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You can't run the north east out of London

June 7, 2019 11:51 AM

Lord Shipley - BrexitJohn Shipley spoke in the House of Lords about people and places, and the need for stronger devolution to the regions.

A few years ago, I had the privilege of leading Newcastle City Council, and I remember being asked in an interview what I worried about most as council leader. I think the expectation was that I would reply, "Keeping council tax down", or perhaps, "Getting re-elected", but I actually said that I worried most about the next generation of jobs-what they would be, where they would come from, whether there be enough to generate full employment, whether they would be good jobs and whether they would offer career progression to encourage graduates to stay in the city. I worried about that then and I still do, because I lived through the 1970s and the 1980s with the huge loss of jobs in mining, iron and steel, chemicals, shipbuilding and manufacturing.

Thanks to the automotive industry, the growth of services and the major achievement of our local universities in attracting students and some cutting-edge research, employment in my region-as elsewhere-is very high. But too many jobs are low-paid and insecure, with too many employees stuck in jobs that they do not enjoy and without opportunities for career progression. It is not just about employment rates, as the Taylor review demonstrated.

Today, job losses have been announced or forecast: by Aviva, of 1,800; by BT, amounting to 13,000; and by Ford, of 1,700 at Bridgend. Job losses are pending in the steel industry, and it was recently reported that car production has dropped 44% between April 2018 and April 2019. Foreign direct investment is down, and investment generally is below its pre-referendum level. These trends are worrying in the context of our debate about Brexit.

I mentioned BT. Today, site closures have been announced by BT of 270 sites-the company is moving from 300 sites to 30-with a loss of 13,000 jobs. BT has identified eight key future locations in Belfast, Birmingham, Bristol, Cardiff, Edinburgh, Ipswich, London and Manchester. It is reported in the Times this morning that BT claims these places demonstrate its commitment to the whole country, but it has missed out Yorkshire, the east Midlands and the north-east of England. In the north-east, over 6,000 jobs are at stake in the absence of any information on the remaining sites-none of which will be key sites with the implication of good jobs going there. This means that no BT key site is planned anywhere on the eastern side of England between the Scottish border and London, other than Ipswich. I ask the Minister specifically what discussions Her Majesty's Government have had with BT and what impact assessments have been done, by anyone, on communities that may see large-scale job losses proposed.

In that context, I draw attention to two recent reports. The first is by the Institute for Fiscal Studies, which asked whether inequality was killing capitalism. It is a complex question, but there are signs that suggest it may be. The trickle-down effect to poorer people and places has proved largely ineffective. We used to be one of the most equal societies in the world, but we have moved to being one of the most unequal.

The second report was published a few days ago by the UK2070 Commission on regional inequality, which he chaired. It forecasts that half of all new jobs will go to London and the south-east. To tackle regional inequality, the commission proposes: four new super-regional economic development agencies; a spatial plan to guide the future development of the whole of the UK; action to harness new technologies and strengthen local economies; and, crucially, a national renewal fund that would rebalance the economy over a 25-year period. I find all those recommendations very positive; they would reduce pressures on the south-east and rebalance wealth. At present, in London the UK has the richest region in northern Europe. That helps the rest of the UK financially, but we also have six of the 10 poorest regions, making the UK the continent's most geographically unbalanced economy.

I am arguing not that the Government should do the job of the private sector but that they should create the conditions to address spatial inequalities through their leadership and intervention, as occurs elsewhere in Europe. If this debate were taking place in Edinburgh, it would be about the third spatial strategy in Scotland. England does not have one at all. Perhaps the Minister could explain why the Government leave so much to the market in England.

In 2017, the Government rightly committed themselves to the industrial strategy, saying that they wanted:

"An economy and labour market which works for everyone".

I concur with that, but you cannot simply run England out of London-it is too big. Devolution within England to date is half-baked, with nothing like the powers available to Wales and Scotland. We have local enterprise partnerships that are underpowered, Whitehall departments that are unco-ordinated at a regional level and only one local industrial strategy, published recently in the West Midlands. We need national and local industrial strategies, national and local spatial strategies and a private sector that understands its duties and obligations to specific communities when it restructures.