Northern England: Opportunity and Productivity

Lord Young of Cookham Excerpts

Thursday 12th January 2017 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, the publication of the IPPR’s annual State of the North report has given us the raw material for a debate on the state of the north, and the noble Baroness, Lady Massey, has provided us with the opportunity. I am grateful to her for her opening contribution, particularly her focus on the way that social mobility has changed over generations. I thank her for setting the scene for the debate, and all noble Lords who have contributed. Having sat through the debate for nearly two and a half hours, I have to say that there is very little with which I disagreed. Indeed, as somebody who for 41 years in another place represented constituencies in London and then Hampshire, I felt a growing sense of guilt at the apparent preferential treatment that my constituents had received for such a long time, compared with those in the north. I hope to try to reassure the House that the Government are determined to see a fair distribution of resources.

The noble Baroness, Lady Massey, quoted from the summary of the IPPR report, as did other noble Lords. It is worth quoting one sentence:

“All this, however, presents new opportunities”.

Maximising the full potential of the economy of the north, which has in many ways lagged behind that of London and the south-east, is vital. The noble Lord, Lord Bragg, in a speech that could have come out of “Henry V”, exhorted us to raise our sights and unlock the potential of the north. As the most reverend Primate the Archbishop of York said, it is important for those who live and work there that we should do this. I found what he said about the human resilience of those who live in the north very moving. It is in the interests of not just the north but the whole of the UK that we should unlock the potential. The point made by the noble Lord, Lord Curry, about the contribution to the balance of payments is well worth making—the fact that there is a major contribution to the balance of payments, which at the moment is in deficit. We should do all we can to unlock that potential.

Noble Lords made many helpful suggestions in the debate about how we can raise our productivity and bring about a sustained rise in wealth, prosperity and opportunity. I hope to respond to as many points as I can in the time available, but where I cannot, I will write to noble Lords and deal with their issues. We have debated this issue a number of times in this Chamber. We had an exchange at Questions on Tuesday. The IPPR report helps us make further progress and I am glad it found favour in the eyes of my noble friend Lord Cavendish, who reminded us of the importance of small and medium-sized enterprises. Along with the noble Lord, Lord Liddle, he made a plea for a reform of governance in Cumbria. I will certainly pass those comments on to the Secretary of State at DCLG. The question of whether Cumbria is going to get the importance it deserves may be answered in the forthcoming by-election up in Copeland, which may focus the minds of all political parties on making sure that that part of the world gets a square deal, but that is beyond my brief.

We are determined to take action to support and strengthen local economies across the north. As noble Lords will be aware, that was an aim pursued with unwavering enthusiasm and dedication by my noble friend Lord O’Neill of Gatley in his work at the Treasury, and I pay tribute to his contribution. In response to the point made by the noble Lord, Lord Monks, I reassure him that colleagues in government will continue to work to realise my noble friend’s vision for a true northern powerhouse—one with a vibrant, resilient and growing economy; a flourishing private sector; modern and efficient transport links; and a more highly skilled population—and to do so, as we move to leave the European Union, with a negotiated outcome that works for all parts of the United Kingdom and shows the world that we are open for business. I hope to say something later about the very forceful points that were made about a voice for the north. The noble Lord, Lord Shipley, reminded us of the importance of the single market and produced a six-point plan, to which he will get a six-point letter in due course.

Reading the IPPR report, I was struck by some of the deeply ingrained challenges that we are trying to overcome; in particular, the productivity gap, which has been the case for decades now and, indeed, was picked out for mention in the Motion before us. Currently, productivity in the north is 13% lower than the UK average and 25% lower than in the south. Clearly, there is a complex range of factors behind that, many of which noble Lords have highlighted previously and did so again today. I will pick up three.

First, connectivity remains a challenge for many people and businesses. To give just one example, congestion on the M62 means that it can take more than two hours to travel the 40 miles between Manchester and Leeds. That is not only frustrating for local people but a barrier to local businesses and the jobs and growth they can bring, and potentially a deterrent to inward investment. I take the point made by the right reverend Prelate the Bishop of Leeds that connectivity is not just linear. What we need is a spider’s web, rather than a telephone wire, to reach out to the communities that are not directly on the main roads or railway lines. I will write to the noble Lord, Lord Alton, about the stations he would like to see reopened. As a former Secretary of State for Transport, I share that enthusiasm.

Secondly, skills have consistently lagged behind the south at all levels. The north has a higher proportion of people with no qualifications than the UK average and a lower proportion of graduates. I will certainly pursue the suggestion made by the noble Lord, Lord Sawyer, about the role of vice-chancellors in making progress in this area.

Thirdly, it is still more difficult to set up and grow a business in the north compared with the south. Connected to that, we find a lower level of entrepreneurialism in this region, although in saying that I take nothing away from all the dynamic and resilient businesses that exist in the north, some of which were referred to in the debate. We were reminded by the noble Lord, Lord Mawson, and others of the history of the great entrepreneurs of the north, particularly those in Bradford.

The IPPR report identifies some excellent examples of successful local economies but, in short, there remain clear areas for improvement, which were highlighted in the debate. The northern powerhouse strategy we published at the Autumn Statement seeks to address these underlying challenges. In saying that, of course I recognise that there are other issues that we need to address—the noble Baroness, Lady Massey, mentioned housing—that are not touched on in the report. We know that lasting changes will not happen overnight, but already we are making substantial progress, as the report acknowledges.

There are signs that our hard work is beginning to pay off. Foreign investors are responding. In 2015-16 the north of England saw inward investment projects increase by nearly a quarter from the previous year, faster than the UK average. In October, the French rail builder Alstom confirmed that it will build a £20 million technology centre in Liverpool, creating up to 600 jobs. In the three months to October 2016, the north saw a record number of people in work—more than 7 million people—and an employment rate of 72.5%, close to its record high. The noble Lord, Lord Liddle, and others mentioned other successful business that either have been established or are growing.

I shall summarise briefly some of the action that we have been taking to support that success, starting with our work to improve the transport networks that businesses and hard-working commuters rely on every day. We are investing £13 billion in transport in the north over the course of this Parliament. Already we have started to take forward important improvements such as upgrading the A1 in North Yorkshire to motorway standard, upgrading the trans-Pennine rail route to take nearly 10 minutes off journey times between Manchester and Leeds and establishing Transport for the North, to which the noble Lord, Lord Prescott, referred. Last night I was reading his intervention in what I think was one of the first debates of this Parliament when he spoke about his work on the Northern Way. I pay tribute to what he did when he was in government to improve infrastructure in the north.

At the recent Autumn Statement we went further, committing to upgrade the A66 to a dual carriageway across the Pennines and to make major improvements to Manchester’s M60 ring road to ease congestion. The noble Lord, Lord Liddle, asked about Cumbria’s coastal railway. The new rail franchise for the northern and trans-Pennine express networks will deliver altogether more than 500 new railway carriages and 2,000 extra services each week. This franchise includes the Cumbrian Coast line to which he referred. Improving connectivity is vital to unleash the north’s economic potential so that the whole can be greater than the sum of its component parts.

As my noble friend Lady Eaton said, better transport links make it easier for people to find jobs, for firms to find workers and for ideas to be shared and developed. That is not just the case domestically within the UK, but in terms of international links as well. In my time as Secretary of State for Transport, one of the things that I took forward was giving the go-ahead to a second runway at Manchester Airport, which is now the UK’s third busiest airport—the busiest outside the south-east.

Skills was a theme that ran through our debate, mentioned by the noble Lord, Lord Beith, the noble Baroness, Lady Pinnock, and others. We have been working to ensure that people have the right skill sets for their chosen career. We have welcomed the findings of Sir Nick Weller’s report into schools performance in the north and committed £70 million to improve outcomes in northern schools. We continue to explore how we can improve everything from careers advice to high quality apprenticeships and world-class teaching. There is more that I would like to say, but time precludes it. However, to respond to the noble Baroness, Lady Warwick, who asked if the Government would consider housing products for the graduate market, in the Northern Powerhouse Strategy we have committed to work with the northern city regions and other local stakeholders to develop innovative proposals for attracting skilled workers. We are funding groundbreaking projects to develop the north’s strengths in science, the arts and sport, including providing £235 million to the Sir Henry Royce Institute for Advanced Materials.

I turn briefly to our responses to the IPPR report. As I have said, a lot of activity is already taking place. The report makes three suggestions as to how we can go further. The Government will work to get the best possible deal for all parts of the United Kingdom as we leave the EU, engaging with businesses up and down the country and continuing to back northern trade. Listening to this debate, I was struck by the number of representations about the potential relative disadvantage of the north in accessing the decision-makers. Without going beyond my brief, that is certainly a point of which my colleagues in government should be aware, given the strength of feeling that has been expressed throughout this debate. That is one of the most important lessons that I have learned.

Our industrial strategy will represent a comprehensive plan for the success of British businesses across all sectors and places, positioning the UK for long-term, sustainable growth as we move towards exiting the EU. A consultation paper will be published shortly.

[Lord Prescott]

Will the Minister explain the difference between—as pointed out in the report—a place growth strategy and the other critical northern house which tends to get debated? Is it the Humber?

[Lord Young of Cookham]

I hope the document on industrial strategy to which I have just referred will shed some light on the important issue that the noble Lord has raised. I hope he will excuse me if I move to my final comments. I am conscious that I have not dealt with a whole range of issues about devolution to local government, about local enterprise partnerships, about employment and wages and about those museums—to which I have an answer that will now have to be converted into a letter.

We are determined to keep up our relentless drive further to enable the sustainable economic success of the north. We are taking action on a number of fronts to tackle the deep-seated structural issues that have held back the economic prosperity of the north for too long. There is more to do. To continue our progress, we will keep working hand in hand with those who know best: local businesses, authorities and other organisations. Together, we can keep seizing the opportunities for growth that benefit not only businesses and individuals in the north, but the UK economy as a whole.

Housing and Planning Bill

Lord Young of Cookham Excerpts

Monday 25th April 2016 Lords Chamber

Moved by

[Lord Young of Cookham]

138B: Clause 192, page 101, line 15, at end insert—
“( ) section (Tenants’ associations: power to request information about tenants);”

Bank of England and Financial Services Bill [HL]

Lord Young of Cookham Excerpts

Tuesday 15th December 2015 Lords Chamber

[Lord Bichard (CB)]

My Lords, in declaring my interest as chairman of the National Audit Office Board I hope that I will not be precluded on this occasion from thanking the Minister for bringing forward the amendments to Clause 11, which I am happy to support. In large part, the amendments deal with the concerns which the NAO had with the original draft, in particular by deleting the Bank’s power of veto over NAO value-for-money studies. As a result, these amendments protect the independence of the NAO and necessarily enhance the accountability of the Bank. I am grateful to the noble Lord and Members across the House who have helped to achieve a very happy outcome.

[Lord Young of Cookham (Con)]

My Lords, I also welcome the progress that my noble friend has made since we discussed this matter on 9 November, when concern was expressed that we had not got the interface between these two independent institutions in the right place. I was delighted to hear that peace has broken out between these two institutions. My noble friend said that the memorandum of understanding would be published in due course. My noble friend Lord Higgins pressed him a little further. Will it be available during the passage of the Bill, which started in this House and will go to another place, because I am sure that it would be of interest? Finally, does one really need proposed new paragraph (d) in Amendment 9 in the memorandum of understanding? If under proposed new paragraph (c) a procedure has been established,

“for resolving in a timely fashion any dispute”,

why does one need paragraph (d), which asks for a procedure where the dispute has not been resolved?

[Baroness Kramer]

My Lords, I will not detain the House very long. The National Audit Office and the Bank of England are crucial institutions. It is absolutely necessary that both are not only independent but perceived to be independent. In earlier stages of this Bill, we asked that those two organisations should be brought together to come to a common understanding and agreement of how we could go forward. That has been achieved and, with that, we are pleased that “peace has broken out”—to quote what has just been said. It was essential that that should be done and I congratulate the Minister on the role that he played in this.

Bank of England and Financial Services Bill [HL]

Lord Young of Cookham Excerpts

Monday 9th November 2015 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I will make a brief intervention in this debate as a former Treasury Minister and ex officio member of the PAC. As we have heard, Clause 11 sets up a new interface between two public institutions, both of which are independent: on the one hand the Bank of England, independent since 1997, and on the other the Comptroller and Auditor-General, who has been independent for a lot longer. In establishing this new interface, clearly one has to get the balance right.

From the exchange before the Treasury Select Committee last month, it is quite clear that the original drafting caused difficulties for the Bank of England and was amended. If one looks at Mr Roxburgh’s answer to a question posed by Helen Goodman, it is clear that there was an agreement that there had been a change in the drafting because of the reservations of the Bank of England. However, it is quite clear that the clause as now drafted causes difficulties for the other partner, namely the Comptroller and Auditor-General. The briefing note says that it “greatly limits” the Comptroller and Auditor-General’s freedom of action and that it does not provide him with,

“the independence that is essential to accountability”.

If one looks back at the C&AG, there is no history of him looking at policy issues in his investigations. There is of course concern that if the Bank of England is given an exemption of this nature, other institutions subject to audit by the C&AG might seek a similar exemption—the BBC is a possible example. At Second Reading my noble friend who wound up the debate said that the concerns that were ventilated then were,

“well argued and should be taken very seriously”.—[Official Report, 26/10/15; col. 1082.]

Obviously, it is important to avoid a public spat between two important independent institutions. The sensible way forward is for the Minister to promote bilateral discussions between the NAO and the Bank of England to see if they can come up with a memorandum of understanding, which, if necessary, might then be incorporated into the Bill if an amendment is necessary. However, there should be some discussions before Report so that there can be an agreement on the appropriate terms of trade between these two public bodies.

[Baroness Kramer]

My Lords, I will briefly join in the debate. We have two very highly regarded independent organisations—the Bank of England and the NAO. I say to the Government that it is unfortunate that legislation has come forward without resolving the relationship between the two of them. This House should not be in this position today, and neither should either of those two institutions. I very much hope that the Government will take the advice proffered and bring these various parties together to get a resolution here. Both are key institutions that need to have their independence appropriately protected.

In answer to the question asked by the noble Lord, Lord Higgins, the two lines about which he was concerned a moment ago, which are taken out and replaced by what he read as almost two identical lines, almost get to the crux of this matter. The amendment strengthens that assurance that the NAO and the Comptroller and Auditor-General do not in any way seek to question the merits of policy objectives. It is trying to make that absolutely clear by putting in a stronger statement to that extent. The problem the NAO has, as the noble Lord, Lord McFall, said, is that due to the way in which the language is now drafted, the Bank effectively now has a veto over which studies are undertaken. Frankly, that is, I think, unacceptable to every party.

We in Parliament depend very much on the NAO and the reports it provides to us. It is very important for us to be able to receive that information, knowing that it is impartial and independent, for us to be able to perform the role we play. All the discussions today have talked of the importance of oversight. While we very much respect the Bank of England, we are all incredibly conscious that it has made very serious mistakes in the past which have cost us dear, and that we all need to play a role in interacting and making sure that we understand and are appropriately taking on our responsibilities toward that institution. Frankly, it is very hard to see how we in this House or in the other place can do that without effective reporting from the NAO.

I hope that the Government will take this matter away for reconsideration because these are significant concerns. I take great heart in hearing from the noble Lord, Lord McFall, that the Federal Reserve board in the United States is one of the bodies on this globe that most asserts its independence and integrity. The Federal Reserve accepts a similar kind of oversight from the US Government Accountability Office, and it seems to me that we have a template there. If it works for the Federal Reserve, surely it can work for the Bank of England.

I hope that these amendments will be taken exceedingly seriously. While the noble Lord, Lord Bichard, is not in a position to speak himself, there are many in this House, including the noble Lord, Lord Higgins, and the noble Baroness, Lady Noakes, who will be able to appreciate the importance of the points that he would have made had he had the opportunity.