Private Sector Investment: Lancashire

Motion made, and Question proposed, That this House do now adjourn.—(Claire Hughes.)

Motion made, and Question proposed, That this House do now adjourn.—(Claire Hughes.)

I am grateful for the opportunity to debate Government support for private investment in Lancashire this evening. Lancashire is my home. It is also the home of some of the most powerful innovators that we have in this country. Often, they fly under the radar of both Government and private investors. In many ways, that is because they do not need us. They already have exceptional trade links and supply chains within their own sectors—decades-old business models in multi-generational companies that just work—so they crack on, quietly making money for this country and prosperity for themselves. In some ways, they do not need our help when they have figured it out for themselves for so long, but we need them. We need companies that have drive and that, with Government support and further investment in enabling infrastructure, could do 10 times what they are currently doing for our economy.

As a Labour Government, we are great at helping people who are struggling and who do not have the opportunities they deserve. I am grateful for the millions this Government are investing into Lancashire through Pride in Place projects, which will absolutely improve health and wellbeing—something we have particular need for in our county, where poor health accounts for a significant portion of the productivity gap. But, as a Labour Government, I think we could be more honest with ourselves that while overcoming deprivation is a top priority, growth is a top priority too. We could also be better at recognising where those growth opportunities are.

I think it is fair to say that this Government are pretty convinced by agglomeration economics and by the idea that if we invest in city regions, the wealth will trickle out. But what happens somewhere like Lancashire, where there is already wealth but it has been supported consistently for decades by EU funding and then by the crisis and resilience fund and the shared prosperity fund, all of which have now been removed? It feels shortsighted to pull the rug from under Lancashire’s thriving economy in the hope that some wealth might trickle out from surrounding city regions in 20 years or so.

My hon. Friend makes an excellent point, particularly around growth in cities and towns, which I am particularly interested in. Over the last 10 years, we have seen growth of around 10% in our cities whereas growth has been around 5% in our towns. Does she agree that if we do not invest in our towns, particularly where they are outside of city regions, we will miss a crucial opportunity to uplift everyone?

I absolutely agree. As I will come on to, it is about ensuring that we make the most of all areas of our country. Some of those areas already have growth, and we need to ensure that we are expanding the growth that is already there.

Without a proper holistic look at how the Government can support businesses in Lancashire, not only will businesses struggle, but our UK economy will struggle more when we miss out on the huge potential for growth.

I could stand here all night waxing lyrical about how wonderful Lancashire is—our hills, our grand town halls, our coastline, our grit—but I know none of those things speak the language of the Treasury, Government and growth, so I will focus on the numbers and the examples of how the Government have a growth opportunity in Lancashire that they need to not miss.

Lancashire is a £40 billion GVA powerhouse. That makes us the 5th largest economy in the north. As the Minister knows, the current growth narrative for the north is often dominated by our major metropolitan neighbours. While we celebrate their success, any true growth narrative for the north must take non-metropolitan areas into account. At this point, let me be clear: “non-metropolitan” does not mean rural. There is a serious risk of people in Westminster making that mistake.

My hon. Friend is a passionate advocate for the Ribble Valley in Lancashire. Does she agree that Lancashire has missed out on millions of pounds of investment because the likes of Manchester and Liverpool have been prioritised and because we have not had a fully functioning combined authority?

I completely agree with my hon. Friend. As I will come on to, the people and places in counties such as Lancashire deserve that kind of funding. Even if the politicians who have been making the decisions have maybe delayed those opportunities to get devolution, we should not penalise the people there for that.

Lancashire is a prime example of a polycentric economy. We have coastal and rural environments, but also urban environments from city centres to market towns, with many of the same issues and opportunities as our metropolitan neighbours. We are a county of 1.57 million people and over 55,000 businesses, contributing a massive portion of the north’s economic output. We face the same challenges—some of the highest levels of deprivation and worklessness in our urban pockets—yet we also have areas that rank in the top five of northern local authorities for productivity. We are not just waiting for growth; we have an economic base that matches any of our neighbours, where strengths in defence, energy and advanced engineering add unique productive potential to the north as a whole.

The private sector in Lancashire is ready to lead. We have a dynamic project pipeline with the potential to attract over £20 billion in additional investment over the next decade. However, we are currently fighting with one hand tied behind our back. The macroeconomic data tells a sobering story: since 1998, Lancashire has experienced the lowest growth in investment spending of any UK region. Despite our high-value production base, we rank in the bottom quarter for average Innovate UK grant size, for example. These grants are increasingly concentrated in areas with strong knowledge-intensive business services, rather than production-oriented economies such as Lancashire’s.

On transport and infrastructure, we are all aware in Lancashire that if we could have investment in a second bridge across the River Ribble linking the M55 and opening up Blackpool airport, and linking it with the M6 and the M65, we could have huge opportunity, but the Government, the Green Book and the Treasury do not seem to want to recognise or support that. Does my hon. Friend agree?

I completely agree. As many of my constituents regularly tell me, the congestion we get when the M6 fails or has a closure is a nightmare when it falls on to the A-roads around the constituency, so a second bridge around Preston to create a ring road is critical.

Staying with the subject of transport, my hon. Friends the Members for West Lancashire (Ashley Dalton) and for Pendle and Clitheroe (Jonathan Hinder) are having to fight relentlessly for better connectivity in their constituencies, which is where devolution could really help us. The Government may say that Lancashire did not come to the table when the offer was first there for devolution, but that is not the fault of Lancashire’s places and people, so it does not seem fair that they should suffer. Lancashire leaders are at the table now, so let us crack on.

The disparities are reflected in our venture capital and equity investment volumes, which trail significantly behind Greater Manchester. In the first quarter of 2024, Greater Manchester reached approximately £104 million in investment, while Lancashire secured just £7 million. That innovation gap is not due to a lack of ingenuity; it is a lack of investment that acts as a direct drag on our wider commercial performance.

When I speak to private investors—both those investing in small companies and those investing in big infrastructure —they often sheepishly tell me they know they should probably be doing more in Lancashire, but that they are creatures of habit. I am making it one of my missions to coax more of them up to Lancashire to see what is on offer, but I ask the Minister not to let this Government fall into the same bad habit of sticking to what we know, even though there is clearly such growth potential in Lancashire.

My hon. Friend is giving a passionate articulation of the frustration felt by many of us outside non-metropolitan areas. We feel that frustration greatly in Redditch, where we are south of the West Midlands combined authority border. I find that difficult to explain to my students who want extra funding in education or to those who want transport links that do not get funding because we miss out on every partnership and every strategic housing fund. If we are really going to get the economy moving and growing, that has to happen in our towns—towns like Redditch—that led the industrial revolution many years before we had even heard of metro mayors.

I completely agree with my hon. Friend. As much as the debate is about Lancashire, one thing that will underpin change for both our counties is a commitment to devolution and to towns, so that the focus is not just on our cities.

We know what works. Our enterprise zones at Samlesbury and Warton have already helped to deliver a cumulative £1.2 billion in private investment. In the wider north-west, private capital already supports 873 businesses. We have world-class assets, from BAE Systems, which supports 20,000 jobs in the north-west and partners with 1,400 UK suppliers, to our nuclear renaissance, anchored by Springfields, Westinghouse and Heysham.

The data is firmly on our side. Lancashire offers a cost-effectiveness ratio of 1:80 for tech talent. That means that a tech professional’s take-home pay goes significantly further in Preston or Blackburn than in London or even Manchester. We are a magnet for the next generation of start-ups, already producing 16 academic spin-outs from our universities that have raised £36 million in equity this year.

I will take a moment to highlight a couple of specific initiatives that exemplify our county’s proactive approach to investment. Fhunded is a project close to my heart, as I had the privilege of working directly on its development during my time at Lancashire county council, prior to my election to this place. I want to give a huge thanks to my former colleagues at LCC, especially Dan Knowles and Rory Southworth, who have nurtured this initiative into the vital economic engine it is today. Fhunded has become a cornerstone of our early-stage finance community, acting as a curated bridge that brings our brightest founders and most ambitious funders together. Its impact is undeniable. The vast majority of equity raised in Lancashire throughout 2024 was generated through connections made via the Fhunded initiative. It serves as a perfect case study for this debate: a local government-funded catalyst that is successfully mobilising private capital and ensuring our high-potential start-ups can thrive right there in Lancashire.

I am incredibly grateful for the opportunity to close this debate on behalf of the Government. I thank my hon. Friend the Member for Ribble Valley (Maya Ellis) for securing this debate on investment in Lancashire’s economy; there can be no doubt about her commitment to and passion for Lancashire. I also thank my hon. Friends the Members for South Ribble (Mr Foster), for Stafford (Leigh Ingham) and for Redditch (Chris Bloore), who contributed so well to the debate. As my hon. Friend the Member for Ribble Valley said in her concluding remarks, she is a red rose, and I think that applies to all those who call the red rose county home.

I want to address as many of the specific issues raised as possible, but I will talk about some of the positive investments in Lancashire that the Government are supporting and that have been enabled by Government policy. I am sure that by this stage, everyone in the House will know that I grew up in the north-east of England, on the other side of the Pennines—I hope that will not be held against me in this debate. We share something very much in common with Lancashire: our recent history, at a time of deindustrialisation in both our regions, which undermined the culture of the proud people of the north.

I saw the effects of successive Governments who stepped back and allowed the slow and supposedly inexorable outsourcing of our industrial base to cheaper overseas markets. My hon. Friend talked about sectors such as advanced manufacturing and defence, and I know she will agree that that decline destroyed the landmarks, identity and culture of many industrial heartlands. What we have seen is that, as important as thriving services are, they work best when they are on top of a powerful industrial base of good, local jobs in manufacturing, engineering and key industries spread across the country.

Leyland Trucks is now the only heavy goods vehicle manufacturer in the United Kingdom, and it is based in my constituency. Is it Government policy that we should be buying British? Does the Minister agree that the Government should support any orders for trucks through Leyland DAF?

I thank my hon. Friend for raising Leyland Trucks. He will be aware of some of the procurement advice changes this Government have made, because we are keen to support British industry particularly in areas relating to national security. Thanks to Government support, Leyland Trucks has invested in its assembly lines and is now capable of producing 30 electric trucks per shift for sale both here in the UK and on international markets. It is also building a fully integrated zero-emission battery electric road sweeper. That is funded in part by our DRIVE35 programme, which represents the biggest investment in our car industry since the second world war. Leyland Trucks is vital to our automative sector and the Government’s industrial strategy.

I could highlight some other great investments in Lancashire, including in aerospace, which we heard about from my hon. Friend the Member for Ribble Valley in opening the debate. There are 6,000 jobs being supported at BAE Warton and Samlesbury, thanks to the Typhoon deal that the Government secured with Turkey last year and our wider Typhoon programme. Production and final assembly of each Turkish Typhoon fighter jet will take place at either Warton or Samlesbury as part of that deal. My hon. Friend the Minister for Trade is in Turkey as we speak, securing more trade opportunities for British industry.

House adjourned.

It was interesting to hear the Minister name a number of towns in relation to manufacturing roles. In our towns, we have on average 9% employment in manufacturing, whereas in cities, that figure is 4%. Does the Minister agree that in towns, if we really push our manufacturing sector, we can massively increase the number of good, unionised jobs available to people in those areas?