrook) pointed out. It would enable a joint approach to be taken on key sectors such as manufacturing. In addition, it includes Central Lancashire and Lancaster universities, and its scale is sufficient to bring together adjacent areas, thereby better integrating transport and planning.

It is the fourth criterion—local government support—that is the root of the problem. Clearly, some councils falling within the geographical scope of the bid are not signed up to it.

[Mr Jack Straw (Blackburn) (Lab)]

Will the Minister be good enough to acknowledge that support for the Pennine Lancashire bid and the serious concern about the so-called pan-Lancashire bid, arise not just from the local authorities in east Lancashire, on an all-party basis, but from the majority of businesses in east Lancashire? I cannot emphasise that point enough. BAE Systems, for reasons that one understands, has decided to sit on the fence, but it is not passionately in favour of one versus the other; if I were in its position, neither would I be. But the East Lancashire chamber of commerce, which is very representative and a very good chamber of commerce, and all the businesses that I know of—I believe that this is shared by my colleagues across the valley—are passionately in favour of the separate east Lancashire solution. In fact, none of us would be supporting that bid if they were not.

[Mr Prisk]

I totally understand the right hon. Gentleman’s point, and I respect the fact that where one is seeking secure evidence, it is inevitably often easier and quicker for larger organisations to respond. We have been mindful of the fact that there may be smaller businesses, about which we do not have evidence, that may support one bid or the other. I am mindful of the danger of assuming that familiar names on a particular bid’s proposal somehow mean that the whole of the business community is unanimous. I am sensitive to that—it is an excellent point. That is why we try to make sure that once we receive bids, we dig beneath the proposals and get a better understanding of the genuine nature of the support or otherwise, so that we can make a value judgment. That allows me to turn to the Pennine Lancashire bid.

On the first criterion—the question of a functional economic area—it has a plausible claim. I understand that economic geography changes. One of the points about changing the regional development agencies is that, in many ways, some of their boundaries simply do not reflect the economies that we have today, which have changed dramatically in the past 10 or 12 years. We think that the Pennine Lancashire bid has a plausible claim to being a functional economic area.

However, its links with other parts of Lancashire and Greater Manchester mean that its economic self-containment is not quite as strong as Lancashire’s as a whole. There are pros and cons. The hon. Member for Hyndburn rightly made the point that a high proportion of people work in the area, but we also need to look at the potential long-term success of a partnership—we need to think about its connectivity. The debate is two-sided; nevertheless, it is true to say that there is a plausible argument and a plausible element to the first question on whether there is a functional economic area.

On the second issue, on the evidence that we have to date—I will come to how we might solve this in a moment—the Pennine Lancashire bid’s claim, in terms of business support, seems to be smaller than that of the pan-county bid. [Hon. Members: “Not true.”] I hope to offer hon. Members a solution to that in a moment.

There is support from local businesses, especially including small and medium-sized enterprises, and I am grateful to hon. Members who highlighted that so that we can make an informed judgment. I am acutely aware of the two different chambers of commerce. I shall not comment on the pros and cons of either, but the fact that historically they exist tells me something about the nature of the economic geography in the county—I do understand it.

On the third criterion, Pennine Lancashire argues that its bid would give it the freedom to build on already close links with Manchester. The evidence is that 17,000 workers travel south to Manchester, and a far smaller number into Preston. I understand the motorway network, and that one does not look west; people look south, if anything, and perhaps a little east. In addition, private sector jobs growth is expected to be focused on Manchester. That brings me back to a point I made earlier about self-containment and balance.

There is then the question of the added value that would come from a Pennine Lancashire bid. We are looking for additionality in the proposal. What is the extra element? That is one of the questions that we want resolved. Like the pan-Lancashire bid, this bid failed on the fourth question—the issue of local authority support—as several hon. Members pointed out.

I am mindful of the challenge. Overall, we feel that the pan-Lancashire bid has some strong elements, but that the Pennine Lancashire bid also has good arguments in its favour. Neither is without its flaws. Like many hon. Members, I am keen to bring the matter to a conclusion without undue delay, so the Government are today asking partners involved in the competing bids to submit revised proposals no later than 8 December. We will write to the proposers today. Any revised proposal needs to be backed up with clear and compelling evidence to support the arguments that it presents. I hope that that clearly spells out the Government’s position. We want a lasting partnership, and that means that the partners must agree. We cannot make that happen without there genuinely being such a wish. That is the key point.

[Graham Jones]

Will the Minister give way?

[Mr Prisk]

I am running out of time, and I am mindful that I will be in trouble unless Mr Weir allows me to stretch beyond 5 o’clock, but I do not think that I can do that.

We want to make a prompt decision and allow both sides to put their evidence firmly. That will allow us to make a judgment on which should be cleared: one, two or neither. We will seek to make that decision if the evidence is presented to us.

Question put and agreed to.