That this House has considered industrial strategy in the North East of England.
It is an honour to serve under your chairmanship, Mr Betts. I am delighted to have been granted this debate on such a crucial subject for our region. There are two local enterprise partnerships in the north-east, so we have two local industrial strategies: one for seven north-east local authorities, and one for the Tees valley. My area is covered by the North East LEP, which leads on the creation of the local industrial strategy, as its footprint includes two combined authorities: the newly created North of Tyne combined authority and the North East combined authority. As the North of Tyne combined authority has a devolution deal that specifically refers to the LIS, the picture is a little more complicated than elsewhere, as the Minister will appreciate. However, both combined authorities are working together, and with businesses and partners and through the LEP board, to make sure the local industrial strategy makes sense for residents and businesses in the north-east.
I will not talk about the north-east’s fantastic industrial and inventive past, because we see that backward look too often in the region, and although it is important to recognise that we have been passionate, ambitious and innovative for hundreds of years, looking back does a disservice to the brilliant people and businesses that we have today. It does not highlight the fact that the north-east has proportionally more businesses in manufacturing—10.5% against 7.7% nationally—or the fact that in 2018, the growth in the number of businesses massively outstripped what was happening nationally; we had 14.2% growth, versus a national fall of 0.5%, and we have seen a growth in productivity since 2014. Those are positive things, but that is not to detract from the less positive things happening in the region that I think my colleagues will talk about.
Looking back would not highlight the fact that the north-east is a brilliant place to live; I am sure all of us in this room agree on that. It is way more affordable than significant parts of the country. As of March, our average house price—for a very nice house—was £123,000, whereas the national average was £227,000, so I urge people to look at relocating to our area.
I want to talk about what is strategically important to the north-east today, and what will make a difference to our future. For the north-east, the industrial strategy and the local industrial strategy will be about our ambition, the sectors in which we are strong, and the infrastructure that will lead to growth, and they have to be about turning strategy into action. The LIS is seen as building on the north-east strategic plan, which was agreed with businesses and communities of all shapes and sizes. It has an ambition for more and better jobs—100,000 jobs by 2024, with at least 70% being what are termed better jobs in managerial, professional and technical roles. We have already seen more than 64,000 new jobs created, of which 77% are classed as better jobs, but we need more investment and support from the Government, so that more can be achieved, and we need the right infrastructure put in place.
Yesterday, some of us went to the drop-in held by Highways England. I was pleased to go and congratulate it on the fantastic new Silverlink interchange on the A19, which has massively improved access to the Tyne tunnels. It was done on time, through collaboration between the council, businesses, and Highways England—a great feat for the region.
I also visited the Highways England drop-in yesterday; my hon. Friend and I were there at the same time. I was told that the project to widen the A19 between Wynyard and Norton will go ahead in May. Will she join me in welcoming that, and an end to the terrible noise that the people of Billingham suffered as a result of the project?
That is fantastic news. I hope that the project is done in the same timely way as Silverlink was, and with minimum disruption.
I hope the Minister is aware that a team from the north-east has been talking to the Government about how to make real the industrial strategy’s grand challenge on ageing, by working with local businesses of all sizes and with our universities. There is an opportunity to meet that challenge in our region. There is definitely a commercial opportunity and benefits for society in working with a population that is living longer. There are benefits for expertise, too. In my constituency, Procter & Gamble’s research and development team is focusing on what its older customers will need to live happy and independent lives. We know about a lot of projects that would influence that.
Across our region, there is groundbreaking work in health and life sciences. I am sure colleagues here will expand on that. The north-east has real strengths in the offshore renewables sector, and our region is ready to take advantage right away of any changes in that environment. Shepherd Offshore, Smulders, WD Close and SMD are all top-class, world-renowned companies in my constituency making a difference across the sector, but they could do even more with the right investments; I will continue to go on about that in Parliament.
One of the main things that hinders the development of those industries to some degree—this is important to South Tyneside, Gateshead and Newcastle—is the need to find a way to secure a significant investment to re-route the National Grid power lines that cross over the Tyne. That would make such a difference in how the Tyne is viewed by companies from around the world. I have been pursuing the issue for a while locally, with National Grid and with another Department for Business, Energy and Industrial Strategy Minister, and I am pleased that all four local authorities, the port of Tyne and the North East LEP are working together to look at how the power lines can be diverted to secure further contracts and local jobs for companies up and down the Tyne. I know it is a vast sum of money—around £20 million—but where there is a will, there is a way, and that is what we are working on.
I congratulate my hon. Friend on making a powerful, important and positive speech about our region and its opportunities. She makes the case for the power of public investment and private sector partnership. Does she agree that it is not only large business that should invest in our region? So should small and medium-sized businesses, which are the lifeblood of our economy. For example, Sage, which is headquartered in my constituency, is working really hard to develop a strategy for a public-private partnership, so that through our public sector organisations, there is more support for growth, investment, productivity and exporting. However, it needs a clear industrial strategy to back that up.
That was an excellent intervention, which the Minister must have heard. I can only agree wholeheartedly with everything my hon. Friend said.
On digital and data, the north-east’s history of engineering excellence continues in the digital age. North Tyneside was recently judged to be a hotspot for digital growth. In my constituency, and that of my right hon. Friend the Member for Tynemouth (Sir Alan Campbell), our residents work in world-class digital businesses, such as Accenture and DXC Technology. There is also groundbreaking public service digital work in the Department for Work and Pensions and Her Majesty’s Revenue and Customs, and work in local companies such as Perfect Image and Infotel UK.
The most important strength in our region is our people. We have thousands of skilled, passionate and hard-working people who drive our economy, creating and leading businesses, large and small, and working together to serve the region. Although the devolution of the adult education budget to the North of Tyne combined authority is a start, and the national careers strategy gives some important pointers, we need to ensure that we leverage the capabilities of local people.
The industrial strategy and local industrial strategy needs must be backed up with deeds. We need sector deals, which make a real difference, and clear support and investment in skills, with joined-up thinking across Government. I ask the Minister to commit to working closely with colleagues in the Department for Transport to ensure that the east coast main line upgrade is prioritised, and that our north-east transforming cities bid gets solid backing.
In both cases, there is a compelling economic case for investment. Colleagues right up the east coast of England and Scotland know that the east coast main line is as critical as investment in HS2. On the transforming cities bid, we are all working together to continue to secure investment to upgrade the metro, to reopen the Northumberland-Newcastle line to passengers, and to ensure that people and businesses can make the right connections in Sunderland, South Tyneside and Durham.
It is an honour to serve under your chairmanship, Mr Betts. I thank my hon. Friend the Member for North Tyneside (Mary Glindon) for securing this important debate and for her excellent speech. She has laid out why a proper industrial strategy is so important, especially for us in the north-east.
The north-east strategic economic plan has been active for five years. In that time, the region has seen some great change and investment, despite the uncertain times in which we find ourselves. I am proud to be the Member of Parliament for Washington and Sunderland West, which is home—as all Members know, because I bang on about it enough—to Nissan’s UK car plant. There has also been exciting development around the International Advanced Manufacturing Park, known as IAMP, which I am sure Members will become equally sick of hearing me talk about.
Meanwhile, a bid to unlock a potential £33 million in funding is under way with the Centre of Excellence for Sustainable Advanced Manufacturing. That hub will provide advanced manufacturing solutions to many businesses across the market in the region, such as Driving the Electric Revolution, which is based in Sunderland. I am certain that that will attract innovation and investment across the region, to benefit both the local and national economy. Those developments have the potential to transform the north-east.
The north-east strategic economic plan has been successful to a certain extent. It has helped towards the creation of 100,000 more jobs by 2024, as we heard, and the economic gap between the north-east and the rest of the country has narrowed. Some 71,600 jobs have been created so far, of which 70% can be described as “better jobs”. That is an excellent feat for the region and its long-term planning. However, we can be certain that the gap still exists between the north-east and the rest of the UK.
Does my hon. Friend agree that we have two economies in the north-east: an economy with well-paid jobs, which allows people to go on foreign holidays and enjoy their lives, and poverty that afflicts tens of thousands of people in our area? We have done extremely well as a region; if we just had more investment, we could take so many more people out of poverty.
Inequality and the wealth gap still exist, probably in all regions—we see it here in London too. Prosperity has never reached some parts of our region, which has led to disenfranchisement in some of our communities. We are now feeling the brunt of that in how they are voting.
Growth is good, but it is important to know where that growth comes from. The quality of communities and how they are sustained by the economy is an important part of keeping the fabric of society vibrant. The role of the Government in the economy must be more than simply growth and redistribution; they should aim to ensure that the country’s growth is responsible and has a social value, so that everyone lives a better life. That is something that the Labour party is committed to, with the introduction of a Minister for manufacturing.
The hon. Lady makes some really important points, especially on the wealth gap, which I, as a Yorkshire MP, would say is between the north—rather than the north-east—and the south. Skills and education play a key role in improving the lives and opportunities of everyone. Does she welcome the technical education offer, and the announcement of 12 new technical institutions? Two are in the north-east and Yorkshire: one, York College, is in my constituency and the other is New College Durham. Surely we have to grasp that opportunity to ensure that we improve skills and technical education in our region—I say “our region”, as a Yorkshire MP—as the north moves forward.
I am happy to say that I agree with the hon. Gentleman. Skills are so important. We hear from employers all the time that they often cannot find the necessary skills in the local workforce, which is heartbreaking when many young people are desperate to acquire those skills. As my hon. Friend the Member for Stockton North (Alex Cunningham) mentioned, we need to ensure that prosperity is shared among everyone. The rise in the number of apprentices is also welcome, and the technical colleges that the hon. Member for York Outer (Julian Sturdy) mentioned play a huge and important part in that.
The Government often point to low unemployment figures as proof that their approach is working, yet in-work poverty is on the rise. It is at its highest for 20 years, with 4 million people living in poverty despite being in work—it is not just me saying that; the figure comes from Joseph Rowntree Foundation research. One in four workers in the north of England is paid less than the real living wage, after a decade of stagnant wages and the rise of zero-hours contracts. That leads to the two-tier workforce that my hon. Friend the Member for Stockton North mentioned.
Although we are on our way to closing the gap and making businesses in the north-east a more valuable prospect, we are still recovering from the catastrophes that the region has faced in the last 50 years. Those catastrophes have made our communities resilient, but to ensure that we endure, one thing must be at the heart of any strategy: the environment. We must invest sustainably in our economy to ensure that future growth does not come at the expense of our environment. It is essential to confront the climate crisis in every Government strategy, especially an industrial strategy. I am proud that the Labour party has committed to do that, having already forced the Government to declare a climate emergency in May.
Nissan’s investment in battery technology and electric vehicles has put Sunderland at the forefront of the European market. It is the only plant in the UK that makes a purely battery electric vehicle, the LEAF. Nissan’s expansion on the back of the worldwide move to electrification offers the UK the chance to be a leader among European manufacturers, and our local communities will benefit most.
It is a pleasure to serve under your chairmanship, Mr Betts. I, too, congratulate my hon. Friend the Member for North Tyneside (Mary Glindon) on securing this important debate. Unlike her, I will refer to the past.
The area that I represent has a rich history of industrial innovation, from the Stockton to Darlington railway, which was the first in the world and will celebrate its 200-year anniversary in a few years’ time, and which laid the foundations of the Tees Valley’s rapid growth, to our world-leading chemical and pharmaceutical industry, John Walker’s invention of the friction match, and Sheraton furniture, which some of us sit on in this place. We have always been an area that leads the way, although our business and industry have changed substantially over the years and we still lament the loss of Tees shipbuilding and the thousands of well-paid jobs it once provided.
Even if we do not always receive the funding and investment we need from national Governments, the Tees Valley has demonstrated again and again that it can change and attract investment, although more could be done to help it to reach its full potential. That said, we are the third best place in the UK for business expansion and the fourth for business innovation, and we are part of the only continuous net-exporting region in the UK—north-east England.
Our Tees Valley combined authority was one of the first, and it has the powers to make the decisions that affect our area in our area. It has a plan for boosting economic growth and creating thousands of jobs. We also have a thriving and innovative industrial sector that we should celebrate and support.
We have much to be proud of, but, sadly, the decline of some industries and the failure of the Government to act mean that unemployment in our area continues to increase—it has gone up month by month in my constituency. The plight of British Steel is a case in point. I was saddened and disappointed to learn that while the Government stand on the sidelines waiting for the official receiver to try to sell the business, our elected Tees Valley Mayor has no power to intervene to protect the hundreds of jobs in steel directly and in the supply chain. I hope that the official receiver can sell the business as an integrated going concern; failure to do so will have huge ramifications for our area and others across the country in terms of jobs, and will mean that we lose a large part of a foundation industry that is crucial to the UK’s manufacturing economy. Perhaps the Minister can update us on where the official receiver is up to in trying to sell the business.
It is a pleasure to serve under your chairmanship, Mr Betts. I thank my hon. Friend the Member for North Tyneside (Mary Glindon) for introducing this debate.
Sedgefield is home to the largest business park in the north-east. Between 10,000 and 12,000 people work there, in about 500 companies, from small sole traders up to massive manufacturers, such as Gestamp, Husqvarna, 3M and, obviously, Hitachi, which is now producing the rolling stock for the east coast main line. Trains for Darlington, Durham, Newcastle and Edinburgh will enter service in August this year. Everybody is looking forward to that—we have been waiting about 40 years for it.
Another manufacturer, Roman, produces showers and bathroom furniture and is now the biggest supplier in Europe. We have a very good story to tell. We are home to a university technical college, which opened two or three years ago. It has been graded good by Ofsted and is going from strength to strength. It has a great future. It is sponsored by Gestamp and Hitachi, who want to see a throughput of apprentices, and it is bringing young people into engineering and electronics and all the manufacturing industries that we want to see maintained in Sedgefield and the north-east.
I want to talk a little about the past, as my hon. Friend the Member for Stockton North (Alex Cunningham) did. We have a sound tradition of manufacturing and industry in Sedgefield. About 500 yards from Hitachi’s base is Heighington crossing, where George Stephenson assembled Locomotion No. 1 so that it could enter service for the Stockton to Darlington railway back in 1825. The platform has a nice plaque about that. Next to it was the Locomotion No. 1 public house, which is now closed, but was the original ticket office and waiting room —the first ticket office and waiting room. It is there for anybody to go and see. The original platform is there as well—the oldest in the world. We can trace our manufacturing and industrial heritage back at least 200 years.
I am surprised that my hon. Friend would claim that the first ticket office is in his constituency, because there is a plaque on a wall in my constituency that declares the first ticket office in the world to be there. Perhaps we need to meet outside of this room to consider the matter further.
We do. All I can say is that that is where the train was assembled, where the ticket office is and where the train set off from.
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As the north-east is the only region that exports more than it imports, we will be hit hardest by Brexit. I had not mentioned Brexit up until now, but it had to come in somewhere. For 2014 to 2020, our region received £437 million from the European structural investment funds, which will be replaced by the shared prosperity fund post Brexit. The consultation was expected last year, but we know that the Brexit timetable has changed.
The consultation has been postponed, with as yet no further date announced. Worryingly, it has been said in response to recent parliamentary questions that the final decision on the fund’s design will be taken during the spending review. However, the spending review report will be published only with the Budget in the autumn. I hope that the Minister can tell us a bit more, and assure us that the consultation will begin soon. We do not want any gaps in replacing the loss of European funding.
I will be quiet now, because colleagues wish to talk about the industrial challenges in their constituencies. Those challenges are many, and influence the current and future prosperity of our region. I hope that the Minister has listened to what I have said, and will listen carefully to everything that my colleagues ask of him, and that he will give us clarity and reassurance that the Government are prepared to commit adequate support and resources to our great region, so that it can flourish for everyone in the north-east.
If performance, enabled by investment and infrastructure, had matched that of the rest of England except for London, we would have 93,000 more jobs in the north-east and 25,000 more businesses. The north-east still lags behind in the majority of areas of economic performance, despite, as we heard, securing more foreign investment than any other region. That suggests that the Government’s economic plan is failing us. It has held back the economies and communities of Washington and Sunderland, and those of many other ex-coalfields and post-industrial northern towns.
Sustainability should be at the centre of all sides of development. For example, with the expansion of IAMP, which I mentioned, I would like the local transport network to be developed to ensure that in years to come, the staff who work there will have an alternative to private motorised transport when going to work. An excellent way to do that—another opportunity that I never cease to mention—would be to expand the Tyne and Wear metro to Washington and IAMP.
Economic development is another concern in these turbulent times. The ongoing uncertainty of the Brexit process—I have mentioned it as well—may damage investment and businesses in the north-east, as 55% of Nissan’s exports go to the EU. We need a solid and sensible deal for exiting the EU to give businesses certainty. Parliament has made it clear that it rejects the possibility of a no-deal Brexit, yet the idea of reintroducing a no-deal option has been used numerous times by candidates in the Conservative party’s ongoing leadership campaign—I will name no names; I do not want to give anybody more publicity, not that anybody would take any notice of me—in a reckless attempt to bolster themselves. That is worryingly irresponsible and gives no assurance to UK manufacturers, some of whom described the idea of leaving the EU without a deal as “economic lunacy” this week.
The potential for a bright future in the north-east is high. Our region is growing well, and as my hon. Friend the Member for North Tyneside said, it is a great place to live, work and have leisure time, but there are more steps to take to ensure that its development can be sustained and work for everyone, which I hope the Minister will consider.
The high cost of energy is a major factor in the steel crisis and for many other industries in our area. That is one reason I have been focusing on the needs of energy intensive industries not just on Teesside but across the country, from chemicals to cement production and from steel to ceramics. They also include the companies developing wind turbines and related products, which have exploited the skills of our talented engineers to produce the goods for offshore and onshore wind farms. All those industries exist in the face of the highest energy costs in Europe, but there is no plan from the Government, or anyone else, to address that or the high carbon taxes.
Our region has a huge advantage when it comes to expanding low-carbon generation through hydrogen production, in which Teesside is the bigger producer in the country; the development of energy storage; the opportunity to develop smart grids to better support our industry and communities; and, of course, carbon capture, use and storage. I set up and chair the all-party parliamentary group on carbon capture and storage, and I was pleased to lead the demands that Teesside should be the first place to utilise its skills and knowledge in that area. CCUS has the potential to create thousands of jobs and protect thousands more. It is also important in meeting the grand clean growth challenge that the Government face and, crucially, in delivering a long-term sustainable future for the other industries based in our region.
We have heard some kindly noises from Ministers but, unfortunately, the Government have been slow to support CCUS. They talk the good talk—we have had statements, ministerial visits and news releases by the dozen—but we await the concrete commitment that will make the Teesside project roll. That is why it is vital that our local industrial strategy really counts in its support not just for CCUS but for our existing industries, and the new ones, that are critical to our future. We need a strategy that provides certainty and direction for local industries, a sound base to attract funding, and support to help the industries to grow.
A local industrial strategy would benefit our chemical and steel industries, which have been hit by Brexit, particularly the prospect of a no-deal Brexit. The chemical industry needs the EU registration, evaluation, authorisation and restriction of chemicals—REACH—regulations, which govern the manufacture of chemicals, to apply in the UK after Brexit, but despite a considerable amount of work by Ministers and officials, the outcome remains far from perfect and we all know how nervous the industry remains. If there is no deal, what happens to the regulations such as those for chemicals? Will we be able to sell the chemicals and every other piece of manufactured kit that relies on common standards with the EU?
I mentioned earlier the collapse of British Steel, which leaves 700 direct jobs under threat on Teesside, not to mention the impact the closure would have on the local supply chain. British Steel made it clear that the likelihood of a no-deal Brexit was a major factor in its collapse. Put simply, a no-deal Brexit means no steel industry, and that would have huge negative implications on Teesside and beyond.
Surely we cannot have another repeat of the SSI fiasco, which saw an end to steel production from what was probably the country’s most efficient blast furnace in Redcar. Let us not forget what the Government’s failure to act has meant for people: thousands thrown out of work, many of whom are still seeking work today. Since 2015, the SSI site has seen little progress or interest from the Government.
We know that trying to put land parcels together to redevelop the area is complicated, but it is now years since the closure. Sadly, despite my hon. Friend the Member for Redcar (Anna Turley) leading Teesside’s charge for investment and raising the issue of the site at every possible opportunity, we have been told the site will get £14 million—nowhere near the £200 million needed to bring the site back into proper use. What we have instead is a plethora of news releases from the Tees Valley Mayor. If we had a million pounds for every news release that has made promises and delivered nothing, we would have the £200 million that is so desperately needed on Teesside.
That said, I am pleased that the Tees Valley combined authority is currently working on a draft industrial strategy that will sit alongside its strategic economic plan. It identifies our local strengths, as well as our weaknesses, and will set a strategic direction for our industries, but our local efforts need to be backed up by the national Government—a Government that have, so far, fallen short in safeguarding our industries.
I am certain that everybody here wants to see our region prosper and thrive. I am sure we all want to reverse the increase in unemployment in our region, but it needs to be backed by more than words and news releases from the Government. I urge the Minister to stand back, look at Teesside carefully and make the right decisions as we go forward.