Inequalities - Motion to Take Note

Part of the debate – in the House of Lords at 4:05 pm on 30 November 2017.

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Photo of Lord Scriven Lord Scriven Liberal Democrat 4:05, 30 November 2017

My Lords, it is very rare that I am mistaken for anyone else in this House. I start by thanking the noble Lord, Lord Liddle, for his excellent introduction. He analysed the issues well and gave some of the solutions that are needed to deal with the inequalities that affect the regions and the nations of the United Kingdom. I also thank the other speakers for their contributions.

I begin with one statistic, which shows the challenge ahead and the slowness of successive Governments in dealing with this issue. It will take 120 years for young people in the most deprived parts of the UK to achieve the same examination grades as those in the most affluent if we continue as we are. I use that statistic because education and the opportunity it brings, and everything that comes from that—health, connections and networks—show why, if we continue to do what we are doing, we will not make significant progress in our lifetime.

That does not mean that some of the things we are doing with regard to HS2, skills and potentially moving government departments out into the regions will not have some success. But many of those things have been tried before and have not had the significant result needed. That is why we need radical solutions, not just tinkering.

The first concerns government itself. We have a Victorian structure of government in the UK. It is interesting that we all talk about what may need to happen outside, but we should start here, at the centre. The centre of government needs to change. It no longer needs to be about managing function but about outcome and structure, so processes need to change on the back of that. Otherwise, we will just be delegating down to the regions of this country a Victorian system of government that is not fit for a modern future. That is really important if we are to unleash the power of our cities, regions and nations in the United Kingdom.

We are talking about what we need to do, but the world is changing; there is a bigger picture. I have two issues to talk about. One is how our economy has decoupled in the United Kingdom. We have different economies and I want to explain how globalisation has affected that and what we need to do. The other issue is that we now live in a networked world which needs very different solutions to such concrete issues as how to connect people. In the future, infrastructure in the sense that we talk about it may not be the issue that unlocks the potential of areas and regions. On infrastructure, for me, the most important issue for dealing with inequality is not just rail track but the internet, broadband and interconnectivity. Again, I come back to how government thinking might be causing problems in terms of managing functions.

In the recent telecom rate subsidy Bill, it is proposed that providers will get paid if they put down fast broadband, no matter where it is. I can tell noble Lords where it will go: it will go to the most affluent, already connected areas because that is where the customer base is. But broadband should be put into the most deprived areas of the UK to unlock the potential of individualised education, using artificial intelligence and internet connectivity to give individual help and support, not just through teachers but through the potential of technology, which will then give young people skills, confidence and access to networks. That is what we have to think about. There is a different way of thinking about how to unlock the potential of young people, cities and areas across the country, rather than just thinking about concrete infrastructure. We need to take a different view of outcomes and think about how we educate young people and get them ready for work rather than thinking just about how we get fast broadband in the UK. If we changed the way we think about those issues, we could unleash the potential of areas and reduce inequalities.

As regards the decoupling of the economy, the UK’s weak long-term productivity results principally from the differing effects of globalisation on different parts of the country. As we know, economies outside London have made a very poor transition from their industrial past, while the benefits of globalisation have remained confined to London and its hinterland. For far too long the problems of the regions have been masked by London’s success. Like other speakers, I do not detract from that success but, as a result, the UK economy is not only diverging but disconnecting, decoupling and dislocating into two, or possibly three, separate economies. London has become insulated and isolated from the wider economy and this is likely to be exacerbated by the UK’s departure from the EU.

We need, therefore, to understand that the key to solving this problem is to go much faster and further in devolving economic powers to the regions and areas of the UK. That is vital. I do not denigrate the work that many noble Lords have done on devolution, including the noble Lord, Lord Heseltine, but that process needs to be more radical and quicker. When I led Sheffield City Council, I pulled levers to try to make my area more economically viable but they were connected to absolutely nothing because the power, the funding and the financing were not there. Attracting private capital to my area was also very difficult. We need to look at that. The argument about whether these problems are more difficult in a city, an area or a region—the north in my case—is false as they apply in all three categories. We have to think about the different levels of economic geography, how we devolve powers and how structures, systems and processes are set up to make areas powerful.

We also have to think very differently about how we use networks to get money in. No one has really talked about how we attract capital to these areas. It is all right having skills and connectivity but how do you attract capital? Technology can be used. Why do we not set up virtual local stock exchanges, so that if I want to make an investment, I can be connected and networked to growing local small and medium-sized enterprises which I may not be aware exist in an area if I do not live there? Therefore, we should think about making localised stock exchanges and localised sovereign wealth funds available through crowdfunding and crowdsourcing so that people, rather than just government, can invest in the future wealth of an area. Local banks have already been mentioned in that regard.

We need a different, radical approach to this matter that addresses the decoupling of the economy, the Victorian approach to government and how we use a networked world to deal with some of the issues; otherwise, young people will have to wait 120 years for their inequalities to be addressed.