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.