South-West England (Long-Term Economic Plan)

– in the House of Commons at 6:52 pm on 8th July 2015.

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Motion made, and Question proposed, That this House do now adjourn.—(Jackie Doyle-Price.)

Photo of Liam Fox Liam Fox Conservative, North Somerset 6:53 pm, 8th July 2015

Today the Chancellor set out in his Budget a number of measures to help strengthen our national economy and keep the promises we made as a party to the British people in May, but before the general election the Conservatives set out a clear set of aims for the south-west in a speech given by the Chancellor in Plymouth. He outlined six clear strategic objectives.

They were: first, to increase the long-term growth rate of the south-west to at least the expected average of the UK as a whole—although the south-west constitutes 8.4% of the UK population, it provides only 7.5% of UK economic output; secondly, to sustain job creation in the region and have 150,000 more people employed by the end of the decade; thirdly, to transform connections, both in transport, via a £7.2 billion investment plan, and in the crucial area of digital connectivity; fourthly, to ensure that the large defence assets in our region support the local economy, high-tech manufacturing and high-end skills—we will have been heartened indeed today to hear the Chancellor commit to spending 2% of our GDP on defence; fifthly, to boost science, and support tech clusters and green energy to promote skills development and an innovative rural economy; and, sixthly, to make the most of the region’s outstanding natural beauty and unique cultural heritage as part of a boost to tourism.

To those aims, we, the south-west Members, would add one of our own: a fair and equitable funding settlement across education, health and local government, redressing the current underfunding in these largely rural areas. Not all those strategic objectives are of equal importance to all our constituencies. For example, the economic situation in Cornwall is quite different from that in North Somerset, which has the lowest unemployment of any constituency in the UK.

Photo of Sheryll Murray Sheryll Murray Conservative, South East Cornwall

Small businesses are a key part of the economy in my constituency. Does my right hon. Friend agree that we need to ensure that information is made available to them so that they do not miss out on any opportunities?

Photo of Liam Fox Liam Fox Conservative, North Somerset

My hon. Friend is right about that point, and I am sure the Minister will want to address it. Transparency and information are key to people being able to take the opportunities that the Government are making available by their economic approach.

Photo of Anne Marie Morris Anne Marie Morris Conservative, Newton Abbot

Does my right hon. Friend agree that growth in our Devon and Somerset area in the items he has listed is very important? Does he also recognise that the Government have already done substantially good things and have demonstrated their support in the settlement on the growth deal funding for 2016 to 2021? The Heart of the South West local enterprise partnership got £130 million in growth deal 1, which was in the top 10, and in growth deal 2 we got £65.2 million, which is the highest award of all the LEPs across the country. That is a sign that the Government are serious about supporting the south-west.

Photo of Liam Fox Liam Fox Conservative, North Somerset

My hon. Friend makes an important point. One thing we will all have to do, if we are to get the best out of the opportunities being made available by the Government, is to work with these emerging groupings, especially the LEPs. Those of us who have worked with these organisations where they are at their best can see the benefits they can bring. If Members of Parliament, as well as local authorities, can co-ordinate with the LEPS, we will get so much more from them.

Photo of Steve Double Steve Double Conservative, St Austell and Newquay

Jobs are always welcome, and it is really good news that the Government are backing job creation across the south-west, but the type of jobs we will create is also very important. That is especially the case in Cornwall, where the average wage is 30% below the national average—indeed, in my constituency, the average wage is only £14,500 a year. It is vital that we create better jobs and invest in the economy to grow the average wages for our residents.

Photo of Liam Fox Liam Fox Conservative, North Somerset

I am sure that is absolutely right. One thing we have to do across the region is ensure that the prosperity in the wealthier parts of the south-west is more evenly spread across the region. I am thinking, for example, about the tech clusters around Bristol. In my constituency, unemployment is now below 0.5%, and we need to ensure that many of the high-tech jobs we have are spread more widely, right across the south-west peninsula, rather than being concentrated around the big cities.

Photo of Simon Hoare Simon Hoare Conservative, North Dorset

Does my right hon. Friend agree that there is a key role to play for local government and our district councils, through the planning process? If they can speed up decisions on planning applications that create jobs and opportunity, the growth will come faster.

Photo of Liam Fox Liam Fox Conservative, North Somerset

Indeed, and I would add that we need co-operation among local authorities. Where we can get good, functional local government clusters, things work well. The one thing I would say to the Minister is that we do not want to push our luck where we have local authorities co-operating and working well together; we do not need to see a change in the organisational structure that would only be expensive and bureaucratic. Where it is working already, we should leave well alone—that is a very good Conservative principle.

One common thread that runs between us is that the economic welfare of the south-west is very closely linked to the transport infrastructure. The new large group of Conservative south-west MPs will be putting that transport infrastructure at the very front of what we intend to do.

Photo of John Glen John Glen Conservative, Salisbury

Does my right hon. Friend acknowledge that one of the key decisions of the previous Government was the welcome investment in the A303

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn.—(Jackie Doyle-Price.)

Photo of John Glen John Glen Conservative, Salisbury 7:00 pm, 8th July 2015

Does my right hon. Friend acknowledge that one of the key decisions of the previous Government was the vital investment in the upgrading—the dualling—of the A303, particularly the contentious but much-needed investment in the Stonehenge tunnel in my constituency? That development will be pivotal in opening up the road to the south-west, which will be of vital significance to the whole region.

Photo of Liam Fox Liam Fox Conservative, North Somerset

The tunnelling to which my hon. Friend refers is a big improvement not only in the transport infrastructure, but in the tourist infrastructure, which go hand in hand. I will come back to that point in a moment.

Such transport infrastructure issues are to be found right across the south-west. Those of us who have campaigned extensively on these matters know all too well how two points on a map, which might look pretty close, can, in effect, be a long way apart. A very good example of that is getting to Barnstaple. On that point, I will give way to my hon. Friend.

Photo of Peter Heaton-Jones Peter Heaton-Jones Conservative, North Devon

That seemed almost planned. Will my right hon. Friend join me in welcoming the announcement made by the Chancellor today in the Red Book of £1.5 million to start planning work for the North Devon link road? Will he join me in hoping that we can push that ahead, because it is a vital piece of infrastructure for economic development and tourism in North Devon?

Photo of Liam Fox Liam Fox Conservative, North Somerset

The North Devon link road is a vital piece of infrastructure. If we are serious about spreading prosperity throughout the region and if we are able to get those with capital to invest and to create the jobs, they must be able to get there. One problem that we have, even in the more affluent parts such as around the southern part of Bristol, is the fact that our transport infrastructure is very poor. We may have low unemployment in my constituency and we may be able to provide many jobs, but where do we get the labour from if people cannot travel from a relatively close conurbation such as Bristol and Weston-super-Mare to get to where the jobs can be provided?

Photo of Neil Parish Neil Parish Chair, Environment, Food and Rural Affairs Committee, Chair, Environment, Food and Rural Affairs Committee, Chair, Environment, Food and Rural Affairs Committee

I thank my right hon. Friend for giving way and for securing this Adjournment debate. The south-west is the milk and honey of this country. It is a marvellous place to be. I welcome what the Chancellor said today, but there is still the Waterloo to Exeter railway line, the rest of the A303 from Ilminster to Honiton that needs to be finished, and the electrification and other work that needs to be done to the Great Western railways. As much as Bristol is important, there is a lot of west country beyond Bristol as well. I very much welcome this debate.

Photo of Liam Fox Liam Fox Conservative, North Somerset

Rail electrification will be key to what we are able to do. If we are able to get the investments that we want, we need to get that central Government investment as well. What we are seeing in the House tonight are the very first stirrings, politically and economically, of the south-west powerhouse. I hope that the Treasury notices how many south-west MPs, compared with some of the other groups in this Parliament, have come to the Chamber to talk about their long-term economic plan.

Photo of Kevin Foster Kevin Foster Conservative, Torbay

My right hon. Friend is right to outline our issues with infrastructure. One of the most visible problems with our infrastructure was identified last year in the constituency of my hon. Friend Anne Marie Morris when we literally had the hanging rails at Dawlish. Does my right hon. Friend agree that a key part of the investment plan is securing a more resilient and modern railway for those communities such as Torbay, which are west of Exeter St David’s?

Photo of Liam Fox Liam Fox Conservative, North Somerset

It is understanding distance and the need to be able to connect the most far flung parts of the region. It is also understanding that people who live in rural areas require a different type of transport infrastructure to that which occurs in the cities. In funding decisions, we must take account of issues of rurality. Not everyone in Britain lives in Islington. We have to understand that there are different needs, and to meet them different solutions will have to be applied by central Government in conjunction with local government.

Photo of Rebecca Pow Rebecca Pow Conservative, Taunton Deane

We have talked about the powerhouse of the south-west, but I see Taunton Deane as the gateway to the south-west. We need much investment in our transport network, but in particular junction 25 on the M5 needs investment in new roads and an upgrade. On that hinges the development of a new business park that will bring high-tech jobs to the area. Does my right hon. Friend agree that we need to put that into our plan as well?

Photo of Liam Fox Liam Fox Conservative, North Somerset

The M5 is key, and we need to ensure proper investment in it all the way down, including at junction 19 where we have experienced problems, and at junction 21, where there will be new development. It would be very nice to have a motorway running all the way down the peninsula, to ensure a proper route down the spine for road traffic. We can give the Chancellor some very good candidates for the road investment that he announced today. I say to my hon. Friend, however, that one would not want to introduce a note of discord among the group by arguing about exactly where lies the point of entry to the powerhouse. It will be a multi-nodal powerhouse, and I am sure that there will be plenty of entry points to be mentioned in everyone’s press release.

Photo of Liam Fox Liam Fox Conservative, North Somerset

I give way to my hon. Friend because I know that she has taken a particular interest in different parts of the railway infrastructure.

Photo of Michelle Donelan Michelle Donelan Conservative, Chippenham

Does my right hon. Friend agree that our transport links are vital to advancing the south-west’s economic growth, and that new stations, such as Corsham in my constituency, will be a huge boost for the economic growth of not only Chippenham but the entire region?

Photo of Liam Fox Liam Fox Conservative, North Somerset

If we are to have railway infrastructure, it is very important that we have access to the railways, and the new station at Corsham is very important in that, as is wider access to the rail network for disabled people. When we are talking about developing a transport infrastructure, we have to remember that we must be able to give access to all the citizens in the region, not just those who are able-bodied. In my constituency we had to wait a very long time to get disabled access to one of our busiest stations. In this day and age, that is simply not good enough, so the sort of infrastructure that my hon. Friend mentions is vital.

The other common factor affecting all of us throughout the south-west, to one degree or another, is the health of tourism. That industry takes many different forms across the south-west but is important to the income of those who live and work there.

Photo of James Heappey James Heappey Conservative, Wells

Of course it is not just the rich heritage, the stunning countryside and our rugged coastlines that bring people to our region; it is the fantastic food and drink produced by our farmers and food manufacturers. I am sure that my right hon. Friend will want to join me in emphasising to those on the Treasury Bench the importance of supporting our farmers and our food and drink manufacturers, not only as a driver for tourism in our region, but as something that we export with pride across the United Kingdom and around the world.

Photo of Liam Fox Liam Fox Conservative, North Somerset

Indeed, the maintenance of our countryside and the protection of agriculture is not only important in itself in terms of generating wealth and jobs; it is important in maintaining the visual environment that is intrinsic to the tourism industry. I am sure that all my colleagues will want to thank my hon. Friend for his dedication to the food and drink industry and his single-handed generation of wealth in the region.

Apart from the countryside, our region has cities with many historical attractions that we need to maintain.

Photo of Liam Fox Liam Fox Conservative, North Somerset

I give way to my hon. Friend, who is the one of the best examples, not of ancient relics but of modern thinking.

Photo of Ben Howlett Ben Howlett Conservative, Bath

I quite agree. As my right hon. Friend will know, one of the key reasons tourists do not return to Bath as a key destination in the south-west is our clogged up transport network and infrastructure. Does he agree that investment in roads and infrastructure in Bath will enable our tourism economy, which is so crucial to our city, to expand?

Photo of Liam Fox Liam Fox Conservative, North Somerset

The only city to compare with Bath in terms of difficulty of getting around, certainly as a driver, is Edinburgh. Anyone who can find a parking space in Bath is doing extremely well. These might seem like minor irritations, but they are major restrictions on a city’s ability to draw in wealth and tourists with spending power. The ability to do that is an important part of the wider economic picture.

I want to give my hon. Friend the Minister plenty of time to deal with all these issues, but may I finally raise the issue of fairer funding? It is a very sore point, not only in the south-west but in many rural areas across the United Kingdom. We have been told for such a long time that we are going to get a better formula that will reduce the discrepancy in per capita funding for those who live in the cities and those who live in the countryside. The countryside is not just where people from the cities go for their holidays or their weekends away, and the concept of rural poverty needs to be taken fully into account. There is no point in saying that the cost of living is lower in rural areas than in cities. We get lower funding per capita for healthcare, education and local government; we pay our taxes, yet our average wages are lower. We are being discriminated against in more than one way. The Government should equalise the formula much sooner than we have been led to expect. That is one of the key elements of being able to bring prosperity to our region.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

Following that point, would my right hon. Friend give time to developing a Fox formula, to ensure that we can link public expenditure in the south-west to the money that Scotland receives?

Photo of Liam Fox Liam Fox Conservative, North Somerset

I would settle for our fair share of funding in England. I have no intention of allowing my name to be used in a pejorative term, in the way that the Barnett formula has come to be regarded. I shall skip that opportunity.

Photo of Scott Mann Scott Mann Conservative, North Cornwall

Is my right hon. Friend aware that the cost of delivering services in rural areas is much higher than in urban areas, and in pupil funding there is a huge disparity, with many rural schools getting significantly less than urban schools—half as much in some instances? That is not good enough for our rural schools.

Photo of Liam Fox Liam Fox Conservative, North Somerset

In my view, it is a simple question of discrimination. Why should a child who happens to be born in a rural part of our country get less money for their education than a child who happens to be born, not necessarily a large distance away, but in an urban environment? We are not asking for more than we deserve. We are asking for our fair share of funding for the children in our constituencies.

Photo of Alex Chalk Alex Chalk Conservative, Cheltenham

Of course, it is not just about rural areas. Does my right hon. Friend agree that the time has come to end the historic funding injustice to schoolchildren in Cheltenham, an urban area; and that we need to give schools in effective local authorities, such as Gloucestershire, the fair enhanced funding that is no less than they deserve?

Photo of Liam Fox Liam Fox Conservative, North Somerset

That is exactly the point. One of the things we will be pressing the Government on in the next five years will be ensuring that we get our fair share. We want to make sure that we can reach our full potential economically, and no area in this country can reach its potential economically unless the next generation is given the appropriate education and the tools to advance in a meritocratic, open, pluralistic society.

Photo of Sarah Wollaston Sarah Wollaston Chair, Health and Social Care Committee, Chair, Health and Social Care Committee

Does my right hon. Friend agree that when it comes to local authority and health funding, there is not only the higher cost of delivery in rural areas, but the fact that we have a higher age demographic in Devon and much greater need, which is not reflected in the current formula?

Photo of Liam Fox Liam Fox Conservative, North Somerset

My hon. Friend, typically, makes an excellent point. We are a part of the country that is a very attractive place for people to go to when they retire, but that brings its own financial problems for funding our local facilities. My hon. Friend is all too aware of the fact that as we get a more elderly population, that brings with it more complex medical needs. It is the complexity of the medical needs that adds to the cost, as well as the number of individuals involved, and that will continue to rise, so we must have a proper match between the funding and the demand if we are to be able to cope with the pressures that are coming.

Photo of Michael Tomlinson Michael Tomlinson Conservative, Mid Dorset and North Poole

Does my right hon. Friend agree that, as others have mentioned, in Dorset the education funding formula must be fixed, as well as the funding for our police forces and local authorities?

Photo of Liam Fox Liam Fox Conservative, North Somerset

I hate difficult questions in the Commons. I entirely agree with my hon. Friend, who makes the point very well. It applies to police authorities, education authorities, health authorities and local government. This is region has not spoken with a single voice sufficiently in recent times. Tonight we are seeing the beginning of that.

Photo of Richard Drax Richard Drax Conservative, South Dorset

In the Chancellor’s excellent speech today, he hinted at enterprise zones for smaller towns. Does my right hon. Friend agree that the towns that we all represent are perfect locations for such zones to create wealth and jobs?

Photo of Liam Fox Liam Fox Conservative, North Somerset

If the Chancellor is looking for places where it would be appropriate for him to invest the money he has and where he would get a good bang for his buck, my hon. Friend makes a very good point. I am sure those of us here tonight could give the Chancellor one or two pointers.

Photo of Andrew Murrison Andrew Murrison Conservative, South West Wiltshire

My right hon. Friend has been extremely generous in giving way. As I sense that he is winding up, I wanted to ask him another difficult question. Has he spotted in the Budget resolution statement that £1.5 billion will be going to intelligence and security services? Does he welcome that, particularly as we in the south-west have a large number of constituents who are engaged in that vital enterprise?

Photo of Liam Fox Liam Fox Conservative, North Somerset

I am extremely grateful to my hon. Friend for making that point. That concentrates our minds in the south-west, but it should concentrate the minds of the whole country because the threats that we face as a nation are increasing. It is therefore vital that we increase the funds available to the intelligence services, but probably and more controversially we will have to give them the powers they require to be able to deal with the threats that we face. That will be a very different argument that we will have in the House in time to come.

At the recent general election a blue tide swept through the south-west, and now every constituency between Bristol and Land’s End, with the exception of Exeter—next time—is in Conservative hands. We understand the responsibility and the duties placed upon us by what was a landslide in that election, but we are thrilled at the opportunity it brings to speak as one to our own Government about the issues facing the south-west, and we have seen that unity of purpose tonight. There may be 56 Scottish National party MPs speaking for Scotland, but there are now 51 Conservative MPs speaking for the south-west. If we are the south-west powerhouse, perhaps we are also politically the new Scotland.

We will be constructive and supportive, giving the Government the time and the space to deliver on their promises, but we will not hesitate to hold Ministers to account when those promises do not materialise. This is a once-in-a-generation opportunity and we are collectively determined to take full advantage of it.

Photo of Marcus Jones Marcus Jones Parliamentary Under-Secretary (Department for Communities and Local Government) (Local Government) 7:19 pm, 8th July 2015

I congratulate my right hon. Friend Dr Fox on securing this important debate. I welcome the interest from hon. Friends across the south-west. There is a slight show of strength from the region here tonight—probably the only constituency not represented is Exeter. I very much feel that I have been on a tour of the south-west. I am sure that colleagues in the Department for Transport and the Treasury—the Chancellor’s Parliamentary Private Secretary is here—will read Hansard intently to see what my right hon. Friend and other colleagues have said. I will try to answer as many of his points as possible in the short time remaining.

The Government’s economic ambition is to create a fairer and more balanced economy by supporting policies that grow the economy and generate new jobs and higher wages for everybody. In our election manifesto, we said that by attracting growth and new businesses we will improve connections to the south-west, with major investment in the road network and electrification of the Great Western main line, bringing new fast trains on to the route. We will increase the number of overseas visits to the south-west each year by investing in tourism. We will ensure that the world-class defence assets and cyber-security industries of the south-west benefit the local economy. We will focus on job creation by supporting business and investing in skills.

Employment in the south-west is up by 163,000 since the 2010 election; unemployment is down by 42% over the same period; and some 99,000 new businesses have been started in the south-west during that time. As my right hon. Friend has said, the Chancellor set out an ambitious six-point plan for the south-west earlier this year. It includes £7.2 billion of investment in the transport connections of the south-west, over £4 billion of investment in the electrification of the Great Western main line and a £10 million package of support for coastal towns across the south-west.

The south-west has an average annual growth rate of 4.17%, which is below the UK average of 4.23%. It is a small difference, but over time it leads to a significant difference in prosperity. It is driven by a gap in productivity; although the south-west accounts for 8.4% of the UK’s population, it accounts for only 7.5% of total output, as my right hon. Friend pointed out. It is that productivity gap that the Government want to address.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater and West Somerset

We are about the start the largest infrastructure project in Europe: Hinkley Point C. The Minister and the Government have been very helpful in that. One of the most important things we have realised is that “learning and skills” is not synonymous with Somerset, Devon, Cornwall, Wiltshire or anywhere else in the south-west. Surely, we should be spending more in further and tertiary education and in universities in the south-west to encourage people to stay and work in some of our excellent industries. Does he agree?

Photo of Marcus Jones Marcus Jones Parliamentary Under-Secretary (Department for Communities and Local Government) (Local Government)

I thank my hon. Friend for his comments. I am aware that growth deals have been put in place in his area to do just that, which is excellent news.

The employment rate in the south-west is above the national average, with over 35,000 more people in work in the past year alone. If we succeed in maintaining that momentum and in raising the long-term growth rate to the UK average, we could add £6.5 billion in real terms to the economy of the south-west by 2030.

The Government have agreed 39 growth deals across England, in which £7 billion will be invested in a wide range of local projects. The money will go towards providing support for local businesses to train young people, create thousands of new jobs, build thousands of new homes and start hundreds of infrastructure projects. Some of the major projects in the south-west that will be built as a result of these deals include £23 million for a new road tunnel linking Swindon to nearby Wichelstowe, creating thousands of jobs and opening up a new site for thousands of homes; £4 million to create the UK’s first robotics institute at Bristol; and £12.9 million to unlock housing and employment sites at junction 25 on the M5 at Taunton, which my hon. Friend Rebecca Pow referred to.

I was pleased to hear in the Chancellor’s Budget earlier the comment that we were making good progress towards a devolution deal in Cornwall, which is an important part of the south-west and of the south-west’s potential.

Let me pick up on a couple of the points made by my right hon. Friend the Member for North Somerset. I note what he says about education, which is extremely important. I can empathise with what he says, as in the county of Warwickshire we often suffer from the same funding inequality. I am sure that he, along with other colleagues, will be pleased that in the last Parliament the Government made strides to move that inequality in the right direction and to close the gap. He will know that our party made a manifesto pledge to continue that funding across this Parliament. I am sure that the Department for Education will have heard his comments and those of several other hon. Members loud and clear.

I hear what my right hon. Friend says on local government funding and rural sparsity. Over the next few months, we will be working on the funding allocations for local government. No doubt, during that process, I will receive many representations from this part of the country if tonight is anything to go by. The Government have also provided additional funding this year for rural areas to take the sparsity issue into account.

Another of my hon. Friends mentioned local councils’ ability to benefit from business rate retention, the new homes bonus and additional council tax. I am sure that the growth deals that have been put in place across the south-west will be beneficial as regards those additional funding streams. I hear what my right hon. Friend the Member for North Somerset said about council structures. Obviously, we are working towards a devolution deal in Cornwall, but I can reassure him that with council structures, devolution deals or combined authorities there is no Government prescription for how local people should organise their affairs. This is purely a bottom-up process in which local areas can come together and tell the Government what they would like to see. I hope that that gives him some assurance that we will not make any councils go into shotgun marriages, shotgun divorces or any arrangements that local people are not pressing for.

I probably do not have time to go through every comment made by my right hon. and hon. Friends. One big point that came out loud and clear was that the south-west sees infrastructure projects as hugely important in improving the tourism industry, industry in general and the lot for the agricultural sector, which is extremely important in many parts of the south-west. A Transport Minister from the south-west was on the Treasury Bench during the debate, and the Department for Transport will listen carefully to what my right hon. and hon. Friends have said about ensuring that we try, within the difficult circumstances we face, to do whatever we can to support the economy in the south-west.

The Chancellor will probably also consider many of the suggestions for roads, dual carriageways, junctions and so on as bids during the spending review, the next autumn statement and the next Budget. I encourage colleagues to speak to the Chancellor’s Parliamentary Private Secretary, as the demands and requests are slightly above my pay grade.

This has been a fantastic debate. The south-west is an extremely important part of our country. The Government are committed to supporting it, and I thank my right hon. Friend the Member for North Somerset and so many of our colleagues for raising issues from the south-west, so that the Government could listen tonight.

Question put and agreed to.

House adjourned.