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Tay Cities Deal

Volume 613: debated on Wednesday 13 July 2016

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

City deals have played a vital role in the economic revival of many urban areas throughout Scotland. Four city deal initiatives have so far been approved, and Dundee and the surrounding areas is the only major city region in Scotland yet to receive one. Draft plans have been submitted and the detail is under way. However, since the EU referendum, the Tay cities deal has been thrown into uncertainty, which is why I have called for this debate.

In August 2014, the Glasgow city region deal was the first Scottish city deal to be delivered, and it will be worth more than £1 billion over the next 20 years. Half of the funding for it was met by the Scottish Government. It has been followed by deals in both Aberdeen and Inverness, and 75% of the funding for the Aberdeen city deal was raised by the Scottish Government.

The 2016 Budget included an announcement that the UK Government would open negotiations with the Scottish Government for a further city deal for Edinburgh and south-east Scotland. Dundee and Perth are, therefore, the last major city regions awaiting approval.

Cities have been invited to see themselves as catalysts for regional development, and to construct proposals that are based not merely within their city boundary, but across their functional economic area, thereby providing a crucial boost to rural economies.

That brings me to my constituency. Dundee has, of course, taken the lead in co-ordinating an outline proposal for a city regional deal based on two cities—Dundee and the fair city of Perth—and the strategic towns of St Andrews in North East Fife and of Arbroath, Montrose and Forfar in Angus are diverse areas all linked by the River Tay. This is probably the largest population area in the UK mainland that is still awaiting a city deal. Our city region encompasses a population of almost 500,000 and represents 10% of Scotland’s population.

My hon. Friend mentioned a number of major cities in Scotland, but he neglected to mention Stirling, which also wants a city deal and faces similar uncertainty as a result of recent events. I hope that he will support Stirling, as well as the fair city of Dundee.

Absolutely. I apologise for not mentioning the wonderful city of Stirling. I wholeheartedly agree with my hon. Friend. I would love confirmation that Stirling will also be seriously considered for a future city deal.

The powerful collaboration is made up of four local authorities—the kingdom of Fife, the ancient seat of Angus, the fair city of Perth and Kinross, and Scotland’s sunniest city, Dundee—along with public agencies such as Scottish Enterprise, VisitScotland, Skills Development Scotland, the chambers of commerce, a wide cross-section of private sector businesses and the four universities in the Tay cities area.

The Tay cities economy is diverse, ranging from agriculture, forestry and public administration to high-tech engineering, life sciences research and development, tourism and, last but not least, the creative industries, in which video game production plays a huge part. It is also the headquarters or the major base of several of the leading 100 companies in the FTSE 100, including Scottish Southern Energy, GlaxoSmithKline, Diageo, Aviva and Stagecoach. The region is intersected by main road and rail transport corridors linking northern Scotland with the central belt and the rest of the UK. The Tay cities area, therefore, accounts for almost 7% of Scotland’s total economic output, and has enormous potential for growth.

The Tay cities partnership bid represents a balance between infrastructure, investment and a number of transformational and collaborative initiatives focused on the devolvement of powers and budgets to create new employment opportunities. Connectivity is a central theme in the Tay cities proposal. The Tay cities region is at the heart of Scotland, and is strategically located between the central belt and Aberdeen and Inverness. However, there is an issue of relative remoteness that needs to be addressed by significant investment in key road, rail and air connections with the rest of Scotland, the UK, Europe and beyond.

My hon. Friend will be aware that, in Angus, the Scottish Government are putting serious money into dealing with, for example, the problems with the rail line. The Tay cities deal, if it comes together, would be a huge economic boost for Angus, as well as for Dundee.

I concur with my hon. Friend. In fact, £200 million has been invested in the rail link between Dundee and Aberdeen. To add to that, the recent link by air to Amsterdam has been wholly welcomed, and is a major boost for the Tay cities region.

Digital connectivity is of equal importance to physical connections. Businesses now look to locate where they can receive a broadband service with the highest possible speeds and capacity. Dundee and Perth are both planning to invest heavily in their fibre networks and in related smart city technologies. To take a small example, of the last three businesses that I have been involved in, from tourism to film and media, and latterly, financial services, all were hugely dependent on broadband.

A successful Tay cities deal will play a vital part in ensuring the fulfilment of the massive potential of the skilled workforce of the Tay cities region. It is not so long ago, when I was growing up in the 1980s in Dundee, that the UK Government appeared hellbent on destroying manufacturing. Dundee paid a very high price for that. Owing to the destruction of jobs, industries and communities that took place in this period, Dundee still has a significant number of unemployed people or people in low-paid jobs. A similar pattern can be found in other towns and areas in the Tay cities region, and potential growth could be seriously held back by a lack of investment. In the Tay cities area, employment growth per year falls short of the Scottish average. Inequality is the single biggest challenge facing our region and, without a strategic approach, the gap between our wealthiest and poorest citizens will continue to grow.

However, the good news is that Dundee is now on the up. My city is a dynamic place and one of diversity, steeped in history, culture and industry. It boasts two universities, Dundee and Abertay; a fantastic art school, the Duncan of Jordanstone; a further education college; and cultural landmarks such as the Dundee Repertory Theatre, the Gardyne Theatre and the Dundee Contemporary Arts centre. We have a world-renowned reputation for life sciences, and Ninewells is one of the largest teaching hospitals in Europe. My constituency is also an internationally renowned centre for video game development, which I have mentioned, and the birthplace of some of the biggest names in game history. Lastly, in 2014 we were recognised as the UK’s first UNESCO City of Design for our diverse contributions to the fields that I have mentioned.

This is all good, but Dundee is not resting on its laurels. We are in the midst of a £1 billion master plan to regenerate and reconnect the waterfront to the city centre. Of all the cities in the UK, Dundee was chosen to build the first Victoria and Albert Museum outside of London, which will open in 2018 and is expected to bring hundreds of thousands of new visitors each year to Dundee and the surrounding areas. The waterfront redevelopment has been a turning point for regeneration in Dundee, and a city deal would ensure that further progress was made in developing Dundee into a modern and important economic centre for Scotland. It is believed that the deal could have an impact on Dundee that is 10 times greater than the waterfront development currently under way.

The Scottish Government have a strong record of delivering for Dundee. We have received over £100 million through the cities growth fund, in conjunction with Scottish Enterprise, for our waterfront regeneration. As I mentioned, we are also set to benefit from a £200 million investment to improve rail links between Dundee and Aberdeen. By comparison, we have received £5 million so far from the UK Government. The Scottish Government are very supportive of city deals and have made it absolutely clear that they will work with any Scottish city considering a deal to make a strong, joint approach to the UK Government. I have touched on this already, but let us see a renewed commitment from the UK Government to seriously consider a more generous proportion of funding for the Tay cities deal.

It is not just Dundee that is seeking clarification on the city deal: North East Fife, the home of golf and of Scotland’s first seat of learning—the University of St Andrews, my alma mater, where I learned with great appreciation the history of my nation—seeks reassurances, as does the wider community. So too does the fair city of Perth—my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) is here tonight—where we find Scone Abbey, home of the Stone of Destiny where the king of the Scots was crowned. Last but not least, reassurance is needed for Angus, the birthplace of Scotland, where the signing of the declaration of Arbroath at Arbroath Abbey in 1320 marked Scotland’s establishment as an independent nation.

Does my hon. Friend welcome the fact that only last week, UNESCO awarded the declaration of Arbroath “memory of the world” status in recognition of its importance in the development of democracy?

My hon. Friend is absolutely right to talk about the Tay cities deal in such terms, because it takes in two great cities: the brand new city of Perth and the city of Dundee. The city deal must succeed because of its geographical spread, and I am sure that he will encourage the Minister to make sure that that happens.

I thank my hon. Friend for his intervention; what he has just said is important. Early discussions with Government officials and Ministers have been very positive, and those who are working on the Tay cities deal are working hard to assemble the detail of how it will make a difference to lives throughout our region. A full-time, dedicated city deal team, assembled from across the regions, is responsible for putting forward a clear and considered deal proposal to the Scottish and UK Governments to bring in at least £400 million of new investment.

My hon. Friend is making a fantastic speech, as per normal. In terms of who will benefit from the deal, I know that he would not wish to miss out Perth and Kinross-shire. Will he take this opportunity to request that the UK Government come good on their promises of support and do not leave it all to the Scottish Government, as has happened previously?

I have to agree. It is important that a generous offer is made towards a Tay cities deal—which includes, of course, Perth and Kinross—in the very near future.

The team that has been put together is learning lessons from the city deals that have been developed so far, and as we know, a draft bid is already with the UK Government. By working in partnership, and by working better, faster and more effectively, we will build Dundee and the surrounding areas for the long term, future-proofing for generations to come.

However, it pains me to announce that the cities deal is in potential crisis. Just two months ago, I asked the Prime Minister in this Chamber during Prime Minister’s questions to give me a personal commitment to work with the Scottish Government to deliver funding for the Tay cities deal. The Prime Minister’s response was unequivocal:

“I am very happy to give that commitment.”—[Official Report, 11 May 2016; Vol. 609, c. 624.]

Where I come from, when someone gives their word, that means everything. In other words, Dundee is a radical town that does not mince its words.

However, as a result of this misguided EU referendum, which Scotland neither asked for nor wanted—a referendum with no plan whatsoever for the outcome, as a result of which we have seen the resignation of the previous Prime Minister and the arrival of a new one—there is huge uncertainty about many of the UK Government’s commitments, and we now hear doubts being expressed over the Tay cities deal. Following the EU referendum, the Secretary of State for Scotland caused alarm when he told our Tay city-wide paper, The Courier, that the new Chancellor could have “a different outlook” on the commitment. Let us hope that that is not the case.

Not only that, but, at the earliest opportunity on returning to Parliament after the vote, I asked the former Prime Minister again in this House to reaffirm his backing and he refused to give an unequivocal answer, stating:

“I cannot bind the hands of my successor”.—[Official Report, 29 June 2016; Vol. 612, c. 320.]

To compound the confusion, I wrote to the Scotland Office to seek clarification, and the letter that I received only last Friday tells us it is “business as usual”. What are Dundee and the neighbouring communities supposed to believe? I am hoping that this evening the Minister will be able to give me an answer that is decisive, definitive and beyond any doubt, for the good people of Dundee and the surrounding areas.

I congratulate my hon. Friend on securing this debate. I absolutely agree about the uncertainty that surrounds the Tay cities deal, and that applies to other city deals that are already in progress. My constituency is part of the Edinburgh and south-east Scotland city deal—and home to Newbattle Abbey, where the declaration of Arbroath was drafted—and we are very much looking forward to securing the funding that may come from the city deal. That uncertainty applies to a number of other deals as well.

That is an important point, and this is the key point on which we need clarification this evening. Not only Dundee, through the Tay cities deal, but cities such as Stirling and Edinburgh need an absolute cast-iron guarantee that the existing proposals will be fulfilled. It must be made clear that there are no doubts about them going forward.

The case for the Tay city deal is crystal clear. It is almost the last major region in Scotland yet to receive one, and I believe it would be a major injustice for that to be compromised on the grounds that the country now has a new Government with different priorities. At a time of economic uncertainty, the city deal programme is now more important than ever. I call on the Government to make a speedy affirmation of their support for this deal—and the others that have been mentioned tonight—so that many stakeholders can continue their crucial work on this vital project. The UK Government must provide an assurance that the outgoing Prime Minister’s commitment to the Tay city deal will be honoured.

I congratulate the hon. Member for Dundee West (Chris Law) on his contribution. When we started I was a little concerned that we were talking about Brexit and the referendum. I was asked to discuss the Government’s support for Stirling, and I thought that we might have ventured into a debate on a different matter. Although I am in a minority in the House at the moment—I was very much a supporter of the referendum—I recognise the case that colleagues who have concerns may wish to raise, and their right to hold a different view. I also commend the hon. Gentleman for the way he has approached this debate, because he provided a lot of information to the House about the deal and why he believes it is important. When the Government take decisions, it is important to look across the piece—particularly for city deals, which are relatively competitive because most areas want to secure one—and ensure that that strong case is made. I commend him for his work this evening, and previously, in that endeavour.

In 2011 the UK Government created the city deals programme that sought to agree a series of bespoke, placed-based policy and funding deals with localities. In total, 26 English city deals were agreed between 2011 and 2014. Recognising the success of those deals, the Government have expanded that programme to other parts of the United Kingdom, working with the Government in Scotland and the devolved Administration in Wales. In 2014 the Glasgow and Clyde Valley city deal was agreed. That was followed by further city deals in Wales and the Cardiff capital region, in Scotland in Aberdeen and Aberdeenshire, and in Inverness and the Highlands in 2016. At the 2016 Budget, the Chancellor announced that the Government were opening city deal negotiations with Edinburgh and Swansea Bay, and hoped that those would be concluded positively.

UK city deals are driven at local level, and it is for local authorities and their partners to take the initiative in leading and proposing bids to the Scottish and the UK Governments. Where support from hon. Members is forthcoming, that is doubly welcome and effective in making the case, as the hon. Gentleman has done this evening. The Government are committed to ensuring that all parts of our country have the tools and support to grow their local economies. As such, Ministers in the Scotland Office are keen to engage with cities or regions that have proposals to improve economic performance, which includes four city deals.

City deals in Scotland are tripartite. They involve the UK Government, the Scottish Government, and the local area from which they are usually, and should expect to be, driven—I have already referred to the deals made since 2014. Building on the significant progress already made, both Governments have made it clear that they are receptive to the idea of a Tay city deal. However, in the first instance it is for those local leaders to come together and develop an ambitious and credible city deal proposal, and subsequently to put that to the UK and Scottish Governments.

The four local authorities involved have a draft bid, and all Members who represent Dundee, Perth, Perth and Kinross, and Angus are here tonight and backing this deal 100%.

That is indeed true and welcome, and the fact that that complete representation is here makes the case all the more powerfully. I want to send a positive message to those who wish to pursue this city deal. I want city deals to be delivered, and I believe they can help to grow local economies. Indeed, I have no doubt that those from the areas affected by such decisions know best how to drive economic growth and what is needed to unlock the undoubtedly significant potential, some of which the hon. Member for Dundee West has already alluded to. I want to find a way to unlock that growth, and to ensure that the UK Government play their part in doing that wherever possible.

On the deal we are here to discuss, I understand that my right hon. Friend Lord Dunlop met Dundee City Council and other potential business bid partners in Dundee on 16 May to discuss their ambitions. He also met leaders of Perth and Kinross Council, at a meeting of the Scottish Cities Alliance, in Inverness on 8 June. The Government are encouraged by the ambition and early thinking contained in the city deal overview that local leaders have shared. It is a relatively high-level proposal. There is still work to be done on it, but it is very welcome that it has come forward. It highlights opportunities around investment, innovation, inclusive growth and internationalisation. It highlights some of the things the hon. Gentleman has spoken about this evening: connectivity, the need for investment, and the opportunities that exist in that area to drive economic growth. They will benefit the UK as a whole, as well as the people living specifically in those communities.

My right hon. Friend the Secretary of State for Scotland spoke with another bid partner, Dundee University, just last week. It is clear that partners are working hard and formulating ideas, but work still needs to be done. I recognise that the hon. Gentleman is seeking clarification and a commitment from the Government that we will continue with the process. I cannot put it any more clearly than this: I would like to see it successfully concluded. I would be happy—I know my colleagues in the Scotland Office would be enthusiastic, too—to work with hon. Members and local partners to see it delivered, if we can come up with the right proposal and the detail can be provided. If the figures stack up and the proposal works, it could be very good for the area the hon. Gentleman represents. Indeed, it would be good for the wider area represented in the House this evening and good for the UK.

The track record of city deals is a successful one. Significant local growth has been generated by listening to those who know what local economies need, and by recognising that different areas need different things and will want to focus on different priorities. They need support to do that effectively. The hon. Gentleman has made a very clear case. He and I have quite a different view on the UK’s membership of the EU, but we share a common interest in driving growth and empowering people to make the best of the wonderful opportunities that exist in the diverse country we are here to represent. I am very happy to give the hon. Gentleman assurances to that effect. I am very happy to continue, for as long as I am in this position, to support the city deals programme, and to work with him and his colleagues to deliver it.

Just a little update for the Minister, if Mr Speaker will indulge me: the Chancellor has just resigned. Will the Minister be able to shed any light on whether city deals will even still be on the table?

I am not sure if that was a hint from the hon. Lady that I should be checking my phone and ensuring it is fully charged. I do not know what might follow.

This is a time of change and we have a new Prime Minister. There will be a new Chancellor, whoever that may be. The track record of city deals is that they have been shown to deliver growth and boost local economies. They have been welcomed across the House and across the political divide for those very reasons. I have no doubt that whoever is appointed Chancellor in due course will want to drive growth and empower communities to unlock the potential that undoubtedly exists in them. I cannot speak for whoever that might be more directly than that, but I can assure the hon. Lady that I share the broad sense of direction put before the House in the debate this evening.

We all want to see local people empowered to make the best of the communities in which they live. We all welcome agreement about how that can be done, particularly when it is cross-party. City deals have been a successful programme, one to which this Government have been firmly committed. I want to see the programme taken forward and more done with it. I am happy to join the hon. Lady, and any hon. Member, in making that case in due course, but I cannot go further than that, as I am sure she will appreciate, because my phone has not yet rung this evening.

I want to end on a positive note. The hon. Member for Dundee West has made a strong case. My right hon. and hon. Friends in the Scotland Office will be keen to follow the debate that has taken place this evening. They are following this matter very closely. I hope the city deal can be delivered for the people he and his colleagues represent. I am convinced that in the future the city deals programme will be looked back on as something that helped to drive growth right across the United Kingdom.

Question put and agreed to.

House adjourned.