Regional Economic Performance and the Northern Way Standing Committee on Regional Affairs 15 Jun 2004

Mr. David Clelland: I welcome the Minister's statement. I was particularly interested in his use of words when he referred to the powers of regions and regional government to improve regional economic performance. I believe that he said that they should have maximum involvement in policy decisions. I am not sure whether the word ''involvement'' was casually or deliberately inserted, because, as the Minister will know, having maximum involvement in policy decisions is not necessarily the same as having maximum power to take decisions. He will also know that some of us want the powers outlined in the White Paper to be beefed up, particularly in transport and training, so perhaps he could expand on his use of the word ''involvement''.

Phil Hope: Yes. I will not be tempted to publish the Bill on the powers of the new assemblies before the end of this session. I would not last very long in my current position if I did. At a regional hearing that we held in Newcastle, we described the advantages of elected regional assemblies. My hon. Friend attended that hearing, and he will know that the audience of some 200 people were overwhelmingly crying out for more powers to be given to elected regional assemblies. Transport was mentioned in particular, as were skills.

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3.46 p.m.

Mr. Clelland: Everything that the Minister said about the assets, ingenuity and robustness of the northern regions is true, but there remains a massive disparity between the northern regions and the South-East. It is difficult to imagine that being overcome if, as he said, all regions will be encouraged to maximise their potential for growth.

The Minister invited the northern regions to tell him what the right solutions are. I am sure that, during the coming months, we will have some interesting debates about that. On the regional government Bill, it has been mentioned that we want enhanced powers, particularly in the areas of transport and skills training. The northern region wants the power to influence transport developments such as the A1 north of Newcastle, the A69 and the A66. The latter two are not even on the map before me but are important links from the North-East to the north-west.

Inner-regional transport is also important. The Tyne and Wear metro system, which is 30 years old, needs infrastructural improvement. The rolling stock needs to be replaced. The passenger transport executive has come up with an imaginative plan to replace the rolling stock with a new kind of tram that can come out of the tunnels on to the streets, into the west end of Newcastle and on to the metro centre in Gateshead. That would greatly improve the transport infrastructure on Tyneside and provide the state-of-the-art transport system that the area deserves. The Department for Transport is not looking on the plan with much favour, but we hope that the Minister will put in a word on our behalf.

For those on a reasonable income, the quality of life in the North-East is very good. It is a pleasant place to live: we have beautiful countryside, a fine coastline, a rich cultural and industrial history and two world heritage centres - the Roman wall and Durham cathedral. The cultural renaissance on Tyneside that has been brought about by the Newcastle-Gateshead partnership is a marvel undreamed of a decade or so ago.

However, too many in our region are not on a reasonable income. The further economic regeneration that we want must increase general prosperity in a sustainable way. Some of the new wave of job opportunities, welcome as they have been, have proven to be built on shifting sands, just like some of the inward investment that has come and gone.

The latest to suffer are the call centres. In my constituency, Lloyds TSB opened a new call centre only two years ago with a fanfare of trumpets. The chairman of Lloyds TSB told us that it was a new employment opportunity for 1,000 people in the constituency and that it would be sustainable in the long term. Only six months ago, Lloyds TSB announced that the call centre would close down and move to India. Of course, that is happening in other parts of the country too. I know that it is difficult for the Government to do anything about such situations, but I am pleased to see that they are considering seriously what the consequences might be if such policies continue.

We need to build the regional economy on firmer foundations, by encouraging the growth of indigenous industry, so that those that have grown out of the inward investment, such as Nissan, can continue to prosper, should inward investors decide to relocate, as the call centres have done. We must go for growth in the northern region. ''Going for growth'' is a well known phrase in my constituency, after Newcastle upon Tyne city council developed a policy called ''Going for Growth'' to develop the west end of my constituency and the east end of Newcastle. That was a controversial policy when it was first announced. It got off to a bad start and was badly handled, yet the general principle of going for growth has to be right.

I am disappointed that the newly elected Liberal Democrat administration have rushed to announce, even before the council's annual meeting, that ''Going for Growth'' will come to an end. That is their right. I am a great supporter of local government and if that is their decision, that is their decision. However, the people of my constituency are more interested in what the new administration are going to do than in what they are not going to do. If those in the administration are not going for growth, are they going for stagnation or decline? What are they going for? People deserve to know, because the situation cannot be left as it is.

Regional planning is one thing, but the Government must have a national plan to reduce disparities among regions. Maximising the south-east's potential to grow will not assist in that, neither will the people who live there necessarily welcome it, as their living environment and transport infrastructure become more congested and uncomfortable to live with. At the same time, opportunities to encourage the location and relocation of businesses to the north are lost, because there is no incentive so to do. Treating all regions equally will neither produce equality nor improve the quality of life of people in the South-East.

The Government could assist in their use of national resources and in their employment and procurement policies. The undertaking to transfer 20,000 civil service jobs to the regions is welcome, although I appreciate that doing so will not be easy because people do not necessarily want to move. An early indication of when the programme is likely to start and how it might be rolled out would be welcome. The improvement of national transport networks and the national transport infrastructure can also be vital. Fast and efficient links across the length and breadth of the country would assist enormously in developing the regions.

The Barnett formula has been mentioned. There is a case for revisiting it, but I am not one of those who believe that the readjustment of Government expenditure through reviewing Barnett would necessarily bring the huge benefits to the North-East that people are often led to believe. There have been many initiatives over the years and the Northern Way is just the latest. I await with interest the reports of the task group, which I hope will offer a meaningful and productive way forward. However, those of us on the northern periphery of the area in question are concerned that our remoteness from the cluster of big cities from Liverpool across to Hull may again put us at something of a disadvantage.

Things are getting better in the North-East. Educational achievements, our schools, hospitals and the general environment are all better. There are of course still problems, with inner-city decay and the consequences of the demise of the mining industry for many coalfield communities. However, the Government are aware of those issues and they are acting. Much of what needs to be done can be done at the local and regional level, given the power and resources. I hope that the Northern Way will lead to that outcome.

3.53 p.m.