Shared Prosperity Fund

Scott Mann Excerpts

Tuesday 14th May 2019 Westminster Hall

[Dan Jarvis]

As always, my right hon. Friend makes an important point. I hope that what is starting to emerge as a consensus in this place is that whatever happens over the next few weeks, months and years, business as usual and the way we have done our politics previously are not going to cut it. This is an opportunity to look at how we invest in our regional communities and to empower decision making at a regional and local level. That is not a silver bullet solution—it will not necessarily address all the challenges that we face—but it has to be part of the solution to many of the concerns that our constituents have.

My right hon. Friend provokes me to make another point. This country has one of the most centralised systems of public finance, policy making and political control of all the OECD nations. The Guardian—I am not sure whether the Minister is a regular reader—reported that local government in this country controls only 1.6% of GDP. That figure is 6% in France, 11% in Germany and 16% in Sweden, yet local government delivers around a quarter of all public services. The inevitable consequence is that decisions, however well meaning, do not always adequately reflect the needs or opportunities of local areas.

The issue is no more acute than in the way that successive Governments have decided where to prioritise investment. I have made this point many times before: when it comes to spending on transport infrastructure, the gap between more affluent areas, such as London and the south-east of England, and the north is particularly stark. Despite the work of the Minister and those in Government supporting the northern powerhouse, it is still the case that, since the northern powerhouse was introduced by the Government in 2014, public transport investment per person has been three times higher in London than in Yorkshire and the Humber.

It is no surprise that that is the case. However herculean the efforts of individual Ministers, the rules of engagement are stacked against us. The inequalities are built into the criteria of the Treasury Green Book model, which favours infrastructure development in more affluent areas, meeting existing demand rather than stimulating latent potential. In the words of my friend and neighbour, the Mayor of Greater Manchester, Andy Burnham—himself a former Chief Secretary to the Treasury—the Government have

“a tendency to shovel more and more into the areas that are already doing well.”

We see that in transport investment and other Government programmes.

[Scott Mann (North Cornwall) (Con)]

I am grateful to the hon. Gentleman for securing this debate. Does he acknowledge that it is not just the north that suffers this problem? Some areas in the south-west have exactly the same difficulty. Does he agree that the Treasury should have other mechanisms, rather than looking at just the economic benefits? Perhaps it could look at the social benefits of putting money into areas such as his and mine.

[Dan Jarvis]

I absolutely agree, and I always try to choose my words very carefully. Not for one moment will Labour try to pit the north against the south, or different parts of the country against each other. I absolutely accept that there are different needs in the remoter regions of our United Kingdom. The hon. Gentleman is absolutely right to make the point that there are areas of deprivation in the south, south-west and south-east, and indeed in London, just as there are in the north. That is why it is so important that we take this opportunity to get the design of this fund right, so that every corner of the country will be best placed to benefit from it.

I was about to make the point that in 1960 the UK had the highest levels of productivity in Europe. Now, though, a French worker produces, on average, more by the end of Thursday than a worker in the UK does by the end of the week. In the UK, the gap between the richest and poorest regions is around 150%, which is almost twice as large as in France and three quarters larger than in Germany. Such gaps in wealth distribution and productivity are neither normal nor inevitable, but for some of our most deprived regions they are increasing. The consequences of public policies and investment decisions entrench the economic and social divide. If we fix that, the prize will be huge.

Looking at the north of England, Transport for the North’s “Northern Powerhouse Independent Economic Review” suggests that we could add £97 billion to our economy by 2025, which is over and above business-as-usual levels. Over the same period, we could add 850,000 jobs, which is also over and above business-as-usual levels. We can do that by focusing on what we are good at. In South Yorkshire, the same qualities that fired the world’s first industrial revolution now power our 21st-century advanced manufacturing and engineering story. Companies such as Rolls-Royce, Boeing and McLaren have chosen our region because we are in the vanguard of developing new materials and solutions to real-life manufacturing and engineering problems. This must be the start of our economic transformation, not the end. To go further, we must have the tools and resources.

--- Later in debate ---

[Scott Mann (North Cornwall) (Con)]

Cornwall has been a net beneficiary of objective 1 and convergence funding, as we have heard from other Members, for the past 20 years. If we step away from the coastal towns that many people visit on holiday, we find pockets of rural deprivation that successive Governments have found difficult to identify. Although the moneys that have flowed into Cornwall have been welcome, there have been challenges with how the money has been administered. I want to raise those challenges with the Minster today in the hope that we can avoid them when we allocate the shared prosperity fund.

Cornwall was a net recipient of almost £1 billion over 20 years. Although there have been some noteworthy allocations of the cash—probably the most important and successful was the roll-out of superfast broadband across Cornwall—much of the money was allocated to buildings and industrial parks. Without a strategic investment plan, the net result over the past 20 years has not really moved the dial. Much of the failure came from the application process and does not reflect any lack of will by the people administering the funds. Most of the businesses in North Cornwall are small family businesses employing between five and 10 people. They generally work six days a week, 10 hours a day, and did not have compliance teams that could pore over complex and onerous forms. There was therefore a tendency for the bigger companies and charities to put in their bids, and because they had the time and the resources, they were able to make the applications that the small businesses were unable to.

One stat that struck me was in a recent cost-benefit analysis of the objective 1 funding: for every £250,000 that was spent, Cornwall was the net beneficiary of one job. That fundamentally illustrates why small businesses were unable to access the money when that is exactly where it needs to go. Can we simplify the application process to make the shared prosperity fund easier to access? The countryside productivity small grants scheme, a similar fund, is administered by DEFRA, which is simpler and much more straightforward.

We are still waiting. After assurances that the funding criteria would be in place, we are still in the dark. I encourage the Minister to lay out the fund as soon as is practical, so that Cornwall can benefit. Cornwall has seen historic growth over the last five years. Unemployment is at record lows and tourism in the county is booming off the back of great weather and the devaluation of the pound.

Many of the small businesses in North Cornwall are exporting for the first time, but we need to start investing in people. Young people growing up and going through secondary education and college will now work until they are 80 and will have at least four careers in their lifetimes. The Government need to invest in those young people in college and give them a future by moving the dial on their social mobility.

In summary, we need a more straightforward process, quicker allocation and the apprenticeships and investment in skills that our young people need.