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That this House has considered support for the economy in the north of England.
It is a great pleasure to serve under your chairship, Mr Efford. I declare an interest as a metro Mayor.
Today’s debate takes place amid an unprecedented economic crisis affecting the whole country, but covid has only reinforced an argument that was already undeniable. We need to level up the north—not by tinkering at the margins, but through a full-scale transformation; not just for the sake of the north, but for the sake of the whole country. The question is, of course, whether the Government will make it happen.
Covid has hit the north hard. We have a disproportionate number of cases and hospitalisations, and the pandemic has affected deprived areas more—and the north still has far too many deprived areas. Our economy has been equally exposed. In South Yorkshire, the level of people claiming unemployment-related benefits is now higher than at any time since the mid-1990s, when we were in the aftermath of the pit closures. We risk undoing a quarter of a century of painful progress. The brutal reality is that the north is now on course for levelling down, not levelling up.
Meanwhile, the issues that made the case for levelling up in the first place have not gone away. The UK has the worst regional inequality of any comparable nation. We have unacceptably unequal education and health outcomes. Many northern council areas are among the most left behind in the UK. In the five years following the launch of the northern powerhouse, the number of our children living in poverty went up by one third, to 800,000.
Policy choices have made, or threaten to make, the situation worse. Planned cuts to universal credit could leave one in three working-age households in the north £1,000 a year worse off. Under austerity, public spending fell by £3.6 billion in the north, even as it rose by £4.7 billion in the south-east and the south-west.
What a pleasure it is to follow the thoughtful speech by the hon. Member for Barnsley Central (Dan Jarvis). He does a fantastic job as the Mayor of South Yorkshire. We have a bit of history of working together to make sure that the area had the powers he mentioned. I am sure that he would want me to say that when he talks about South Yorkshire, and Mayors more widely, having a deal and investing money, that is a partnership of significant Government money and money that he will have raised locally. Of course, there was no devolution in England except in London until a Conservative Government were elected in 2010 with the sole desire of delivering a northern powerhouse of which devolution is such an important part.
I do not intend to talk about the challenges facing the northern economy because they have been well set out by the hon. Gentleman, but I do want to talk about two things briefly. The first is the hit that northern culture has taken from the covid crisis. Opera and ballet will be at the heart of the culture of many people who live in London and the south of England, but for many of us in the north it is our local football club—our Glyndebourne, Royal Ballet, Royal Opera House or Royal Shakespeare Company will be Blackburn Rovers, Accrington Stanley, Barrow, Carlisle or Sunderland.
There is an argument going on between the EFL and the Premier League at the moment, and the time has come for the Government to intervene to seek to unblock it and save local football clubs across the north of England, many of which are the cornerstone of our communities and at the heart of our culture. I hope that the Minister will reflect on that during the debate.
A bright point for the north is that many of us in this room have the privilege of representing constituencies that have a significant manufacturing base. It was our constituents who, during the covid crisis, put their shoulders to the wheel—there was no furlough for them. They went into factories to do shift work. People at Bark Engineering in Bacup made ventilators; people at Perspex in Darwen made the screens that we see all over the country in retail and office space.
It is a pleasure to serve under your chairmanship, Mr Efford. I thank my hon. Friend the Member for Barnsley Central (Dan Jarvis) for securing this important debate.
Last year, the Prime Minister fought and won an election on the promise of uniting our country and levelling up left-behind towns such as Birkenhead. As is often the case with this failing Government, the reality falls short of the rhetoric. When areas of northern England were placed under tier 3 local restrictions in October, the Chancellor imposed a cut-price furlough payment of just 67% on the thousands of people who were unable to work; only when the Tory heartlands entered lockdown did he agree to step up furlough to 80%. The message was clear in the eyes of the Government: workers in the north were simply worth less than those in the south. They remain left behind.
The UK remains one of the most regionally unbalanced economies in the developed world. It has nothing to do with accents or geography. There was a conscious policy over 10 years of Conservative Governments to channel wealth to the south-east and sit back while the traditional centres of industry and employment in the north became ghost towns at worst and tourist attractions at best.
Rotherham, once famous for its steel, is starved of hope as the mills close and the jobs disappear. St Helens, which used to be famous for making glass, now has a glass museum with too few visitors. My constituency of Birkenhead is at the sharp end of regional disparity. I represent two of the most deprived council wards in England. Unemployment is above the national average and my constituency can expect far worse outcomes in terms of job opportunities, income and even life expectancy than the people elsewhere in the country. Things do not need to be that way.
This week, the Labour party outlined our plans for the green economic recovery, which offers real hope to towns in the north of England. The proposals call for £30 billion in capital investment to create 400,000 high skilled, low-carbon jobs in just 18 months to provide vital support for UK manufacturing. The Trades Union Congress has estimated that £85 billion in capital spending on rail, social housing and green investment could create 1.2 million jobs in the next two years alone. The Chancellor should take note. To lead us out of the worst recession in living memory, the Government need to exploit historically low lending rates and invest in the high skill green jobs of the future.
It is a pleasure to serve under your chairmanship, Mr Efford. I commend the hon. Member for Barnsley Central (Dan Jarvis) for securing this debate. It is great to see the Minister in her place as well. This debate is important as we need to recognise that the pandemic is not only a health crisis, but an economic one. Nowhere has that been felt more than in the north. My constituency, like that of the hon. Member for Birkenhead (Mick Whitley), is also in the Liverpool city region and has felt the disruption of going into lockdown, then out of lockdown, then having additional restrictions—tier 3 with gyms, tier 3 without gyms—and now lockdown again. We need to get out of this lockdown and we need a tiering system that takes us out of it, but we need to know what the plan is.
There is no doubt that businesses in my constituency, and many others in the north, have suffered as a result of this disruption and uncertainty. They need our support now more than ever. That said, I wholeheartedly commend this Government for their world-beating furlough package, business grants and loans, reduced VAT, business rates relief and, of course, eat out to help out. That has been particularly important in my constituency, where one third of our businesses are in tourism and hospitality. That sector has probably had the most disruption, and the owners of these businesses just want to be able to trade again.
In Southport we have submitted a town deal. As with many other towns, particularly in the north, it is vital that we deliver on the £50 million proposed in that package to unleash £400 million for my constituency alone. Delivering on this would help other areas in the north, stimulating our economy and growing our businesses. That is only part of what is needed if all our constituencies are to prosper, because some do not have town deals. We need infrastructure projects to connect us better, to increase footfall and to increase business across our whole region. Better connected, we can work better together for a more prosperous future.
It is a pleasure to serve under your chairmanship, Mr Efford. I join all those who have thanked my hon. Friend the Member for Barnsley Central (Dan Jarvis), and not just for securing the debate, but for the leadership he has shown on this agenda. We are all grateful to him for that.
Halifax was punching well above its weight as a northern Pennine town prior to the virus. We have aspiration by the bucketload in my home town. This is certainly a timely debate because, like other parts of the region represented here today, we were still recovering from the second devastating floods of the past five years when we had to immediately turn our attention to fighting the virus.
For some of us in this room, it seems like only yesterday we were here in Westminster Hall advocating on behalf of small and medium-sized enterprises in our constituencies. As I explained in that debate, Halifax has been in the equivalent to tier 2 restrictions since July—alongside our neighbours Batley and Spen and Bradford South, if I am not mistaken. We entered restrictions over 3 months ago, and we were about to enter tier 3 when the second national lockdown overtook us. I share that to make the point that although we have a great deal to offer, we have also faced a perfect storm of challenges, and we look to the Government to recognise that when considering devolution deals, economic support packages and their commitment to local authorities.
Turning to Calderdale Council, any levelling up in the north must start with properly funded services. The cost to the council of the pandemic and related lost income from closed facilities is expected to total around £37.2 million by year end. That has been partly offset by £22.2 million of additional Government funding, but that still leaves a potential deficit of £15 million for the council to deal with. Some of the losses associated with council tax and business rates can be carried forward, but we know that the cost will continue to rise as long as local and national restrictions are in effect.
It is a pleasure to serve under your chairmanship, Mr Efford, and I thank the hon. Member for Barnsley Central (Dan Jarvis) for securing the debate.
Walking around communities like ours, it is clear that businesses are struggling and are worried about the future where once, really not that long ago, they felt optimism. Furness’s economy has thrived in the past, almost in spite of its infrastructure—our roads are terrible; our rail network, although improving, is a branch line and not fast with it. People live in Furness for the amazing community, and businesses stay there because of its deep pool of skills and knowledge—from advanced manufacturing to life sciences and green energy—but it is not hard to think that we are running with our shoelaces tied together. We are achieving not because of our environment, but in spite of it; we are achieving because of those people.
In some areas we are not achieving. There are wide and deep economic and health disparities between wards that neighbour each other. We have excellent teachers, doctors, nurses and public servants, but our geography—it takes two hours to get from Barrow to Carlisle—means that those same public services are stretched, and covid has only made those challenges worse.
This Government were elected to level up, and there has never been a more pressing time to do it. Let us be clear that we are not asking for handouts; we are asking to be put on a level footing, and to be given the chance to stand on our own two feet. If we want to tackle some of those economic and health disparities in our communities, we need to trust those communities. We need to use covid as an opportunity to open up and empower civil society to step in, to start focusing on families now and not when they hit crisis points. We need to focus on prevention and not cure.
Some villages in my constituency do not have broadband of any type. They often cannot get a phone signal, so let us level them up. Let us redouble efforts to get the infrastructure they need. Let us focus on the areas where we can meaningfully grow skills and recover. Cumbria is ideally placed to be the beating heart of a green industrial revolution. Let us think what an industrial strategy looks like and build on a base of offshore wind, nuclear and gas—and build towards hydrogen and tidal energy too. We have the skills, so enable us to do it. A northern economic recovery plan is what we need from the Government, for communities and constituencies across the north, so that we can build our way out of this pandemic.
It is a pleasure to serve under your chairmanship, Mr Efford. I thank and pay tribute to my friend and neighbour, the hon. Member for Barnsley Central (Dan Jarvis), for securing this important debate. He has rightly made the case for better economic support for areas, such as ours, that have been hit hard by the covid-19 pandemic. Back in April, it was the former industrial towns that were predicted to be the most economically at risk. Indeed, Worsbrough in my constituency was given the unenviable title of tenth most at risk town in the country. The number of people claiming unemployment benefits in Barnsley East has doubled over the last six months and we need urgent help to get through the winter.
I will focus my remarks today on three simple asks. First, can the Minister outline the Government’s exit plan for the national lockdown? Last minute announcements by social media and the press have left too many businesses in limbo and unable to plan beyond the next week. We need clarity now more than ever. Secondly, will the Government use the national lockdown to fix the broken track and trace system and give control to local authorities? Test and trace should be run by people who know their areas best. The biggest threat to economies in the north is the spread of the virus and we need to get control of it now. Lastly, will the Government close the gaps in the economic support package and provide clarity on what support local areas should expect if they have to stay in lockdown for longer? Too many Barnsley businesses have gone to the wall and too many workers have been made redundant while the Chancellor has changed his plans from one week to the next.
Barnsley, like many areas across the north, was under strict tier 3 restrictions when the national lockdown was announced. During the negotiations, the Government said that workers in the north would receive only 67% of their pre-crisis income—80% was apparently impossible. Now, however, when restrictions are put in place in the south, the Government have again changed their mind. Clearly, there is one rule for the north and another for the leafy Tory shires. Last week, alongside fellow Labour MPs, Yorkshire Mayors and council leaders, I signed a letter to the Chancellor. We said:
Order. You have been disciplined with your time, which has allowed me to relax the time for Back-Bench speeches to four minutes, for the time being.
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Therefore the need for levelling up is clear, but there is a flipside to all this—the great potential and the strengths that make the positive argument for levelling up. We are still the heartland of British industry. South Yorkshire, for example, has amazing companies such as ITM Power, helping to build a hydrogen-fuelled clean energy revolution, and Magtec, developing contactless magnetic gears for wind turbines. Those enterprises reflect the north’s storied history of manufacturing prowess, but we also have huge strengths in culture, sport and tourism; incredible natural beauty; and world-class universities with fantastic strengths in research and skills. Together, we really can create a better economy, not just for our regions but for the whole UK, and help to drive the transformations that we all badly want to see. It is estimated that if we do rebalance national investment, that could add £97 billion to our economy by 2050.
However, we have not just shown our potential; we have also shown that we can use it. We can do our bit if we are given the tools; as the only MP with the somewhat unusual privilege of also being a metro Mayor, I know that at first hand. Since I became the Mayor in 2018, we have created or protected 15,000 jobs in South Yorkshire; our pioneering Working Win programme has helped 6,000 people with health conditions who want to get back to work; we have leveraged £319 million of investment and awarded more than £100 million for regeneration and redevelopment; and we have just committed £5.5 million of our own funds to kickstart nine flood prevention projects. We are putting our skin in the game and laying down a challenge for the Government to do their part, rather than waiting for them to take the initiative. I can safely say that we stand ready to be levelled up, and I know that my counterparts across both sides of the political divide in the north would say the same.
We are not coming to this debate today with a begging bowl: we have the need and the potential, and we have shown that we are ready. The north, perhaps more than anywhere, is where we will do the job of building a better Britain for all of us. What we are asking for is the tools to get on with that job, but we have not received them yet.
We have been quite successful recently in attracting funds into South Yorkshire, but none of that money, apart from the £30 million of gainshare that we are getting following our devolution deal, represents new resources specifically targeted at South Yorkshire, the north or even disadvantaged areas more widely. These are existing funds that have come under our control, such as the adult education budget; or a share of national funds that we have been allocated or successfully bid for on the same basis as any other region, such as the Transforming Cities fund. Do not get me wrong—it is hugely important that that money is being spent under local control and we are grateful for it, but this is not levelling up.
There is a similar picture across the north. There are a few exceptions. The towns fund is perhaps the most obvious, but it leaves out hundreds of very deprived towns in favour of some wealthier areas, and it is only a one-off £3.6 billion fund spread across the whole country. I would be grateful if the Minister could confirm today how much new money the Government have put into levelling up since they took office, because the overall picture is one of tinkering and not transforming.
An indication of what we need is the UK2070 Commission’s recommendation: to triple the new UK shared prosperity fund to £15 billion a year for 20 years, which would be a total of £200 billion of new funding. That is for all deprived areas, but it shows the scale that we should be talking about. The moment to do that was at the comprehensive spending review, but in the current crisis it is understandable that the Government are carrying out a more modest one-year review instead. However, that must not become an excuse to delay the transformative investment we need if levelling up is really to mean something.
Already, over two thirds of northerners believe that the Government will not follow through on levelling up; that is a concern that the 55 Conservative MPs who wrote to the Prime Minister last month—we will hear from one of them in a moment—seem to share. We all have an interest in proving those fears wrong, and here is where I think we need to start.
In the short term, we need better covid emergency support, including adequate funding for hard-pressed local authorities, but the key issue is that the reduced spending review should retain real ambition. First, it must extend the local growth fund, which expires in March. The LGF has been absolutely critical in generating jobs, investment and regeneration, and it would be great to hear a commitment to extend it from the Minister today. However, LGF renewal is only enough for us to stand still. For transformation, we need something much more like a new deal for the north.
In my patch, we think that that would look like our renewal action plan, which calls for funding and powers to expand kickstart and apprenticeship schemes, begin a massive investment in infrastructure and decarbonisation, increase active travel and plant millions of trees. Will the Minister confirm today what plans the Government have for investment at this transformational scale across the north?
Transport will be especially key. Northern Powerhouse Rail is often presented as the infrastructure that will be at the heart of levelling up, but there are growing fears that critical parts of it could be delayed, along with the north-east leg of High Speed 2. It is hard to overstate how damaging that would be for the levelling-up agenda.
Lastly, the Government should make some critical structural changes, especially reforming the Green Book to reduce the in-built bias towards more affluent areas in Government investment decisions and following through on proposals to move significant parts of the civil service. Perhaps the Minister could update us on that today. Of course, beyond the spending review, the new shared prosperity fund must also embed the same ambitions. Like the European Union funds that it replaces, it must be based heavily on need. It should be as devolved as practically possible. All this is not just about making the northern economy bigger; it is about making it better—more high-tech and more high value, more sustainable and more equitable.
My ambition for the north is for it to be stronger, greener and fairer. That should be our aim for the whole United Kingdom. Covid is not an obstacle to that, but an opportunity: there is a near-consensus on the need for spending to protect our economy. The question is whether that spending will serve a greater purpose. Crucially, the issue is about not just money but power—to be legitimate and effective, levelling up must be done with and by us, not to us. We need much more flexibility over how we spend the funds allocated to us, but we also need a more fundamental doubling down on devolution.
We have done a lot in South Yorkshire, but we have done it with modest powers and resources. We are still the most centralised large developed country in the world. That must change, not just to unleash our potential but to help address the disillusionment and division that is growing across our country and that threatens to break it up. The polls showing a majority of Scots expressing support for leaving the Union are only the most alarming symptom of a wider crisis of faith also visible in the north. For all our sakes, we must make levelling up part of a more ambitious vision for reform—one that lets people feel that they are taking back control and that they have a country, a United Kingdom, that they can believe in.
We are now at a moment of crisis, but also a moment of opportunity. There is an overwhelming case for us to rise to this moment with ambition—not just to give the north the means and the powers to rejuvenate our economy and our society, but to do so as part of a wider vision for a more prosperous, more equitable, more democratic United Kingdom. In the process, perhaps we can make this a transformative moment not just for the north but for the whole country.
It is our constituents who have worked so hard for the economy, doing hard jobs to make sure that we can trade through covid. We can see that from the September purchasing managers index stats, which showed that the north of England—every part of the north—was growing faster than London. That is a testament to the strength of our manufacturing base and the huge amount of work that our constituents have done.
We formed the northern research group to pay tribute to our constituents and look at important issues such as the Green Book, which we are going to dissect in very short order. We will also press the Minister and the Government on this issue. We need a northern economic recovery plan and recovery fund so that we can ensure, as a praetorian guard for the Prime Minister, that we are levelling up our communities across the north.
Despite the Chancellor’s promise of a green jobs revolution, the UK has committed only £5 billion to green stimulus projects since the pandemic began. In contrast, France has committed to spending €27 billion and Germany more than €36 billion, with countries as diverse as Italy, South Korea and Colombia putting sustainable developments at the heart of their recovery. The UK risks falling far behind.
We want the north to be given support that truly levels up, which is why I wholeheartedly back my right hon. Friend the Member for Rossendale and Darwen (Jake Berry) in his call for a northern economic recovery plan. We cannot just hope our way out of this crisis and towards a better economic future; we have to plan for that, and we want to be part of that plan.
Alongside investing in local authorities, sorting out rail in the north will be one of the best ways to connect, to stimulate our economies and to drive regeneration, and I have no doubt that others will say the same. We need it all: HS2, Northern Powerhouse Rail and the long overdue electrification of the Calder Valley line, which goes beyond these stations and connects Leeds and Manchester, two of the biggest cities in the north. In 2015, the north of England electrification taskforce recommended the full Calder Valley line as the top priority for economic and operational benefits, but we are still waiting for that to become a reality. I hope the Minister will pledge to work with colleagues to make that a focus of the Government’s levelling-up agenda.
Those of us in this room would argue that we are the north’s greatest advocates, but there is no greater advocate for levelling up the north than God’s own newspaper, The Yorkshire Post. It does not hold back on holding the Government to account, which comes from its unwavering commitment to doing the right thing by its readers. It does need a little help, however, and I hope the Minister will reflect on that.
“People in the north are not worth 13% less than those in the rest of the country.”
I ask the Minister to clarify the Government’s position.
The north of England is full of ex-industrial towns that have suffered, since pit closures, from a lack of investment, underemployment, a declining bus network and poor broadband performance. It is a simple fact that low-wage workers and those on insecure contracts are more at risk of becoming unemployed during recessions. The shutdown of pubs, restaurants and shops has had a devastating effect on the local economy in my area, where a large proportion of the population work in those sectors and rely on less secure and low-paid work. If levelling up is to become more than just a slogan, a genuine commitment will be required.