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Budget: North East of England

Volume 787: debated on Thursday 14 December 2017

Question

Asked by

To ask Her Majesty’s Government what assessment they have made of the likely impact of measures announced in the Budget on the north east of England.

My Lords, the Budget has provided a significant and very positive impact for the north-east of England, with more than £300 million to replace the Tyne and Wear Metro fleet, Transforming Cities funding for Tees Valley and an investment fund of £600 million over 30 years as part of the “minded to” devolution deal for the north of Tyne.

My Lords, the funding for the Tyneside metro is welcome, but the big announcement in the Budget was the half-baked devolution deal. Does the Minister realise that the region has none of the transport, health and social care powers and still less the level of funding which other regions such as Manchester and Birmingham are getting? It has a boundary cutting right through the middle of Tyneside and it focuses on the creation of an expensive elected mayor who nobody asked for and very few people want. What, if anything, will this deal do for the low-wage rural areas of north Northumberland, so often outvoted by the Tyneside areas on which this deal will focus?

My Lords, I welcome what the noble Lord said at the beginning about the metro. The rolling stock is some 40 years old and is not as reliable as it should be, and the new rolling stock will make the north-east an even better place in which to live and work. So far as what the noble Lord calls the “half-baked deal” is concerned, for those not familiar with the story so far, seven local authorities in the north-east approached the Government, under the umbrella of the North East Combined Authority, for a devolution deal. This was in accordance with the Government’s wish to decentralise decision-making and give local areas more powers and resources. Half way through the discussions, four of those local authorities withdrew. Those who understand the socio-political dynamics of the north-east and the tribal tensions of the Tyne may understand why—but I do not. The decision for the Government was whether the three remaining local authorities of Northumberland, Newcastle and North Tyneside should go ahead. Those authorities want to proceed, as do the business community and the local enterprise partnership. For those reasons, the Government are minded to proceed and the ball now rests in the court of the three local authorities to go through the statutory consultation and pass the local orders.

My Lords, I should declare my interest as a member of one of the tribes in question. Educational attainment is a key contributor to economic development. In Newcastle—this will be true of the region as a whole—27% of children are living in poverty; that is 50% more than the national average. Will the Government now seek to improve the life chances of these children by replicating in the north-east the very successful London Challenge that transformed education in the capital?

I have no objection at all to rolling out successful experiments in London, or indeed anywhere else, to other parts of the country that could benefit from them. There is quite a lot in the Budget to help the north-east on housing, health, transport and technology. Under the proposed deal on education, adult education would of course be devolved to the new combined authority. On the noble Lord’s specific question on education, perhaps I could take advice from colleagues in the respective departments and then come back to him.

My Lords, will my noble friend agree that there is a lot in the Budget and the industrial strategy to improve connectivity, particularly in rural areas? Will he ensure that these measures are used in rural communities across the whole of the north of England—the north-east, north Yorkshire and the north-west—to ensure that access to and the speed of rural broadband are improved, to enable rural businesses to compete?

I entirely agree with my noble friend. She will know that the industrial strategy, which was launched at the same time as the Budget, promised, among other things, to make the UK a more connected country, with high-speed fixed-to-mobile access available in all areas including rural ones. It also aimed to make decisions on infrastructure more geographically balanced. That is at the heart of the industrial strategy. My noble friend will have an opportunity to develop her arguments after Christmas, when there will be a whole day’s debate on the industrial strategy.

My Lords, the Minister may not have a handle on the tribal conflicts in the north-east, but I have a slightly better handle on the tribal conflicts in Yorkshire. There is a real worry that the whole of the east Pennines is losing out in relation to resources which would otherwise be available if the plans for elected mayors in the city regions there had actually been carried through. If they do occur in the months ahead, will the noble Lord give an assurance that the resources earmarked for authorities with elected mayors will be available, and backdated, for combined authorities that move forward with an elected mayor in the way he has described?

The noble Lord will know that there is a Sheffield regional city devolution deal with an elected mayor. That is being set up, with an election scheduled I think for May next year. If other parts of Yorkshire want to approach the Government and offer a similar devolution deal, of course we would listen. When it comes to backdating resources, my colleagues in the Treasury might just pause before signing up to that one. But what we do not want to do is have an all-Yorkshire deal which then unwinds the deal that is already going ahead with the Sheffield City Region. The Government would listen very warmly to any work the noble Lord can do to encourage more authorities to come forward with devolution deals and elected mayors.

The Minister is quite right to welcome the support that has been given to the north-east, in particular the support for Teesside, where the steelworks have been closed and where a Conservative mayor has been working very closely with the Labour authorities to ensure the success of the Government’s approach. The position on Tyneside is quite disastrous. I was chairman of the Port of Tyne Authority for a number of years, and with an international passenger terminal on one side of the river and docks on the other, working with different authorities across the river is going to be most difficult. Will the Minister therefore seek to do whatever he can to get the Labour authorities on the south side of the river to join their colleagues north of the river in order to set up a single authority for the whole area?

I am grateful to the noble Lord. He may have more influence than I have in seeking the reconciliation that he promotes, in view of his knowledge of and commitment to the area. On Tees Valley, as he referred to, the Chancellor announced £123 million of new funding to ensure the ongoing safe and secure management of the former SSI steelworks, and I welcome the close working between the mayor, Ben Houchen, and the local authority. On the north-east and Tyneside, whether it is too late for the four authorities to change their mind I do not know, but obviously we would like to go ahead with the previously proposed authority with all seven local authorities involved.