Local Infrastructure (East Midlands)

Tony Lloyd Excerpts

Tuesday 20th March 2018 Westminster Hall

[Tony Lloyd (Rochdale) (Lab)]

I congratulate the hon. Member for North East Derbyshire (Lee Rowley) on securing an interesting debate that has covered a huge range—from Sandy Lane all the way through to Crossrail and investment in St Pancras. There have been important contributions across the piece on which I will comment as I go along.

Housing has shot up the political agenda dramatically. My own party has been banging the drum for some time, but it is good that the Government are beginning to talk about the fundamental importance of housing both as a social and an economic driver. That must be welcomed. However, we are still not where we ought to be: intelligent public policy, mixed with the private sector and working with local government. The hon. Member for Northampton South (Andrew Lewer) has already mentioned the importance of local government in the mix.

We ought to have a policy of housing replacement. The hon. Member for North East Derbyshire referred to the fact that in the east midlands there is a higher rate of housing formation than in most other parts of the country, but it will still take 135 years for it to replace its existing housing stocks. Houses that were built 50 years ago will not last the next 85 years, so we have to do massively better.

We need a mix of housing, but we do not have that in the east midlands. Of the roughly 15,000 new homes built in 2015-16, the overwhelming majority, 12,500, were built by the private sector for owner occupation. Some 2,000 were built by housing associations, but they are often for sale as well. Only 200 were built by local authorities. That does not provide the housing mix that allows people to be properly housed.

In Derby, for example, the average house price is just short of £170,000. Someone needs an income of £37,000 to £40,000 to service such a purchase, and that is above the levels of income typical in large parts of the east midlands. We know there will always be a need for social rented accommodation and we must see local authorities as part of that mix. I endorse the words of my hon. Friend the Member for Chesterfield (Toby Perkins) about the need to look at the right to buy and how councils build houses that simply disappear from the stock. We must at least see adequate replacement.

We must recognise that houses are people’s homes in their own communities. That emphasises the importance of infrastructure. If we do not integrate the planning process and make infrastructure an integral part of planning for people’s homes, then we miss a huge trick. That means public involvement because only the public sector can have such a planning framework. However, there are problems with that.

People who know my background are aware that I spent time working on the devolution agenda in a very practical way. I profoundly believe that there should be devolution from central Government, who have been far too centralising. Frankly, Government Department does not talk to Government Department; it is much easier at the level of a Northamptonshire or Derbyshire local authority.

For the sake of brevity, I will not name every east midlands county. Localism is important for coherent planning. It is possible to integrate, although I recognise there are difficulties and different arm wrestles between counties and districts. I will not get into the local government reorganisation debate, but devolution is fundamental to the delivery of good infrastructure. We are not there yet across the country.

We must also recognise that the Government are preoccupied with London. I disagree with the right hon. Member for Derbyshire Dales (Sir Patrick McLoughlin). Crossrail might be necessary for London, but London should not get the lion’s share of investment too often, whether it is for transport or across the piece. Of course the national capital is economically important, but we do not have a balance. It is not reasonable for public infrastructure investment in the east midlands to be only half that of London. In terms of economic investment, for example, it is only a third of that that goes into the national capital. That is not efficient for the nation’s economy.

Hon. Members have rightly emphasised the importance of the industrial traditions of the east midlands. I have studied and worked in the east midlands, so I am well aware of both the challenges and the opportunities. To liberate the capacity of that industry, we need public investment on a more equitable footing. The Government have to begin to rethink their allocation processes. Interestingly, in the week when the Government re-committed to Crossrail 2, they announced that the electrification of the midland line would not go ahead. That was a symbolic and interesting commentary on the Government’s priorities.

[Sir Patrick McLoughlin]

From the hon. Gentleman’s previous experience in Manchester, he will know that HS2 and the whole concept of the Northern powerhouse, which was pushed heavily by the previous Chancellor, are very important. In the hon. Gentleman’s area, there will be one of the biggest upgrades of Northern Rail in the next eight or nine months, with brand new rolling stock—something that was completely missed out when the last franchise was awarded under the previous Labour Government.

--- Later in debate ---

[Tony Lloyd]

Today’s debate is not about the north of England, but clearly I welcome what the right hon. Gentleman has mentioned. However, I do not just live in the Greater Manchester area; as I travel around, I recognise that we have a long way to go. I recently travelled between Manchester and Nottingham, and the journey was frankly worse than many decades ago, when I lived in Nottingham as a young man. We have to do better. [Interruption.] It was many decades ago—hon. Members can check the record. The investment in St Pancras is welcome, but it has not been mirrored by the same kind of investment in Nottingham station. It is not of the same quality as our London stations.

Another issue is the atomisation of local government. I was talking to the deputy leader of Derby City Council recently, and he made the point that the building control and planning departments in his city council have been eroded over recent years, and that is typical of every local authority across the country. I welcome the fact that there will now be an increase in fees in this area, but the skills infrastructure in our local authorities has declined, and it will take time to rebuild that. We need to recognise that if infrastructure is destroyed, it takes time to rebuild it.

My hon. Friend the Member for Chesterfield made the point that we have the same issue with the skills mix in the construction industry. In the east midlands, we simply do not have the skilled workers for the great leap forward that we need. Those are major issues that we have to look at. Another issue that the Government have to address on infrastructure investment—this is another point that the deputy leader in Derby made to me—is that when Derby, for example, is trying to match its schools with its housing developments, because all new schools have to be academies and therefore delivered outside the local authority framework, a much more complicated balancing act is now needed to incentivise local people to look at section 106 funding to erect the structure for a new school to be built. That is not the right way to plan. We need better mechanics for our planning.

Statistics on the level of infrastructure may be misleading, but they are an important comparator. As a nation, we do not invest in our infrastructure. The World Economic Forum said recently that when it comes to infrastructure quality we have slipped from 16th place to 24th between 2006 and today. That is a major issue if we are to attract the inward investment into the east midlands and other parts of the country. Even the Government’s present plans for infrastructure spending—about 2.8% of GDP—are below the OECD’s recommended level of 3.5% internationally. We are falling behind even now, as the economic tide has changed after the global crisis. We are still lagging behind the levels of infrastructure spending that we need.

Within that, the east midlands does badly. Hon. Members on both sides of the Chamber representing communities in the east midlands should be jumping up and down on that issue. The spend on transport infrastructure in the east midlands is some 49% of the national average. That is a long way short of what the east midlands needs for the local schemes that Government Members have talked about. The spend on health is only 79% of the national average; on schools, it is some 78%. At important levels, the east midlands is sliding behind what the nation as a whole can deliver. Hon. Members ought to be concerned about that.

East Midlands Councils, in its committee report, said:

“The recent trend has worsened…and in summary, Government statistics demonstrate that in 2015-16, the East Midlands has…The lowest level of public expenditure on ‘economic affairs’…The lowest level of public expenditure on transport, in total and per head…The lowest level of public expenditure on rail per head…The 3rd lowest on health care…The 3rd lowest on education…The 3rd lowest total of public expenditure on services, in total and per head.”

Frankly, if I were an east midlands MP I would be saying to the Minister, “It’s not good enough. What are you going to do about it?”

The fundamental issue, which comes back to the important speech made by the hon. Member for Northampton South, is that central Government will never provide the joined-up structures that we need to deliver the infrastructure development that will liberate the houses of the future. With no disrespect to the Minister, he covers a huge range of issues. A Treasury Minister probably ought to be responding to today’s debate, if we are to see real join-up in central Government. We also have to give our local communities, through their local elected representatives, the capacity for strategic planning both to build housing consistent with local communities, and to plan public infrastructure, so that schools, hospitals, health services, roads, and transport systems are provided for those houses and those communities.

This is a very important debate, and I congratulate the hon. Member for North East Derbyshire on securing it.