Regional Growth Fund

Debate between Tom Blenkinsop and Eric Ollerenshaw

Tuesday 1st November 2011 Westminster Hall

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

It is nice to follow the hon. Member for Rochdale (Simon Danczuk). The regional growth fund must have got something right if there are majority of northern MPs here because the majority of the money has gone to the north, and that, in a sense, is where I want to start. First, however, I congratulate the hon. Member for Sheffield Stockbridge and Penistone (Angela Smith) on getting this debate and on the fight she has put up for her area.

I want to talk about the background of the north-south divide, which Opposition Members seem to forget. The division between the north and the south has been recognised by the Government and by Government Members from the north, but it is not clear whether the previous Government recognised it. In December 1999, former Prime Minister Tony Blair said the north-south divide was as myth and

“an over-simplistic explanation of the problems that regional economies face”.

One wonders where the problems did begin. To be fair, he told The Journal in Newcastle four months later that

“the North South divide exists, and I never said it doesn’t.”

Labour then set up regional development agencies in every region. Even at the time, some Labour Members criticised the fact that London had a regional development agency. At this point, I should declare an interest, having been a member of that RDA. I should tell the hon. Member for Stockbridge and Penistone that I never saw a great deal of transparency in the way that agency dealt with things, but perhaps that was because I was its minority Tory member.

I thought the point of RDAs was to deal with the north-south divide. However, my hon. Friend the Member for Wirral West (Esther McVey) has spoken about the relative decline of the north over the past 13 years. I want to give some figures to illustrate that. The latest figures I have for gross value added in the north—for what the north added to the national wealth—show that between 1995 and 2008, which is before the coalition Government took office, and with 100 being the average, the north-east saw a decline from 82.9 to 78.2, the north-west saw a decline from 90.2 to 86.4 and Yorkshire and the Humber saw a decline from 89 to 82.9.

If we go beneath that to the sub-region and look at my area, we see that Lancashire had a GVA of 88.7 in 1995, but that went down to 78.7 in the figures for 2008. That is a 10 point drop. What was the RDA doing if that was happening?

[Tom Blenkinsop]

What are the actual or nominal figures? What is this 82% of?

[Eric Ollerenshaw]

I am talking about a national average of 100 from 1995 to 2008. The hon. Gentleman’s area declined even further.

--- Later in debate ---

[Tom Blenkinsop]

rose—

[Eric Ollerenshaw]

I shall give way first to the hon. Lady, and then to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop).

--- Later in debate ---

[Eric Ollerenshaw]

There are a couple of things to say. My hon. Friend the Member for Wirral West has explained the economic circumstances, and I do not need to go through that again. However, as my hon. Friend the Member for Nuneaton (Mr Jones) keeps pointing out, the bureaucratic cost of the regional development agencies was something like £300 million, before any money got to any business through any due diligence process. We got rid of that, and what I regard as the success in round 2 is the fact that the companies in question are way beyond the normal areas, in Burnley, Wigan and as far as Carlisle and Cumbria—and I hope that my own part of Lancaster is part of that. That is a recognition of where success lies, and what we have learned from the mistakes of the regional development agencies.

[ Mrs Linda Riordan in the Chair]

[Tom Blenkinsop]

The hon. Gentleman is very generous with his time, and although we disagree, he is obviously fighting hard for his local patch. The only point I will make is about the regional growth fund and its significance in the north-south divide. I will go back to the nominal figures for how much was put into the north-east, for example. More, nominally, was going into the north-east. If the regional growth fund is such a great regional pot of cash, why is it less than the money that the Government are spending on mutualising the Post Office?

[Eric Ollerenshaw]

Yet again, because of the circumstance that we were left with by the previous Government. It seems we must go on repeating those figures. I think everyone understands—and that the hon. Gentleman knows it. I was not going to go into this—other hon. Members have mentioned it—but it is not just the regional growth fund that is relevant. There is also the national insurance contribution holiday for new start-ups, and the Localism Bill. Many Government Members believe that the Bill will equip local authorities to do a great deal more for themselves, and get through the sub-regional bureaucracy, which we have abolished, and do something for their areas. They are far more in the picture as to what is successful.