Regional Economic Performance and Imbalances

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Several hon. Members rose—

The Chairman: Order. I have no wish to limit speeches, but if everyone continues for as long as the right hon. Member for Berwick-upon-Tweed (Mr. Beith), not everyone will get in.

2.48 pm

Mr. Lawrie Quinn (Scarborough and Whitby): I shall try to restrict myself to no more than five minutes to give other hon. Members the opportunity to participate as fully as possible.

I have a background in engineering and, when I made my maiden speech on first entering Parliament, I talked about landslides and problems with failure. My experience as a professional engineer taught me that one should take as proactive an approach to the economy as one would take, say, to a major piece of earthworks. If one maintains and tends the feature properly, the garden will flourish and one will have a successful crop. If one does not tend and maintain the garden or have a proactive approach to it, one faces a harvest failure.

The policy of regionalism is similar to that problem. Last week, I received a phone call from a major private employer in my constituency. A large factory was closing and one in 20 of the work force would face redundancy—a bleak prospect. Without the help of the Department of Trade and Industry, the Department of the Environment, Transport and the Regions and all the good forces that the Government have put in place, the ambulance would not have come to that awful, bloody accident that, potentially, could cripple the people of Scarborough and Whitby. I refer to the closure of the Plaxton bus factory.

It is vital that we grab this agenda in the next Parliament. We must take it and score a try—a reference that my hon. Friend the Member for Sittingbourne and Sheppey (Mr. Wyatt) will appreciate from his rugby days. We need to score for our regions and ensure that our communities participate fully.

I should like to mention the areas of economic activity in my constituency. Scarborough is known for tourism, of which there are two types: coastal and rural. I commend the excellent work carried out by my hon. Friend the Minister in recognising the inequalities in the coastal communities around the country. Without that intervention, my constituency and other coastal constituencies would not have received the assistance that they have over the past four years. We would be facing a bleaker future had a proactive approach not been taken.

Rural tourism in my constituency involves a national park. I want to associate myself with the comments of the right hon. Member for Berwick-upon-Tweed, who identified the problems that face rural constituents in relation to national parks and the tensions and conflict between the farming community and rural hoteliers and the tourism industry. Such problems manifested themselves during a recent visit from my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food. We need a framework, a dialogue and a mechanism for a proactive approach.

Our fishing industry is also related to tourism. My hon. Friend the Member for Great Grimsby and I know too well that we desperately need a more proactive approach to the fishing industry in Yorkshire and the Humber. Through a regionalised approach, we can enhance, remarket and reinvent the fishing industry in the North sea, in tandem with the work that must be done on a pan-European basis. Many of Yorkshire's remoter communities have a struggling manufacturing industry. There has been a lack of research and development, and a lack of positive reskilling, retooling and retraining of the work force. Such problems will not be dealt with by the policies of the Conservative party, who are not here—like their policies, they are invisible. They offer nothing for the people of Scarborough and Whitby. Members of the community in the Eastfield area of Scarborough face the prospect of long-term redundancy. They are 42 miles from the nearest alternative source of work, and I would fear for their future were it not for the regionalised approach taken thus far.

We need vitality and an agenda with which we can proactively move forward when Parliament reassembles. I hope that all hon. Members who reassemble after the general election will be at the forefront of the arguments, the scrutiny and the process. I commend the excellent work done by my right hon. Friends the Deputy Prime Minister and the Minister for Trade. I have worked as an individual member of the Labour party and a trade unionist for nearly 20 years and have tried to support the notion of regionalism and devolution. It is vital for my community and region, and I hope that the Committee will fully and wholeheartedly endorse the proposition.

2.55 pm

Mrs. Louise Ellman (Liverpool, Riverside): This is an historic meeting. It is 23 years since the last meeting of the Standing Committee on the Regions. On that occasion, the discussion was about the strategic plan for the south-east; today, we are looking at broader regional economic disparities. I hope that our worth as a Committee will be measured by the action that emanates from discussions such as today's and the facts that we are able to bring out.

I shall comment briefly, about the north-west in particular. The facts about relative economic disparity and deprivation affecting the north-west are well known. Although in terms of population we are the largest region outside London and the south-east, in terms of gross domestic product per head we are seventh out of nine English regions. On the regional competitive index, we are, again, seventh out of nine; on the index of knowledge-based business we are fifth out of nine; and we have a low level of business formation and retention. Those factors have a widespread impact, which is shown in part in continued population movements and in the intensification of existing regional disparities. It is estimated, for example, that in the next seven years, 8,000 people will leave the north-west and that more than 12,500 will go to the already overheated south-east. Economic disparities lead to conditions that will continue those disparities unless steps are taken.

Last year, the north-west faced a watershed that showed more clearly than ever the importance of having an effective regional structure. The crisis was precipitated when, as a result of a decision by the Wellcome Foundation, an expected major investment in the Daresbury laboratory in Cheshire—the synchrotron project—was removed from the north-west and made in Oxfordshire. That undermined the local scientific and research base that is so important to future growth and the retention of the existing skills base. That decision galvanised the region. The North West Development Agency took a leading role in bringing together business, scientists, local authorities, Members of Parliament, the trade union movement and a range of people interested in the future of the north-west. Apart from drawing attention to the very unsatisfactory fact that more than 70 per cent. of Government research and development expenditure goes to the south-east and the London area, the decision resulted in a number of changes.

Those changes came about in part because the north-west brought itself together as a region, and in part because in my right hon. Friend the Member for Tyneside, North (Mr. Byers), we had a sympathetic Secretary of State for Trade and Industry. His action in response to the strong impetus and strong organisation from the north-west resulted in a major announcement, made earlier this year, of massive investment in the north-west's science base. That included the Casim project, the feasibility study for the fourth generation of light sources, a major investment in bio-pharmaceutical manufacturing facilities, and a proposal for a north-west science council. Since those announcements, the North West Development Agency has announced that it will go ahead with a science park at Daresbury.

That action shows the importance of having an organised regional structure. If such a structure had existed formally before, I doubt that the Wellcome Foundation would have found it so easy to take the decision that it did. That underlines the importance of bringing people together across the region. The projects that have been promised to the region mean benefits right across the region. In my constituency, Liverpool university is directly involved in the majority of projects based on Daresbury laboratory: in particular, the major Casim project will greatly benefit Liverpool and develop the skills base in that part of the north-west. The whole experience has demonstrated how it is necessary to act regionally in order to deal with the economic needs of the region's science and research base.

Today, I draw attention to a new issue facing Liverpool in particular and Merseyside and the north-west in general: retaining the skills base at the Marconi company in Liverpool. Marconi is at the centre of new technology, which is the kind of investment that we want and need. It currently employs about 2,500 people in Liverpool. It is a centre for high-technology skills that deals with software engineering and the research and development of computer operations and information technology. A little while ago, the company announced that it will make between 200 and 400 redundancies at its Liverpool site. At the same time, Marconi has stated that it anticipates increasing employment by about 3,000 new jobs, but that that increase will take place in Ansty, Nottingham and Northampton, where the company will develop centres of excellence.

The big question is why the existing Liverpool site cannot be developed as a centre of excellence. If we accept that other parts of the country outside the north-west should become centres of excellence for major world players such as Marconi, we are saying that the skills base in Liverpool and the north-west could be at risk. That is unacceptable. The North West Development Agency, which is currently working with trade unions and Members of Parliament, is putting together a plan to develop and promote that skills base, which is another example of the importance of regional action. I raise that example in Committee today because it is a live issue. It is about both maintaining the regional skills and research base and building on what we have.

I hope that the Minister can give some reassurance that the Government will support activities taking place within the region on the initiative of the region. It is people in the north-west, specifically in Liverpool and Merseyside, who are closest to the impact of what is happening and they have taken the initiative to put things right. I hope that both the Government's newly reactivated regional policy will bring practical results and the retention of the Marconi site in Liverpool as a future centre of excellence will be one practical result of our new regional policy.

3.3 pm

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Prepared 10 May 2001