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Growth Deals

Volume 591: debated on Thursday 29 January 2015

With permission, Mr Speaker, I would like to make a statement about growth deals. During the past four and a half years, the Government’s long-term economic plan has put the British economy on the road to prosperity. Since 2010, the deficit has been cut by half as a proportion of national income; 1.75 million more people are in work; there are 750,000 more businesses; and growth is among the strongest in the G7.

For Britain to fulfil its maximum potential, every part of the country must be an engine of growth, powering the nation ahead. Every city, town and county in Britain is unique, and the people who know best what is needed to build on the particular strengths of each place are the men and women who live, work and do business there. It is in the local interest, but also in the national interest, that they should be given the power to exercise leadership.

This Government have negotiated a series of city deals with England’s principal cities outside London, and also with the city of Glasgow. Impelled by Lord Heseltine’s report, “No Stone Unturned”, £12 billion was taken from central Government Departments and made available for devolution to business and civic leaders in every area across England. In July, I announced growth deals with each of the 39 local enterprise partnerships. They were a great success—welcomed in all parts of the country by businesses, local leaders from all parties and indeed in all parts of the House. The strength of the projects put forward, levering in at least twice the value of Government funds devolved, allowed me to invite LEPs to bring forward further proposals, building on this momentum.

In the autumn statement, the Chancellor made another £1 billion available for this purpose, and I am announcing today that we have agreed expanded growth deals with all 39 LEPs. The expanded deals will help to train the people that industry needs in order to fulfil the orders on its books in the future, such as through the Institute for Advanced Manufacturing at Nottingham university, which will train more than 3,000 engineers. The deals will improve road connections that allow people to get to work on sites that can provide more jobs in future, such as at Fareham and Gosport. They will provide the infrastructure that will help growing places to prosper, such as the new high-level bridge across the Manchester ship canal at Warrington. They will improve rail services: for instance, there will be a major overhaul of Gatwick airport station, track improvements on the midland main line, and better facilities for the Night Riviera sleeper service to Cornwall, which provides one of the country’s most magical train journeys.

The deals will regenerate parts of towns and cities that can be attractive destinations for employers, visitors and residents, such as Blackfriars and the quayside in Gloucester. They will enhance the collaboration between growing businesses and universities which has produced, for example, the incubation and innovation centre at the university of Huddersfield. They will expand successful programmes of grants to small businesses, including those in Sheffield and Liverpool. They will allow local economies—and the national economy—to benefit from cutting-edge technologies, such as those that will be provided by the national centre for healthcare photonics that will be established in Sedgefield. Once again, the £1 billion of central Government funding will be added to, by at least £2 billion of private and local funding. That will give a £3 billion boost to local economies all over Britain.

The cities, towns and counties of this country are on the rise. Between 2004 and 2010, two thirds of net job creation took place in London and the south-east; since 2010, those areas have continued to create jobs, but they are being created everywhere else as well. The balance has been reversed, and 60% of the rise in employment is now taking place outside London and the south-east. The expanded growth deals that I have announced today will fuel the resurgence of our local economies, and I commend them to the House.

I am grateful to the Minister for giving me advance sight of his statement.

There is strong support throughout the House for devolution, and communities all over the country are crying out for more power. I pay tribute to the Minister for the role that he has played in Whitehall as a champion of decentralisation. He has been helped enormously by the initiative of Labour councils throughout the country which have come together to form combined authorities, and I also pay tribute to all the councils that are doing that in the interests of the people whom they serve.

The Opposition recognise the steps that the Government have taken, and the progress that has been made with the work that was set in train by the Labour Government through multi-area agreements and the legislation that allowed the creation of combined authorities and economic prosperity boards. However, local enterprise partnerships have not been supported properly—their performance has been patchy— and, as the Business Secretary now admits, abolishing regional development agencies without providing proper replacements caused chaos. Furthermore, the Government’s flagship regional growth fund has been dogged by delay.

The Minister has tried his best, but there are reports that his efforts have not made him popular in Whitehall. Some say that his localism scorecard embarrassed the Government and led to his being reshuffled, and some say that attempts to enlist the power of Lord Heseltine and his report “No Stone Unturned” caused him to be reshuffled again. I think that it is all a little unfair, because there is only so much that one man can do.

The Minister talks a great deal about the northern powerhouse. Why, then, is he trickling out bits and pieces with one hand, while taking away much more with the other? Can he explain why, under the present Government, Manchester city council, one of the most deprived parts of the country with some of the greatest needs, has suffered a reduction in spending power of £741 per household, whereas Wokingham, one of the very least deprived parts of the country, has been given an increase of £20? Why have Liverpool, Newcastle and Birmingham, which have some of the greatest needs in the country, faced some of the greatest funding reductions? What happened to the Prime Minister’s pledge that those with the broadest shoulders would bear the greatest burden?

Can the Minister update the House on any discussions that he has had with the Department for Communities and Local Government about the deeply unfair cuts that have been made in many areas, which are having an impact on councils and their partners, and a wider impact on local economies? Both the National Audit Office and the Public Accounts Committee have been highly critical about the uneven impact of the cuts and the Government’s failure to make any assessment of it. Has the Minister made an assessment himself?

The small amounts of money that have been announced today seem to have more to do with another round of overblown press releases than with substance. We know Tory Ministers are big fans of trickle-down economics, but this stuttering decentralisation under this Government gives the term a whole new dimension, and it has not gone unnoticed that the Minister is not announcing new devolution of money for this year, but from 2016, and spread thinly over the next Parliament—indeed, some is not for the next Parliament, but for the Parliament after that. That is not a long-term economic plan; it is more delay and continued centralisation.

Will the Minister back up his rhetoric with substance by matching Labour’s commitment to devolve £30 billion of funding for city and county regions over five years? Why does the Minister think it is acceptable to offer limited devolution to some areas and none to others? Why are county regions excluded? County areas are responsible for generating over half of England’s gross value added outside London and this Government are refusing to back them. Were there any areas that sought funding that were unsuccessful? What happened to the significant deals for the Leeds and Sheffield city regions? Were they stymied by the Chancellor’s obsession with imposing metro mayors, or was it just Whitehall inertia?

As Ministers fan out across the marginal seats that the Government are courting with today’s announcements, people in many other cities, towns and rural areas will ask why they are being ignored by this Government when it comes to devolution. A Labour Government will make our devolution offer open to all parts of England—not just to cities, but to towns and villages that come together in combined authorities, with city and county regions across the whole country.

A Labour Government will pass an English devolution Act to reverse a century of centralisation and secure devolution for the people of England’s city and county regions. As I said, we will transfer £30 billion of funding over five years, passing power and resource down for transport, skills, employment support, housing and business support. That is three times more money than the current Government have said they will devolve. We will also give city and county regions more power over their public transport networks so that they can set the right bus routes and have fairer fares, as well as integrate their transport services to help working people and businesses succeed in their areas.

Today’s announcement is more of the same from this Government: limited powers for a small number of areas. Labour’s devolution offer will be far more ambitious in scale and scope. This statement looks like a desperate attempt to produce press releases for Tory marginals, rather than giving the long-term investment in infrastructure and skills that our country so desperately needs.

I am grateful to the hon. Lady; she has given us some entertainment this morning. I am also grateful for her warm words at the beginning of her comments; they are appreciated. I have never set out to be the most popular person with Whitehall officialdom, but I have enjoyed the full-hearted support of my official colleagues. They have been working extremely hard in recent months, and I want to pay tribute to them. It is a funny kind of reward if getting promoted to the Cabinet is seen as a punishment for success. I am very pleased to be taking these measures forward.

Let me respond to some of the hon. Lady’s points. She is mistaken to hark back to regional development agencies. When I go around the country talking to even Labour leaders of cities there is no nostalgia for the RDAs. Under the last Government £20 billion was spent on the RDAs and the regional disparities worsened during that time. What we have seen since 2010 is a different approach—a locally led approach recognising that places such as Liverpool and Manchester are proud cities with an identity of their own and should not be subsumed under an artificial Whitehall creation called “the north-west” run from Whitehall. They need to have their voice, and they are proudly expressing it.

As I have said, since 2010 most new jobs have been created outside London and the south-east. Under the last Government, during the boom the number of private sector jobs in the city of Birmingham actually contracted. We do not want to go back to RDAs.

Enthusiasm is widespread across the country, and that is making a difference. I am very happy to confirm to the hon. Lady that counties and districts are very much included. Every part of England is covered by a local enterprise partnership and will benefit from this, and we want to go further forward in the future.

The difficulty we have with this agenda is that the enthusiasm of all parties throughout the country is not reflected on the Labour Front Bench. I am afraid that we heard this in the hon. Lady’s tone when she concluded her remarks. The Labour mayor of Leicester has said:

“Today’s announcement is excellent news for businesses and communities in our city and county.”

The leader of Sandwell council has said:

“The additional investment…will boost the quality of life in the Black Country”.

The leader of Birmingham city council says:

“This is fantastic news for Birmingham and the wider region”,

and the leader of Barnsley council has described it as a milestone. Even Labour council leaders across the country are in despair at the half-hearted approach of those on the Labour Front Bench.

We will continue this programme. We have more to allocate in the years ahead. Lest any hon. Member on either side of the House should be gulled into thinking that there is any prospect of greater devolution under Labour, they should be aware of the fact that the shadow Chancellor has confirmed that Labour has no plans to make extra funding available to be devolved to local government. Indeed, the devolution report that Lord Adonis authored made it clear that any devolved funds would be offset by a reduction in grants to local government—robbing Peter to pay Paul. We are taking money away from Whitehall and London and putting it into the hands of local leaders. That is working; it is creating jobs and confidence right round the country.

I warmly welcome the funding that the growth fund will give to the new innovation centre at the Royal Agricultural university in Cirencester. However, the biggest problem in Gloucestershire is the “missing link”: the A419 between the M4 and the M5. It is part of the road scheme but it is going to be very expensive and the budget will need to be supplemented. Could that supplement be obtained from the growth fund?

I welcome my hon. Friend’s remarks. He demonstrates the fact that these growth deals apply not only to our industrial cities but to counties, such as his own, with a substantial rural population. We know that the road schemes and improvements to connections in those counties are particularly important. The devolution of funds, now and in the future, to the Gloucestershire local enterprise partnership will allow it to put forward—as it has done—the schemes that will make the biggest difference in its area, and I encourage my hon. Friend to work with his LEP to achieve precisely that.

Devolution of expenditure needs to be transparent and beyond reproach. In August, I raised with the Minister the role of the chair of the North East LEP, Paul Woolston, who had just been appointed to the chairmanship of Middleton Enterprises, a company owned by Jeremy Middleton, a Conservative party member and donor who is now also on the investment board of the LEP. The Minister promised me, outside the House, to look into that arrangement. Is he satisfied with it?

I did indeed look into it. Paul Woolston is the chairman of the LEP, which has members from all the local authorities in the north-east. I think he is doing a very good job. I also raised this matter with my officials and I was assured that there were no questions at all to be addressed, but I will happily write to the hon. Gentleman about this.

The Worcestershire LEP has warmly welcomed the extra £7 million of investment that has been announced today, which will enable more than 600 apprenticeships to be created in our area. I am very grateful for that. All the south Worcestershire MPs recently joined Worcestershire county council in lobbying the Department for Transport for further investment in the southern link, and particularly in the dualling of Carrington bridge. We have had some positive commitments to work with the county on the southern link, but will my right hon. Friend meet us to discuss taking the matter further, and ensure that in future rounds of allocations from the local growth fund, which I am sure he will be championing at the Cabinet table, he will be as strong an advocate as he has been today?

I will indeed. There is no stronger advocate for Worcester than my hon. Friend. He will know that the agreement we have with the LEP mentions the importance of improving the capacity of that road, and there is a commitment from the Government to work with local leaders to advance that.

May we have a reality check? The extra money for the Sheffield city region—£30 million over a number of years—needs to be put in the context of the £60 million of cuts to Sheffield city council in the next year alone. The Minister is recognised as one of the most committed devolutionists in the Government. We can accept and welcome extra money and extra powers going to our city regions and combined authorities—more money where the decision on how it will be spent is made at the local level not the national level. Will he explain, however, why we cannot have a package of devolution measures that transfers responsibility for raising taxation at a local level in England—this is done in Scotland—and therefore give more powers to local councils in that way? He probably believes that that is the right approach, so why can he not convince his Government colleagues of it?

No, I do not. It is worth pointing out that the total size of the growth deal with Sheffield is £328 million, which is a huge investment; it is a transfer of funds from central Government to the leaders of Sheffield. I do not think that the answer to the problem of creating further opportunities for places outside London is to increase taxes; I think the answer is to take money away from central Government and put it in the hands of people who can make decisions better informed by their local knowledge.

My constituency is covered by a thick blanket of snow this morning, but this announcement has caused great warmth in Buxton, because the D2N2 LEP bid in respect of the Buxton Crescent hotel and spa is the final piece of a very long jigsaw that has taken many years. It will create jobs, boost the local economy and increase the tourism offer of Buxton and the High Peak for people across the world. I thank the Minister on behalf of my constituents, and may I tell the hon. Member for City of Durham (Roberta Blackman-Woods) that Buxton is not a city?

My hon. Friend is right. I am delighted that the thaw has started in Buxton, although I am sure it looks even nicer under a covering of snow. From a rival spa town of Tunbridge Wells, I commend the attractiveness of the great town of Buxton and I hope to be able to visit it to see the impact of this investment.

The Minister will know that Huddersfield is not a city but that the Kirklees local authority is one of the largest in the land. Nobody from my constituency would not welcome new money to the university of Huddersfield or our area, but may I put this in context? The research published last week by the Centre for Cities gives a very different picture of the way in which over the past five years power and resources have flowed to the richest parts of our country, particularly to London and the south-east. Is he aware of how much of a cut people in Kirklees have suffered in recent years and face in the future? Services are being cut at every level.

The university of Huddersfield is a strong institution. I know that the hon. Gentleman takes a particular interest in its connections with business, so I hope he will welcome locally the investment that has gone in there. The Centre for Cities is a good and valued think-tank. It carried out a 10-year review of the performance of cities over that period. It did not split what happened before 2010 from what happened subsequently, but when one does that, the story is striking: most of the net new jobs before 2010 were in London and the south-east, whereas most now are outside London and the south-east. Strikingly, since 2010 the list of areas that have had the biggest fall in unemployment, as measured by the claimant count, is topped by Liverpool, followed by the black country, Birmingham, Teesside, Manchester, Coventry and Warwickshire, the Humber, and Stoke and Staffordshire. That is a picture of the revival of our local economy, which is due to the efforts of local leaders but backed by this Government.

I welcome this coalition Government’s investment in the north-east of England—in skills, science and manufacturing—including in Northumberland college. May I, however, underline the fact that the college needs to extend its services into the north of Northumberland, where many students are 40 or 50 miles away from the college?

I welcome my right hon. Friend’s endorsement. The investment in the north-east has been striking, and it is making a big impact. We have been talking about the local growth fund, but there is also the regional growth fund, of which the north-east has been a big beneficiary to the tune of more than £300 million. That is the right way to go—to take money from Departments in Whitehall and to put it into the hands of local leaders and business leaders in the community, because they know where to get the best bang for their buck.

I understand that the Deputy Prime Minister is in Bristol West this morning to announce the new money that Bristol will be getting. I am sure the visit has nothing to do with the fact that the election prospects of the local Liberal Democrat MP are looking rather precarious. I welcome the new money for Bristol, but urge the Minister to consider one proposal that has not yet received funding, which is a centre of excellence for the food and drinks industry. It is an exciting proposal and Bristol would be the perfect city to host it.

I will certainly look at that proposal, but the great advantage of these growth deals is that it is not me, but local leaders who make the decision to put such projects forward. I hope the hon. Lady will take up that matter with the West of England local enterprise partnership. The Deputy Prime Minister may be in Bristol today, but representatives from Bristol came to 10 Downing street on Tuesday, and I was pleased to have the chair of the LEP and the mayor of Bristol, George Ferguson, pitching to international investors some of the fantastic projects that are available in Bristol. The projects went down a storm, and the meeting was a huge hit, so, quite apart from the investment that comes from these local growth deals, the interest in international investment in Bristol is now rising very strongly.

I welcome the Government’s support for Lancashire in this latest package and also the application from the LEP to make Blackpool airport an enterprise zone, but will the Minister join me in accepting that the LEP’s track record on enterprise zones has been deeply disappointing to say the least? There are concerns across the House about the performance of the Lancashire LEP. Will he meet Lancashire MPs as soon as possible to try to put the LEP back on track again?

I will indeed. As my hon. Friend knows, I have had a meeting with Lancashire MPs across the House. It is important that that enterprise zone achieves its potential, which means that it must be properly implemented. I am happy to convene the meeting that he suggests.

The Minister will be aware that the National Audit Office says that the original figure claimed for jobs likely to result from these initiatives was 54,000, which was later revised down by the Government to between 6,000 and 18,000. What steps is the Minister putting in place to ensure that there are comparable outcome measures so that these initiatives can be properly analysed and assessed and we have a true picture of what they are achieving?

All the agreements are in the public domain. They are published and on the websites of all the local enterprise partnerships. There is a framework that tracks the implementation of each component of the deal. We have signing ceremonies that commit the local leaders as well as central Government to do what is laid out. But the difference between the growth deals and previous programmes is that the growth deals are in the hands of the local leaders. It is the local businesses that make estimates of the jobs that they are going to create, so it is an estimate not by the Government but by the local business leaders.

The Minister has said that the West Yorkshire combined authority will use the new single appraisal framework to inform a formal review of transport funding priorities by 2015 to include the Shipley eastern bypass, which is something that I very much welcome. Does that mean that the Government have been persuaded by the persistent case I have made of the need for that bypass? Will he confirm that the funding is now available to progress the scheme, and whether the onus is now on Bradford council and the West Yorkshire combined authority to prioritise schemes that benefit the whole of west Yorkshire, and not just its Labour heartlands?

I agree with my hon. Friend that he is a persistent advocate for Shipley, which is quite right as he is the local MP. The transport funds have been devolved to the West Yorkshire combined authority. In fact, £1 billion is available. Of course it is right that, in prioritising the transport schemes, the authority should cover the whole area. That is clearly understood and is set out in the agreement. I know that my hon. Friend will make his cause locally with the same vigour and passion that he does here in Westminster.

The Government have foisted massive cuts in local services on Coventry. Will the Minister tell me what has happened to the gateway project in Coventry? There have been delays, and there is now talk about an announcement next week. Will he also outline the reasons for that delay? He announced in his statement that there would be grants for LEPs. What grants are available for small businesses in Coventry?

On the Coventry and Warwickshire local enterprise partnership, its expanded growth deal is now worth nearly £90 million and it includes a programme of grants and advice and support for growing businesses. As for the access improvements to Coventry city centre, they have been funded. Sites that are being brought into use require planning permission, but that is a matter for the local authority. If the hon. Gentleman wishes to meet me, I will take up the matter with the LEP and the local authority.

I welcome the announcement of funding for the Folkestone seafront regeneration scheme. Does the Minister agree that the regeneration of Folkestone, which is led by Sir Roger de Haan, is a model for the regeneration of coastal towns, and that this extra funding through the local growth fund will help to kick-start the next important stage of the development?

I do indeed agree. I pay tribute to Sir Roger who has worked very closely with my hon. Friend to develop and promote Folkestone as the attractive destination that it is. The area is going from strength to strength, and this further investment will enhance its attractiveness.

I thank the Minister for the extra £2.9 million allocated to Huddersfield university through the local enterprise partnership. It will help fund a new incubator centre at the Globe Mills development project at Slaithwaite in my constituency. Does the Minister agree that that is a real sign that the northern powerhouse is making a difference in my beautiful part of Yorkshire?

It certainly is, and Huddersfield is an excellent university. It is always good to reinforce success. Another aspect of this is that it shows the close working relationship between universities, businesses and local authorities. Universities are now, unambiguously, among the leaders of their local economies. It is very gratifying to see in so many of these deals that universities are playing a very strong and impressive role.

May I commend the Minister for today’s announcement of an expanded growth deal for Northamptonshire? I press him to try to find an urgent funding solution for the Weekley-Warkton bypass, which is mentioned in his statement. The Department for Transport has already provided £110 million for the widening of the A14 around Kettering. It has also promised £15 million to fund a new junction—junction 10A. The Weekley-Warkton bypass is the missing bit of the circle around Kettering that is required for the necessary traffic relief for all the new houses that are being built locally.

My hon. Friend makes an important point. There has been substantial investment in the road capacity in and around Northamptonshire. This particular project has the support of the Government. It is mentioned in the deal with the local enterprise partnership as something that is a priority to be taken forward through further discussions.

I, too, wish to thank the Minister for his great support for the Ipswich innovation centre, run by University Campus Suffolk, and also for the feasibility funding for the Wet Dock crossing, both of which were welcomed by the Labour leader of Ipswich borough council as “excellent news”—clearly, he had not co-ordinated his message with those on the Labour Front-Bench. I hope that he will not listen to the voices of the Labour party on this, because the new Anglia LEP has delivered for towns such as Ipswich the kind of investment that was never present during the previous Government.

My hon. Friend is absolutely right. We have been able to work very cordially with leaders of all parties across the country because we recognise that, where there is local knowledge that can bring forward compelling propositions, it is in the national as well as local interest to do so. Ipswich is a good example in that regard. In the city deal with Ipswich, I was pleased to see one of the first youth oriented jobcentres in the country, which is a tremendous success. The investment that comes from this deal, which was proposed locally, will have just such an impact, and my hon. Friend has been a great champion of such deals.

I particularly welcome the £11.3 million announced today for Cornwall. The Minister mentioned the Night Riviera service—something on which I have campaigned and petitioned the House for many years. Investment in that, as well as the broadband investment are welcome. I do not want to sound a discordant note, but may I urge the Minister to ask his Cabinet colleagues to look again at whether Cornwall should achieve intermediate body status so that the LEP does not have to go to Whitehall to ask permission every time it wants to move a paper clip around the county? Surely we could be given the same status as many cities so that we can advance our European convergence programme.

It is fantastic news that Cornwall has had such substantial success through the growth deal programme. Further improvement of the facilities on the sleeper service will be good for the visitor economy as well as the people who live and work in Cornwall. The hon. Gentleman knows that I am determined to continue the substantial progress that we have made towards getting power out of its centralised bunker in Whitehall and into the hands of people right across the country, and I will not let up in pursuing that.