Economic Growth: South-west

Rebecca Pow Excerpts

Tuesday 5th February 2019 Westminster Hall

[Sir Gary Streeter]

All of those things are true, of course, but I did say that “for some” the south-west is the seven counties, including even Gloucestershire, which Cheltenham is in. I understand that Cheltenham itself is a small market town somewhere to the north-east.

I will describe that which is going well, what we welcome from the Government already and what we still want to see. First, what is going well? Of course, our natural assets are still there and they remain unrivalled: the sea, the coast, the moor, the areas of outstanding natural beauty, the stunning landscapes and the beautiful towns and villages. The south-west is a region like no other.

I am delighted to say that tourism is flourishing. We have more quality places to stay, and better visitor destinations and tourist attractions. Mr Owen, you might be interested to know that I will make the case that we are not just a tourist region—far from it—but 311,000 people were employed in the hospitality sector in 2017 and it provides roughly 11% of the overall regional employment. So tourism remains significant and it is doing well, thanks partly to the fact that we had some wonderful weather last year and the roads were full all the time.

The second thing that is going well is the collaboration between our local enterprise partnerships, and our local authorities and national parks. That collaboration is the closest and most effective since records began, and in all my time in this House I have certainly never seen our various component parts working together as they are today. There is also a close working relationship with the private sector. Some colleagues in Westminster Hall today will recall the “Back The South West” campaign that we launched in 2016, with the charter—the south-west growth charter—that I will refer to shortly. All of that is driven by private sector companies that are ambitious for our region and determined to deliver.

At the 2016 Exeter conference, the then Secretary of State for Communities and Local Government came down and made a great and passionate speech, and told us to speak with a single voice in the south-west. We have done that; we are more joined-up than ever before, and I think it is beginning to make its mark upon Government.

Far from being just a tourist area, our region boasts some wonderful companies. For example, Princess Yachts in Plymouth employs 3,000 people and Babcock employs 4,500 people in the dockyard and naval base. That is to name but two; there are many other companies and I am sure that colleagues will mention some of the high-performing companies in their constituencies.

I will single out just two companies from the south-west that are doing particularly well. First, there is the Pennon Group. Brilliantly led by Chris Loughlin, it includes South West Water, which is a leading national water and sewerage company that will make £1 billion of investment in our region by 2025. Its business plan has been fast-tracked by Ofwat for the second time in a row, which I think is unique among the water companies. Pennon Group also includes Viridor, which is the UK’s largest recycling company, so we have this successful and ambitious green company that employs over 5,000 people UK-wide. It is a company that our region is rightly proud of and it generates over 6,000 jobs in our region alone through direct and indirect employment. We thank the Pennon Group for all it does for our region.

The second company is Thales, which is a major global defence contractor that employs over 1,100 people in the wider south-west, including in Cheltenham. Thales stated recently that it sees huge potential for its business in the south-west and the region as a whole:

“There is the opportunity to put the region on the map in the digital technology and maritime space and with the support of Government we think the region can go from strength to strength.”

[Rebecca Pow (Taunton Deane) (Con)]

The Heart of the South West local enterprise partnership has a focus on the marine environment and in Taunton Deane we have the UK Hydrographic Office, which is the global leader on marine data. It is putting in a bid for a geospatial hub in Taunton, as well as an innovation centre. Does my hon. Friend agree that building on that will help the whole of the south-west to really up this sector, which will bring with it untold economic opportunities for the whole region?

[Sir Gary Streeter]

I certainly agree with my hon. Friend. That is one of the areas of development for our region that makes it very exciting indeed, and I am very happy to add my support to her excellent support for that project and opportunity.

I will just go back to Thales briefly. It recently opened a Maritime Autonomy Centre at Turnchapel Wharf in my constituency, which I know the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) has visited. That work includes capital investment of over £1 million, which represents the company’s commitment to its future in the south-west as a place where it can invest in digitally transformative maritime technologies—not a phrase to say after a glass or two of wine. This facility will act as the key maritime integration, test and evaluation centre for the combined United Kingdom and French maritime mine countermeasures programme. It is very impressive.

Our region therefore has substantial companies operating throughout it and is not just a place for people to come for their cream tea, although of course, Mr Owen, you would be very welcome to come down next summer and enjoy one.

Our universities are also doing well—

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[Neil Parish (Tiverton and Honiton) (Con)]

It is a pleasure to serve under your chairmanship, Mr Owen. It is also a pleasure to follow my hon. Friend the Member for St Austell and Newquay (Steve Double) and I thank my hon. Friend the Member for South West Devon (Sir Gary Streeter) for initiating the debate. As we speak here in Westminster Hall, in the main Chamber there is a debate on the police grant report. It is welcome to see the extra grant for the police forces across the country. It is very much needed.

The south-west is a great place to live, work and do business, as my hon. Friend the Member for South West Devon has said, but more needs to be done to attract and retain the high-skilled jobs that we need to boost wage growth and offer opportunities for young people. Hinkley Point will play a useful role in that. The availability of labour and skills continues to be a significant challenge to many south-west businesses affected by factors such as transport, housing affordability and an ageing population. It is great that we have several speakers here from Cornwall, but I remind them that they have to go through Devon, Somerset and many other counties before they can get to Cornwall. I remind the Minister that we are debating what has happened in the south-west peninsula. Bristol is a great city, but there is an awful lot of land between Bristol and Penzance. We want our fair share of resources, which we are getting more of, but we need even more.

In areas such as agriculture, hospitality and tourism, we continue to rely on a high proportion of migrant labour. We need a system in which we have control over migrant labour and have enough migrant workers in future. As we leave the EU, not only do we need to ensure that we can still get access to EU migrant labour to fill the jobs but we need to devise a south-west strategy to retain graduates and skilled labour, boost investment in our infrastructure and grow business in our region.

Improving transport in the region and around the south-west is vital. There are two strategic transport corridors for rail and road into the peninsula, which means that the south-west lacks resilience. We welcome the development of the A303, but it will be dualled all the way to Ilminster and then out through the A358 to Taunton. A little bit of the A303 from Ilminster to Honiton needs a little bit more done to it. Much as I welcome and support what is happening to the north Devon link road, we also need that last little bit of road to make sure that we get a second arterial road.

We are improving resilience on the Dawlish railway line. Not only have we got the mainline from Paddington to Penzance but we have a great line from Waterloo to Exeter, which goes through the south of my constituency and runs through the constituency of my right hon. Friend the Member for East Devon (Sir Hugo Swire). We could do a lot more to invest in loops and other things to make sure that we get more trains through the second route. It is essential to have a second railway link into the south-west. Along with my hon. Friend the Member for Taunton Deane (Rebecca Pow), I am interested in the Devon Metro coming through Somerset and creating more resilience on our existing lines so that we can have smaller trains as well as the large commuter trains. That will be a great improvement.

Improving transport will improve education accessibility, so that students can choose whether to do A-levels, apprenticeships or technical education. Not only do we have the great universities of Exeter and Plymouth, and of course Bristol, but we have Petroc, Axe Valley and many other colleges across our region. Apprenticeships are so useful because not everybody wants to go to university, and it is a great bonus to have that provision.

Improving transport will mean that tourists can get around the whole of the south-west, from the Jurassic coast to Exeter Cathedral, and even down to Cornwall, as well as to great towns such as Seaton, Axminster and many others in my constituency.

Broadband and mobile connection is hugely important. As many colleagues have said, it is a huge driver of the economy. Superfast broadband is absolutely essential.

[Rebecca Pow]

A recent report by the South West Rural Productivity Commission said that improving digital connectivity was a game changer for rural businesses. Also, it is one of the key things in the Somerset Chamber’s report and is its businesses’ most important factor in upping productivity in our region. Will my hon. Friend join me in a campaign to get the Treasury to extend state aid so that Connecting Devon and Somerset can bring about the final rollout of the superfast broadband that we so urgently need in our two constituencies to deliver for our businesses?

[Neil Parish]

I very much support my hon. Friend, who is a neighbour on the Somerset border. We have worked together not only on delivering in the Blackdowns but across our constituencies. State aid will be essential to keep the money flowing. Also, I look forward to Gigaclear really getting its act together and getting more investment in, which will help us to deliver broadband overall in a combination of state, council and private sector funding.

With everything online now, from tax returns to farming administration and farm payments, and from online shopping to school homework, it is imperative that we get the improvements to broadband and mobile coverage that we need. In some areas the mobile system will deliver broadband to some of the very hardest-to-reach areas. Mobile and broadband speeds might not be such a problem here in Westminster, but in the south-west they are a constant handicap for many farm families and businesses. In my own farmhouse there is very little connectivity. Sometimes it can be a blessing when the Whips are trying to get hold of me; I can be completely unconnectable and off the page.

Despite the best efforts of colleagues here today, we still have some of the worst mobile coverage of any region apart from Wales. It is getting better, but we need to do more. We have to make sure that the mobile companies do not keep the masts all to themselves; they must share them more. Joining everything together will make things work better with the same resource. Delays to broadband in the Devon and Somerset area have been extremely disappointing, mainly because we know how transformational superfast broadband will be to our rural economy and home lives once it is delivered. We need the Treasury to provide state aid.

Finally, I want to touch on the importance of farming to our rural economy and the south-west economy as a whole. The UK’s food and farming industry generates more than £110 billion and employs one in eight people in the UK. Farming is a driver for the local economy as it brings money to the south-west, which is then spent in the south-west. However, I cannot get through a whole speech on the economy without mentioning the B word: Brexit is both an opportunity and a threat to our rural economy. We need more fish for our fishermen. We might see greater opportunities for deep-sea anglers, more fish for our processors, and much needed regeneration of our coastal communities. We also need to ensure that we produce good food so that our food processors—our largest manufacturing industry—continue to thrive. Brexit offers us the opportunity to reposition agriculture and the wider rural economy as a powerhouse in its own right. It needs to be recognised across Government, and not just in DEFRA. I hope that the Minister will today recognise the vital multiplier effect of farming businesses in the rural economy, along with tourism in the south-west, and will do everything possible to protect and help farmers as we leave the EU.

[Mrs Sheryll Murray (South East Cornwall) (Con)]

I congratulate my hon. Friend the Member for South West Devon (Sir Gary Streeter) on securing the debate. I am sure that all of us here believe passionately in the south-west. The region is already an economic powerhouse, which can rival the northern powerhouse or the midlands engine. We now have a network of professional organisations whose job it is to promote aspects of economic growth in the region. I pay tribute to the local enterprise partnerships—especially the Cornwall and Isles of Scilly LEP, my local one. Mark Duddridge and his team have a clear vision:

“By 2030, Cornwall and Isles of Scilly will be the place where businesses thrive and people enjoy an outstanding quality of life.”

Those few words really sum up the joy and opportunity of living in the south-west.

I was born and bred in my constituency, and we all know what a brilliant quality of life people can have in south-east Cornwall. Apparently the rest of the south-west region is not that bad, either, apart from the fact that my hon. Friend the Member for Tiverton and Honiton (Neil Parish) insists on putting the cream and jam on to scones the wrong way. However, that amazing quality of life is no good unless it is built on a strong economic foundation. We need profitable, expanding, forward-looking businesses, to create value that earns profits and pays taxes. To support those businesses we need to be able to provide smart investment funds where they are most needed.

The LEP does a great job, but there are headwinds. For example, when we leave the European Union we can redirect the shared prosperity fund. I, like others, am keen to hear details of how that will be spent in a way that is tailored to suit the needs of Cornwall, instead of dictated by the European Commission. The most important thing is for funds to be directed to where they can most affect productivity. If productivity in the south-west matched current levels in the south-east, the region would add about £18 billion a year to the UK economy. In that regard I want to mention the farming industry, which I am sure my hon. Friend the Member for Tiverton and Honiton will be pleased about. It is one of the most productive sectors in the south-west. Farming brings a lot of money into the region, most of which stays in the local economy. It is vital that farming should be given prominence in the industrial strategy.

[Rebecca Pow]

My hon. Friend is making a good case. Does she agree that if we combined agriculture with the food manufacturing and processing industries that would represent the largest economy in the south-west region? We could make a good case for its being a major plank of the industrial strategy. I see that the Minister for Agriculture, Fisheries and Food, my hon. Friend the Member for Camborne and Redruth (George Eustice) is in the Chamber, so perhaps he and the Minister who is responding to the debate will take notes.

[Mrs Murray]

I completely concur with my hon. Friend.

As hon. Members know, I am passionate about our highly professional fishing industry and determined that our fishermen should reap the benefits of Brexit. I urge the Government to do everything they can to protect fishermen and ensure that British fishermen get the best from our highly productive fishing grounds. We all know that infrastructure investment is key to the region’s success. We have some superb schemes well under way. The Looe flood protection project will protect the fishing industry’s future and stimulate the local economy and tourism in the area surrounding the town.

Improvements to the A38 are vital. Thousands of people use it every day, and 1.2 million vehicle hours are wasted every year due to delays. Think of the environmental impact. We all know about the safety concerns. Finally, a few improvements to the railway line could make a big impact. I, too, am looking forward to next week’s announcement. I would like more frequent services, a move towards clock-face timetables, early adoption of a free 5G network for travellers and, of course, better integration with local bus services—especially in rural constituencies such as mine.

I could go on with a shopping list of superb investment opportunities, but I will simply reiterate what a fantastic quality of life we have in south-east Cornwall and the rest of the south-west. Let us see what we can do to create the economic growth that is needed to support that quality of life.

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[Chi Onwurah]

I am afraid I will not give way.

Regional disparities and the unique issues facing the south-west are the reason we need the £250 billion national investment bank. [Interruption.] May I just point out that we have heard much more from Government Members than Opposition Members so far?

Many Members mentioned the need for regional investment. Our network of regional development funds will ensure that regional needs are put first and that local decision makers decide what is right for their area. The future of the south-west, and of our country, depends on a real industrial strategy that lays a path for a high-wage, high-skill, high-productivity region. The Government should follow Labour’s example in crafting a visionary, vigorous and viable industrial strategy.

[Rebecca Pow]

rose—

[Dr Offord]

Will the hon. Lady give way?

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[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)]

It is a privilege to serve under your chairmanship, Mr Owen.

I congratulate my hon. Friend the Member for South West Devon (Sir Gary Streeter) on securing this important debate. It is not about Brexit, but if I were channelling a famous son of Devon—Samuel Taylor Coleridge, who wrote “The Rime of the Ancient Mariner”—I would say that Conservative Members believe that Brexit is full of opportunities, while the Opposition have already shot the albatross and hung it round the neck of every business in this country, because they see Brexit only as a risk.

The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) said that Labour has a real industrial strategy. As Minister for local growth, I must tell her that I visit businesses all over the United Kingdom and they tell me that they have one thing on their risk register at the moment: not Brexit, but a Labour Government. Industrial strategies are not created by political parties that believe in the appropriation and removal of businesses from their owners. It is a Labour Prime Minister, not Brexit, that is the real risk.

[Rebecca Pow]

rose—

[Albert Owen (in the Chair)]

Order. I am sure that this intervention will be on the subject of the debate.

[Rebecca Pow]

It relates to something that the Minister has just said.

[Albert Owen (in the Chair)]

No, you are not listening. We are debating the motion before the Chamber. It has been a good-hearted debate and you have made several interventions, but they have to relate to the subject matter.

[Rebecca Pow]

My intervention relates to the south-west. Colleagues have made a strong case for upping the productivity in the south-west region, but under this Government a great deal of funding has come to the south-west—far more than ever before. We simply want to build on that.

[Jake Berry]

That is why we have heard from 10 Conservative colleagues, but only one Opposition Back Bencher. It is a sign that we are a Government who listen to colleagues in the south-west and ensure that economic growth in the south-west is at the heart of our approach.

We have had an interesting debate that has focused on three areas. The first is infrastructure, which we have to accept is one of the building blocks of any vibrant economy outside the capital. We have described this year as the year of delivery for digital, road and rail infrastructure, so it is important that our debate has addressed how we can ensure that we continue to deliver for everyone living in the south-west of England, particularly after years of under-investment. That is the real similarity between the north of England, where we have the northern powerhouse, and the south-west region: for far too long, under different Governments, the country has focused on infrastructure and industrial growth in London and its surrounding hinterland. It is about time we moved beyond that.

We have heard some good speeches today about human capital, in relation both to education and productivity. It is right to focus on how we can drive opportunity to people young and old across the south-west for a more varied educational picture, whether that is through the brilliant universities that have been mentioned or the great businesses that drive productivity. There are huge opportunities for productivity in cyber-security, spaceports, civil and nuclear developments in Hinkley, tourism, agriculture and our maritime economy.

I applaud the south-west local enterprise partnerships for their creation of the Heart of the South West economic co-operation and growth area. I hope that that combined effort will be reflected in their local industrial strategy, because this year needs to be the year of our regions, not just of our capital city. As Minister for local growth, I firmly believe that our biggest opportunity after leaving the European Union will be regional, and that is what the Government should be measured on.

In the limited time available, I will attempt to deal with the questions raised by hon. Members. First, my hon. Friend the Member for South West Devon spoke about tourism’s value to the economy. The Government continue to invest in tourism, particularly through the “Great” campaign to attract overseas visitors to this country. I encourage him and his LEP to engage with BEIS to discuss the developing potential of the tourism sector deal and pursue the idea of putting natural capital—the beauty that exists across the whole south-west—at the heart of their local industrial strategy.

Many hon. Members raised transport, particularly the Dawlish line. Colleagues will acknowledge that the Government have already invested £70 million in the line to date. I have heard the calls from Members across the parties to use whatever influence I may have over the Department for Transport to get it to fast-track its announcement about the line and ensure that we complete our commitment to making sure that it remains a robust and reliable connection for their constituents.

Hon. Members also raised the transforming cities fund, which we announced in the Budget. Some of that £2.5 billion fund has already been devolved to areas with Mayors, such as the Bristol city region, and the remaining £1.2 billion in the pot is subject to the competitive bidding process. The results of that process will be announced after the assessment of the bids; the Department for Transport tells me that that announcement will be made shortly.

My hon. Friend the Member for Taunton Deane (Rebecca Pow) raised geothermal energy, which the Government recognise as a large opportunity. I encourage her to ensure that clean growth continues to be a priority, not just for the Government but for her area’s local industrial strategy.

The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard), who made the only speech from the Opposition Back Benches, spoke with real passion and in a very non-partisan way about the opportunity for a marine park in Plymouth Sound, which takes me back to the point that we need to ensure that local industrial strategies and our national industrial strategy accurately reflect the value of natural capital. When we talk about things like productivity, it is all too easy to ignore what may be on our doorstep.

I hope that in 2018, when the landscapes review undertaken by the Department for Environment, Food and Rural Affairs consulted on whether the current network of national parks and areas of outstanding natural beauty should extend out to sea, partners in Plymouth and Devonport made a strong case for that marine park. There is no update from DEFRA yet, but I will continue to watch developments with interest because the marine park is an important idea that could be rolled out across the country—not least in your Anglesey constituency of Ynys Môn, Mr Owen. The hon. Member for Plymouth, Sutton and Devonport is right that we need to be bold and clear about our passion to grow the south-west’s economy; his speech made that point very well.

My hon. Friend the Member for St Ives (Derek Thomas) spoke well about the UK shared prosperity fund. He will be aware of the Government commitment to ensure that the current round of EU structural funding has the benefit of a Treasury guarantee until March 2021, but our specific aim in introducing the UK shared prosperity fund is to provide a single domestic local growth fund without the bureaucracy of EU funds. As my hon. Friend the Member for South East Cornwall (Mrs Murray) noted, we need to ensure that our UK growth funds concentrate on what we need to grow in this country. That is one of the opportunities that leaving the European Union will bring.

My hon. Friend the Member for St Austell and Newquay (Steve Double) spoke about the desired growth of the Cornish economy. Of course the spaceport has already received funding of £2 million from the Government, and the Space Industry Act 2018 will enable spaceships—I guess—to take off by 2020.

I want to give my hon. Friend the Member for South West Devon an opportunity to wind up, so I do not have time to answer all the questions asked by hon. Members, but I will write to them about any outstanding issues. This has been a wonderful debate. This is the year of regional growth, and the south-west must be at the heart of it.