Regional Economic Performance and Imbalances

[back to previous text]

Mr. Denis Murphy (Wansbeck): With the right hon. Member for Berwick-upon-Tweed and my hon. Friend the Member for Blyth Valley (Mr. Campbell), I represent a constituency in the north-east of England—a region that contains wide disparities and it is the most disadvantaged region in the United Kingdom. I hope to use the next few minutes to explain some of those disparities and propose ways to overcome some of the problems affecting our region.

At 77.3, our GDP per head of population is the lowest in the United Kingdom. London's GDP of 146 is probably not a fair comparison as there are huge disparities within London, but the eastern region's GDP of 103 and Scotland's GDP of 96 demonstrate how far we as a region lag behind the rest of the country. Sadly, all other indicators are equally bleak. Although unemployment has decreased dramatically over the past four years, it is still nearly twice the national average. As a region, we have the lowest business survival rate and the lowest level of educational attainment in the United Kingdom. The indices of deprivation that were published in 2000 identify seven districts in the north-east as among the poorest 20 local authority areas in the country.

There are many reasons for the problems that we face. The rapid decline in shipbuilding, heavy engineering and mining has played a major role. However, even within our region, there are huge disparities of wealth and of opportunity. There are leafy suburbs and smart new housing estates with properties selling for hundreds of thousands of pounds, cheek by jowl with local authority three-bedroom, double-glazed, centrally-heated semis that cannot be let or even sold for £2,500 each.

The arts in the region are flourishing, adding to and improving civic pride and the quality of life. The publicly funded ``angel of the north'' and the conversion of the Baltic flour mill on the Tyne as a contemporary arts centre of international standing are two excellent examples, and there are many more. The beautiful new millennium footbridge over the Tyne sets new standards of design and engineering. Made in Tyneside, in many ways it completes the famous Tyne bridges scene. It has a huge advantage over the millennium footbridge in London: when it is completed in two or three weeks, people will actually be able to walk across it. However, against that backdrop of welcome and exciting projects bringing tens of millions of pounds into our region, we occasionally struggle to find funds to maintain our brass bands. Not all of our children have access to musical instruments, and we cannot fund the community projects that we so desperately need.

As a result of Government policies, there is probably more money being invested in the north-east now than ever before. We have health action zones, education action zones, action for jobs, single regeneration budget funding, objective 2 and objective 5B funding and many more targeted initiatives in the region. Generally, they are successful, but sometimes the funding ends before the problem is solved. There is a lot of money, energy and passion being targeted at our region, yet unemployment remains twice the national average. Many of our communities are not sharing in the prosperity of the rest of the nation. That cannot be right.

Several issues must be tackled immediately to enable the area to realise its full potential. We need to strengthen our industrial and economic base, diversifying into new and improved technologies. One example of that vision would be to build a clean energy centre, and I offer my constituency as a base for that new centre. The UK's only offshore wind farm is there, but sadly it uses imported technologies. Newcastle university is a world leader in photovoltaics, yet we do not produce them at all in the United Kingdom. We have a history in the region of engineering excellence. Let us bring all of that together on one site, with research and development along with our universities. Let us design and manufacture state-of-the-art renewable energy systems, for which there is a huge international market as nations strive to come to terms with global warming. Our region fuelled the industrial revolution and I am confident that we are capable of powering cleanly this century and beyond.

That is one example of how we could strengthen our industrial base, but we also desperately need to connect people in business to job opportunities. The region's transport infrastructure requires continuous development and, as the right hon. Member for Berwick-upon-Tweed said, the A1 needs to be made into a dual carriageway right up to the Scottish border. Major improvements are also needed on the east-west links—the A66 and A69. There is an opportunity to develop within the region a truly integrated public transport system by reintroducing passenger rail services on the Blyth and Tyne line, linking one of the most deprived parts of the region into the Tyneside conurbation and the Stephenson jobs corridor. Other opportunities exist in County Durham and Teesside.

The current standard spending assessment is not adequate for the region's needs. Our education funding is £232 per pupil less than London's—before any London adjustments. Population decline affects our local government income. I love my region, but there are times when I wish that Hadrian's wall was the border with Scotland and that we had access to the same levels of public funding that are available to the Scots. My hon. Friend and neighbour the Member for Blyth Valley (Mr. Campbell) speaks of little else: for relaxation, he occasionally has a pint in the Services club in Blyth, whose quiz team has won many a tie-breaker by correctly answering the question, ``What is the mathematical calculation of the Barnett formula?''

I have tried to identify and explain some of the region's problems and have suggested one or two solutions and improvements. I do not doubt that the Minister and her team work hard on the strengths and weaknesses of all the regions. The only long-term solution is to allow the people of the north-east to decide their priorities for themselves. In a recent poll, the north-east was the only area outside London to agree with the statement that a regional assembly would look after its interests better than central Government. That was before the public had had the opportunity to examine the performance of the Scottish Parliament and the National Assembly for Wales, which, as hon. Members have noted, is well liked and respected.

A directly elected regional assembly with specific devolved powers and budgets would help to realise the final statement in a regional economic strategy document that was produced very recently. It stated:

    ``In 2010 the north east of England is a vibrant, self-reliant and outward-looking region with the assertion, ambition and confidence to unlock the potential of all its people.''

I urge the Minister to make a commitment to the setting up of an assembly.

3.12 pm

Mr. Derek Wyatt (Sittingbourne and Sheppey): My constituency is in the area of the South East of England Development Agency and I declare that my father-in-law, Allan Willett, is the chairman. That has led me into some correspondence with the Commissioner for Public Appointments. I would not wish any hon. Member to go through what my family went through because a family member was closely involved in economic development while another was a Member of Parliament for the same region. I hope for some reform of the procedures in the new Parliament. The relevant form should require those concerned to declare that there are Members of Parliament in their midst. None the less, I am a huge supporter of the regional development agency, even though, owing to my personal circumstances, I have been unable to make a greater contribution.

We in the south-east have a different issue to contend with from those outlined by my hon. Friend the Member for Eastwood (Mr. Murphy) and the right hon. Member for Berwick-upon-Tweed, in that the region does not hang together: it is not a cultural, linguistic or religious entity, and it is mere accident that the South East of England RDA has been created. The region extends from Milton Keynes to Margate and to Portsmouth. There is nothing to bring us together or to lead us to feel warmth about the region. Those circumstances present us with distinctive problems in that we are, in a sense, behind the north-west, the north-east and parts of the midlands in our thinking.

I am not sure that it would be fair for regional government to be awarded to a region on account of its relative coherence. Many hon. Members feel that the Thames gateway, north and south of the Thames, which includes part of the areas covered by the East of England and the South East of England RDAs, is a far more coherent region. Will the Minister reflect on the possibility of changes to the map of the regional development agencies? Are they set in stone? That could have a huge impact on the way in which the Thames gateway feels, which is in part owing to the fact that the south-east RDA has ignored London. The majority of people who live within 40 minutes of London commute; they do not feel part of Kent, Hampshire or Surrey. They are a commuting class and feel that they belong to London, but they have no vote there. The problem is complicated, and I do not have a solution.

My hon. Friend the Member for Wansbeck mentioned that we have not engaged our universities. We have 120 universities, but I do not believe that they represent 120 centres of excellence. In Canterbury, we have the University of Kent. We might compare it with Stamford, in silicon valley, but Stamford's board took it upon itself to own the poorest schools within a 50-mile radius saying, ``We have a duty to ensure that those schools are higher performers.'' Who could imagine a single university in this country saying that it had a role in respect of the poorest sectors in Liverpool, Newcastle or Sheppey, where I live? Imagine what a breath of fresh air it would be if the universities were far more integrated into their regions.

There is a debate to be had about how we disinter the traditional role of the universities and we must be quite hard in dealing with the issue. We will have world-class universities and regional universities and they should work together. Great practice at the universities in Newcastle, Liverpool, Nottingham or even—God forbid—Oxford and Cambridge should be shared, not sealed in; it has to be brought out of the ivory tower. We have been saying that for 50 years, but we still need to debate the issue. The Thames gateway has no university. In Medway and Swale—the unitary authority and the district council respectively—there are 380,000 people without a university. That is the largest population in Europe without a university. That shows that in the 1960s Robbins saw university expansion very differently from the way in which we need to look at it now. We need to tie universities more closely to their areas.

We have discussed tourism. Some RDAs have it and some do not. The south-west RDA has tourism in its area and it immediately gave financial help, but that is not necessarily true of the south-east RDA or other RDAs. Some have more urgent needs than others. I accept that there must be organic change and growth among RDAs, but tourism is our fourth largest industry, and it is clearly the responsibility of the wrong Department. It needs to be dealt with by the Department for Trade and Industry and it needs a much stronger ministerial presence if we are to promote it.

The same can be said for arts boards. I was privileged to go to Salford—an unusual destination. One would have to spend two and a half days there to see everything. There is the magnificent Lowry centre—people forget what wonderful things the Millennium Commission has done—and the imperial war museum, which is nearly finished. I know that it is in the Minister's constituency, because she asked me in the Lobby one day to make sure that it was finished in the end. The point is that the area has been regenerated. We have never considered the arts as a regeneration mechanism. The Arts Council is fundamentally wrong not to see the arts as promoters of economic growth, but they are. Hundreds of jobs have been created in Salford. Land that could not be sold for dozens of years has been sold and the premium has gone up. There is good will and confidence in the system. We should compare that with the situation in Sittingbourne and Sheppey, which are an hour from London: there, there is no drama, no theatre and only one small cinema for 65,000 people. One would think that we had a greater and stronger cultural life, but we do not.

One thing that the RDAs have missed is the need for a real audit of the basic requirements that regeneration can meet. My hon. Friend the Member for Scarborough and Whitby (Mr. Quinn) is not here at the moment, but he talked about getting the base of the pyramid correct. We have some blocks, but the cement is a bit loose. Even in the Treasury, we appear to lack a fundamental economic understanding of the regenerational factors of tourism, the arts and sport. People usually go to Manchester for Manchester United, but now they must go to the Lowry centre and they will have to visit the imperial war museum. Those will become destinations, as they should be. However, we have lucked into that, rather than got there through the regional audits that are necessary to create regeneration through sport, art and the universities.

There are still 200 economic committees responsible for economic growth in Kent. I was hoping that the RDAs would bang some heads together and stop public money being wasted. To be fair, they have only been up and running for two years, but there is more economic activity in the committees than outside them. In the end, the Barnett formula or Hughes formula may change that.

The devolution argument worries me most. I cannot remember any Welsh, Scottish or Northern Irish Members asking for regional assemblies before they got their National Assemblies and Parliament. We are asking for regional assemblies with no English parliament or assembly, and I am beginning to wonder why. I am nervous that we are going a road that we have not considered in enough detail. We have debates about the House of Lords—we had one this week—but we were not allowed to consider the unitary chamber in the Wakeham report. We were not allowed to discuss why we never see MEPs or why they are not located in the British constitution. That is not the case in Finland, which has a unitary Chamber. I know that its population is only 3 million people, but its MEPs must report back to the MPs.

With devolution, the development of constitutional reform has been a muddle. As we establish regional assemblies, we must place them in a larger constitutional debate. My instincts tell me that we shall come to have four national parliaments in the United Kingdom and that the upper house will be the house of representatives of those four. If we do not have that, Scotland will inevitably be lost to the UK, which in 20 years' time we would come to regret. I accept what a famous existential philosopher, Soren Kierkegaard, said:

    ``the truth is . . . in the minority''.

I recognise the depth of his wisdom in respect of my wish for four Parliaments and a house of representatives.

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 10 May 2001