Motion to Take Note
My Lords, I draw attention to my interests in the register as a member of Cumbria County Council and as pro-chancellor and chairman of Lancaster University.
The United Kingdom, England in particular, has a massive problem of regional inequality. It is growing and though there is a political consensus that “something must be done”, what is being done is incoherent, underfunded and does not yet match the scale of the challenge. We saw this in two government reports published this week. The industrial strategy document highlighted in one of its tables the enormous productivity gap between London and the south-east and some of the other regions in the country. On Tuesday, the State of the Nation report from the Social Mobility Commission, chaired by my good friend Alan Milburn—I wish he was still in politics—painted an extraordinarily bleak picture. The commission’s report said:
“The UK now has greater regional disparities in economic performance than any other European country”.
Just reflect on that for a moment: greater disparity than that between northern Italy and the Mezzogiorno and greater disparity than there is between prosperous southern Germany and the eastern Länder. If I may add my own aside on that, this is before Brexit and the disappearance of the European structural funds that have, over the years, been one of the few consistently reliable sources of money for physical and economic regeneration. We still have no guarantee of what will happen to this vital source of regional investment in the longer term. I do not know whether the Minister has news for us today. I doubt it, but it is something that the Government will have to speak about.
Since the great depression of the 1930s, our prosperity has been overwhelmingly driven by London and the south-east. There are also big differences in public spending per head between northern and southern regions. The estimate of the Social Mobility Commission is that this comes to £6 billion a year. Even where public spending is relatively generous per head, as it is in the north-east, it is important to look at the composition: almost half of public spending in the north-east goes on welfare payments and only 6% on stimulating the regional economy through investment in science, employment and transport. In London, despite pockets of great inner-city deprivation, only a third of public spending goes on welfare and 12% is spent on economic regeneration.
Of course, there is a more variegated picture than the regional picture: coastal towns in the south have done badly, as well as other parts of the country. There is one interesting fact that the commission brings out: in thinking today of Kensington and Chelsea, we think of the awful tragedy of Grenfell Tower. But in K&C borough, 50% of disadvantaged youngsters get to university. Do you know what the figure is for Barnsley, Eastbourne and Hastings? It is less than 10%. Therefore, on the creation of social mobility, as well as on inequality, the regional picture is pretty gloomy. It is a matter of great concern to me as a Carlisle lad that Carlisle is fifth worst blackspot in Britain for social mobility, while the area I represent on Cumbria County Council—Wigton in Allerdale district—is the sixth worst. We need something to be done. It is not good enough to say that we are anti society’s ills, particularly if you are on the progressive left. We win only when we offer solutions.
As for the past, Labour can say that it helped invent regional policy. My grandfather was a miner in west Cumbria. His pit closed in 1926 and no one worked in the area until the Second World War. It was the Distribution of Industry Act 1945, passed under the wartime coalition when Hugh Dalton was president of the Board of Trade that started the process of development areas, the building of advanced factories on new estates, and the putting in place of a system of licences, grants and aids that helped transform these depressed areas. That achievement was built on with great success by the Wilson Governments of the 1960s with investment grants, regional employment premia and all of that.
We have to find a way to devise a credible regional policy for modern economic conditions. What we did then will not work. Britain is unlikely to attract major new manufacturing plants. Small firms are the major source of employment growth. Services are Britain’s major competitive strength. It is a new generation of innovation and high-tech entrepreneurs who are likely to deliver the best jobs for the future.
What needs to be prioritised? For me, connectivity, both digital and rail, is very important. I remain a committed supporter of HS2 as potentially a great uniter of the divided north and south economies. He is not here, but I greatly admired my noble friend Lord Adonis’s lecture on the future of London, in which he talked about HS2 facilitating a great golden arrow of economic integration between the north, the Midlands and the south. I am with him on this, but with an important qualification: I would like the golden arrow to point north rather than south. For instance, I want it to be feasible as a result of HS2 to shift whole government departments out of London, with fast connectivity to the capital to attend occasional ministerial meetings. In fact, to be cheeky, I suggest that we relocate Defra to my native Cumbria, where the civil servants could hop out of their office and look at the practical consequences of policies on farming, fishing, environmental management and flooding.
In research and innovation, better connectivity will stretch the golden triangle of our university research north-west, I hope to the excellent Lancaster University, which I chair, and, in the north-east, to Durham and Newcastle. I greatly applaud the Government’s commitment to expand the nation’s research and innovation budget. However, at present, 46% of that goes to Oxbridge and the top London institutions. A modern regional policy would set a target for the new UK Research and Innovation to reduce their share to, say, 30% of a greatly expanded budget. The way to do this is with the science and innovation audits presently being conducted area by area. Risky decisions have to be taken to back job creation and innovation outside the present golden triangle, because the north has to become a magnet. The Government have to help design that magnet for this new generation of entrepreneurs, scientists and engineers. Here, it is important that we continue to encourage overseas academics to work in Britain and that we have a generous policy towards refugees—often brilliant people whose countries deny them basic freedoms, who want to come and work in Britain. They should be encouraged to work in the regions.
The north needs more investment than HS2. I am disappointed that the Government have not made a commitment to getting on with HS3. We need modern transport hubs at every level. Again to quote a local example, the journey time from Carlisle to Manchester Airport is getting on for two and a half hours. It takes only three and a quarter hours to get to London. We have to improve services within the regions. When you get to Carlisle, if you are going to Sellafield, the greatest nuclear site, it takes an hour and a half on the train to get there westwards. If you are going to Newcastle, it takes you more than an hour and a half to cover 60 miles to the east. We have to improve that connectivity.
How is all this to be paid for? I am not in favour of robbing London to pay for investment in the north. I support Crossrail 2—I see the economic case for it—but London is a very rich place with a huge tax base. I would like the Government to give London’s mayor expanded powers to raise revenues from that rich tax base. I would start by putting additional council tax bands at the top end on expensive properties. That would release more national funds for the north.
In the 1960s, Labour used to self-confidently make the argument for regional policy on the grounds that it was in the interests of London as well as the north to have a better-balanced distribution of growth across the whole country. That was relevant then and is even more relevant now in taking the pressure off house prices and creating exciting new opportunities for dynamic young people in other parts of the country, where their expectations of the good life can be somewhat better than renting an affordable bed-sitting room.
It is in the interests of the whole country, non-Londoners and Londoners alike, that we have a kind of British Marshall plan for the regions. I would put two other elements in it. First would be an attack on our decaying town centres in the north: tackling empty properties, not allowing heritage to decay, creating attractive units at affordable rents and business rates, and bringing back housing to town centres. Secondly, it is important that we try to transform the quality of public services in the north, particularly teaching in the too many low-performing schools, which have been tolerated for far too long, but also doctors and nurses, who are in short supply, to deal with the brunt of an ageing population. That means incentives for young professionals, particularly for youngsters to come back home from university—their parents would dearly love that. Why not try to devise a scheme where the burden of tuition fees is lifted from students who commit to working for five or 10 years in the regions whence they came?
There has to be a new political framework for a revived regional policy. Again, to compliment the Government, I greatly welcomed George Osborne’s commitment to the northern powerhouse, devo deals and city regional mayors. It showed commitment that something needed to change. Given the presence of the noble Lord, Lord Heseltine, in the House, I say how much I admired his effort in trying to make that policy work. It was an outstanding performance. I am very sorry the Government took the opportunity for it to continue away from him. However, it was too piecemeal an approach and the devo deals depended on establishing local consensus. I know from bitter experience in Cumbria how difficult local consensus is to establish. In our case, there is frankly no sense in adding the third tier of an elected mayor to an already dysfunctional two-tier local government structure.
It is a shame that Osborne is no longer in the Cabinet to advocate these policies, although he is a brilliant editor of the Evening Standard. His policy now seems to suffer from the “not invented here” syndrome of the present Government. We have an industrial strategy that seems to prioritise sectoral deals over regional deals. We have to find a way of meshing the two together. In another Cumbrian example, it is self-evident that it is the Government who have to make a decision about whether we have new nuclear power stations. They will require some form of public equity stake, but if they are to go ahead the preparations for them—the working out of the planning, housing, skills and local supply chains—has to be done by some powerful devolved body.
I am coming to the conclusion of my remarks. We need a comprehensive new political structure of devolution based on city regions. This should form part of a constitutional convention that looks at the future of England and the United Kingdom. We need that political change to go alongside the renewed regional policy of which I have spoken. I look forward to the rest of our debate this afternoon.
My Lords, when I was asked whether I would take part in this debate I blanched, solely because I knew it was to be opened by the noble Lord, Lord Liddle. I have the highest respect for the noble Lord but I am terrified by his intellect. I am terrified by the things he has suggested in the past, particularly on Europe, because I have nearly always agreed with him. That has happened again today, although I am no longer terrified because I believe that we are more or less singing off the same hymn sheet in many areas. I remember his contributions on EU matters in the good old days when I was either the chairman or a member of our EU Committees—oh, happy days. Those were days of cementing understanding and friendship with our closest neighbours on the land-mass of Europe, but life must go on and there is much to do on our own patch and even more on establishing solid links through new trade encouragement. This is something I look forward to.
Yes, there are huge regional and national inequalities, but the growth in economic activity is not limited solely to the south-east and London. I have been astonished recently, in the last 12 months, as I have visited Birmingham, which is completely unrecognisable from five or six years ago, Manchester, and towns in the north-east about which I had always felt, “Oh, don’t stop here”, and seen that the imbalance in economic activity is being changed. Furthermore, the noble Lord made reference to the various reports we have had recently. They have all encouraged me to think that the Government really are doing something—I see that the noble Lord is nodding—and that gives me great faith. Whereas they have to do the analysis, and we all know that we are in great danger of being paralysed by analysis, there are gems in these reports, not least the railways report and the industrial report. Indeed, the Autumn Budget speech by Philip Hammond showed that there is not much between us in striving to eliminate inequalities. In fact, I am sure that there is not much between any of us in recognising the necessity of eliminating inequalities.
I can assure the House that in the last few weeks I have felt submerged by different analyses of this; each one requires a lot more work, but we have to get the message across that it is not good enough to have huge inequalities. Whereas we are doing very well in some areas, we have to realise that something has got to be done with the younger people in this country. There are glaring omissions—some of them have been mentioned—not least in skills and education. Connecting People: A Strategic Vision for Rail has just been published. I believe that this is one of the major areas of development which will bear fruit and be very positive in reducing inequalities in areas north of London. Britain needs to have faith in the Government’s ability to eliminate the poverty of low aspiration, to eliminate the poverty of weak determination and to eliminate the poverty of low self-worth. It is a tall order but we can do it.
I always remember the fact that we are, after all, the fifth-largest economy in the world. That has given us some push and influence. Not only that, our language is the best language, or at least the most used language in the world—other than Chinese, I suppose—and it is immensely in our interest to use these sorts of plus factors when selling ourselves to our own people, saying that we can get much more work out of people and that people need to develop their skills. We are also treated as one of the most financially competent countries in the world, which should bear us fruit as we develop these new trades.
I suspect that a high proportion of Members of this House have scant knowledge of what is happening now in the rebalancing of our economy, I know that Hastings, Stoke-on-Trent and Ipswich were regarded to some extent as basket cases, but the amount of work that is going on even in Hastings, where I have been recently, is quite exhilarating. Certainly, social mobility is happening and will probably happen further. I am told that the Department for Education has designated these three places—Stoke-on-Trent, Ipswich and Hastings—and will encourage them to get more investment and to beef up their skills.
The skills that we need were dealt with by the Chancellor of the Exchequer in the Autumn Budget. I was very taken by his statement:
“Knowledge of maths is key to the high-tech, cutting-edge jobs in our digital economy, but it is also useful in less glamorous roles such as frontline politics. So we will expand the Teaching for Mastery of Maths programme to a further 3,000 schools”.
This is terribly important, because maths is still regarded as too difficult, too out of touch and not likely to help in getting a job. What is not likely to help in getting a job is no knowledge of maths and we all ought to try to do something about that. I think of the success of ad hoc committees in the House of Lords: perhaps we should ask for an ad hoc committee on the teaching of maths. I do not know if that is too narrow a subject but I think not, because it embraces so many other subjects. The Chancellor of the Exchequer went on to say,
“we will provide £40 million to train maths teachers across the country”.—[Official Report, Commons, 22/11/17; col. 1050.]
Investment is planned on an all-Britain basis, with the northern powerhouse—that is an exception, of course, except that is part of an all-Britain process—and the transforming cities fund. Elected metro mayors are gearing up to change their areas and LEPs have done very good work in Birmingham. Those should be held up as beacons for people to imitate. Giving hope, encouraging action and, above all, having faith in this great country sums up what is needed to rebalance the economy and reduce inequalities. What is not needed is beating ourselves up.
On the subject of HS2, I can inform the noble Lord that there is movement on the next stage—HS2a is going before the House of Commons, I think, within the next few weeks. I agree with him that although a lot of people say it is a dreadful project, it is just what we want at the moment, particularly when you consider those who are taking the initiative of developing learning hubs and academies along the route to encourage more construction engineers and architects.
I am not anything like as downhearted as the noble Lord but I do agree with some of his points and wonder whether we should actually do something about it.
My Lords, I apologise to my noble friend , Lord Liddle, and the House for being a couple of minutes late. I left my speech on the table and had to run back for it. I hope it does not affect the speech. I congratulate my noble friend on having this debate and his support for regionalism—something I have always believed in. I differed a little bit when he came to HS2. As the Secretary of State who had to rescue the privatised HS1 and take it back into public ownership, I think we should have had an industrial strategy there that might have decided that you start this big investment in the north and go south if you want, and we would not have to wait until 2030 to get the 20 minutes off the train journey.
But leaving that aside, I welcome the debate. It is important to give the right priorities to the whole country, not just the regions, but at the moment the central planning system tends to look to developing in the south and not the north. I will not repeat the many statements that have been made about the inequalities and the differences between the north and the south. They are many, they are true and they are affecting the development—where you could get the highest productivity and the highest level of investment, both for the north and the country as a whole—but I will not dwell on them.
It is quite remarkable when you look at the change that has taken place. I was in the House of Commons for 40 years and have been in this House for a few years and I have heard all the arguments about intervention and planning. These were words which embodied ideological differences. One party was for planning and intervention, the other party was for the free market, and we can see it from the “Neddies” right through to the Thatcherite idea of leaving it to the market. It has not worked, frankly.
What I welcome about the industrial strategy document is that it has recognised the common sense of ownership—not necessarily public or private but working together in co-operation with the massive kind of investment that we need to achieve the new type of low-carbon economy, which will require major skills and major investment. We have broken away from the political debate about whether you believe in planning or intervention and this is now the language of the Government. Previously, it has been, “There have been failures in investment and productivity”, as spelled out by the Chancellor last week, and indeed other bodies. Now the Government say, “Let us look at how we can act differently”. As the document points out, that is really about having some planning, having a strategy and looking at it as a whole. Governments are involved because some of these major investments, as with HS1, cannot be done unless the Government are guaranteeing it in one form or another; private capital may also be used in it.
We have the development of an industrial strategy which means that after arguing in Parliament about all these elements for 40 or 50 years, we are now looking at what we have to do to meet the requirements of a low-carbon economy—increasing productivity, investment and skills—which Parliament has embedded in the Climate Change Act in saying that it must be one part of the development of the economy. Thankfully, that was done by a Government I was part of. That is the future. To that extent, I welcome a mechanism.
I welcome the language in the industrial strategy. It is very much what I believe, so I would tend to welcome it. It probably goes a little bit further than I used to think before. I see the co-operation; that is an essential part of it. But the language is right. The vision is probably right but at the end of the day it depends on the delivery mechanism. All these different forms of planning that have been used by different Governments at different times have failed because they have not been able to deliver on their language, whether in prices, incomes, planning or whatever. Therefore, we need to have something that gets greater support and co-operation and, above all, works. That would be helped by a parliamentary timetable that normally would be five years; you do not really get started or you get started and then of course somebody abolishes it or another Government come in.
A classic example of that is in the regions. The so-called northern powerhouse is not northern. It divides on the Pennines. Okay, I know it is aimed in that direction but it is not that. Is it a powerhouse? It is limited to co-ordinated authorities. It shows a divided country in many ways. I think the Government want to go further but I do not believe that the way they are suggesting is the best way. If you are regional, that is strategic; you want it on a region. Let us call it the north, because that is what I am very much involved in. But if you divide the north, as at the moment, whether because you cannot get the co-ordinating authorities to agree or you cannot get the planning body, that is a disadvantage for delivery.
A good example was when it was suggested that Transport for the North, the body set up by the Government and to be given strategy powers by Parliament, would have the right to decide on the strategy for the north and how it was going to be implemented. We now know that that is not so. It can only make recommendations to the infrastructure commission—which I think the noble Lord opposite is a member of. That was the purpose. Now it can only make recommendations. It was thought that it would have the resources, as we did with the regional development agencies when we set them up. They had the resources and the powers to implement what was decided in the regions. That is not to be so. It is another good example.
The Government do not like regions—that is quite clear—so they call them “subnational”. They do not like to use the word “region”. They have to strategically think from one end of the north, whether it is Liverpool or right up into Newcastle and Hull. They do not like the concept of regions for very good reasons: it takes it out of the Chancellor’s hands, and he is very committed in all these plans that it has to go back to him and he will decide what resources are going to be delivered. If we have a body for the north that makes recommendations, the infrastructure bodies that are set up and the Chancellor, that is what has been happening for the past 10 years. What is going to be different?
There are differences and there are movements. That is why, while I disagree with some of the strategy, I want to make a suggestion to it that would help. The industrial strategy and the document that the noble Lord, Lord Heseltine, produced see the need for having a structure for the policy. I think the Government give it six or seven columns. Fine, but what you have to do is based on sectors. How many times have we argued about whether the Government should be involved in sector planning? But it is in this document. I suggest to them that they ought to think of corridor growth.
I live on the Humber. The Humber is one of the greatest assets we have in the north. It is estuarial growth. Those that locate in those growth patterns are different from land-based ones. You can see that in the Mersey; you can see it in the Thames, where a great deal was worked out on the Thames development; but we also saw it in the Teesside development—to look at having a mayor. I brought in devolution for Scotland, Wales and Northern Ireland, and I also brought in for London an elected mayor so I have been involved in dealing with that level of governance. But that is not what is seen in the development at the moment. It is still limited to local authority accountability and boundaries. So I commend estuarial growth to the Minister.
The Humber has Siemens. It has the greatest energy and renewable plants developing. It has Drax Biomass, which is a very important part of it. Along the river it has a lot of industry. We have plenty of land. We have the fastest broadband technology in the country—mind you, it is not owned by BT; that is probably why it is the fastest. If you put all those things together, we have those essential bits of growth that the Government identify in their industrial strategy. I invite the Minister and the Government to look at all the reports we have done about the Humber. We developed the first low-carbon report four or five years ago for the Humber. We have done reports on carbon development and skills training. We have been operating on that. It is a matter of bringing them together. I am calling for a Humber strategy in line with what the Government are doing at the moment. If the Government are looking for a place for quick growth, they have it on the Humber. Let us get working on it and get it done.
My Lords, I thank the noble Lord, Lord Liddle, for enabling us to have this debate at an extremely important and relevant time, given the publication in the past week and after the Budget of the two documents that he referred to: the Social Mobility in Great Britain report and the industrial strategy. He may be interested to know that the conclusions I will draw in my speech are broadly similar to those that he has drawn. I pay tribute to the noble Baroness, Lady O’Cathain, and the noble Lord, Lord Prescott, for their contributions. I hope that on this issue we will be able to see a coming together and common thinking about what conclusions we need to implement.
This debate is about creating a comprehensive agenda to address regional and national inequalities within the United Kingdom. “United” matters because our country is becoming increasingly disunited and the words “comprehensive agenda” matter because we need detailed thought on how growth and productivity can be generated across the whole country.
The noble Lord, Lord Liddle, was right to remind us that the inequalities gap is widening, and is wider than in any other EU country. He talked about the importance of EU regional development funding and its future, on which I think the Government will need to respond sooner rather than later. He rightly identified the high proportion of disadvantaged children in the London Borough of Kensington and Chelsea who go to university whereas the figure for Barnsley, for example, was under 10%. But one reason for that is that the per capita spending in secondary schools is much higher in London than in the north of England. We need to learn from that, particularly in terms of teacher incentives. He is absolutely right about HS2, HS3, rail connectivity generally and Crossrail 2. I subscribe to his view on those.
On devolution deals, I pay tribute to what the noble Lord, Lord Heseltine, achieved during the coalition Government and afterwards. Those deals have established a trend. However, the noble Lord, Lord Liddle, is right that income levels, levels of individual wealth, growth rates, productivity rates, deprivation indices, educational attainment and public spending levels mostly confirm that inequalities are growing.
Last week, as we have heard, as well as a Budget statement there were two reports published demonstrating the extent of the problem. The Social Mobility in Great Britain report by the Social Mobility Commission confirmed in its first words that:
“Britain is a deeply divided nation”.
Its work on the place-based divide, the subject of this year’s report, has confirmed that in the fields of education, employability and housing, there is a growing gulf between Greater London—and some parts of other UK cities—and the rest of the country, particularly the further you go from London. The second publication was the industrial strategy, which contains a very positive set of proposals and, commendably, has place as one of its five foundations. It is encouraging that it is clearly stated to be a strategy for the whole country; it needs to be.
The Secretary of State was right to identify, in an article that he wrote for the Evening Standard a few days ago, that the Government have to switch their role from being a boss to being a partner with the private sector and local communities. I concur with that and would simply add a specific wish for all our universities to have a policy obligation for local engagement in their broader regions, particularly those towns neighbouring the cities the universities are in, to help address some of the concerns identified by the Social Mobility Commission.
The crucial question is how we will make our living not just now but in 20 or 30 years’ time. It is about the nature of work and the skills needed right across the country to deliver the right outcomes. I have concluded that transformational change is needed; that will require not just government intervention but greater private sector investment in the poorer parts of the United Kingdom. It is too easy for the private sector to think only of their shareholders and their international opportunities. How good it would be if annual reporting had to include a statement of a company’s UK-wide impact. That comment and concern includes the banking system.
Devolution within England is, as I have said, helping to right imbalances a little but it will not substantially do so until the control of resources and tax-raising powers are more devolved too, so that the constituent parts of England are treated more like Wales. As for the northern powerhouse and a Midlands engine, I have never been clear whether a powerhouse is bigger and better than an engine. I wish the Government would stop hiding a lack of detailed policy behind a brand name; it does not help because the lack of policy is easily exposed. Having said that, it is right to have a northern powerhouse and a Midlands engine. I hope that the Budget may help a bit around infrastructure and productivity, and that the coming months will tell us whether they might then help to reduce inequalities.
In this respect, I commend the work of Transport for the North, which is getting into place a set of proposals to help improve transport in the north of England. The imbalance of transport spending between London and the rest of the country is well- established. Something needs to be done urgently about this but the allocation of resources remains a broader problem. Regional spending in the UK shows per capita spending in Northern Ireland to be £11,042, in Scotland of £10,651, in London of £10,192 and in Wales of £10,076, but with an English average of only £8,898. There is a clear and worrying discrepancy which feeds through to fewer resources in England for public services. I suppose I should remind the House that I am a vice-president of the Local Government Association at this point.
The noble Lord, Lord Liddle, reminded us that London has been hugely successful. I agree that that success should not be criticised by other parts of the United Kingdom because it generates tax income for the rest of the UK. However, there is a problem: because London is a world city, decision-makers in London may think internationally about expansion or solutions to problems more than they think about finding the solutions elsewhere within the UK. We need to have a national discussion about the role of London in governing England. There is an assumption that, following the abolition of the Government Offices for the Regions, London represents England. In practice it does of course, because it controls taxation. I am very happy that more devolved powers are going into combined authorities but they are distinctly limited in comparison with those of the nations, although many English regions have comparable populations to that of the nations.
The Government must give a lead. I agree with the noble Lord, Lord Liddle, that more of Whitehall should be moved progressively out of London. He used the example of Defra going to Cumbria but I will use the Department for Transport. If, for example, the Department for Transport was moved to the north of England, it would make a profound difference to what seems all too often to be short-term thinking on infrastructure investment policy, which has resulted in the lion’s share of spending going to London. It is possible to do this. Digital communication and HS2 will make communicating much easier. Of course, other Whitehall departments with a domestic focus could similarly be progressively relocated, in whole or in part, out of London. I accept that they would need a small London presence but let us remember that many private sector companies operate with a small London presence while their headquarters are elsewhere.
In the meantime, I hope the Government will think carefully about establishing an integrated government office in each English region, as we used to have. It was a bad mistake to abolish them a few years ago because it has simply added to the over-centralisation of England. Those offices would push to develop new industries in their regions and implement the industrial strategy, working alongside the local enterprise partnerships. They would also have that responsibility for supporting those towns that lack jobs and educational opportunity—towns which are seeing a general loss of jobs, with retail moving to centralised warehouses. The towns could be helped if there was a better government focus in each of the English regions.
My Lords, I, too, thank my noble friend Lord Liddle for his initiative today in launching this debate on a subject which is very important for the future of our country. His initiative coincides—I guess it is a coincidence—with the social mobility report to which he and other noble Lords have referred. It graphically shows the imbalances in our country today. The picture is of a far from united kingdom. It is a nation where children’s life chances, the results they can expect at school and the pay they can expect to earn are shaped by where they are born. The uncomfortable truth is that London and the south-east begin to look like a separate country, distinct from the rest of the nation, despite pockets of intense and profound deprivation in the capital, of which we are only too aware. We have growing wealth and growing poverty side by side in our country today. That is the nature of the challenge we face. I saw some remarkable figures the other day. I have not had a chance to check whether they are absolutely accurate, but they show that in downtown Blackpool a man’s average life expectancy is 67.5 years whereas in Westminster it is now approaching 90 years. That is the difference in health and wealth, and those two things go together to a large extent.
We have been developing more and more in an unbalanced way with the emphasis on London and on an overmighty financial services sector, with short-term shareholder value becoming the leitmotif of private companies on a very wide scale, as the noble Lord, Lord Shipley, said, and inadequate attention to patient investment, skills building and genuine entrepreneurship of the building-business kind and to partnership working with employees and—yes—trade unions. One day there will perhaps have to be a monument to all the household-name companies that died in the post-war period, such as ICI, British Leyland, Lucas and many more. It will need to be a pretty big monument. This country led the world with the first Industrial Revolution, and sadly we have been leading the world with the de-industrial revolution. The staple industries on which particular towns and cities depended have shrunk or disappeared and, just as importantly, banks migrated away from their local and regional bases into amalgamations based in London. As other noble Lords have said, infrastructure investment has been low, and had it not been for the public sector and nationally agreed pay rates applying to employees of the public sector, shops, leisure providers and the arts would have struggled in the provinces even more than they have.
Productivity is in the news this week, and I hope it will be there not just for this week but constantly. We know that our performance outside the south-east is dismal. In the league table of European regions, many of our regions come very low down. Some of that is caused by global factors which we cannot do much about, but other countries have not lost as much as we have. France and Italy are now larger manufacturers than we are, which is an astonishing turnaround over the past 50 years.
Some of this has been caused by public policy failures, an absence of long-term thinking and, particularly perhaps, consistency in areas. Contributors to this debate have mentioned the different initiatives taken over the years that have been changed after a change of Government or of Minister. I acknowledge that some of our problems are caused by adversarial industrial relations which produce a lack of confidence in change and limit action to repair the deficit in the skills of the workforce. However, from long experience with many of the country’s leading employers, I sincerely believe that at the heart of the nation’s problem is entrepreneurial failure. Too many companies became sclerotic and vulnerable to being sliced and diced by smart financial interests and being left anorexic. Old products, technology and premises are not replaced, and low skills and motivation and inefficiency have been all too common. The uncomfortable fact is that many of our very welcome success stories—and fortunately there are many, and the car industry is a spectacular example—rest on foreign entrepreneurship attracted by the UK being part of the single market of the EU. We hold our breath about how these companies will react to Brexit and to life outside the single market and the customs union.
I join those who welcome the Government’s conversion to an industrial strategy. In a sense, we have been doing it without calling it an industrial strategy. The noble Lord, Lord Heseltine, in particular, has played a very distinguished part in that work in Docklands, Liverpool, Manchester after the IRA bomb, the Humber and the Wirral. The document No Stone Unturned: In Pursuit of Growth still has many lessons which are highly relevant to where we need to go. Like the noble Lord, Lord Shipley, I served on the regional growth fund advisory committee, which did some useful work under the coalition Government in particular, but I have to admit that we were sometimes short of strong candidates in the poorer regions to whom to give money. It was not easy to find the best-deserving cases. I understand that some of the Labour Government’s regional development agencies had a similar problem, and it is good to see my noble friend Lord Prescott, who was the engine behind their development, taking part in this debate. I hoped they would have the time to evolve into regional banks and would restore the sense of banks being close to business on the ground that we had in the 19th century, but they never got the chance. The “not invented here” syndrome, to which my noble friend Lord Liddle referred, applied, and they were abolished. Will the Minister outline the regional implications of the industrial strategy and how the Government think they are going to embrace the regional side of all this? What steps are being taken to improve business leadership?
I declare an interest as I was a visiting professor at Manchester Business School, which is a centre of excellence in very many ways. When I was giving a lecture there to an MBA class, I found it sobering when I asked them where they expected to work and nine out of 10 of the Brits said they expected to work in financial services. One smart alec, who got a laugh from the class at my expense, said that a long-term investment is a short-term investment gone wrong. That shows the mentality of many of the kids—they were mainly kids—who were studying in that class.
What are we going to do to ask business schools to contribute to the industrial strategy? Do they just carry on in their own world under the guise of academic freedom or could they not become staff colleges for a new generation of entrepreneurs building firms for the long term, building a range of skills in the workforce and building their own skills, not just in finance but in technical innovation and people management as well? It is very rare to find British managers who are good at those three things. Most of them are good at one, mostly finance, some are good at two, but very few are good at the technical side of the business, the people side of the business and the money. This last point is crucial. We need business leaders who are technically innovative, financially literate and capable of working with the workforce. The role of unions is extremely important in this process, so do not forget the trade union contribution, which can be extremely positive.
My Lords, I am very pleased to be speaking in the debate secured by the noble Lord, Lord Liddle. I am a Londoner and I was born in Notting Hill, but I have always tried to escape from London and have, on occasions, lived in other places, such as in Scotland and in Sheffield, Yorkshire.
I have always been aware of what you might call metropolitan imperialism. I call it that because everything seems to want to shift south. I started the Big Issue on the double yellow lines of the West End of London, but very quickly realised that virtually all the people I was working with did not come from London. They were not locals, or London-Irish gits like me from Notting Hill, but were from Scotland, Ireland and, increasingly, Europe. Everybody was being pulled in by gravity: people who had problems as well as those who came to seek their fortune.
The United Kingdom is a very strange beast. It is one of the few major countries where there is only one really big place where you can go and make it. For example, in Germany, you can make it musically, intellectually, culturally or philosophically in all sorts of places, but here you have to come to London. That kind of weirdness, that draw, is behind it all. We really need to start moving some of the institutions, and not just government ones. For instance, that beautiful place, the Barbara Hepworth gallery up in, I forget where—
Wakefield, forgive me—I have only been there once. It is an absolutely brilliant place, and what an effect it is having on the community. Then, in Margate, there is the way in which the new Turner gallery has helped create a totally new kind of economy, with a 37% to 47% increase in the number of people going down on the train to Margate. There are similar figures for those going up to Wakefield. We need these cultural shifts to help us grow—for instance, the stuff that is happening in Gateshead—as they draw people from other places not just into the UK but further on.
Look at the effect on Edinburgh. I used to live there when it was a poor little place, but an enormous wealth of opportunities has been created by the Edinburgh festival. This has happened in my lifetime: 50 years ago, when I was sleeping rough in Edinburgh, you could not get a penny off anybody, but now you can live quite comfortably on the streets, and probably put a bit away for a bad day. These kind of considerations need to be there to address the interest that we have to show in the fact that we have a very lumpy and strangely formed economy.
When I was the printer for the Victorian Society, I took a great interest in looking into British society. By 1851, for instance, Britain had lost its role as the workshop of the world and was becoming the sweat-shop of the world. Over 100 years later, Margaret Thatcher—the late Baroness Thatcher—closed down all these industries and added to the major problems that we have in this very lumpy economy. I do not know that she had an awful lot of choice, because most of those industries had been on government subsidy since the First World War. The car industry was the only new industry.
We have a very weird way of investing in the future. When we have a situation in Britain where the average bank lends 87% of its money for the buying and selling of property, what is left for the development of new industry? What is left for the development of new educational superstructures and all those things? I was very struck by the wonderful term that the noble Lord, Lord Liddle, used when he said it was time for a British Marshall plan. I believe that we need to dig deep and find out a way of doing this. I agree with the noble Lord, Lord Prescott, in that I have been looking at all these plans over the years and thinking, “When are they actually going to stop talking about it and deliver it?”. We need to do something very profound.
I am doing something quite interesting called social mapping. We are going to cities, towns and villages and finding out who is there, who is doing what and what organisations are there. I can tell your Lordships there is one city that is desperate for help and change. It has 200 different providers who provide social businesses, work and all sorts of things, and they do not even know each other or talk to each other. So we are brokering a relationship between them. Why can we not have communities, like in Carlisle, where there are at least 100 providers in the community providing for the well-being of that community? Why can they not start working together? Why can they not start doing things such as sharing each other’s facilities? Why can they not do that?
I believe very strongly that one of the ways that we can overcome many of the problems that we have with this very lumpy economy is to involve the community in bringing about changes. We cannot rely on government. Governments think in big strategies, and Governments and Ministers change. I remember that when I was dealing with the DWP at the time when the noble Lord, Lord Prescott, was in office, I dealt with four, five or six different Ministers over a period of about eight years. There is this weird situation where Governments change. However, if we go back to the community and start putting the community together and trying to broker social change, we will be able to build on the generosity, local opportunity and local talent that exists. So I would say that if the noble Lord, Lord Liddle, wants to do something in Carlisle, he wants to find out who is there, and neither the local authority nor national government will know. It is only by going back to the community that we can bring about those changes.
My Lords, I, too, thank the noble Lord, Lord Liddle, for securing this debate. I begin by declaring my interest as a commissioner on the Equality and Human Rights Commission.
There is a group of people who I do not think a single Member of your Lordships’ House has mentioned in the debate so far and whose positive contribution to reducing inequalities and incredible generosity so often goes unacknowledged. I want to thank them today for the inequality reduction measures that they fund, including measures to reduce regional and national inequality across the UK. Who are these wonderful anonymous individuals? They are the great British taxpayer. Their generosity knows no bounds. They are already asked for so much of their hard-earned income—yet still the shadow Chancellor demands more from them. Some may look longingly towards the land of McDonnell make-believe, but the patronising promises of more money are simply a mirage—an illusion, concealing increased debt interest payments, which are the very payments that would impoverish our people, imperil our welfare state and exacerbate inequalities.
I do not live—indeed, as a stakeholder in a sustainable welfare state, I cannot afford to live—in the land of McDonnell make-believe. Back on planet earth, with UK debt at around 88% of GDP, I ask myself: “Where is our buffer—our capacity to absorb the inevitable shocks of the economic cycle?”. This is the contextual reality that I say we cannot divorce from discussions about longed-for largesse—as if the Government themselves owned any money. My noble friend Lord Tebbit, who is not in his place today, often reminds your Lordships’ House that taxpayers own their money and give it to the Government in trust. I feel we need to remember that.
When we consider how to address regional and national inequalities, I also believe it is essential that we recognise the immense inherited financial constraints within which the Government are operating. It is therefore to the Government’s credit that, despite the lasting legacy of debt bequeathed by the last Labour Government, such a significant amount has been and is being done in this area. I am particularly heartened by the renewed focus on a one-nation vision, which has informed Conservative policy and practice for the last seven years. As we have already heard from other noble Lords, the former Chancellor, George Osborne, played a pivotal role in putting the northern powerhouse centre stage and empowering local government. That is to his enormous and lasting credit. Now this Government are building on that work, including with up to £1.8 billion announced by the Chancellor in his Autumn Budget, as well as devolution deals so that devolved powers and funding can be exercised at the appropriate level.
Surely we can all welcome the fact that the Government are investing more taxpayers’ money to improve transport connections across the north—more than any Government in history. Similarly, the devolution deal agreed between the Government and the West Midlands mayor and combined authority to address local productivity barriers includes £5 million for a housing delivery task force, £5 million for a construction skills training scheme and a £250 million allocation from the Transforming Cities fund to be spent on local intercity transport priorities. Is this not further proof of a Government who have put addressing regional inequalities high on their agenda and are committed to using taxpayers’ money responsibly to make sustainable progress?
I also welcome the fact that the Government are focusing on areas of the country with the greatest challenges and fewest opportunities, including by investing £72 million in 12 opportunity areas. While continuing to provide the pupil premium, worth around £2.5 billion this year, they are also investing £137 million through the Education Endowment Foundation to expand the evidence base on what works in education for disadvantaged pupils.
I could go on, but the fundamental point in all this is that the right delicate balance is being struck between encouraging enterprise, spending taxpayers’ money responsibly and in a sustainable way and, crucially, addressing inequalities. That combination surely is the best guarantee of what every noble Lord wants—a more equal society.
My Lords, I welcome this debate and strongly support the analysis of the UK by my noble friend Lord Liddle. As he emphasised, we have to consider issues within regions as well as between them and some of the UK’s big cities—that is critical. We must also think about different types of inequality that correlate with each other: health and mortality, the environment, economics, transport, education, tourism and culture. So I was a bit disappointed when the Library produced a document for this debate that was exclusively on economics. All those aspects are critical. We should also note the maritime aspects of the UK along our coasts.
I declare my interests as a president of ACOPS, an NGO; as having set up an SME; and as a former city councillor. The issue of mathematics has also been raised: I have been president of the Institute of Mathematics.
National and local government leaders, public bodies and the private sector play an extremely important role in trying to deal with these issues of inequality. I went to China a couple of years ago and saw how difficult it is being a mayor or local government person in that country. Ningbo is now famous in the UK for Nottingham University having a branch there. The mayor of Ningbo gets up in the morning, draws his curtains and wonders if he can see the ground, 15 storeys below, because of the pollution. He then looks to see whether he can drive because of the incredible traffic jams. He goes into his room and turns on the tap to see whether the water is brown or white. So there are big challenges in huge cities all around the world. As we deal with our own inequalities, we interact with other countries.
It is particularly important to have continuing good relations between the regions of the UK and across Europe. It is essential that these links continue. I look forward to hearing from the Minister on whether this will be a new role for the FCO or some expansion of the role of the Department for Communities and Local Government. I should like him, or one of his colleagues, to look on the DCLG website. On 29 November it recommended that local government should apply for European structural and investment funds—so I suppose that we are still being encouraged to go there. Perhaps the Minister might explain, because it sounds as if boroughs should work very fast if they are going to get in there before the witching date.
In a recent speech to the House of Lords Science and Technology Committee, the noble Lord, Lord Heseltine—who I am pleased to see in his place—emphasised the role of local initiatives, exemplified by his work in Liverpool, Docklands and elsewhere. He thought that these initiatives could be improved by reinstating the local audit commission. I was astonished to hear him say that because, when I was in local government, the commission was extremely important. It enabled local government to explore more difficult and controversial areas with a body of great experience and authority. There were many occasions when the policies and advice of the local audit commission were considered.
For example, the advice was particularly important in a controversial initiative of the early 1970s when it had to deal with the financial implications of setting up a tourist office and facility. At the time, most cities in the country did not have that controversial facility, but it was finally accepted in Cambridge. I am afraid that even the noble Baroness, Lady Trumpington, a doughty lady, opposed the radical suggestion. There is no doubt now that many new kinds of tourism initiatives and investment are now being considered, and are a most important area of development. As my noble friend Lord Prescott reminded us, you need to have planning.
Hull is an example of a city that has benefited greatly from a cultural aspect to its economic development. There has been great development in artistic tourism and the arts, all supported by local communities and councils: great sculptures and culture parks now bring many visitors to centres. I was recently in Ilfracombe and saw the large statue that Damien Hirst has loaned to Ilfracombe for 20 or 30 years, and the website for Antony Gormley’s great sculpture, the Angel of the North, states proudly that it is in conjunction with Gateshead council.
Interestingly, some centres, such as Bath, are now so popular that it is really important that the Government, through their agencies, should promote other centres of tourism and the arts, because overcrowding needs to be dealt with. So what will the Government do to support these initiatives now that we have heard the sad news that the city of culture programme, which is funded through Brussels, will be closed down? Will the Government fund our own UK cities of culture to work with our European colleagues? This is a tremendous blow to the cities and an egregious loss of regional development.
Another approach to develop less developed regions is to establish and grow science and technology centres and museums. Many of these are already very successful tourist and educational attractions, drawing in thousands of tourists, such as the Eden Project in Cornwall, Jodrell Bank, Dundee City of Design, which connects to the V&A here in London, and the National Space Centre at Leicester. We do not yet have an international mathematics museum. They have one in Toulouse, which is combined with a museum for garlic. The French have this idea that we should have centres that combine two quite different areas of intellectual or economic activity.
It is also important that some areas of the UK have particular natural scientific qualities that greatly interest schools and other educational establishments, such as the Darwin Centre in Pembrokeshire, which involves science and theatrical events. An extraordinary new example is in Lyme Bay, where economic developments, working with the local marine protected areas, have produced all sorts of activities involving geology, history and the fishing industry. Such developments are complementary to having greater industrial strength in the different regions.
Another feature I wanted to mention, which may not have been mentioned so far, or only in passing, is that we have great inequalities in health and morbidity in different towns and areas of the UK. A study by Marmot and Stafford at UCL showed differences in life expectancy, about which we have already heard, between western and eastern London boroughs and in mortality between males and females. There are comparable differences between the regions. It is a welcome fact that all socio-economic groups are living longer—but the inequality between regions and sub-regions continues. Localised air pollution is a very important cause of local mortality. These inequalities will decrease only by the application of a broad range of policies and local initiatives, such as those presented in this debate. I look forward to the Minister’s reply.
My Lords, it is very rare that I am mistaken for anyone else in this House. I start by thanking the noble Lord, Lord Liddle, for his excellent introduction. He analysed the issues well and gave some of the solutions that are needed to deal with the inequalities that affect the regions and the nations of the United Kingdom. I also thank the other speakers for their contributions.
I begin with one statistic, which shows the challenge ahead and the slowness of successive Governments in dealing with this issue. It will take 120 years for young people in the most deprived parts of the UK to achieve the same examination grades as those in the most affluent if we continue as we are. I use that statistic because education and the opportunity it brings, and everything that comes from that—health, connections and networks—show why, if we continue to do what we are doing, we will not make significant progress in our lifetime.
That does not mean that some of the things we are doing with regard to HS2, skills and potentially moving government departments out into the regions will not have some success. But many of those things have been tried before and have not had the significant result needed. That is why we need radical solutions, not just tinkering.
The first concerns government itself. We have a Victorian structure of government in the UK. It is interesting that we all talk about what may need to happen outside, but we should start here, at the centre. The centre of government needs to change. It no longer needs to be about managing function but about outcome and structure, so processes need to change on the back of that. Otherwise, we will just be delegating down to the regions of this country a Victorian system of government that is not fit for a modern future. That is really important if we are to unleash the power of our cities, regions and nations in the United Kingdom.
We are talking about what we need to do, but the world is changing; there is a bigger picture. I have two issues to talk about. One is how our economy has decoupled in the United Kingdom. We have different economies and I want to explain how globalisation has affected that and what we need to do. The other issue is that we now live in a networked world which needs very different solutions to such concrete issues as how to connect people. In the future, infrastructure in the sense that we talk about it may not be the issue that unlocks the potential of areas and regions. On infrastructure, for me, the most important issue for dealing with inequality is not just rail track but the internet, broadband and interconnectivity. Again, I come back to how government thinking might be causing problems in terms of managing functions.
In the recent telecom rate subsidy Bill, it is proposed that providers will get paid if they put down fast broadband, no matter where it is. I can tell noble Lords where it will go: it will go to the most affluent, already connected areas because that is where the customer base is. But broadband should be put into the most deprived areas of the UK to unlock the potential of individualised education, using artificial intelligence and internet connectivity to give individual help and support, not just through teachers but through the potential of technology, which will then give young people skills, confidence and access to networks. That is what we have to think about. There is a different way of thinking about how to unlock the potential of young people, cities and areas across the country, rather than just thinking about concrete infrastructure. We need to take a different view of outcomes and think about how we educate young people and get them ready for work rather than thinking just about how we get fast broadband in the UK. If we changed the way we think about those issues, we could unleash the potential of areas and reduce inequalities.
As regards the decoupling of the economy, the UK’s weak long-term productivity results principally from the differing effects of globalisation on different parts of the country. As we know, economies outside London have made a very poor transition from their industrial past, while the benefits of globalisation have remained confined to London and its hinterland. For far too long the problems of the regions have been masked by London’s success. Like other speakers, I do not detract from that success but, as a result, the UK economy is not only diverging but disconnecting, decoupling and dislocating into two, or possibly three, separate economies. London has become insulated and isolated from the wider economy and this is likely to be exacerbated by the UK’s departure from the EU.
We need, therefore, to understand that the key to solving this problem is to go much faster and further in devolving economic powers to the regions and areas of the UK. That is vital. I do not denigrate the work that many noble Lords have done on devolution, including the noble Lord, Lord Heseltine, but that process needs to be more radical and quicker. When I led Sheffield City Council, I pulled levers to try to make my area more economically viable but they were connected to absolutely nothing because the power, the funding and the financing were not there. Attracting private capital to my area was also very difficult. We need to look at that. The argument about whether these problems are more difficult in a city, an area or a region—the north in my case—is false as they apply in all three categories. We have to think about the different levels of economic geography, how we devolve powers and how structures, systems and processes are set up to make areas powerful.
We also have to think very differently about how we use networks to get money in. No one has really talked about how we attract capital to these areas. It is all right having skills and connectivity but how do you attract capital? Technology can be used. Why do we not set up virtual local stock exchanges, so that if I want to make an investment, I can be connected and networked to growing local small and medium-sized enterprises which I may not be aware exist in an area if I do not live there? Therefore, we should think about making localised stock exchanges and localised sovereign wealth funds available through crowdfunding and crowdsourcing so that people, rather than just government, can invest in the future wealth of an area. Local banks have already been mentioned in that regard.
We need a different, radical approach to this matter that addresses the decoupling of the economy, the Victorian approach to government and how we use a networked world to deal with some of the issues; otherwise, young people will have to wait 120 years for their inequalities to be addressed.
My Lords, I offer my sincerest apologies to the noble Lord, Lord Scriven, for attempting to jump the sequence of speakers. The idea was not to usurp his place; I was simply impatient to get what I wanted to say out of the way.
I congratulate the noble Lord, Lord Liddle, on securing the debate and introducing it so well. I express my great delight and pleasure at the presence of the noble Lord, Lord Heseltine, who has given far more thought to this subject than many other Members of this House. I am pleased that he should be here, exerting a quiet influence on the speakers. One can exercise power without being in power. One can be influential from outside the political arena.
I want to address this subject from a slightly different angle. We have been talking about regional and national inequalities. When I raised this subject with a friend of mine, his question was very obvious. He said, “Regional inequality is simply a stalking horse for the old socialist idea of equality. After all, what are regions? What are nations? They are made of individuals. When we talk about regional equality, we are talking about equality between individuals—and if we are going to talk about equality between individuals, we are establishing some kind of equality between all British citizens throughout the country, which is nothing else but the old socialist idea of promoting equality by different means”.
I want to talk not about regional inequalities, which have already been demonstrated and established by many of your Lordships, but about equality in general. Why is equality a good thing? Why is it desirable? People say, for example, that as long as nobody is starving, everybody’s self-respect is maintained and everybody’s worth is respected, it does not matter who is equal to whom. In this case, when we are constantly comparing ourselves to London, the argument is that we all want to be like Londoners. If London has 60% more income than the national average, and better facilities, then why can we not have the same? A Londoner could turn to you and say, “This is all politics of envy”—as they always said about the preachers of equality. Are we simply talking about politics of envy? Do we all want to be Londoners, without living in London and suffering its hardships? At the end of the day, what are we asking for? Assuming that the question is about politics of envy, I want to address the question at that level.
Why is equality important? I think that equality is important for four reasons, at least. First, any kind of inequality, especially the kind that operates in our society, is unjust. If someone is born in a rich family, they inherit a network of contacts, which are never deserved but simply acquired by virtue of who they are. Inequality in our society is unjust because it makes people bearers of undesired, undeserved and unwanted privileges.
The other thing is that inequality is never alone. Different kinds of inequalities are always interlocked: inequality of powers, political inequality, inequality of income and inequality of respectability. They all come together and collectively create a system from which those at the bottom are unable to escape.
Inequality also skews a society’s system of values. After the financial crisis, banks were helped out pretty quickly, but millions were condemned to suffer from austerity. The question is: why? Why did even the most sensible people not think it proper to look after the victims in the aftermath of the crisis, rather than the bankers, who could simply laugh at us and move on to equally nasty things? This is what inequality does: it skews our system of values so that certain things appear obvious to us when they should not.
Finally, and importantly, inequality between regions and individuals creates unequal experiences. The rich live in gated communities, but we condemn the rest to travel by public transport or live in public residences. The result is that there is nothing in common between these people. If they have nothing in common, how can we sustain a sense of community? How can we sustain a democratic form of government, which depends on a shared sense of community?
Therefore, for all these reasons, regional inequality and other kinds of inequality are unacceptable and we are absolutely right to fight them—not out of politics of envy, but out of politics of common good. Common good and justice require that these inequalities should be countered and that something should be done to create a genuine sense of community in the country. The regional inequalities detract from that sense of community and therefore reduce the spirit of democracy that obtains in the country. At the same time, while I recognise that inequalities create these ugly consequences, I accept the fact that inequalities are bound to exist because of differences in talents and circumstances where one is born. This is where the state’s role comes in—to make sure that these inevitable inequalities that issue out of differences in circumstances do not get intergenerationally consolidated, do not get interlocked, and do not skew our values. This is where some kind of sensible policy from the state has a great role to play.
We are talking about a comprehensive agenda for equality. Obviously, a comprehensive agenda includes not simply economic equality but social inequality: of race, that the Muslims suffer, and that other communities suffer. However, given the shortage of time I will not talk about it. I will just talk about economic inequality and how it impacts on people’s lives. People in different parts of the country, from different walks of life, suffer from certain consequences because of the circumstances in which they are condemned to live. People in the poorest areas, for example, die on average seven years earlier, according to the British Lung Foundation. They are cognitively less developed, suffer from poor health, and there is weak motivation among those in deprived areas, and more smoking and more alcohol.
With all these things, too many people are left behind. The advantages of globalisation go only to the few and the rest express themselves through Brexit and other kinds of pedlars of strange, fanciful, seductive and unrealistic utopias. This is where the problem arises, that people who are unable to benefit from globalisation feel left out, full of resentment and anger, and the only way they think they can counter those who seem to be benefiting is by acting in ways which appear strange to some of us but perfectly natural to those who have grown up with them. In this context I am pleased that the Labour Party, certainly for the last few years, has taken up this idea of equality. Not only Jeremy Corbyn but Tom Watson, who happens to have been a student of mine once upon a time, have been strongly arguing for equality.
My last point is that I talked about community; without it there is no democracy or sense of sharing, and our destinies are interlocked. This is something that liberals do not often realise when they talk about choices. In a racially mixed school, if white parents withdraw their children, the blacks are condemned to study in all-black schools. This was not their choice—they did not want their children to go to all-black schools. They are condemned to send their children there because the whites have decided to withdraw. In other words, one man’s choice is another man’s coercion. When you choose, you choose not only for yourself but for others. Therefore, when you choose, you must choose with a sense of responsibility, with some concern for others. That implies a sense of community, which we have all been talking about.
My Lords, I start by congratulating my noble friend Lord Liddle on securing this debate and on the detailed, magisterial and persuasive way in which he opened it. I was slightly worried about whether what I was going to say would fit into the pattern of the debate. However, I am grateful to my noble friend Lord Parekh, because he has reassured me firmly that what I will say will, I hope, be of some relevance.
My noble friend Lord Liddle and other speakers have demonstrated clearly that there are economic, social and cultural inequalities between different parts of the United Kingdom. I do not propose to look at the economics of the situation, but I have some comments to make about the politics.
One thing that most concerns me is the haphazard, asymmetric and almost capricious way in which we are developing a pattern of devolving powers in this country. In some ways, this is really rather strange since, whenever the British set up a constitution for a former colony, or when, for example, it advised the then German Government on a proposed constitution for a federal Germany, the tendency was always in the direction of political symmetry, not asymmetry. However, the situation that we now have in the United Kingdom, in which different parts of the UK have different patterns of devolution, seems to be potentially dangerous and unstable, and what I have heard in today’s debate slightly reinforces my fears in that respect. The more we go down that particular road, the worse it will get. That is particularly so given the way in which powers are now being increasingly devolved not only to the nations that make up the UK but to the cities and regions. It is an untidy and almost quaintly eccentric way to behave. It reminds me a bit of the Chesterton poem “The Rolling English Road”, which he described as:
“A merry road, a mazy road, and such as we did tread
The night we went to Birmingham by way of Beachy Head”.
We now have a new British creation. It is individualistic, idiosyncratic and inefficient and, unless we are very careful, it will soon become traditional and, as such, deemed worthy of historical respect. I really do not think that this country can go on affording such a luxury for very much longer.
However, if there is a need for political symmetry, the other side of the coin is that there is clearly a need for greater financial equalisation, which brings us to our old friend the Barnett formula. I do not think that you can produce greater equality between the different parts of the United Kingdom unless and until you can produce greater equality of contributions from central government to those parts. In 2008, I had the honour of chairing a committee of this House which considered the Barnett formula. It concluded that the Barnett formula should no longer be used to determine annual increases in the block grant for the UK’s devolved Administrations. The formula accounts for around £50 billion of public spending each year. It has been neither reviewed nor revised during the last 40 years, and indeed it was totally disowned by its originator, Lord Barnett himself.
The main recommendation of that committee—I commend it to the House this afternoon—was:
“A new system which allocates resources to the devolved administrations based on an explicit assessment of their relative needs should be introduced. Those devolved administrations which have greater needs should receive more funding, per head of population, than those with lesser needs. Such a system must above all be simple, clear and comprehensible. It must also be dynamic: able to be kept up to date in order to respond to changing needs across the United Kingdom”.
I can see no reason at all why precisely the same principle should not apply to the regions and cities of Britain as a whole as it could apply to the devolved Administrations. It seems to be common sense that needs should be the determining factor in deciding the size of central government allocations. Can this be achieved? I think that a major examination of the scope and extent of devolution is needed, whether that applies more to the nations of Britain or also to the cities and other regions. It really should not be beyond the wit of man to devise a system in which needs are assessed and moneys are distributed accordingly. Indeed, our committee in 2008 pointed the way forward.
It could be done if the Government are prepared to do it. My noble friend’s Motion calls for a fuller examination of this problem. Potentially, it raises issues of profound constitutional importance—I do not deny that—but we surely have to start this process with serious and detailed consideration of this issue and the numerous other issues that it raises.
I hope that the Government will at last have the courage and the determination to look at this problem in its entirety and not roll around it in a charmingly eccentric, almost Chestertonian way, attractive on the surface but inherently dangerous underneath. I hope that will happen but, given my past experience, I am not holding my breath.
My Lords, I draw the House’s attention to my interests as a councillor in the borough of Kirklees in West Yorkshire and as a member of the governing body of the University of Huddersfield. This has been an excellent debate highlighting the challenges and potential solutions from noble Lords across the House, and I thank the noble Lord, Lord Liddle, for initiating it.
We have heard graphic descriptions and definitions of regional and national inequality but less about what it means for individuals and families. I live, as you have heard, in West Yorkshire, which has some urban areas where evidence of inequality is stark. Much of the cheaper housing is of poor quality, health inequalities are pronounced and the majority of local jobs are low paid. Those conditions have a knock-on effect on the wider community—shops are limited to low-cost goods and the high street is full of betting shops. Those who can leave do, and so the spiral continues in a downward direction.
The noble Lord, Lord Liddle, drew attention to an area—I think he was referring to Carlisle—where the majority of the money, some 83%, was spent on welfare where it ought be focused on regeneration. He made a good point—with which I agree—about how we need to turn over the way we focus our public money, with less going into welfare support and more focus on regenerating jobs and lives.
Successive Governments have made efforts to address inequality, though often in a piecemeal fashion. They have targeted one element of the problem and made some improvement but what is needed, as this debate seeks, is a comprehensive approach. Several noble Lords across the House, including the noble Lord, Lord Liddle, and my noble friend Lord Shipley, have referred to the industrial strategy that was published last week and the report of the Social Mobility Commission. Economic regeneration has a long history—some of it very successful. One of the schemes under City Challenge—an initiative of the noble Lord, Lord Heseltine—was in Batley, the town adjacent to mine, and evidence of what it did there is still obvious. That was followed by the New Deal for Communities and the regional development agencies. I know from my experience on the board of the regional development agency, Yorkshire Forward, that change is possible. In partnership with the private sector, to which my noble friend Lord Shipley referred, some of these schemes have had long-lasting effects. Investment by Yorkshire Forward in Siemens in establishing a wind turbine manufacturing base in Hull and the amazing Advanced Manufacturing Park in Rotherham have both brought high-skilled employment to areas of high unemployment. However, that has not been sustained everywhere.
The second element for addressing inequality is connectivity, which has been referred to across the House, and currently the focus is on improving rail connectivity and broadband, investment being a key to economic revival. I served on the predecessor to Transport for the North, which was then called the Northern Way. The evidence then pointed to the importance of a fast and effective rail link from Liverpool to Hull—HS3 was the answer. Only this week, the Secretary of State for Transport has made the first tiny footsteps in that direction. Businesses saw HS3 as at least of equal importance to improving the economic productivity gap in the north as HS2, linking the ports of Liverpool and Hull. Yet successive Governments have lamentably failed to deliver on a project as basic as the electrification of the trans-Pennine line and now the Government intend to fob off the north with bi-modal trains. That unfortunately gives us a flavour of what has happened in successive attempts to do something.
Bringing superfast broadband to all parts of the country is vital. The Government need to consider access to broadband and mobile as an essential utility—such as electricity, gas, energy supplies and so on—and enable the costs of the services to be subsidised where people in poor communities are unable to afford them, as this is yet another instance where lack of access will worsen inequalities.
The third element of tackling inequalities, as my noble friend Lord Scriven so graphically stated with his example, is through education, skills and learning: it is the route out of poverty. A couple of initiatives that successive Governments have taken have done something to improve this. The university technical colleges have had mixed success; some of them have done very well but some had have to close. Apprenticeships, as we know, have seen a steep decline in numbers when what we needed to do as a country was to continue to put as much effort as we could into persuading young people to go into those areas of learning skills and accessing employment.
The fourth element of tackling inequalities is political leadership. We have heard much from the noble Lord, Lord Richard, and others about how important it is. Devolution is in many forms now and we have a fair patchwork of approaches to devolution across the country. None of it will work unless there are two factors present. One is that the Government have to loosen the purse strings and the tight grip they have on central funding and let a thousand flowers bloom by releasing the energy, skills and vision that people elsewhere in the country have for their areas. The second part of that is having political leadership of a quality that sees the importance of vision and strategy above wheeler-dealing for the sake of political fortunes. Those are the essential ingredients of tackling inequality across the country, but people who suffer from sustained inequality above all lack hope. That is what I see when I visit the places near me where inequalities are so obvious. They have lost hope that anything will ever improve. So as well as all the things that I have said, they are simply being left out of access to opportunities that others are taking for granted.
In this context, the Government have an enormous duty to consider the impact of Brexit, if it indeed happens, on the economic prospects of people already suffering inequality. For example, the town near where I live, Batley, is the bed manufacturing centre of the country and exports the vast majority of its beds to Europe. These companies are already telling me that they are very concerned about the impact on their businesses and they are fearful that the imposition of tariffs will make their products uncompetitive.
There are four elements that we need to think about and the Government need to address if we are ever to tackle inequalities. It needs to be comprehensive—that is the word I liked the most in the debate—to be sustained, to have high-quality political leadership and, above all, to provide hope for people for whom hope has not been part of their lives for too long.
My Lords, I refer to my interest as a member of Newcastle City Council. Perhaps I should also declare an interest in the light of the remarks of the noble Lord, Lord Shinkwin, as someone disproportionately benefiting from the Government’s policy towards higher-rate taxpayers.
I congratulate my noble friend Lord Liddle on bringing this debate to your Lordships’ House. He has long experience of local government, as well as other responsibilities. It is fortuitous that the debate occurs just a week after the announcement of a devolution deal for the north of Tyne authorities of Newcastle, North Tyneside and Northumberland. Unfortunately, while this is in many respects welcome, it does not include Gateshead, South Tyneside and Sunderland, which chose not to be involved in the devolution process. That is unfortunate, but I am afraid we have some history of that kind in the area. I recall that in the 1960s, when local radio was about to be implemented, the leader of Gateshead council said that nobody in Gateshead could possibly be interested in anything broadcast from Newcastle. Latterly, in the 1980s, when I produced a paper calling for the formation of a northern regional councils association I did not dare release it under my name—I had it circulated anonymously by the leader of Northumberland, Robin Birley, who is also an eminent archaeologist. Fortunately, nobody noticed the origins of the report and we managed to get the association into being.
The announcement last week was generally welcomed. It has the potential to benefit the area, but we have to look at the financial implications and benefits. The Government have loudly proclaimed that there will be a £600 million investment to improve the economy of the area—but that is over 30 years. That means £20 million a year for three councils with a population of 800,000 people. By my calculation that amounts to £25 a year per head of population. In Newcastle alone we have lost £280 million in cuts to local council services. That is £1,000 per head of our population. There does not seem to be consistency in the Government’s approach to these matters.
While we are thinking about financing local government, the revenue support grant is now disappearing and councils will have to rely much more on business rates. We have yet to understand from the Government how that will work. Perhaps the noble Lord will indicate in his reply, if he is able to, how the new business rates system will work and how there might be transfers between better-off areas to those that are essentially the subject of the debate.
My noble friend Lord Liddle made a very powerful case, but there is one area about which I am somewhat sceptical—high-speed rail and HS2 in particular. As I understand it, it will cost some £403 million per mile and will fall far short of reaching the north-east in any case. We are more interested in improving connections with Yorkshire and the north-west through an improved system of cross-rail. That does not seem to be imminent, whereas this week’s announcement by the Secretary of State for Transport will apply £7 billion to a proposed link between Oxford and Cambridge—hardly the most hard-pressed economic area in the country.
There is another question that I would like clarification on, because it affects Newcastle Airport and other airports in the regions, many of which are regarded as important to their financial and economic future: what is going to happen to air passenger duty? There is always a threat that Scotland may go its own way on that, which would imperil services from airports such as ours.
At the moment in the north-east and in other regions, we still have low wages and higher than average unemployment—although the north-east is the leading region for gross value added to the economy, thanks largely to foreign-owned companies. There, of course, we begin to worry about the future, given Brexit. Like other areas in the region and elsewhere, Newcastle has thriving universities: we very much welcome that, although we are, frankly, educating too few of our local population in those universities. As we have already heard, there is a distinct shortfall in access to higher education from the most hard-pressed regions in the country. We do, however, have a large number of overseas students. We have seen in Newcastle, and I suspect in other places as well, very large developments of new residential accommodation for overseas students. One wonders whether Brexit will have an impact on the number of students and European and other academics. I certainly know of some in Newcastle who are considering their future in the light of what is likely to happen following Brexit.
However, the main issue, surely, is to ensure that our own local population has genuine access to further and higher education. In that respect it would be welcome if we could manage to achieve what was achieved under the London Challenge, which made a huge difference to the educational and other opportunities of people in London. There does not seem to be any sign that that is likely to happen. Of course, we are not unique in the north-east in having these problems. There are too many parts of the country where opportunities are limited and where conditions are, frankly, intolerable for many people. It is certainly true that we have a low rate of unemployment compared to many other times over the years, but we also have the lowest growth in wages and earnings that we have seen for a generation or more. That is a serious outcome for far too many of our people in areas such as the north-east and many others, whose concerns we are debating today.
We have a strange situation in which we are getting some degree of devolution—we are, perhaps, reinventing the Anglo-Saxon Heptarchy, with a number of large areas which will make up a country—although some of us are inclined to revert to Anglo-Saxon terminology in our use of adjective to describe the impact of government policy in those areas. What we need to hear from the Government is that there will be a reallocation of priorities—in investment, in particular—across the regions that are currently lagging behind London and the south-east. We have also become aware recently of something that has not really become apparent—or at least has not been introduced into the public debate—which is that in some areas that look to be thriving and prosperous there are smaller areas displaying perhaps even more acute economic and social needs than regions such as the north-east. What we are seeing—sometimes in prosperous areas, certainly in areas such as the north-east and the north-west—is a widening gap in income, health, well-being and longevity. This is really unacceptable. Whether the Government will begin to address it remains to be seen.
I have another couple of short questions for the Minister. The noble Lord, Lord Shipley, referred to the government regional offices, which were established many years ago and were effectively scrapped by the coalition Government. There is also the question of the regional development agencies—which, again, were scrapped by the coalition Government when the current leader of the Liberal Democrats was the Secretary of State responsible. Will the Government look again at both these areas? If we are going to have an influence on policy, we need close connection with the Government of the day. Certainly, in our experience in the north-east, it was very helpful to have a senior civil servant able to act as an interlocutor between central government and the local and regional authorities. That is something that could serve us—and not only our region—well in the future. It will help improve governance in this country in the long term, as well as help us tackle the immediate problems that we face.
My Lords, I thank the noble Lord, Lord Liddle, for moving the Motion so ably and bringing this matter to the House. He has, quite rightly, a reputation for having a brain the size of a small planet and that was evident in his contribution, as my noble friend Lady O’Cathain said. I thank all noble Lords who participated. The debate has shown a remarkable consistency of theme and generality of approach with regard to the things that we should be looking at and doing—not necessarily identical policies but very much recognising some of the challenges that we face and some of the approaches we should be taking. I am grateful to the noble Lord, Lord Shipley, for talking about coming together and ensuring that we have a truly national, cross-party approach.
The 2008 recession brought to the foreground the debate over the scale and nature of the imbalance in the British economy, but an economic divide between the north of England, the Midlands and the south can be traced back to the 19th century. During the Industrial Revolution, regions built on their strengths: engineering and metal trades in the West Midlands; coal and steel in south Wales; shipbuilding in the north-east and Scotland. London was an important centre for manufacturing but it had already established itself as an international city in finance, law and commerce. We find this in evidence. In 1911, London’s output was already 65% higher than the UK average, compared with that of the north, which was 11% lower. As the UK economy transitioned from industrialisation to services and new technology, the upheaval was felt most acutely in the north of England, Wales and Scotland.
London’s strengths are unparalleled. It is a city like no other. Indeed, it is the world city. It occupies a unique position in the world and government policy should not hold it back, as noble Lords recognised. We do not make regions stronger by making London poorer—a theme developed by my noble friend Lord Shinkwin. But I am sure I speak for all noble Lords in this Chamber when I say that we cannot afford to rely on the strength of a few regions, or indeed a single region, of our country; nor should we seek to—it is fundamentally unfair that a few regions share in the proceeds of economic growth while other regions are left behind.
Questions were asked about the industrial strategy and the attitude towards relocating jobs to the regions on the part of public bodies. I think there was a suggestion from the noble Lord, Lord Liddle, that Defra would benefit from the cleaner air and lower house prices of Cumbria. So it would. We are committed to looking at the relocation of arm’s-length bodies and departmental functions to support growth across the United Kingdom, as we have made clear in the industrial strategy.
It is great to see my noble friend Lord Heseltine in his place today. He was responsible for creating the government offices in the 1990s; those ceased, but we are looking again at the industrial strategy. I am sure that he will have an important continuing role in public life. As in the Frank Sinatra song, he certainly did it his way and I hope that he will continue to do so.
The 2008 recession was the deepest since the 1930s; output fell by more than 6%. This took place during a global recession and the recovery has been held back by lacklustre productivity. Decline was not experienced equally between British regions, as has been said. GDP declined less in London and the south-east but, again, it has not been uniform there. Hastings has been mentioned and there are certainly parts of the south-east that face serious challenges, as Hastings has historically—it was Mugsborough in The Ragged-Trousered Philanthropists. This is nothing new but it still suffers enormous challenges. The recession was felt most acutely in areas that were already behind. All this shows that the policies of successive Governments have not gone far enough to reduce regional disparities.
Since the Industrial Revolution, we have become one of the most centralised developed economies, a point made by the noble Lords, Lord Monks and Lord Bird, and others. London has a magnetic effect, and not just on the people who are relatively wealthy. It means that people are coming to what is the world city. Government can set national policies and create an environment where business can prosper, but economic success depends on businesses and individuals themselves. This is acknowledged by past and present Governments. The previous Labour Government agreed devolution settlements with Scotland, Wales and, building on the groundwork laid by John Major, Northern Ireland as well as in London. I certainly pay tribute to the considerable work of the noble Lord, Lord Prescott, in that regard.
The coalition Government devolved further powers to Scotland, Wales and Northern Ireland. In relation to Northern Ireland, we will of course devolve corporation tax to it once there is a devolved Government there again. However, devolution is not reserved for nations. By reversing the flow of power to the centre the 2010 Conservative-led coalition Government, along with the Liberal Democrats, renewed trust in local institutions for the first time in 40 years. In 2010 we published the Local Growth White Paper, which brought an end to top-down government policy. Local enterprise partnerships formed across England and enterprise zones formed throughout the United Kingdom—including in Cumbria with Kingmoor Park, which has helped more than 100 businesses in that area. This policy has been effective throughout the United Kingdom including, I am happy to say, in Northern Ireland where one was set up over the course of the summer.
Two years later, my noble friend Lord Heseltine published his independent report No Stone Unturned—a seminal report with very important recommendations. It set out 89 recommendations to rebalance the responsibility for economic development between central and local government, and between government and the private sector. The Government responded by enacting 81 of the recommendations, including the devolution of centrally held funding into a single, competitively allocated pot of money. My noble friend Lady O’Cathain, in what was a very persuasive speech, talked about the importance of that and of the fact that it has made a great difference to the way that we approach industrial policy in this country, and regional policy as well.
We have also created new mayoral combined authorities based in the northern city regions of Greater Manchester, Liverpool and Tees Valley, as we have in the West Midlands, the West of England and Cambridgeshire and Peterborough, as well as creating a non-mayoral deal in Cornwall. The Government have progressed these developments with broad support, for which I am grateful, from the other parties. We have given these authorities powers over areas including transport, skills and healthcare. To back that up, we have awarded more than £4.8 billion to mayoral combined authorities over a 30-year period. One-third of the population of England now has a directly elected mayor. It means decisions are made by those they affect, and they are accountable to the people whom they serve.
In all parts of England, local enterprise partnerships have increased private sector involvement in decision-making and encouraged greater collaboration across old political and geographical boundaries. They have bid for more than £9 billion of funding through three rounds of growth deals. In Manchester, we have invested £38 million in the National Graphene Institute; in Birmingham, the Institute of Transitional Medicine benefited from £12 million; in Norwich, the International Aviation Academy will train cabin crew, mechanics and pilots of the future; and, in Cumbria, the local enterprise partnership invested £1.43 million in a new centre that will support more than 1,000 apprentices in the manufacturing, biopharmaceutical and nuclear industries, which are clearly very relevant to that area.
The noble Lord, Lord Hunt, referred to the crowded nature of some cities and the Government’s policies to make sure we have something that will counter the effect of Bath becoming too crowded. This is again something that has to come from the bottom up, but it is a point well made, and we see towns such as Margate, which was referred to in the debate, coming up with new developments. The Turner Contemporary in Margate is making a real difference. Other towns must come forward with their ideas. Blackpool was mentioned during the debate and may be an example.
This shift from centralism to localism is exemplified by the northern powerhouse. The Government are giving more power and influence to northern towns and cities through metro mayors and Transport for the North than any Government in decades.
We must not forget that disparities exist between the four nations of the United Kingdom as well. The noble Lord, Lord Richard, spoke powerfully about this and very modestly did not mention his considerable role in chairing the Richard commission, which gave many signposts for the future, some of which are still being taken up. I take his point about the political symmetry not being perfect, but he will know as well as I do—we have been at conferences together at Ditchley and so on, although I cannot discuss the content—that the nature of the United Kingdom with, for example, the separate legal system in Scotland, means that we are coming at these things from different angles. It is certainly untidy and ad hoc, but that does not mean that it does not broadly work. I take the point that we have to ensure that there are not disparities that we cannot live with. We have to ensure that that is not the case.
When Theresa May made her first speech as Prime Minister, she spoke of the burning injustices that still exist in our country—for example, that one’s prospects are still determined by the lottery of birth. This cannot continue. Since 2010, this Government, initially in coalition, have achieved much of which they can be proud. In October, we published the race disparity audit, which cannot be ignored and shows that people from different backgrounds are treated differently. We continue to tackle health inequalities. Like the noble Lord, Lord Hunt, I expected that there would be much more on health inequality than was the case, but there are health inequalities that need addressing.
In the Budget last week, the Chancellor of the Exchequer announced plans to improve performance in every region of the United Kingdom. They build on the principles set out in the Local Growth White Paper in 2010. We announced our intention to enter into a new devolution agreement with the north of the Tyne, to which the noble Lord, Lord Beecham, referred. That likely lad was extremely honest when he indicated that there have been difficulties with south of the Tyne and north of the Tyne, but I think they have nothing to do with the amount of money being invested there. It is traditional that people in Gateshead will not listen to a radio programme broadcast from Newcastle. We look to the noble Lord, Lord Beecham, to use his good offices there to ensure that things improve. The noble Lord, who is generally extremely fair, made a point about the money being spent in the Oxford-Cambridge corridor. It is being spent there for the very good reason that we are looking at an enormous expansion of housing there, which is something that he, with another hat on, is quite rightly pressing for. To do that, we must have investment in the infrastructure that we indicated on that occasion.
In the Midlands, the second devolution deal with the West Midlands mayor and combined authority will focus investment on productivity, with a government commitment of £250 million from our new Transforming Cities fund.
The devolution deals and the powerful metro mayors that we are seeing—regardless of party—indicate how important it is that we invest, both financially and in terms of energy, in ensuring that these go forward. I hope that Yorkshire comes forward with a deal. Hull should certainly be a part of that, and I look to the noble Lord, Lord Prescott, to use his good offices for Hull and other areas of Yorkshire to come forward. The Siemens issue, as he said, makes Hull unique—as does the noble Lord himself and the lack of BT and the different telecommunications system. There are many things that make a devolution deal effective, and we certainly look forward to that and to effective leaders coming forward in that regard.
Shortly before this debate, we launched our industrial strategy for the United Kingdom, which is set against the backdrop of our exit from the European Union. The changes that confront us are profound, but they present an equally great opportunity to become a confident, competitive trading country. This modern industrial strategy sets out how government can help businesses create better, higher-paid jobs in every part of our country with investment in skills, infrastructure and industries of the future. It is key to our future, as many noble Lords have said.
The industrial strategy puts great emphasis on place and on some of the historical developments we have seen where individuals have made a massive difference. I think of Sir Tim Berners-Lee redefining the way we can communicate with one another. I think of Sir Frank Whittle, an RAF officer working on a base in Lincolnshire and patenting the jet engine. I think, too, of Sir Alexander Fleming discovering penicillin, one of the greatest medical advances in human history.
All this is important, and it is not just happening in London and the south-east. There are life sciences in Edinburgh, focused on the university; cybersecurity in the University of South Wales; and the Jodrell Bank observatory near Manchester, which was mentioned by the noble Lord, Lord Hunt. I look forward to these being linked with food—there is space research in Leicester, which could perhaps be linked with Stilton and Red Leicester cheeses. This is a challenge I expect these institutions to respond to now. Great work is going on in our universities—and not just in Oxford, Cambridge and the London universities, although of course it is natural that they, as established research centres, would expect to see significant investment.
I turn to infrastructure. The Government know we have more to do to improve journeys between our great cities outside London. Many noble Lords mentioned issues of infrastructure, including the noble Lord, Lord Scriven, and the noble Baroness, Lady Pinnock, and that is absolutely right. In addition to the £56 billion investment in HS2, which is a massive amount, we have of course announced £300 million for northern powerhouse rail, which is being looked at in the context of HS3, as I agree it must be.
Also important, and again referenced by the noble Lord, Lord Scriven, and the noble Baroness, Lady Pinnock, is the issue of fast broadband. The noble Baroness in particular will know the importance of the telecommunications Bill we are taking through at the moment, which is due for Third Reading on 6 December, in providing business rate relief for those businesses investing in fibre for at least the next five years. Again, I thank the parties opposite for their support on this.
In every decision we make, we commit to take greater account of the disparities between places. That is absolutely important. I noted with great interest the very cerebral contribution of the noble Lord, Lord Parekh, on equality. I think it is perhaps a debate for another occasion, but I would certainly like to engage with him on that issue and on the importance of the views of Rawls and Nozick. To some extent, I go along with the importance of a genuine sense of community and shared goals. I was never comfortable with those who said they did not mind people becoming filthy rich. That seemed to me slightly unseemly, but of course it was not somebody from this side who said that but somebody from the other side, in the last Labour Government—possibly the noble Lord, Lord Mandelson.
The United Kingdom has one of the most successful employment markets in the world, with the employment rate nearing a historic high point. Of course, that does not mean there is not more to be done. Our universities are respected the world over and businesses work more closely with educational institutions than ever before. My noble friend Lady O’Cathain, mentioned how students from disadvantaged backgrounds are now 43% more likely to go to university than in 2009. This is based on UCAS acceptances. Still, I note the point about the regional disparities there; Barnsley in the north and Hastings in the south, for example, face massive challenges. This year alone, though, universities have committed to spend £800 million to give students from disadvantaged backgrounds the best chance of taking up a place. We will be watching that like hawks. This week, we committed to putting technical education on the same footing as our academic system, establishing new T-levels—technology levels, I think—and we will invest an additional £406 million in maths education, which again was something rightly mentioned by my noble friend Lady O’Cathain as of key importance.
We are already home to half of Europe’s fastest-growing companies and the most attractive country to invest in in Europe. I accept that there is a challenge to retain that position and we all need to put our shoulder to the wheel to ensure that that is the case. The Budget and the industrial strategy provide support for businesses in every part of the country to get the help they need to improve our productivity. The strategy can succeed only if businesses continue to invest and become more competitive. We have identified areas that need reform in management, access to finance and exporting. These are national problems that the Government have a role in reforming, but these do not replace the ingenuity of businesses themselves. Rather, we will seek to improve the environment in which businesses operate.
The success of our economy depends not just on the size of our gross domestic product but on the reach of that prosperity to all corners of the UK, as this debate has demonstrated. I am sure there are individual points that I have missed but I undertake to write to all Peers who have participated in this debate—including my noble friend Lord Heseltine, who clearly takes a great interest in this area—and place a copy in the Library. Once again, I thank all noble Lords who have participated in this first-class debate that has showed the House at its best.
My Lords, I thank all noble Lords who have participated in a very good debate. I was particularly honoured by the presence of two former Deputy Prime Ministers, which I think emphasises the importance of the topic. I think there is a lot of consensus that we need more investment. We are talking not about wasting money but about collective action that will pay rich dividends both for individuals and for taxpayers. The only other point that I would make is that the great unanswered questions in our pursuit of regionalism are those that my noble friend Lord Richard so elegantly pointed to in his speech. With that, I beg to move.