Industrial Strategy: North-East of England — [Mr Clive Betts in the Chair]

– in Westminster Hall at 9:30 am on 5th June 2019.

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Photo of Mary Glindon Mary Glindon Shadow Minister (Environment, Food and Rural Affairs) (Farming and Rural Communities) 9:30 am, 5th June 2019

I beg to move,

That this House
has considered industrial strategy in the North East of England.

It is an honour to serve under your chairmanship, Mr Betts. I am delighted to have been granted this debate on such a crucial subject for our region. There are two local enterprise partnerships in the north-east, so we have two local industrial strategies: one for seven north-east local authorities, and one for the Tees valley. My area is covered by the North East LEP, which leads on the creation of the local industrial strategy, as its footprint includes two combined authorities: the newly created North of Tyne combined authority and the North East combined authority. As the North of Tyne combined authority has a devolution deal that specifically refers to the LIS, the picture is a little more complicated than elsewhere, as the Minister will appreciate. However, both combined authorities are working together, and with businesses and partners and through the LEP board, to make sure the local industrial strategy makes sense for residents and businesses in the north-east.

I will not talk about the north-east’s fantastic industrial and inventive past, because we see that backward look too often in the region, and although it is important to recognise that we have been passionate, ambitious and innovative for hundreds of years, looking back does a disservice to the brilliant people and businesses that we have today. It does not highlight the fact that the north-east has proportionally more businesses in manufacturing—10.5% against 7.7% nationally—or the fact that in 2018, the growth in the number of businesses massively outstripped what was happening nationally; we had 14.2% growth, versus a national fall of 0.5%, and we have seen a growth in productivity since 2014. Those are positive things, but that is not to detract from the less positive things happening in the region that I think my colleagues will talk about.

Looking back would not highlight the fact that the north-east is a brilliant place to live; I am sure all of us in this room agree on that. It is way more affordable than significant parts of the country. As of March, our average house price—for a very nice house—was £123,000, whereas the national average was £227,000, so I urge people to look at relocating to our area.

Photo of Mary Glindon Mary Glindon Shadow Minister (Environment, Food and Rural Affairs) (Farming and Rural Communities)

Perhaps not too many, but all are welcome.

I want to talk about what is strategically important to the north-east today, and what will make a difference to our future. For the north-east, the industrial strategy and the local industrial strategy will be about our ambition, the sectors in which we are strong, and the infrastructure that will lead to growth, and they have to be about turning strategy into action. The LIS is seen as building on the north-east strategic plan, which was agreed with businesses and communities of all shapes and sizes. It has an ambition for more and better jobs—100,000 jobs by 2024, with at least 70% being what are termed better jobs in managerial, professional and technical roles. We have already seen more than 64,000 new jobs created, of which 77% are classed as better jobs, but we need more investment and support from the Government, so that more can be achieved, and we need the right infrastructure put in place.

Yesterday, some of us went to the drop-in held by Highways England. I was pleased to go and congratulate it on the fantastic new Silverlink interchange on the A19, which has massively improved access to the Tyne tunnels. It was done on time, through collaboration between the council, businesses, and Highways England—a great feat for the region.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

I also visited the Highways England drop-in yesterday; my hon. Friend and I were there at the same time. I was told that the project to widen the A19 between Wynyard and Norton will go ahead in May. Will she join me in welcoming that, and an end to the terrible noise that the people of Billingham suffered as a result of the project?

Photo of Mary Glindon Mary Glindon Shadow Minister (Environment, Food and Rural Affairs) (Farming and Rural Communities)

That is fantastic news. I hope that the project is done in the same timely way as Silverlink was, and with minimum disruption.

I hope the Minister is aware that a team from the north-east has been talking to the Government about how to make real the industrial strategy’s grand challenge on ageing, by working with local businesses of all sizes and with our universities. There is an opportunity to meet that challenge in our region. There is definitely a commercial opportunity and benefits for society in working with a population that is living longer. There are benefits for expertise, too. In my constituency, Procter & Gamble’s research and development team is focusing on what its older customers will need to live happy and independent lives. We know about a lot of projects that would influence that.

Across our region, there is groundbreaking work in health and life sciences. I am sure colleagues here will expand on that. The north-east has real strengths in the offshore renewables sector, and our region is ready to take advantage right away of any changes in that environment. Shepherd Offshore, Smulders, WD Close and SMD are all top-class, world-renowned companies in my constituency making a difference across the sector, but they could do even more with the right investments; I will continue to go on about that in Parliament.

One of the main things that hinders the development of those industries to some degree—this is important to South Tyneside, Gateshead and Newcastle—is the need to find a way to secure a significant investment to re-route the National Grid power lines that cross over the Tyne. That would make such a difference in how the Tyne is viewed by companies from around the world. I have been pursuing the issue for a while locally, with National Grid and with another Department for Business, Energy and Industrial Strategy Minister, and I am pleased that all four local authorities, the port of Tyne and the North East LEP are working together to look at how the power lines can be diverted to secure further contracts and local jobs for companies up and down the Tyne. I know it is a vast sum of money—around £20 million—but where there is a will, there is a way, and that is what we are working on.

Photo of Catherine McKinnell Catherine McKinnell Labour, Newcastle upon Tyne North

I congratulate my hon. Friend on making a powerful, important and positive speech about our region and its opportunities. She makes the case for the power of public investment and private sector partnership. Does she agree that it is not only large business that should invest in our region? So should small and medium-sized businesses, which are the lifeblood of our economy. For example, Sage, which is headquartered in my constituency, is working really hard to develop a strategy for a public-private partnership, so that through our public sector organisations, there is more support for growth, investment, productivity and exporting. However, it needs a clear industrial strategy to back that up.

Photo of Mary Glindon Mary Glindon Shadow Minister (Environment, Food and Rural Affairs) (Farming and Rural Communities)

That was an excellent intervention, which the Minister must have heard. I can only agree wholeheartedly with everything my hon. Friend said.

On digital and data, the north-east’s history of engineering excellence continues in the digital age. North Tyneside was recently judged to be a hotspot for digital growth. In my constituency, and that of my right hon. Friend Sir Alan Campbell, our residents work in world-class digital businesses, such as Accenture and DXC Technology. There is also groundbreaking public service digital work in the Department for Work and Pensions and Her Majesty’s Revenue and Customs, and work in local companies such as Perfect Image and Infotel UK.

The most important strength in our region is our people. We have thousands of skilled, passionate and hard-working people who drive our economy, creating and leading businesses, large and small, and working together to serve the region. Although the devolution of the adult education budget to the North of Tyne combined authority is a start, and the national careers strategy gives some important pointers, we need to ensure that we leverage the capabilities of local people.

The industrial strategy and local industrial strategy needs must be backed up with deeds. We need sector deals, which make a real difference, and clear support and investment in skills, with joined-up thinking across Government. I ask the Minister to commit to working closely with colleagues in the Department for Transport to ensure that the east coast main line upgrade is prioritised, and that our north-east transforming cities bid gets solid backing.

In both cases, there is a compelling economic case for investment. Colleagues right up the east coast of England and Scotland know that the east coast main line is as critical as investment in HS2. On the transforming cities bid, we are all working together to continue to secure investment to upgrade the metro, to reopen the Northumberland-Newcastle line to passengers, and to ensure that people and businesses can make the right connections in Sunderland, South Tyneside and Durham.

As the north-east is the only region that exports more than it imports, we will be hit hardest by Brexit. I had not mentioned Brexit up until now, but it had to come in somewhere. For 2014 to 2020, our region received £437 million from the European structural investment funds, which will be replaced by the shared prosperity fund post Brexit. The consultation was expected last year, but we know that the Brexit timetable has changed.

The consultation has been postponed, with as yet no further date announced. Worryingly, it has been said in response to recent parliamentary questions that the final decision on the fund’s design will be taken during the spending review. However, the spending review report will be published only with the Budget in the autumn. I hope that the Minister can tell us a bit more, and assure us that the consultation will begin soon. We do not want any gaps in replacing the loss of European funding.

I will be quiet now, because colleagues wish to talk about the industrial challenges in their constituencies. Those challenges are many, and influence the current and future prosperity of our region. I hope that the Minister has listened to what I have said, and will listen carefully to everything that my colleagues ask of him, and that he will give us clarity and reassurance that the Government are prepared to commit adequate support and resources to our great region, so that it can flourish for everyone in the north-east.

Photo of Sharon Hodgson Sharon Hodgson Shadow Minister (Public Health) 9:44 am, 5th June 2019

It is an honour to serve under your chairmanship, Mr Betts. I thank my hon. Friend Mary Glindon for securing this important debate and for her excellent speech. She has laid out why a proper industrial strategy is so important, especially for us in the north-east.

The north-east strategic economic plan has been active for five years. In that time, the region has seen some great change and investment, despite the uncertain times in which we find ourselves. I am proud to be the Member of Parliament for Washington and Sunderland West, which is home—as all Members know, because I bang on about it enough—to Nissan’s UK car plant. There has also been exciting development around the International Advanced Manufacturing Park, known as IAMP, which I am sure Members will become equally sick of hearing me talk about.

Meanwhile, a bid to unlock a potential £33 million in funding is under way with the Centre of Excellence for Sustainable Advanced Manufacturing. That hub will provide advanced manufacturing solutions to many businesses across the market in the region, such as Driving the Electric Revolution, which is based in Sunderland. I am certain that that will attract innovation and investment across the region, to benefit both the local and national economy. Those developments have the potential to transform the north-east.

The north-east strategic economic plan has been successful to a certain extent. It has helped towards the creation of 100,000 more jobs by 2024, as we heard, and the economic gap between the north-east and the rest of the country has narrowed. Some 71,600 jobs have been created so far, of which 70% can be described as “better jobs”. That is an excellent feat for the region and its long-term planning. However, we can be certain that the gap still exists between the north-east and the rest of the UK.

If performance, enabled by investment and infrastructure, had matched that of the rest of England except for London, we would have 93,000 more jobs in the north-east and 25,000 more businesses. The north-east still lags behind in the majority of areas of economic performance, despite, as we heard, securing more foreign investment than any other region. That suggests that the Government’s economic plan is failing us. It has held back the economies and communities of Washington and Sunderland, and those of many other ex-coalfields and post-industrial northern towns.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

Does my hon. Friend agree that we have two economies in the north-east: an economy with well-paid jobs, which allows people to go on foreign holidays and enjoy their lives, and poverty that afflicts tens of thousands of people in our area? We have done extremely well as a region; if we just had more investment, we could take so many more people out of poverty.

Photo of Sharon Hodgson Sharon Hodgson Shadow Minister (Public Health)

Inequality and the wealth gap still exist, probably in all regions—we see it here in London too. Prosperity has never reached some parts of our region, which has led to disenfranchisement in some of our communities. We are now feeling the brunt of that in how they are voting.

Growth is good, but it is important to know where that growth comes from. The quality of communities and how they are sustained by the economy is an important part of keeping the fabric of society vibrant. The role of the Government in the economy must be more than simply growth and redistribution; they should aim to ensure that the country’s growth is responsible and has a social value, so that everyone lives a better life. That is something that the Labour party is committed to, with the introduction of a Minister for manufacturing.

Photo of Julian Sturdy Julian Sturdy Conservative, York Outer

The hon. Lady makes some really important points, especially on the wealth gap, which I, as a Yorkshire MP, would say is between the north—rather than the north-east—and the south. Skills and education play a key role in improving the lives and opportunities of everyone. Does she welcome the technical education offer, and the announcement of 12 new technical institutions? Two are in the north-east and Yorkshire: one, York College, is in my constituency and the other is New College Durham. Surely we have to grasp that opportunity to ensure that we improve skills and technical education in our region—I say “our region”, as a Yorkshire MP—as the north moves forward.

Photo of Sharon Hodgson Sharon Hodgson Shadow Minister (Public Health)

I am happy to say that I agree with the hon. Gentleman. Skills are so important. We hear from employers all the time that they often cannot find the necessary skills in the local workforce, which is heartbreaking when many young people are desperate to acquire those skills. As my hon. Friend Alex Cunningham mentioned, we need to ensure that prosperity is shared among everyone. The rise in the number of apprentices is also welcome, and the technical colleges that Julian Sturdy mentioned play a huge and important part in that.

The Government often point to low unemployment figures as proof that their approach is working, yet in-work poverty is on the rise. It is at its highest for 20 years, with 4 million people living in poverty despite being in work—it is not just me saying that; the figure comes from Joseph Rowntree Foundation research. One in four workers in the north of England is paid less than the real living wage, after a decade of stagnant wages and the rise of zero-hours contracts. That leads to the two-tier workforce that my hon. Friend the Member for Stockton North mentioned.

Although we are on our way to closing the gap and making businesses in the north-east a more valuable prospect, we are still recovering from the catastrophes that the region has faced in the last 50 years. Those catastrophes have made our communities resilient, but to ensure that we endure, one thing must be at the heart of any strategy: the environment. We must invest sustainably in our economy to ensure that future growth does not come at the expense of our environment. It is essential to confront the climate crisis in every Government strategy, especially an industrial strategy. I am proud that the Labour party has committed to do that, having already forced the Government to declare a climate emergency in May.

Nissan’s investment in battery technology and electric vehicles has put Sunderland at the forefront of the European market. It is the only plant in the UK that makes a purely battery electric vehicle, the LEAF. Nissan’s expansion on the back of the worldwide move to electrification offers the UK the chance to be a leader among European manufacturers, and our local communities will benefit most.

Sustainability should be at the centre of all sides of development. For example, with the expansion of IAMP, which I mentioned, I would like the local transport network to be developed to ensure that in years to come, the staff who work there will have an alternative to private motorised transport when going to work. An excellent way to do that—another opportunity that I never cease to mention—would be to expand the Tyne and Wear metro to Washington and IAMP.

Economic development is another concern in these turbulent times. The ongoing uncertainty of the Brexit process—I have mentioned it as well—may damage investment and businesses in the north-east, as 55% of Nissan’s exports go to the EU. We need a solid and sensible deal for exiting the EU to give businesses certainty. Parliament has made it clear that it rejects the possibility of a no-deal Brexit, yet the idea of reintroducing a no-deal option has been used numerous times by candidates in the Conservative party’s ongoing leadership campaign—I will name no names; I do not want to give anybody more publicity, not that anybody would take any notice of me—in a reckless attempt to bolster themselves. That is worryingly irresponsible and gives no assurance to UK manufacturers, some of whom described the idea of leaving the EU without a deal as “economic lunacy” this week.

The potential for a bright future in the north-east is high. Our region is growing well, and as my hon. Friend the Member for North Tyneside said, it is a great place to live, work and have leisure time, but there are more steps to take to ensure that its development can be sustained and work for everyone, which I hope the Minister will consider.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North 9:54 am, 5th June 2019

It is a pleasure to serve under your chairmanship, Mr Betts. I, too, congratulate my hon. Friend Mary Glindon on securing this important debate. Unlike her, I will refer to the past.

The area that I represent has a rich history of industrial innovation, from the Stockton to Darlington railway, which was the first in the world and will celebrate its 200-year anniversary in a few years’ time, and which laid the foundations of the Tees Valley’s rapid growth, to our world-leading chemical and pharmaceutical industry, John Walker’s invention of the friction match, and Sheraton furniture, which some of us sit on in this place. We have always been an area that leads the way, although our business and industry have changed substantially over the years and we still lament the loss of Tees shipbuilding and the thousands of well-paid jobs it once provided.

Even if we do not always receive the funding and investment we need from national Governments, the Tees Valley has demonstrated again and again that it can change and attract investment, although more could be done to help it to reach its full potential. That said, we are the third best place in the UK for business expansion and the fourth for business innovation, and we are part of the only continuous net-exporting region in the UK—north-east England.

Our Tees Valley combined authority was one of the first, and it has the powers to make the decisions that affect our area in our area. It has a plan for boosting economic growth and creating thousands of jobs. We also have a thriving and innovative industrial sector that we should celebrate and support.

We have much to be proud of, but, sadly, the decline of some industries and the failure of the Government to act mean that unemployment in our area continues to increase—it has gone up month by month in my constituency. The plight of British Steel is a case in point. I was saddened and disappointed to learn that while the Government stand on the sidelines waiting for the official receiver to try to sell the business, our elected Tees Valley Mayor has no power to intervene to protect the hundreds of jobs in steel directly and in the supply chain. I hope that the official receiver can sell the business as an integrated going concern; failure to do so will have huge ramifications for our area and others across the country in terms of jobs, and will mean that we lose a large part of a foundation industry that is crucial to the UK’s manufacturing economy. Perhaps the Minister can update us on where the official receiver is up to in trying to sell the business.

The high cost of energy is a major factor in the steel crisis and for many other industries in our area. That is one reason I have been focusing on the needs of energy intensive industries not just on Teesside but across the country, from chemicals to cement production and from steel to ceramics. They also include the companies developing wind turbines and related products, which have exploited the skills of our talented engineers to produce the goods for offshore and onshore wind farms. All those industries exist in the face of the highest energy costs in Europe, but there is no plan from the Government, or anyone else, to address that or the high carbon taxes.

Our region has a huge advantage when it comes to expanding low-carbon generation through hydrogen production, in which Teesside is the bigger producer in the country; the development of energy storage; the opportunity to develop smart grids to better support our industry and communities; and, of course, carbon capture, use and storage. I set up and chair the all-party parliamentary group on carbon capture and storage, and I was pleased to lead the demands that Teesside should be the first place to utilise its skills and knowledge in that area. CCUS has the potential to create thousands of jobs and protect thousands more. It is also important in meeting the grand clean growth challenge that the Government face and, crucially, in delivering a long-term sustainable future for the other industries based in our region.

We have heard some kindly noises from Ministers but, unfortunately, the Government have been slow to support CCUS. They talk the good talk—we have had statements, ministerial visits and news releases by the dozen—but we await the concrete commitment that will make the Teesside project roll. That is why it is vital that our local industrial strategy really counts in its support not just for CCUS but for our existing industries, and the new ones, that are critical to our future. We need a strategy that provides certainty and direction for local industries, a sound base to attract funding, and support to help the industries to grow.

A local industrial strategy would benefit our chemical and steel industries, which have been hit by Brexit, particularly the prospect of a no-deal Brexit. The chemical industry needs the EU registration, evaluation, authorisation and restriction of chemicals—REACH—regulations, which govern the manufacture of chemicals, to apply in the UK after Brexit, but despite a considerable amount of work by Ministers and officials, the outcome remains far from perfect and we all know how nervous the industry remains. If there is no deal, what happens to the regulations such as those for chemicals? Will we be able to sell the chemicals and every other piece of manufactured kit that relies on common standards with the EU?

I mentioned earlier the collapse of British Steel, which leaves 700 direct jobs under threat on Teesside, not to mention the impact the closure would have on the local supply chain. British Steel made it clear that the likelihood of a no-deal Brexit was a major factor in its collapse. Put simply, a no-deal Brexit means no steel industry, and that would have huge negative implications on Teesside and beyond.

Surely we cannot have another repeat of the SSI fiasco, which saw an end to steel production from what was probably the country’s most efficient blast furnace in Redcar. Let us not forget what the Government’s failure to act has meant for people: thousands thrown out of work, many of whom are still seeking work today. Since 2015, the SSI site has seen little progress or interest from the Government.

We know that trying to put land parcels together to redevelop the area is complicated, but it is now years since the closure. Sadly, despite my hon. Friend Anna Turley leading Teesside’s charge for investment and raising the issue of the site at every possible opportunity, we have been told the site will get £14 million—nowhere near the £200 million needed to bring the site back into proper use. What we have instead is a plethora of news releases from the Tees Valley Mayor. If we had a million pounds for every news release that has made promises and delivered nothing, we would have the £200 million that is so desperately needed on Teesside.

That said, I am pleased that the Tees Valley combined authority is currently working on a draft industrial strategy that will sit alongside its strategic economic plan. It identifies our local strengths, as well as our weaknesses, and will set a strategic direction for our industries, but our local efforts need to be backed up by the national Government—a Government that have, so far, fallen short in safeguarding our industries.

I am certain that everybody here wants to see our region prosper and thrive. I am sure we all want to reverse the increase in unemployment in our region, but it needs to be backed by more than words and news releases from the Government. I urge the Minister to stand back, look at Teesside carefully and make the right decisions as we go forward.

Photo of Phil Wilson Phil Wilson Labour, Sedgefield 10:02 am, 5th June 2019

It is a pleasure to serve under your chairmanship, Mr Betts. I thank my hon. Friend Mary Glindon for introducing this debate.

Sedgefield is home to the largest business park in the north-east. Between 10,000 and 12,000 people work there, in about 500 companies, from small sole traders up to massive manufacturers, such as Gestamp, Husqvarna, 3M and, obviously, Hitachi, which is now producing the rolling stock for the east coast main line. Trains for Darlington, Durham, Newcastle and Edinburgh will enter service in August this year. Everybody is looking forward to that—we have been waiting about 40 years for it.

Another manufacturer, Roman, produces showers and bathroom furniture and is now the biggest supplier in Europe. We have a very good story to tell. We are home to a university technical college, which opened two or three years ago. It has been graded good by Ofsted and is going from strength to strength. It has a great future. It is sponsored by Gestamp and Hitachi, who want to see a throughput of apprentices, and it is bringing young people into engineering and electronics and all the manufacturing industries that we want to see maintained in Sedgefield and the north-east.

I want to talk a little about the past, as my hon. Friend Alex Cunningham did. We have a sound tradition of manufacturing and industry in Sedgefield. About 500 yards from Hitachi’s base is Heighington crossing, where George Stephenson assembled Locomotion No. 1 so that it could enter service for the Stockton to Darlington railway back in 1825. The platform has a nice plaque about that. Next to it was the Locomotion No. 1 public house, which is now closed, but was the original ticket office and waiting room —the first ticket office and waiting room. It is there for anybody to go and see. The original platform is there as well—the oldest in the world. We can trace our manufacturing and industrial heritage back at least 200 years.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

I am surprised that my hon. Friend would claim that the first ticket office is in his constituency, because there is a plaque on a wall in my constituency that declares the first ticket office in the world to be there. Perhaps we need to meet outside of this room to consider the matter further.

Photo of Phil Wilson Phil Wilson Labour, Sedgefield

We do. All I can say is that that is where the train was assembled, where the ticket office is and where the train set off from.

Photo of Clive Betts Clive Betts Chair, Housing, Communities and Local Government Committee

Order. I hope you will not be asking the Chair to rule on that.

Photo of Phil Wilson Phil Wilson Labour, Sedgefield

No, no, but I know that Stockton had the first passenger railway in the world. We have a lot to be proud of in our area.

NETPark, a science park just outside Sedgefield village is leading the way in all kinds of technologies, including light-based technology. It produces masks that people with diabetes wear when they are asleep, which helps. It is also a catapult centre for the space industry. It is the home of technology for the future. The park overlooks the site of the old Fishburn coke works and pit, where my dad worked all those years ago. If he could only see the technologies that are now on the doorstep of where he was brought up. I am really proud of it all.

There are 9,000 manufacturing jobs in Sedgefield, which is second only to those in the constituency of my hon. Friend Mrs Hodgson, where there are 17,000 jobs and tens of thousands in the supply chain. We have a supply chain of about 16,000. Manufacturing is a key industry for the north-east of England. Make UK, the manufacturers’ organisation, is now saying that it is very worried about a no-deal scenario, as it is “economic lunacy”. On this side of the House, we can all agree. Make UK’s key findings are that domestic and export orders are continuing to weaken, the gap between output and orders has increased, export orders remain at their weakest since the referendum, there is growing evidence of European companies abandoning UK supply chains, investment intentions are paralysed, and the manufacturing forecast for growth is just 0.2% in 2018 and 0.8% in 2020. These are dire figures. We need to think about those indicators as we further consider in this House what to do about Brexit.

I have deep concerns about Brexit. The north-east is the only region that exports more than it imports, and more than 60% of our exports go to European markets. Being part of the EU, the single market and the customs union is vital to the north-east of England. If there is a no-deal Brexit, it is estimated that GDP will fall by 16%, which could mean the loss of something like 200,000 jobs. Those are dire figures, and we should be broadcasting them all the time.

Between 2014 and 2020, the European structural investment fund invested £437 million in the north-east economy. The aim of EU structural funds is to rebalance our economy through regional investment allocated according to need. Will the Minister tell us where that money will come from when it stops coming from the EU? The Government’s stronger towns fund, launched in March this year, consists of a £1 billion fund allocated to English regions and £600 million available under competitive bidding after Brexit. That is less than 10% of what UK regions would receive if the UK remained in the EU; the north-east alone was projected to receive £1 billion over seven years. The shared prosperity fund, which was designed to reduce inequalities between communities, has released no details on the level of funding, the funding model, the length of funding periods or the fund’s administration.

Another issue that I want to raise with the Minister, which he might not be responsible for, is the high street fund, which was announced by the Chancellor of the Exchequer a few months ago. We all agree that we need to see improvements to our high streets. Newton Aycliffe in my constituency has a high street that is owned by Freshwater. The environmental area has been vastly improved—something for which the town has won awards—but there is still the problem of empty units and shops closing, which affects not just Newton Aycliffe, but our high streets up and down the country. If the likes of Darlington and Durham are losing their branches of Marks & Spencer, I really worry about the future of high streets in new towns such as Newton Aycliffe. What can we do to remedy that?

I want to make one or two other points. The north-east is one region, but we do not act like one region. If we did, we would become a true powerhouse. The regional development agency, which was abolished by this Government back in 2010-11, was a key asset to the north-east of England. I think it is fair to say that investment was from the public sector to the private sector in the north; in the south-east, it might be from the private sector to the private sector. The regional development agency was therefore a key contributor to bringing investment to the north-east.

Photo of Sharon Hodgson Sharon Hodgson Shadow Minister (Public Health)

My hon. Friend is making a very good point, which I want to reinforce by putting it on record that, from my recollection, the regional development agency in the north-east was the only one that really worked as it should have. For every £1 that the Government invested in the north-east through the One North East RDA, the return was £7. I might have it wrong, but that is the figure from memory. Does he agree that we should have certainly been able to keep One North East, because it worked?

Photo of Phil Wilson Phil Wilson Labour, Sedgefield

That is right, and to abolish One North East was an act of economic vandalism. It was a kind of ideology gone mad—“If it is public sector, we should abolish it.” We now see the impact of its loss, to the detriment of the north-east of England. We have got rid of the regional development agency, and we do not act as one region. We have two Mayors and three combined authorities competing with each other, whereas we need to be one region—the north-east of England—talking as one for the benefit of the whole region.

I will finish by discussing the issue of Brexit. I remember when the news came out a few months ago about the manufacturing loss of Nissan models such as the X-Trail. I remember people from the region saying on the television, “Well, if Nissan goes, we’ll be okay. We survived the closure of the pits. We survived the closure of the shipyards.” Well, we might have done—we might be starting to come out of that period—but it has taken years. How did we survive that? Why have we got a big upturn in car manufacturing? How have we as a region been able to attract foreign direct investment in the way that we have, with Nissan and Hitachi in my constituency, and with other manufacturers around the country? How were we able to survive the closures of the pits and the shipyards? The reason is that we were in the single market and the customs union, and we had access to the biggest trading bloc—the biggest economic bloc—in the world. My view is that it is absolutely wrong for the region, and for this country, to close the door on that.

We were able to come round from the closure of the pits. I grew up in a pit village, and I know what happened back in the 1980s. We managed to get through the catastrophe of the closure of the shipyards because we were in the single market and the customs union. If we close the door, what will it do for the future of manufacturing and the economic wellbeing of my region and the country? Should there be a no-deal Brexit, GDP will fall by 16%, which is not in the best interest of the people of the north-east of England. We need to be saying that loud and clear from this day on, until we get a resolution to the issue of Brexit. In my view, there is no deal that is better than the one we have now. I have asked the Prime Minister whether the deal she brought forward is better than the one we have now, but I have yet to receive an answer.

Photo of Liz Twist Liz Twist Labour, Blaydon 10:14 am, 5th June 2019

It is a pleasure to serve under your chairmanship, Mr Betts. I thank my hon. Friend Mary Glindon for securing this important debate. It is really apposite that we are having this debate now, as later this month the North East LEP will publish its evidence base, which will contribute to developing our north-east industrial strategy.

As hon. Members have said, we have some difficulties in the north-east. Like others, I am hugely proud of our communities, businesses and places in the north-east. They have real strength, real history and real power, and I want to see us build on that. We need to recognise the issues we face, if we are to have any chance of addressing those difficulties. In my constituency, we have both industrial and retail sites, which I will come to later. We have the Metrocentre, which is still the largest indoor shopping centre in the UK. We also have the long-established Team Valley trading estate, which houses over 700 businesses. Not all of it is in my constituency of Blaydon—some of it is in the Gateshead constituency—but a significant part is. It is really important that we keep our links with the people trading on the estate; they are an important part of our local economy.

As I have said, we need to recognise the issues that we face, if we are to address them. We need to ensure that the north-east can grow and develop its economy, creating more and better jobs. Sadly, unemployment in the region is still 5.4%, compared with 3.8% across the UK, and many of the jobs that have been created are part time and low paid and do not represent the best jobs that we could have for our communities. That is where the industrial strategy is important. It must reflect our current strengths and also grow new sectors. We have heard about the digital sector, and there is also a growing video game sector in Gateshead that we need to develop. Any industrial strategy must consider those new sectors and present new opportunities.

I want to touch on a few of the things that should go into the strategy. The first is infrastructure, which hon. Members have mentioned. Connectivity is a real issue in the north, especially in the north-east. It needs to be addressed if we are to have a positive industrial future. We know that Transport for the North, which covers the whole of the north rather than just the north-east, has submitted a request for industrial funding under the “Rail for the north” strategy. That is a £39 billion development proposal. Many of us in the north-east want to see much more of that rail development in the region, and we will continue to argue for that. We certainly must address that infrastructure issue, and the others that hon. Members have mentioned, if we are to have a positive future industrial strategy.

The issue of European funding was mentioned by my hon. Friend Phil Wilson and others. As we have heard, the north-east is the only region that is a net exporter. We have heard that it will be hit hard by Brexit, especially a no-deal Brexit—there would be an estimated 16% fall in GDP growth. It is important to ensure that we have the right conditions and the right deal for the north-east if we are to avoid real problems.

Hon. Members have already referred to the shared prosperity fund. The north-east currently benefits from EU structural investment funds that are designed to address regional imbalances, receiving £437 million between 2014 and 2020. It is vital that businesses know the size and the terms of the shared prosperity fund as soon as possible. It has been kicked down the road in the years since the initial announcement was made. It is absolutely vital that our businesses know what is coming so they can plan accordingly.

Let me touch on education and skills. As we have heard, the north-east has some excellent universities and further education colleges, including Gateshead College—the outstanding and high-performing college—yet employers still struggle to find workers with the right skills, so we need action to close the skills gap and identify our future skills needs. We must address that in the strategy, and local input—the local power to have a say on skills—is really important when we do that.

The retail sector provides nearly a quarter of the jobs in my constituency. We know that the retail sector, high streets and shopping malls are going through a tough time, so we need a retail strategy. That is one of the weaknesses of the Government’s national industrial strategy. We need a greater emphasis on retail, because it is such a significant part of our economy. We need a proper strategy to deal with the problems on the high street. The Government need look no further than the excellent report on the future of the high street that the Housing, Communities and Local Government Committee produced earlier this year. We must also address the wider problems in retail and issues relating to pay, skills and retail sector workers’ personal development and training, so that they are able to develop, enhance their skills, improve the services they provide and add value to the sector.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

I congratulate the Select Committee on its excellent report. It visited my constituency to see Stockton high street. Will my hon. Friend join me in congratulating the local authority, which is bringing international athletics to the area? International athletes will be running down the widest high street in England, bringing people into our town centre and boosting our local businesses.

Photo of Liz Twist Liz Twist Labour, Blaydon

I am very happy to congratulate Stockton on those innovations—while of course mentioning that Gateshead, which is not to be outdone, has a strong record in international athletics.

The north-east has a rich and proud industrial history, but we need support. Positive steps must be taken to put in place infrastructure. We must recognise and address the particular issues that we face in the north-east.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Department for Business, Energy and Industrial Strategy) (Industrial Strategy) 10:22 am, 5th June 2019

It is a real pleasure and honour to serve under your chairmanship, Mr Betts. I congratulate my constituency neighbour, my hon. Friend Mary Glindon, on securing this important and timely debate. The industrial strategy in the north-east does not receive the attention it deserves, so I am grateful to her for bringing this debate to Westminster Hall and for making such a passionate and comprehensive opening speech. She combined in-depth knowledge of her constituency and region with real lived experience. In that, she was joined by my hon. Friends the Members for Washington and Sunderland West (Mrs Hodgson), for Sedgefield (Phil Wilson), for Blaydon (Liz Twist) and for Stockton North (Alex Cunningham), who all grew up and have lived in the region, and spoke with such knowledge. It is a pity that that knowledge is not reflected by the presence of Government Members from north-east constituencies, but Labour Members have done well and have spoken with in-depth knowledge about our region.

Like other hon. Members, I will talk a little about the past. We are very proud of our industrial heritage. I grew up in Newcastle in the shadow of industrial greats such as Armstrong, Stephenson and Parsons—that, by the way, is Rachel Parsons, the world’s first female naval engineer, who inspired me to become an engineer. I always like to remind colleagues from across the UK that the north-east literally drove the first industrial revolution. There might be some debate about where the first ticket office was—you were wise not to rule on that, Mr Betts, but perhaps we can have a parliamentary inquiry on that important subject—but there is no debate about who invented the railways. George Stephenson built the locomotive in my constituency, and our region mined and built many of the industrial riches that flowed from the first industrial revolution.

Today, as we have heard, manufacturing makes up approximately 15% of the north-east economy, and we have more than 63,000 specialist workers in our successful advanced manufacturing sector. We have a 126,000-strong workforce in wider manufacturing, and an average of 51,000 science, technology, engineering and mathematics students come through our universities every year. We are in the top five UK regions for advanced manufacturing. We have world-class universities and growing strengths in science, digital, energy, healthcare and business.

Years of deindustrialisation, and chronic underinvestment in infrastructure and education have left the north-east with significant economic challenges. No one who lived in the region in the 1980s can forget what forced deindustrialisation did to our region, the economic livelihoods that were lost and the talent and potential that was lost with them. The financialisation of our economy that followed centred on London and the south and meant that thousands of manufacturing jobs in the north-east were lost. As leading economist Mariana Mazzucato has argued, the “two faces” of financialisation are at the heart of capitalism’s fundamental failure. The first is that the financial sector has stopped resourcing the real economy. Instead of investing in companies that produce stuff, finance is financing finance. The second is how financialisation changes the motors behind economic activity, giving investors with short-term interests more control over firms. That disproportionately affects the north-east—a region that still takes pride in making and building things. Its legacy is low productivity and low pay.

As we heard from many of my hon. Friends, Brexit adds more uncertainty. The north-east exports more than it imports, as my hon. Friends the Members for Sedgefield, for Washington and Sunderland West, and for Blaydon highlighted, and more than half of that goes to the European Union. No matter what deal there is, there will be negative economic consequences for our region. A no-deal Brexit would be absolutely catastrophic. I ask the Minister to rule that out personally.

As my hon. Friends emphasised, the north-east received almost £0.5 billion in European structural investment funding in the period 2014 to 2020. As my hon. Friend the Member for Sedgefield said, projections for the next seven years suggest that we would have received up to £1 billion in EU funding, but the Government’s paltry stronger towns fund repackages existing money to the tune of £1 billion for all UK regions. As my hon. Friends said, we have no details about the supposed shared prosperity fund. Labour has committed to matching European Union regional development funding for at least the next decade, so will the Minister take this opportunity to commit to tackling regional inequality by guaranteeing the continuation of the current and projected future levels of regional funding?

At the heart of tackling the challenges that our great region faces needs to be a strong, positive industrial strategy capable of building and rebuilding the economy to meet the needs of the future. Until very recently, the Government were incapable of saying “industrial” and “strategy” in the same sentence, so their acknowledgment of the need for local industrial strategies is a step forward. Unfortunately, we have no evidence that the Government’s industrial strategy is anywhere near sufficient for the north-east’s needs. Their industrial strategy is sectoral, favours sectors that are already well organised and can push to the front of the queue, and focuses on what I, as an engineer, would call “sexy science”. Last year, Sheffield Hallam University researchers found that the Government’s industrial strategy pledges would impact only 10% of our manufacturing base and only 1% of the whole economy.

The north-east’s five universities make a huge contribution to our economy—they contribute £750 million directly, and £1 billion more through other industries—yet the golden triangle of London-Cambridge-Oxford attracts the lion’s share of research funding—more than £17 billion, compared with only £600 million for the north-east—despite the north-east’s many research-intensive universities, such as Newcastle University. Cambridge, with a population of just over a quarter of a million, has as many private research and development jobs as the whole of the north. Does the Minister agree that innovation should deliver high-skilled jobs across our country, and how will he ensure that local industrial strategies from our local enterprise partnerships and the North of Tyne Mayor have the resources that they need to deliver high-skilled and high-productivity jobs?

Labour’s “innovation nation” mission would raise R&D to 3% of GDP, and would democratise science and technology, so that they benefit the whole country, as well as the whole region. It would also be certain to benefit the north-east’s growing tech industry. We need to maintain our current centres of excellence, but we must ensure that every region can benefit from innovation and growth. That is why we are committed to putting technology and innovation at the heart of the lowest-paid and least-productive sectors. My hon. Friends the Members for Blaydon, and for Stockton North, mentioned the importance of retail. We are committed to creating a retail catapult, which will support the 3 million people who work in retail across the UK, making it the UK’s largest private sector employer.

Much of our additional R&D spend would be drawn on by our industrial strategy missions, such as investing in carbon capture and storage, which my hon. Friend the Member for Stockton North also mentioned, as part of our commitment to decarbonise our economy by 2050 and to deliver hundreds of thousands of green jobs in the process. The Government’s refusal to commit to funding a carbon capture and storage facility on Teesside is another example of their unwillingness to invest in the green technologies of the future.

The regional disparity and unique issues that the north-east faces are the reason that we need the £250 billion national investment bank—a network of regional development banks—to which Labour is committed. That would properly put regional needs first and restore regional decision making. Labour’s national education service will address some of the challenges highlighted by my hon. Friends, by delivering education, free at the point of demand, from cradle to grave, and ensuring that we have the skills that our regional businesses need.

As my hon. Friends also highlighted, improving infrastructure is critical to raising productivity. Under the Tories, infrastructure spending in the north-east is five times lower than in London, which is why Labour’s £250 billion national transformation fund would invest in our transport and digital infrastructure. We have already committed to a £1.4 billion investment in north-east transport, which would renew rolling stock on the Metro and build a Crossrail for the north. Would the Minister like to do the same?

Labour would also establish a new materials and metals catapult centre on Teesside—that is supported by UK Steel, the Federation of Small Businesses and the Confederation of British Industry—to help secure the future of UK steel by encouraging innovation in the materials industry. Will the Minister secure the future of UK steel with a commitment to support it?

As we have heard, the north-east is a fantastic region that offers a quality of life that is second to none, with sun, surf, castles, coasts, rolling landscapes, history—including the Romans—excellent local produce and excellent industry. We need a real industrial strategy to support the north-east, realise its potential and deliver an economy that ensures prosperity for everyone across our region. Labour’s industrial strategy is positive, practical and visionary enough to know the future that we want, while focusing on addressing our present challenges in productivity, skills and wages. Will the Minister commit to doing the same?

Photo of Andrew Stephenson Andrew Stephenson Assistant Whip, Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy) 10:35 am, 5th June 2019

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate Mary Glindon on securing the debate. I thank hon. Members, who have given very considered and generally good-natured speeches.

I will now start to get controversial. My father was born in Shildon, County Durham, which is of course the home of the railways, and I still have family living in Wylam, Northumberland, which is the birthplace of George Stephenson, the father of the railways. He did much of his pioneering work in Killingworth, in the constituency of the hon. Member for North Tyneside. I am delighted that his work was mentioned by Phil Wilson, but I will not pass judgment on where the first ticket office was. Sadly, even though I am Andrew George Stephenson and my family descend from that part of the world, I cannot claim to be a descendant of the great man, because George Stephenson had only one son, Robert, who had no children. If we look far back enough, though, who knows?

My father’s first job in the north-east was for British Rail in Shildon, before he moved permanently to Manchester, where he worked in the aerospace sector for Avro, the famed manufacturer of the Lancaster and Vulcan bombers. I know that the pride my family felt at working in vital industries across the north-east of England is still deeply felt by people in the region today.

Our industrial strategy is about ensuring that that heritage of excellence is translated into future success and prosperity. We want to grow productivity and prosperity across all parts of the country, so that whenever young people decide to leave a place such as Shildon for opportunities elsewhere in the country, they do it through choice and not because they feel forced out by a lack of chances closer to home.

As we have heard, the north-east has a proud tradition of innovation, creativity and technical skills. We know that from the histories of railways, mining, shipbuilding and electronics, as well as from today’s leading businesses in the region, such as the cutting-edge offshore energy companies that have moved into the region’s old shipbuilding areas and one of the world’s most productive automotive clusters, based around Nissan. The industrial strategy is about taking that existing strength and blending it with the future-facing technologies and skills that emerge from our knowledge-intensive centres, such as those at Newcastle’s £350 million Helix site, Sunderland’s Software City or Durham’s NETPark.

The industrial strategy focuses on strengthening the foundations of productivity: skilled people, thriving places, ideas, innovation and support for the business environment. The industrial strategy is also about taking on the grand challenges of clean growth, the future of mobility, our ageing society, and artificial intelligence and data. Those are society-changing opportunities and industries of the future in which the UK can build on its strengths and truly lead the world.

Since the publication of the industrial strategy, we have made significant progress across the country. We have committed to the biggest ever increase in R&D, an extra £7 billion by 2021-22, which includes the £1.7 billion that we have already allocated to innovative programmes to support industries and researchers through the first two waves of the industrial strategy challenge fund.

The first wave of the strength in places fund, which supports industrial strategy with a place-based approach to research and innovation, has awarded seedcorn support to two north-east projects to enable them to develop full bids this year: the Centre of Excellence for Sustainable Advanced Manufacturing, led by the University of Sunderland; and the north-east cluster for healthy ageing and independent living, led by Newcastle University. In the neighbouring Tees Valley, strength in places support has been awarded to a project to establish the UK hydrogen corridor, which aims to reduce carbon usage dramatically by producing, using and storing hydrogen energy.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

Any investment in the north-east is great news, in particular if it encourages innovation, but does the Minister also recognise that we need to support our existing industries? British Steel is a particularly important one at this time. As I asked in my remarks, will he update us on his understanding of the progress being made in that area?

Photo of Andrew Stephenson Andrew Stephenson Assistant Whip, Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Certainly. I am grateful to the hon. Gentleman for raising the issue of British Steel. Since I was appointed, it has probably been the one thing that has taken up more of my time than anything else. The one point of contention in what he said was his suggestion that the Government were standing on the sidelines as British Steel went into liquidation, waiting for the receiver to act.

The hon. Gentleman was in the main Chamber when I answered an urgent question by saying that no stone was being left unturned. At that point, I think that the Department was up to 87 meetings about British Steel. The £120 million bridging loan that we extended to the company earlier in the year showed the Secretary of State’s willingness to think innovatively and to act with regard to British Steel. We considered all sorts of proposals made by the company but, unfortunately, none of them proved compliant with state aid rules—we took legal opinion on that—so the company went into liquidation.

The Government acted immediately by providing the liquidator with an indemnity for the cost of keeping the site running, so that the blast furnaces could be kept running and we would end up with British Steel in the best possible situation to be sold as a going concern. The very next day after the Secretary of State made his statement to the House about the unfortunate news of the liquidation, he and I went up to Scunthorpe to meet trade union representatives and other people on the site to discuss how to work together to ensure that it can be sold as a going concern. I remain hopeful that that will be the case, and I will continue to leave no stone unturned, working with the trade unions, the workers and others on site to ensure that it is sold as a going concern.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

I might have been a little unkind to the Minister—that is a hell of a lot of meetings—but talking does not get us far when real funding is needed. If this integrated part of the steel industry cannot be sold as a going concern, just as we nationalised the banks, will the Minister consider nationalising part of the steel industry, even on a temporary basis, to ensure that we do not lose this critical foundation industry?

Photo of Andrew Stephenson Andrew Stephenson Assistant Whip, Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I think that I am correct in saying that the Secretary of State has not ruled that option out. However, the thing to bear in mind about nationalisation is that, even if British Steel were nationalised, the same state aid rules apply: the company has to be run on a commercial basis in order to be compliant with those rules. Therefore, nationalisation is not a simple solution; it might be the solution, but it is not an easy option.

Lots of steel companies in the UK and across Europe are doing great work, and I hope that we can find an experienced company in the sector that wants to invest in British Steel. If we look at the steel sector pipeline—orders and infrastructure projects across the UK, such as Hinkley Point, High Speed 2 and various other big projects—there is sizeable domestic demand for products made by British Steel. I think that the company has a strong future. I am therefore very hopeful that over the coming weeks and months we will find a good buyer who will want to invest in the site and, most importantly, its workers who have such skills and knowledge of the industry, to ensure the future of steelmaking in that part of this country.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Department for Business, Energy and Industrial Strategy) (Industrial Strategy)

I thank the Minister for responding to questions about the key strategic asset of British Steel and of that capability. He cited state aid rules as a crucial concern in providing the right level of financial and other support. Does he agree that different countries interpret state aid rules in different ways? Other countries within the European Union have been, shall we say, far more innovative, creative and supportive with their strategic industrial capacities, despite the same state aid rules environment. Will he commit to publishing parts of the legal advice on the possible infringement of state aid, so that we can see whether there is a way to provide British Steel with the support it requires within the European Union and, indeed, World Trade Organisation state aid rules, which other countries do manage to achieve?

Photo of Andrew Stephenson Andrew Stephenson Assistant Whip, Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The shadow Minister makes a valid point about the interpretation of state aid rules. The challenge of the rules in relation to the steel sector is that they are particularly rigid. A lot of the global overcapacity was created by illegal subsidies around the world for domestic steel producers.

We received legal advice from within the Department and, on the Secretary of State’s instruction, we sought a second opinion, because we wanted to ensure that there was definitely nothing more that we could do. The accounting officer’s advice has, I believe, been laid in the Libraries of both Houses, so it is available to all hon. Members who wish to see it. I hope that it sets out how the Government looked at the issue in a detailed way.

The reason I mentioned the 87 meetings is that we were meeting morning, evening and night about it, in order to find a way through. The Secretary of State, whom I have the pleasure of working with and serving under, has a real commitment to the north-east. Originally, he is from that part of the world, and he really wants the British Steel site to remain a going concern. Through the number of meetings he has had, the £120 million bridging facility provided to the industry and other things, he clearly demonstrates a commitment to finding a way through, but it has to be legal and compliant with both UK domestic law and EU law. I look forward to continuing to work with him, hon. Members in all parts of the House, trade unions and others to ensure a future for British Steel.

Returning to research and development spending, we have committed record investment in UK infrastructure: £37 billion has been committed through the national productivity investment fund, including £2.5 billion for the transforming cities fund to improve transport, £5.5 billion for the housing infrastructure fund and £740 million for digital infrastructure. That infrastructure investment has been of direct relevance to the north-east of England. In March, the Government announced that £10 million from the first tranche of the transforming cities fund will be allocated to the north-east, and £35.9 million of housing infrastructure funding has been allocated to the region.

Aside from that national work, all places will produce local industrial strategies, setting out how the quest for prosperity will come to life in our cities, towns and rural areas. The first local industrial strategy was published on 16 May in the west midlands. I was delighted to join local councillors and others in Coventry to launch that strategy. The north-east and the Tees Valley areas are both in the second wave of places to produce their own local industrial strategies in collaboration with Government. In the area of the hon. Member for North Tyneside, that work is led by the North East local enterprise partnership, which has a strong history of evidence-based delivery and is well placed to develop a powerful and distinctive local industrial strategy for the region. So far, a number of critical local drivers have been identified to improve productivity in the north-east: from the need to grow small businesses and to improve start-up rates, to improving the skills base of the local workforce.

The north-east boasts a cutting-edge technological and knowledge economy, based on its four leading universities and its fast-growing digital and tech sectors. On the doorstep are tremendous opportunities in east coast offshore energy, as well as deep expertise in advanced manufacturing. I am particularly interested in the contribution that the area could make to the ageing society grand challenge, which was cited by Mrs Hodgson. The north-east is home to the £40 million National Innovation Centre for Ageing, which reflects Newcastle University’s longstanding leadership in that field. There is a powerful story to tell about how the north-east, with its large rural area and expertise of the transition away from heavy industry, is ideally placed to lead the response to this national and global challenge.

The north-east local industrial strategy will be empowered by the recent North of Tyne devolution deal, which covers three north-east authorities: Newcastle, Northumberland and the home authority of the hon. Member for North Tyneside. I congratulate the three councils on their successful pursuit of devolution, and Jamie Driscoll for his recent election as the first North of Tyne Mayor. The Government have a strong track record of working with the elected mayors, including Ben Houchen in Tees Valley. Alongside specific powers such as control over the adult education budget, the deal includes a total investment fund of £600 million over 30 years, to be used by the area to pursue its local growth goals. Local estimates are that the investment will generate £1.1 billion for the local economy and create 10,000 new jobs.

The north-east local industrial strategy will build on a strong track record of investment in the wider North East local enterprise partnership area. Over the three rounds of the local growth fund, £379.6 million will be invested in the North East LEP area. That includes £1 million for the Ignite centre for engineering and innovation in North Tyneside. I look forward to visiting the north-east and Tees Valley—shortly I will visit the Centre for Process Innovation, which has bases in both areas. That centre has a strong record of collaboration with Government, including a £38 million grant from UK Research and Innovation to establish a national biologics industry innovation centre in Darlington.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

I am sure we will welcome the Minister when he comes to the Tees Valley. Will he bring some good news on carbon capture, use and storage?

Photo of Andrew Stephenson Andrew Stephenson Assistant Whip, Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I am very keen to see the UK move forward with carbon capture, use and storage. The hon. Gentleman will be aware of the report by the Committee on Climate Change, which suggested that we could move towards a target of net zero in the same cost envelope as our current target. It says that carbon capture and storage has to be part of the mix. That will accelerate what the Government are doing in this area. I will certainly pass on remarks from today’s debate to the Minister for Energy and Climate Change, as I am sure she will want to focus on this area. When I am in the region, I will be keen to see some of the work in the renewables sector, and I will also pay close attention to carbon capture, use and storage now that the hon. Gentleman has raised it.

I will visit the CPI’s Redcar centre to discuss its achievements and ambitions and the development of the industrial strategy. I look forward to attending the northern powerhouse SME roadshow in June, to discuss investment opportunities and links to the industrial strategy across the whole of the north. Through local partnerships with Government and the impact of national investments, we expect the north-east and Tees Valley to play a full part in the industrial strategy agenda.

I was pleased to hear a number of hon. Members support various Highways England projects in the region, including Silverlink and improvements to the A19. I take on board the point made by the hon. Member for North Tyneside about power lines; she has raised that point on numerous occasions and has met my ministerial colleague about this issue, who wrote to Ofgem about it, and we are looking at possible ways forward. I am sure we will continue to push the point, and I assure her that her remarks today have not gone unnoticed.

Members rightly raised the importance of the east coast main line. At the Cabinet meeting in Newcastle in July 2018, a £780 million investment in the east coast main line was announced, which hopefully will mean faster journey times and more frequent services. That builds on the £337 million that was announced to upgrade local transport through a new fleet on the Tyne and Wear metro.

I strongly agree with the comments by the hon. Member for Washington and Sunderland West about the importance of Nissan and its huge strength in battery technology. I agree that the company is incredibly well placed to benefit from schemes such as the Government’s £246 million Faraday battery challenge, which is supporting the development of new battery technology in a market that will be worth £5 billion to the UK by 2025.

As the Minister responsible for the automotive sector, I recognise that the sector will go through more change in the next 10 years than it has in the last 100. We need to work closely with car manufacturers based in the UK to help them with that transition and to ensure that they decide this is the best country in the world in which to invest in new, cleaner modes of transport.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Department for Business, Energy and Industrial Strategy) (Industrial Strategy)

The Minister speaks about the importance of battery technology, and Nissan’s strength in particular, but does he recognise that while the five-year fund supports investment in battery technology, it does not support investment in battery manufacturing? In this country we need a battery manufacturing base, so that batteries are not simply imported. Will he speak to that? I also hope he will not forget to respond to the concerns about a replacement for European regional development and structural investment funds.

Photo of Andrew Stephenson Andrew Stephenson Assistant Whip, Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The shadow Minister is correct; that is one of the reasons that we have the industrial strategy challenge fund. I mentioned my being in Coventry to launch the west midlands local industrial strategy, which was the first to be launched. On that day, I was delighted to visit the UK Battery Industrialisation Centre and to announce a further £28 million for that facility, which will be about production. It will take technologies being developed in places such as the Advanced Propulsion Centre and see how to produce batteries here in the UK. Some existing companies that have already done incredible work, such as Nissan, have the potential to bid for some of the Government funds that are already available, as well as future funds. That is fundamental because of the number of petrol engines we produce in the UK: to keep the UK as an automotive hub, we need to ensure that companies across the board invest in battery technology and production in the UK.

Questions have been asked about the £675 million high streets fund, the £1.6 billion stronger towns fund and the UK shared prosperity fund. More details of all those funds will be published in due course. They show the Government’s commitment to addressing the challenges raised by Members today. We need to invest more in renewable technologies, as was raised by several Members. The offshore wind sector deal is a great example of that. The Government’s commitment to the sector is underlined by the £92 billion of public and private investment in renewables since 2010. We have just finished an 18-day coal-free run in our power supply.

Lots has been done, but there is lots more to do, and lots of great ideas have been suggested today. I look forward to working with all Members who spoke in the debate and to visiting their constituencies and some of the projects they talked about.

Photo of Mary Glindon Mary Glindon Shadow Minister (Environment, Food and Rural Affairs) (Farming and Rural Communities) 10:58 am, 5th June 2019

I neglected to congratulate the Minister on his appointment. We are all pleased to hear that he has roots in the north-east and a personal knowledge of it, and we will call on that—he has dropped himself right in it.

I hope that the issues about British steel, which have been stressed over and again, will be carried forward because they are so important. Will the Minister take on board and pass on the message that a no-deal Brexit is no good for the north-east in any shape or form? It would be catastrophic.

Members in the debate have shown the pride of the north-east today. We want an industrial strategy that works for everyone—as the Minister said, to get prosperity in every region so nobody misses out and everyone can flourish in the north-east through a good industrial strategy. We will push the Minister as we move towards the publication of our industrial strategy. Thanks again to everyone who has participated in this debate and to you, Mr Betts.

Question put and agreed to.

Resolved,

That this House
has considered industrial strategy in the North East of England.