Session 2008 - 2009
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General Committee Debates
Regional Grand Committee Debates

Identifying Growth Sectors of the South East Economy

The Committee consisted of the following Members:

Chairman: Mr. Mike Hancock

Afriyie, Adam (Windsor) (Con)

Ainsworth, Mr. Peter (East Surrey) (Con)

† Arbuthnot, Mr. James (North-East Hampshire) (Con)

Baker, Norman (Lewes) (LD)

Baldry, Tony (Banbury) (Con)

Barker, Gregory (Bexhill and Battle) (Con)

† Barlow, Ms Celia (Hove) (Lab)

Benyon, Mr. Richard (Newbury) (Con)

Bercow, John (Buckingham) (Con)

Beresford, Sir Paul (Mole Valley) (Con)

Blunt, Mr. Crispin (Reigate) (Con)

† Bottomley, Peter (Worthing, West) (Con)

Brazier, Mr. Julian (Canterbury) (Con)

Cameron, Mr. David (Witney) (Con)

Clark, Greg (Tunbridge Wells) (Con)

† Clark, Paul ( Gillingham )

Denham, Mr. John ( Southampton, Itchen )

† Fallon, Mr. Michael (Sevenoaks) (Con)

Foster, Michael Jabez ( Hastings and Rye )

Gale, Mr. Roger (North Thanet) (Con)

Gibb, Mr. Nick (Bognor Regis and Littlehampton) (Con)

† Gidley, Sandra (Romsey) (LD)

Gillan, Mrs. Cheryl (Chesham and Amersham) (Con)

Goodman, Mr. Paul (Wycombe) (Con)

Gove, Michael (Surrey Heath) (Con)

Grayling, Chris (Epsom and Ewell) (Con)

Green, Damian (Ashford) (Con)

Grieve, Mr. Dominic (Beaconsfield) (Con)

Hammond, Mr. Philip (Runnymede and Weybridge) (Con)

† Harris, Dr. Evan (Oxford, West and Abingdon) (LD)

† Hendry, Charles (Wealden) (Con)

Herbert, Nick (Arundel and South Downs) (Con)

Hoban, Mr. Mark (Fareham) (Con)

Holloway, Mr. Adam (Gravesham) (Con)

† Howard, Mr. Michael (Folkestone and Hythe) (Con)

† Howarth, Mr. Gerald (Aldershot) (Con)

Howell, John (Henley) (Con)

† Huhne, Chris (Eastleigh) (LD)

Hunt, Mr. Jeremy (South-West Surrey) (Con)

† Ladyman, Dr. Stephen (South Thanet) (Lab)

Lancaster, Mr. Mark (North-East Milton Keynes) (Con)

Lepper, David (Brighton, Pavilion) (Lab/Co-op)

Lewis, Dr. Julian (New Forest, East) (Con)

Lidington, Mr. David (Aylesbury) (Con)

† Loughton, Tim (East Worthing and Shoreham) (Con)

McCarthy-Fry, Sarah ( Portsmouth, North )

Mackay, Mr. Andrew (Bracknell) (Con)

Mactaggart, Fiona (Slough) (Lab)

Malins, Mr. Humfrey (Woking) (Con)

Marshall-Andrews, Mr. Robert (Medway) (Lab)

Mates, Mr. Michael (East Hampshire) (Con)

Maude, Mr. Francis (Horsham) (Con)

† May, Mrs. Theresa (Maidenhead) (Con)

† Miller, Mrs. Maria (Basingstoke) (Con)

Milton, Anne (Guildford) (Con)

† Moffatt, Laura (Crawley) (Lab)

Oaten, Mr. Mark (Winchester) (LD)

Prosser, Gwyn (Dover) (Lab)

† Redwood, Mr. John (Wokingham) (Con)

Robertson, Hugh (Faversham and Mid-Kent) (Con)

† Salter, Martin (Reading, West) (Lab)

† Shaw, Jonathan ( Minister for the South East )

† Smith, Mr. Andrew (Oxford, East) (Lab)

† Soames, Mr. Nicholas (Mid-Sussex) (Con)

Stanley, Sir John (Tonbridge and Malling) (Con)

† Starkey, Dr. Phyllis (Milton Keynes, South-West) (Lab)

Stoate, Dr. Howard (Dartford) (Lab)

Swayne, Mr. Desmond (New Forest, West) (Con)

† Taylor, Mr. Ian (Esher and Walton) (Con)

Turner, Mr. Andrew (Isle of Wight) (Con)

Turner, Dr. Desmond (Brighton, Kemptown) (Lab)

Tyrie, Mr. Andrew (Chichester) (Con)

Vaizey, Mr. Edward (Wantage) (Con)

Viggers, Sir Peter (Gosport) (Con)

† Waterson, Mr. Nigel (Eastbourne) (Con)

† Whitehead, Dr. Alan (Southampton, Test) (Lab)

Widdecombe, Miss Ann (Maidstone and The Weald) (Con)

Willetts, Mr. David (Havant) (Con)

Wilshire, Mr. David (Spelthorne) (Con)

† Wilson, Mr. Rob (Reading, East) (Con)

Wyatt, Derek (Sittingbourne and Sheppey) (Lab)

Young, Sir George (North-West Hampshire) (Con)

Mike Hennessy, Sîan Woodward, Committee Clerks

† attended the Committee

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South East Regional Grand Committee

Monday 14 September 2009

( Reading )

[Mr . Mike Hancock in the Chair]

Identifying Growth Sectors of the South East Economy

House Building Targets

4. Mrs. Maria Miller (Basingstoke) (Con): What recent discussions he has had on progress towards meeting house building targets in the South East. [291322]

The Minister for the South East (Jonathan Shaw): I am committed to addressing the long-term need for housing in the south-east. That is why I am in regular discussions with all concerned—local authorities, developers and registered social landlords—to ensure that the conditions that facilitate recovery and make long-term growth possible are in place.

Mrs. Miller: I thank the Minister for his answer, but perhaps he should also have included in it the point that although house building is continuing in the region there are also cuts in the funding that was promised for the improvement of local services. In just the past two months £128 million has been cut from growth point funding, which should have been available to improve services in my constituency.

The Minister said in response to my hon. Friend the Member for Mid-Sussex that delivery of infrastructure is critical; so do the Government intend to cut house building targets, in line with the cuts that they have made in infrastructure funding?

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Jonathan Shaw: The hon. Lady will know that her local authority received £16 million in 2008 for social housing and that for transport infrastructure Hampshire county council, the highways authority, received £34.4 million for 2010-11. That is a rise from £29 million in 2007-08. We continue to provide Hampshire and Basingstoke with additional resources. Indeed, the housing completions in her borough are doing very well, in stark contrast to other places in the region. I applaud the work of the authority and the amount of housing that it is able to provide for its community, but we shall continue to invest.

As to the question of the growth point, the Government decided that the construction industry needed a shot in the arm, and that is why we redirected some funds from growth point to housing development. The hon. Lady will know from her area, where there have been several sites where work has stopped, that that meant thousands of construction workers being laid off. We need to get the housing industry back on course, and that has been our intention. That is why we reached the decision we did, and it is the reason for the announcement by my hon. Friend the Housing Minister.

The Chairman: I ask Members asking questions to make them short and precise, and the Minister to respond in the same way. I intend to try to get all the listed questions answered today, and to give as many hon. Members as possible a chance to ask questions. If we keep things brief, everyone will get their question answered.

Martin Salter (Reading, West) (Lab): Does the Minister share my concern that, despite the fact that West Berkshire council has had its housing numbers reduced following the Government’s wise decision to remove the Kennet meadows flood plain from the south-east plan, Conservative councillors have taken the extraordinary decision to include Pincents hill, on the edge of the area of outstanding natural beauty, as one of their preferred development zones, thereby obliterating the settlement boundary of west Reading?

Jonathan Shaw: I am not familiar with Pincents hill, but I am sure that my hon. Friend will provide me with details about it. In the announcement about the regional spatial strategies some areas had their housing numbers reduced and some, indeed, had them increased. We need to consider the balance, with respect to protecting the environment; he referred to the Kennet meadows and has raised concerns about the natural environment in another area. It is always a question of balance, but we need also to remember that there are 200,000 people on the waiting list in the region, who need homes. We need to do our level best to provide those homes.

Sandra Gidley (Romsey) (LD): Does the Minister agree that plans for building houses for the future must be considered alongside sustainability? If so, why do the Government still allow building on grade 2 agricultural land, and will he reconsider the policy that currently allows that?

Jonathan Shaw: We shall work in partnership and listen to local concerns, but there is a regional spatial strategy process and an examination in public. The hon. Lady has said where she does not want housing

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development to happen, but it would be interesting to hear where she does want it to happen. She could then tell constituents on the waiting list in her borough that we were making difficult choices to ensure that they and their families have a future in the communities where they were born and raised, but where they cannot yet afford to buy or rent a property. These decisions are always difficult, particularly in the south-east.

Mr. Nigel Waterson (Eastbourne) (Con): Does the Minister accept, however, that it is bad enough having centralised house-building targets, but it is worse when there is a failure to invest in existing infrastructure? Will he please talk to his colleagues in the Department for Transport about improving rail services in and with Sussex? Will he also look at the road infrastructure and particularly at the dreadful A27 between Lewes and Polegate, which is a real block on economic development?

Jonathan Shaw: I am grateful to the hon. Gentleman for mentioning investment in infrastructure. The south-east has done very well in terms of investment in transport infrastructure. For example, more than £300 million will be spent on improving the A3 at the Hindhead tunnel. That reflects the collective view of all the authorities in the south-east, which put their resources there. There has been a campaign on the issue for many years, and we have been able to provide the resources. Furthermore, we are in Reading today, which will receive about £400 million to improve its railway station.

The hon. Gentleman’s point brings us back to the point made by the hon. Member for Wealden. We cannot live our lives according to administrative boundaries and we have to take a view across the board. One authority’s development plans will affect another authority, which is why we need the spatial strategy. However, we are investing in Sussex. The hon. Member for Eastbourne will be aware of the Hastings-Bexhill relief road, which we announced recently. East Sussex county council campaigned on the issue, and the project was not called in, so work will begin next year, providing important infrastructure, investment and jobs in the construction industry.

We will do what we can on investment, and I welcome the fact that Opposition Members are calling for more resources. I have not yet heard anyone call for a reduction in resources from the public purse.

Mr. Ian Taylor (Esher and Walton) (Con): Of course we need more houses and social housing, but will the Minister please note that we in Esher and Walton are gravely concerned about the fact that the housing target figures are not capped and that the constituency is expected to “do something” about the pressures of London’s overspill? There are also concerns about the protection of the green belt.

Jonathan Shaw: The hon. Gentleman presents the difficulties and challenges facing the Government and the local authority, and he will have constituents at his advice surgery in desperate need of housing. We have to strike a balance, and that is something that this and previous Governments have done. I was a member of a local authority whose housing targets were increased by a previous Conservative Government, and he will know that that did indeed take place.

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There will always be an issue for us. There are difficult decisions and balances to be struck, but we need to remember the impact of poor housing conditions on children and families. We all want people to have the best start in life and to be able to bring up their families in harmony, but living in bed-and-breakfast or substandard accommodation will not allow them to do that. Yes, we have to invest in infrastructure, but there will always be a fine line and a limit on the resources that we can spend.

Comprehensive Area Assessments

5. Mr. Michael Howard (Folkestone and Hythe) (Con): What recent representations he has received on progress made by local authorities in the south-east on their comprehensive area assessments; and what discussions he has had on the effect of comprehensive area assessments on the costs of inspection of local authority services. [291323]

The Minister for the South East (Jonathan Shaw): The Audit Commission is currently in discussions with south-east local strategic partnerships as part of the process of completing the comprehensive area assessments. The first CAA reports will be published by the Audit Commission in December.

The inspectorates have made it clear that the framework for the CAA is consistent with the Government’s commitment to reduce the cost of public service inspection by a third by April 2009 compared with 2003-04.

Mr. Howard: The National Audit Office has estimated the annual cost of inspecting local government at about £2 billion. Does the Minister think that that is, to use Lord Mandelson’s words from earlier today, wise spending, or is it just big spending?

Jonathan Shaw: I think that it is proportionate spending when one considers that local authorities spend £200 billion of taxpayers’ money every year. If the right hon. and learned Gentleman is suggesting that there should not be an inspection regime for that amount of money, that would be an interesting point to make. However, I think that the public thinks that there should be an inspection regime. We are reducing the amount of money spent on that regime, and where authorities are doing well there will be a much lighter touch—an example of such an authority being our own county authority.

Mr. Michael Fallon (Sevenoaks) (Con): But does the Minister appreciate the associated cost of the consultancy studies that local authorities are compulsorily required by Whitehall to carry out, which are an increasing burden on hard-pressed councils such as Sevenoaks, whose grant has been consistently reduced in real terms by this Government? Will he look again at the burden placed on councils by consultancy studies that they are compulsorily required to carry out?

Jonathan Shaw: If the hon. Gentleman wants to provide me with the detail from Sevenoaks council about the consultancy figures that he says they are required to spend, I will happily look into that issue. However, in this debate about spending we have said that we want to see £4.9 billion of savings across the board from local authorities. When they are spending £200 billion a year, we think that that saving is important.

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If an authority, in its judgment, needs advice about how to make those savings, perhaps that is why consultants are used rather than permanent staff. It is very easy sometimes just to make points about consultants when in fact there is a cost saving for the authority compared with employing them on a permanent basis. We want to see the figure of £200 billion reduced, and it is important that there is inspection, not least of all so that our constituents—the general public—can understand the performance of their local authorities.

Economy

6. Mr. John Redwood (Wokingham) (Con): What recent discussions has he had with the Chancellor of the Exchequer on the effects on the economy of the south-east of steps taken in response to the recession; and if he will make a statement. [291324]

The Minister for the South East (Jonathan Shaw): As regional Minister, I report regularly to the Chancellor of the Exchequer and the Secretary of State for Business, Innovation and Skills on the impact of the recession in the south-east and the impact of the action that the Government and others are taking to support the economy in our area.

Mr. Redwood: What would the impact be on prices in the south-east of printing £175 billion of new money?

Jonathan Shaw: I will look into that issue and I will write to the right hon. Gentleman. It will not surprise him to know that I do not have that figure to hand. However, what a shame that he did not ask a question about how we are supporting businesses; what a shame that he did not ask a question about what we are doing to help young people, rather than asking a question that he anticipated that I would not have the answer to. That is a matter for him; I think that it says more about his judgment than mine.

Dr. Evan Harris (Oxford, West and Abingdon) (LD): The Minister will know that the regional spatial strategy for central Oxfordshire, which covers five different local authorities, recommended 18,000 new jobs as a minimum during the period from 2006 to 2026? Is he aware that the “South East Plan Supplementary Guidance: Employment Land Reviews” consultation document from the South East Partnership Board says that, because of the recession, sadly that projection ought to be cut by up to 50 per cent.? Therefore, does he recognise that, particularly given the housing shortage, 18,000 should no longer be the figure that local authorities should be planning on for new land for new jobs to be created in the central Oxfordshire area?

Jonathan Shaw: The important point to remember when we are talking about the regional economic strategy is that it is not for one, two or three years, but for a 20-year period. Of course, we are in recession at the moment. We will emerge from that recession. The hon. Gentleman’s county, in terms of the scientific base that it has and the contribution that it makes not only to the region but to the whole UK economy, will be an essential part of our securing the technologies and knowledge for jobs for the future.

I hope that, within Oxfordshire, there is not any lack of ambition in terms of the investment that has been made, not least at Harwell at the diamond synchrotron

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facility, which is the biggest science investment made in this country in some three decades. As I say, I hope that there is not a lack of ambition. We need those jobs created within the Oxfordshire area. The contribution that the area has made to the region and to the country has been essential, and we will continue to support it.

The Chairman: May I ask the Minister to keep his answers fairly short from now on so we can get everyone in?

Mr. James Arbuthnot (North-East Hampshire) (Con): One step recently taken in response to the recession was the Secretary of State’s decision to overturn Hart district council’s decision to refuse the planning application for the Pyestock warehouse development. The Secretary of State even overturned the decision of his own planning inspector, who confirmed that Hart district council was right. However, we are now told that it was not the Secretary of State who made that decision, because he represents a constituency in the south-east. My question is simple: which Minister made the decision?

Jonathan Shaw: I will look into the detail of who made the decision. I do not have to hand every decision made by all of the many district authorities across the south-east. It is a direct question, and I will look into it for the right hon. Gentleman.

Mr. Andrew Smith (Oxford, East) (Lab): Does my hon. Friend agree that, of the measures taken by the Government to counter the recession, the car scrappage scheme has been of enormous value to the automotive industry? In Oxford, the scheme has benefited Mini sales a great deal, resulting in the welcome recent announcement that a further two Mini models are to be produced at the Cowley plant with the prospect of hundreds of extra jobs. That is certainly ambitious for Oxfordshire, as he has said, in relation to our contribution to economic success and we welcome the measures.

Jonathan Shaw: We all welcome the success of Mini at the Cowley plant, not only now but in relation to its development of the Mini E for tomorrow. My right hon. Friend has been working with my colleagues in the Department for Business, Innovation and Skills to ensure that we are providing support to the plant. That is a success story and there are many other such stories at the cutting edge of technology and science in our region. It is right that we need to be ambitious and support such work, and we need have the right frameworks in place, whether they are for housing or economic development, to ensure that our region remains an attractive place to come to work and live, and that it continues to contribute £17 billion to the Exchequer every year.

Mr. Gerald Howarth (Aldershot) (Con): If it is right to support public investment in science, why has a further cut of £100 million been made to the already depleted defence research budget? That will have a seriously adverse effect on high-tech jobs around the country, particularly in my constituency where both BAE Systems and QinetiQ have their headquarters and employ some of the most important scientists in the country who are contributing to our troops’ fight in Afghanistan as we speak.

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Jonathan Shaw: The hon. Gentleman is right to point out the importance of the defence industry in our region. Indeed, BAE Systems operates from my constituency as well. We have seen a considerable increase in the amount of defence contracts and jobs in the industry in recent years, particularly the Vosper Thornycroft development in the Portsmouth dockyard, which has been a tremendous boost for potential exports. It is certainly our intention to invest in the defence sector, but while the hon. Gentleman will advocate additional spending, I have not heard anything from Opposition Members about wanting reductions in the amount of resources.

A27

7. Peter Bottomley (Worthing, West) (Con): What recent discussions he has had with ministerial colleagues on the environmental, economic and safety case for improvement of the A27 through West Sussex. [291325]

Jonathan Shaw: Following the South East Regional Transport Board’s recommendation, a Government-funded transport study to identify options on the A27 corridor will start within the next few weeks in line with our delivering a sustainable transport system strategy. An interim report is due next spring and will build on earlier bypass and dual carriageway improvements to the A27.

Peter Bottomley: The Minister may have been told by his colleagues that most of those improvements were made when I was a Transport Minister in 1986, which was 23 years ago. May I pre-empt the cost of the work that he has announced by saying that he should do three things? First, he should drop the bogus environmental objections to the Arundel completion; secondly, he should try to improve Chichester so it is faster to go round it than to go through it; and thirdly, he should start the plans so that there might be improvements at Worthing while the Minister is still alive—that is probably for the next 30 years. At the present rate of progress, this is one area where the Government have broken no promises and made no changes of plans, because they have had no plans and they have made no promises. They should be ashamed of themselves. In particular, by putting the costs of the Hindhead scheme on the regional national budget, they have prevented any schemes in any of our constituencies.

Jonathan Shaw: On the last point regarding more than £300 million, that decision was made by the local authority. It was not a decision made by the Government; it was the decision reached by local councils the length and breadth of the region. The hon. Gentleman may have approved the original plan, but he was certainly not able to write the cheque. There were many plans under the previous Conservative Government, but we did not see a great many of them come to fruition. However, he will know that last year £32 million was spent on the A27 from Southerham to Beddingham—that improvement, which was completed, has removed a serious bottleneck and improved safety. He has made his point about environmental aspects of development. Of course, all of those things need to be properly

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considered. He has got his view, but the decision-making process needs to strike the balance in all such matters between a road development, or a rail development, and the protection of the environment.

Tim Loughton (East Worthing and Shoreham) (Con): I am surprised at the Minister’s lack of geographical knowledge about where the A27 runs, given his recent unannounced visit to Worthing where he would have seen at first hand the fact that the A27 in West Sussex is described as the country’s largest car park. Will he comment on the claims made by the Under-Secretary of State for Transport, the hon. Member for Gillingham (Paul Clark), who is with us today, when he said earlier this year that

“appropriate measures to address the current issues on the A27...will primarily be based on the provision of sustainable travel initiatives with additional road capacity as a last resort.”—[Official Report, 23 March 2009; Vol. 490, c. 10W.]

Can he tell us what that means and when we are going to get it?

Jonathan Shaw: The hon. Gentleman wants more money. I have not heard any calls for a reduction in money—none at all. The improvement plan for the A27 has been substantial. Currently, more than £150 million is within the regional funding advice programme for Chichester and for the coastal rapid transport bus system. There are studies—[ Interruption. ]

The Chairman: Order. Can we let the Minister finish and not interrupt him so much? We have got a few minutes left.

Jonathan Shaw: On the one hand hon. Members dismiss the environmental aspects as bogus, but of course how is an environmental assessment made? There has to be a study. If the hon. Member for East Worthing and Shoreham is advocating that, in future, there will never be any studies conducted on any road development that a future Conservative Government may bring in, then that rather blows a hole in the environmental credentials that the right hon. Member for Witney (Mr. Cameron) has tried to present.

The Chairman: Order. That is long enough on that response, if you don’t mind.

Unemployment

8. Mr. Rob Wilson (Reading, East) (Con): What discussions he has had with ministerial colleagues on measures to reduce levels of unemployment in (a) the South East region, (b) Berkshire and (c) Reading, East constituency. [291326]

Jonathan Shaw: My colleagues in the Council of Regional Ministers regularly discuss the recession and levels of unemployment. The recession has had an impact on the south-east’s generally high employment rates but the region is benefiting from a range of Government support to maintain employment. In addition, strong partnership working is delivering programmes that support people to remain in employment and find new work.

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Mr. Wilson: I thank the Minister for that answer, but it is truly shocking that in my constituency unemployment is now 65 per cent. higher than it was in 1997. It is also catastrophic that in a region such as this the number of working age, economically inactive people stood at almost 20 per cent. in June. That means that, in reality, one in five people in my constituency are not working. We can see every day the enormous social consequences of that. Can the Minister confirm that that is actually the true picture of unemployment and would he like to apologise to all those people who have lost their jobs and lost their home as a result of his Government’s actions?

Jonathan Shaw: The hon. Gentleman rather ruined his point towards the end. Perhaps he should apologise because his party has not supported the future jobs fund, the house building programme or the fiscal stimulus. He will be aware that according to the July figures, about 34,000 people lost their jobs, but at the same time around 30,000 people left the jobseeker’s allowance. It is dynamic—the unemployment figures are not piling up and up as we have seen in previous recessions. We are not seeing a large increase in unemployment, or increases in long-term unemployment. People are finding work. The economy is dynamic, and if you speak to employers across the region, the picture is mixed.

In some areas, particularly in construction as I have said, we have seen many people lose their jobs. In other areas such as defence or rail, the Engineering Employers Federation was generally positive about the current situation and its prospects. We are assisting businesses. For example, the time to pay initiative is ensuring that £500 million stays with businesses in deferred taxes.

I am well aware that people have lost their jobs, but I am also aware that we are actively assisting them. That is why we are putting additional staff into our Jobcentre Plus programme, and why the hon. Gentleman’s authority can bring forward bids for the future jobs fund, which is designed to help our long-term, young unemployed. Action has been taken on housing, as well as to assist young people, to help businesses to defer payments and business health checks have been conducted—between 13,000 and 14,000 have been done in this region, more than any other in the country. We are being proactive and stepping forward, not sitting back, doing nothing, and waiting for the recession to take its course.

Several hon. Members rose —

The Chairman: May I say to hon. Members that I will be a little lenient because I would not like anyone to leave the room today feeling frustrated at not getting their questions in? However, we have three people on their feet, including you, Mr. Soames. I want questions to be quick and for the Minister to respond quickly.

Peter Bottomley: Will the Minister kindly arrange to make a written statement, or to write to us all and publish it, saying with regard to each of our constituencies in which month and year unemployment was higher than when the Labour Government came to power in 1997? For each of our constituencies, will he publish the level of unemployment now compared with the rate this time a year ago?

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Jonathan Shaw: I will look at the hon. Gentleman’s request. If that information is already available in the Library, he will be able to acquire it.

Tim Loughton: My hon. Friend the Member for Reading, East (Mr. Wilson) has got off relatively lightly—in East Worthing and Shoreham from July 2008 to July 2009 unemployment has increased by no less than 128 per cent. Does the Minister agree that those raw figures disguise the underlying problem that the number of firms and workers now on short-term working—four days a week or fewer—is much greater, with serious consequences such as the impact on transport?

Jonathan Shaw: The hon. Gentleman mentions a percentage—123 per cent, I think. In Worthing, that is 2,260 people. Of course that is 2,260 too many, but as I said, we are not seeing the figures pile up, we are seeing people flowing off jobseeker’s allowance as well. We saw the highest peak in unemployment a couple of months ago, and the indications are that the number is coming down, although it is too early to be confident about that. The hon. Gentleman chose to use a percentage as that is the most graphic way to illustrate his point. He did not choose to cite the actual numbers, which is about 3.9 per cent. of the population, and which puts things into a little more perspective.

Mrs. Theresa May (Maidenhead) (Con): The reality is that the Government’s failure to act on welfare reform over 12 years meant that after years of economic boom, we went into recession with nearly 5 million people in the country on out-of-work benefits. The Minister refers to the work of the future jobs fund. Will he say how many young people in this region he expects to see getting sustainable jobs—jobs of longer than six months—as a result of that fund?

Jonathan Shaw: It is clear that the right hon. Lady does not support the future jobs fund. The future jobs fund is supported by [ Interruption. ] I will answer more of the right hon. Lady’s question later. Many authorities up and down the region are supporting the future jobs fund. For example, Hampshire is going to create 900 jobs and we have given it £5.85 million. If the very worst happens and a youngster does not get a job after six months, what will the situation be? They will have skills, experience and, importantly under this programme, they will have made a contribution to their community. Is that young person more likely to get a job if they have not been on that programme? I do not think so, because experience is always important for a youngster, and that is what employers talk about. I think that the right hon. Lady understands that. She is embarrassed because she has been unable to support the future jobs fund, which is regrettable, particularly given its warm welcome from Conservative authorities the length and breadth of the country, including the Local Government Association.

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The Chairman: Thank you. We have completed all the questions and the supplementaries.

Mr. Redwood: On a point of order, Mr. Hancock. This sitting has all the spirit of a Soviet-style consultation. I sought to amend the motion because it is bland and idiotic, and I was told I was not allowed to seek to amend it. I asked if I and my colleagues could have a vote of substance on the south-eastern economy and I was told that we could not, presumably because the Government would lose it. I would therefore like your guidance, Mr. Hancock. How can the majority on the Committee communicate to senior Ministers—I do not blame the junior Minister; I did not come to have a spat with him and he is not responsible for this farce—namely the Chancellor of the Exchequer that we hold him to blame for the state of the economy? We want to cross-examine him and we want a proper Parliament where we can debate that subject and vote on it.

The Chairman: For your benefit, Mr. Redwood, and for that of the Committee as a whole, there is an opportunity to vote at the end if you want. It is up to you to decide whether you want to have a vote. If that is the case, we can have a vote. Secondly, I am sure that the Chancellor will be eagerly awaiting the Hansard report of this Committee to read the comments from you and your colleagues, as well as the comments of those representing the Government here today.

I know that it is an exciting prospect to meet here in Reading, with the opportunities to harangue each other and shout across the room, but the acoustics are not good and it is difficult for Hansard writers.

Martin Salter: So you want us to shout louder, then?

The Chairman: Mr. Salter, I will leave that to you, but I hope that Members will not go down that line.

Peter Bottomley: On a point of order, Mr. Hancock. In the motion, the first part states that

“the Committee has considered the matter”

and that is likely to be factual when we have done so, but it goes on to mention the growth sectors of the south-east economy and refers to

“ensuring that their growth is maximised”,

which adds in a bit of argument. The motion obviously cannot be changed today, but in future would it be possible to ensure that a motion of such terms is rejected and that it is either a motion of opinion or of fact? To put the two together is improper in the parliamentary sense.

The Chairman: That is a very good point, Mr. Bottomley. I will pass that on to the Speaker and ask the usual channels to respond in the most appropriate manner. Like you, I think that the motion should be drawn in positive or negative terms, not as a compromise, as it would appear today.

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Identifying Growth Sectors in the South East Economy

The Chairman: We now have until 1 o’clock to debate the motion. For those who wish to speak, I intend to get as many people as possible into the debate. I hope that any interventions will be precise and to the point. When replying to any points, I hope that the Minister will also try to keep to time to enable as many Members as possible to speak.

Peter Bottomley (Worthing, West) (Con): On a point of order. Apologies, Mr. Hancock. I acknowledge that this is my second point of order. You will draw to our attention that the report of the South East England Development Agency and the regional economic strategy’s first report from the South East Regional Committee has been released at 11.15 today. In future, would it be possible to ask the authorities if it can be released the day before we meet, giving us a chance to read it before we have a debate on the subject?

The Chairman: Again, that is a very good point, Mr. Bottomley. The report is available for Members if they want it. It is in the room and it will be reported to the House under the normal Standing Orders procedure, under Standing Order No. 137. I am pleased that Members are amused by the fact that the report might be available in the room—it is, so if hon. Members want it, they should avail themselves of it. I call the Minister to make the statement.

Peter Bottomley: On a further point of order, Mr. Hancock. As a courtesy to the Chairman, and before we get into the debate, is it possible to find out whether he has himself had a chance to read the report?

The Chairman: I have just been presented with a copy of it, Mr. Bottomley, and like you, I do not think I will have time to read it today. I hope that the Minister can deal with that issue for you in his contribution. I will ask the Doorkeepers to circulate the report, so every Member in the room has it.

Mr. John Redwood (Wokingham) (Con): On a point of order, Mr. Hancock. When reporting back this farce, could you also say that it is not a good idea to hold the last meeting to ratify the report during the proceedings of the Grand Committee, which is precisely what happened this morning?

The Chairman: I was aware that some hon. Members went out, but I thought it would be beneficial for the report to be ratified by those Members present, so that it would be available to Members here if, during the next two hours or so, they want to read it. I am grateful to those three Members for making a determined effort to get the report ready for today. I would like to move on, unless there is a further point of order.

Mr. Gerald Howarth (Aldershot) (Con): On a further point of order, Mr. Hancock. This matter is such a farce that the report, which was clearly presented before the Committee had approved it, was all rubber-stamped. Perhaps, Mr. Hancock, you could point out to the

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Members who ratified the report that they did not meet on 14 September 2002. I believe that it is 2009, although many of us perhaps wish that it was 2002.

The Chairman: Well spotted Mr. Howarth. I am delighted that you have had time to read the report and get down to the minutia of getting the date right. At least one Member has had time to read and digest it.

Mr. Andrew Smith (Oxford, East) (Lab): On a point of order, Mr. Hancock. Would not the protestations from Conservative Members carry more force with the public as well as with those in this hall if instead of raising trivial points and calling the proceedings a farce, they took part in the Regional Select Committee and exercised their proper responsibility, which is scrutinising public policy in this area?

The Chairman: That is not a point of order, Mr. Smith. It is for the parties in the House to make a decision on that. I hope that they will consider those points. Let us now move on to the statement. I do not intend to take any more points of order on the procedure or on the report at this stage.

Tim Loughton (East Worthing and Shoreham) (Con): On a point of order, Mr. Hancock.

The Chairman: No. I am not taking any more points of order on this matter. We have to move on to the debate.

11.27 am

The Minister for the South East (Jonathan Shaw): I beg to move,

That the Committee has considered the matter of identifying the growth sectors of the South East economy and ensuring that their growth is maximised.

I am very pleased to be able to address this first meeting of the South East Regional Grand Committee. Like you, Mr. Hancock, I am grateful to Reading borough council for hosting the event in what I am sure we would all agree is a magnificent town hall. I am also grateful to you for acting as our Chair.

This is an historic day for regional accountability. The establishment of Regional Grand Committees alongside the Regional Select Committees fulfils the conclusions reached by Parliament and the Select Committee on Modernisation of the House of Commons. As has been referred to, today also sees the publication of the South East Regional Select Committee report.

Mr. James Arbuthnot (North-East Hampshire) (Con): I am sorry to have to tell the Minister that I have not read it because only 20 copies have been delivered and there are more people than that in the room. Has the Minister read it? If there are not enough copies for us to read, what is the point in carrying on?

The Chairman: Unfortunately there were not enough copies when they first came in. I have been assured by the Clerk that that is now being addressed. If the right hon. Gentleman is keen to get a copy quickly, he can have mine, but the matter is currently being addressed.

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We need to move on. We owe it to the people of the south-east to move the issue along and have this debate properly. I hope that every Member will have a copy of the report very quickly indeed.

Jonathan Shaw: In response to the right hon. Gentleman, I am looking forward to reading the report and seeing what the Committee has said about the important work carried out by the regional economic development agency.

Today’s Regional Grand Committee also allows Parliament, particularly Members from the south-east, to hold me to account as the regional Minister. Given the importance of today’s proceedings, I should say in passing that I am pleased to see Members from all areas of our region attending this meeting in Reading. I am sure that today’s debate will make a valuable contribution as we wrestle with the competing demands that are so apparent in our region and that have been articulated in our questions earlier. I am pleased that the debate has focused on the south-east economy, particularly on the prospects for growth.

I am sure that we all agree that the south-east is a great region, and the engine room of the UK economy. There is high calibre manufacturing and an excellent service sector, and quality of life for many is high. People want to live here and businesses want to come here. Employment rates are high: 81 per cent. for men and 73.3 per cent. for women. However, as has been mentioned, we know that none of that can be taken for granted in the recession, and that is why I, as the regional Minister, have made the economy my No. 1 priority.

Mr. Michael Fallon (Sevenoaks) (Con): I am grateful to the Minster for giving way so early in his speech. Given that the Budget’s Red Book will reduce the total capital expenditure from over £40 billion to just over £20 billion over the next three years, can he explain how much of that reduction will be felt in our region, and on what kind of capital projects?

Jonathan Shaw: A reduction in capital expenditure will undoubtedly mean that the type of investments that we want to see in our communities will not be as apparent as they once were, but it is reasonable for me to point out also that we have seen, and will continue to see, substantial capital investment. I have referred to several of those investments during the course of our oral questions, and I am sure that they will come up during this debate. By any measure, the increase in capital investment that we have seen since 1997 has been substantial and, in many areas, record-breaking. Are we able to continue that forever and a day? We know that difficult decisions are upon us. The hon. Gentleman has set out the detail from the Red Book, and we have been clear that capital investment will not be as it once was. Within the current comprehensive spending review arrangements it is there, and we will ensure that investments that have been announced will be made. An example is the investment for Reading station, which is important not only for Reading, but for the economy of the Thames valley.

Mr. Redwood: Will the Minister give way?

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Jonathan Shaw: I would like to make a little more progress before giving way.

The south-east has not fared as badly as some regions, but we saw unemployment double between July 2008 and July 2009. Individuals, households and businesses have been affected, and we have all seen that in our constituencies. We cannot allow one business to go under because it was not aware of the support available, and we cannot allow one family to lose their home because they were unable to access the help to which they were entitled. An important part of my job as the regional Minister is promoting the help that is available for families and for businesses.

Mr. Redwood: I am grateful to the Minister, who is being generous in giving way. He has challenged Opposition Members present to suggest cuts. I suggest that a really popular set of cuts would be to get rid of all this regional, unelected Government overhead, which we all hate so much. Could he tell us how much we would save if we swept it all away and did what needed to be done in the public sector through elected councils?

Jonathan Shaw: The right hon. Gentleman will be aware that the regional assembly has been abolished. We cannot live our lives by administrative boundaries, because in order to get an economy of scale, making capital investment, which has just been referred to, crosses a whole range of different authorities, and that is why we need to take a strategic approach. We have seen considerable success, particularly from the regional development agencies: a recent study by PricewaterhouseCoopers showed that every £1 spent by the agencies brings £4 of investment. If we were simply to have a council boundary initiative as a way of distributing money, as the right hon. Gentleman seems to be proposing, I think the costs would be considerably greater. We would not get the economies of scale and that is certainly not what business would welcome. Speaking to authority after authority would be how to jam up the whole planning and investment process.

Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): May I take the Minister back to what he was saying about support for businesses? The feedback that I have had about the Government’s enterprise finance guarantee scheme from businesses in my constituency is that they very much welcome it, but that they do not believe that the banks are playing their part. Business after business recounts that the banks are effectively not taking any risks themselves, but are unloading all the risk on to the Government. Can the Minister take back to the Chancellor the need for banks to play their part in the partnership, to ensure that the Government help available through the EFG scheme is benefiting businesses to the full and is not simply removing risk from banks?

Jonathan Shaw: I am grateful to my hon. Friend for that intervention. She referred to the enterprise finance guarantee scheme. There have been 42 loans offered in her constituency, to the value of £4.2 million, helping businesses and ensuring that jobs are either created or retained. Her point was fair. One of the general items of the South East Economic Delivery Council, which I chair and which brings together the business and public sectors, is those discussions with the banks. The regional

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development agency had been able to get all the banks in the region in the same room and to develop that dialogue with businesses that is so important. That is in marked contrast with where we were a short while ago. The dialogue has improved. I hear her point about the banks needing to ensure that the money is available, particularly to our small businesses. I would also like to reassure her that 42 companies in her community have received support.

Mr. Michael Howard (Folkestone and Hythe) (Con): The Minister said a moment ago that he cannot allow one business to go under because it did not know that support was available. Had he had the opportunity to read the Select Committee report—it is outrageous that it was not made available in time for the Committee’s deliberations—he might have been able to learn from the first sentence of paragraph 91, on page 28, that the South East England Development Agency

“acknowledged that there was some confusion early in the roll-out of the national finance measures in terms of eligibility criteria and inconsistency across the banks.”

So, is it not clear that the Government are responsible for the uncertainty and confusion that existed over their own schemes to make help available to businesses?

Jonathan Shaw: We got the schemes off in record time, and 14,000 businesses have benefited from the business health checks provided by Business Link across our region—more than in any other region in the country. I very much welcome the work done. What made me make my point is that it is important that we have a good dissemination of information. That is why we are working in partnership with private sector organisations such as the CBI, the Institute of Directors and the Federation of Small Businesses and with local authorities, alongside public sector delivery bodies such as Jobcentre Plus, the Learning and Skills Council and so on, to ensure that the information is disseminated.

The right hon. and learned Gentleman perhaps chooses to highlight that point at the initial stage. Of course, businesses and the organisations that represent them will need to clarify the detail, but get on with it we did. The right hon. and learned Gentleman criticises, but if we were advocating the policies of his party, it would be a blank sheet of paper, because it did not support the fiscal stimulus.

Charles Hendry (Wealden) (Con): Some while ago I asked a parliamentary question about how many schemes were available to support business. The reply was that my question could only be answered at disproportionate cost. The Government could not even add up the number of schemes that they have. Is that not evidence of how confusing the whole system is?

Jonathan Shaw: That brings me on—

Dr. Stephen Ladyman (South Thanet) (Lab): Will my hon. Friend give way?

Jonathan Shaw: I shall take my hon. Friend’s intervention, but I am bursting to respond to the hon. Member for Wealden.

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Dr. Ladyman: I just want to point out that, if the right hon. and learned Member for Folkestone and Hythe had read the rest of the paragraph he cited, my hon. Friend would have noted that SEEDA has created a financial services forum to address the issue. Is not that exactly the sort of thing that can only be done by a regional body, which is willing to take a regional view and address a regional issue?

The Chairman: I hope that the Minister does not burst when trying to answer the question of the hon. Member for Wealden.

Jonathan Shaw: I will try not to do so. An example of when the Government’s initiatives have assisted is the prompt payment code. Late payment is quoted as businesses’ biggest concern, and I want to see an increase in the sign-up to the code in the south-east so that we can deal with the problem. I want to encourage each and every one of us, particularly when talking to those in the public sector, to ensure that small businesses in our communities are paid on time. Those of us at the Department for Work and Pensions are doing our best in that regard. For example, we are paying more than 90 per cent. of invoices within 10 days.

Mr. Howard: Will the Minister give way?

Jonathan Shaw: I want to make a little progress. The mortgage rescue scheme helps individuals. The “time to pay” initiative, to which I referred earlier, helps businesses to stay afloat by deferring their tax payments. For example, 30,000 businesses have benefited to the tune of £540 million in this region. I also commend local authorities for their support, as well as citizens advice bureaux, which provide assistance to citizens and households.

Mr. Howard: I recall the Minister saying that he was bursting to answer the question asked by my hon. Friend the Member for Wealden. I have not yet detected an answer, a burst or anything resembling such a response.

Jonathan Shaw: I have been referring to the initiatives that we have introduced, such as the prompt payment code, the “time to pay” initiative, business health checks and the enterprise finance guarantee scheme. About 700 of our businesses have been offered almost £70 million in loans, and 20 businesses have received loans totalling £2.4 million under SEEDA’s transitional loan fund, creating or preserving about 800 jobs. There is now real help for businesses and individuals throughout our region, not a blank page as we would expect from Opposition Members.

The effects of the recession are still with us, but it will come to an end and we must make sure that recovery benefits all individuals, households and businesses in the region. All of us will have in our constituencies those who have been left behind after previous recessions, and we cannot let that happen again. Through SEEDA, we are focusing on the key sectors that will lead our regional and global economy out of recession most successfully, such as advanced engineering, ICT, life sciences, environmental technologies, aerospace and defence.

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We have already seen many successful businesses in such sectors in the south-east—businesses that have kept growing throughout the recession. I have had the privilege of visiting many of them. For example, Ceres Power at Crawley is developing cutting edge fuel cell technology and plans to expand its manufacturing to a new base at Horsham thus creating 100 highly skilled jobs. Just a few months ago, I visited the Diamond Light Synchrotron at Harwell, to which I referred earlier. It is the largest science facility to be built in the United Kingdom for 30 years. The synchrotron is a world-class resource, providing research facilities for virtually all fields of science and engineering to help create the high-tech jobs and commercial applications of the future.

Through my regular dialogue with SEEDA, I have kept in touch with other exciting developments in the region in such important sectors.

Dr. Evan Harris (Oxford, West and Abingdon) (LD): In answer to an earlier question, the Minister mentioned Diamond Light Source. I should be grateful to receive an assurance that funding to Diamond Light Source will not be cut so that there will not be a reduction in the planned number of scientific groups that can use the detection stations that will be available there in the coming year?

Jonathan Shaw: I am grateful to the hon. Gentleman. What is also important is for the organisation to be attracting customers as well. We have made that huge investment. Obviously, going forward, the Chancellor will set out future funding in the pre-Budget report. We are within the current CSR envelope to 2007. All parties are talking about the financial constraints. However, when it comes to the specific—the hon. Gentleman has mentioned a specific, but it is a case of “not this one”, “not that one”, “not in my backyard”—it will be a difficult period for us going forward.

We want to identify the key areas that will create growth. The important area of science and technology in Oxfordshire—in the hon. Gentleman’s constituency—is one on which I think we need to place a great priority, whatever the resources that we have available to us.

One example of where SEEDA has worked is the £36 million investment into Alphasat. Alphasat is developing the next generation of mobile telecommunications satellites, development that will take place in the United Kingdom, not overseas. Another example is the £6.4 million investment into piloting the low-carbon cars, in the form of the electric Mini E. SEEDA is part of a consortium at Cowley, with Oxfordshire local authorities, academics from Oxford Brookes university, Scottish and Southern Energy, the electricity supplier, and the Technology Strategy Board. Test cars will be on the road this year and Cowley’s production expertise has recently helped it to win production of the two models to which my right hon. Friend the Member for Oxford, East referred, creating 1,000 jobs at the plant that are very welcome.

Mr. Redwood: On the SEEDA budget, we read on page 127 of the report that there was a 5 per cent. cut followed by a £300 million national cut in regional development agency budgets, followed by a “£17 cut”; I think that perhaps the Committee meant a “£17 million cut”, but it did not proofread this morning. So there has been a series of cuts, which may have been very sensibly judged. How many more cuts does the Minister think that we need in a tough-choice environment?

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Jonathan Shaw: The reductions in the RDA budgets to which the right hon. Gentleman referred have been about a reprioritisation of resources, to provide businesses with the support that they need and to ensure that we have sufficient people in our Jobcentre Plus offices. We can then have the future jobs fund and provide all the support necessary to ensure that we have an active fiscal stimulus package to get us out of recession. Therefore, it is a reallocation of resources, prioritising the difficult time within this worldwide recession. That is about active government and about providing real help now.

Yes, the RDA has seen a reduction in its budget. [ Interruption. ] Yes, it has been a cut, but the money has not been taken to the Treasury. It has been reallocated for social housing in our constituencies, to help businesses and to bring forward capital investment to provide jobs. Therefore, if the hon. Member for East Worthing and Shoreham just wants to get the headline, he should look at the detail, because it is the detail and the activity that assists our communities, this region and our country.

One final example is from an important area within the creative industry in which our region has an important base. The post-production of a recent Disney blockbuster is now taking place in Pinewood studios. [ Laughter. ] The hon. Member for East Worthing and Shoreham laughs, but that is an investment of £70 million and there will be 300 jobs. He will welcome the fact that 10 films are expected to follow. That is not amusing. I am sure that the film itself might entertain us, but these are real jobs in a creative industry, which is really important for our area. I am sure that, even from a sedentary position, the hon. Gentleman would be able to identify really good examples of businesses within his constituency. In fact, I am sure that all of us in this room would be able to do so. All this activity presents a real opportunity.

Mr. Ian Taylor (Esher and Walton) (Con): I am listening very carefully; the Minister is giving some interesting facts. However, he must be confused, because page 13 of the latest report says:

“We recognise the south-east region is not an easily identifiable region.”

That is becoming very evident from today’s discussion. It appears from paragraph 101 that the new chief executive is doing all sorts of things to refocus SEEDA. To whom is he actually responsible? Is he doing these things himself? Is the new Select Committee or the Minister involved? Who is setting all the priorities in paragraph 101—

The Chairman: Order. I think that that is quite enough for an intervention. That was more of a speech.

Jonathan Shaw: It is not much of a speech—I think that the hon. Gentleman would agree. As he will know, the regional boundaries were set up by the right hon. Member for Suffolk, Coastal (Mr. Gummer) when the Government offices were put in place. I do not want a long debate about the peculiarities of the region or where it should begin and end. However, most organisations now organise themselves on a regional basis, not because they have any love and affection for particular boundaries, but because those boundaries provide for economies of scale. A national organisation will not be able to organise

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itself effectively just from the centre. That is why the CBI, the National Farmers Union, the TUC and myriad different organisations in the private, voluntary and public sectors organise themselves on a regional basis. As I said, boundaries are one thing, and I do not want to have a debate about them, but if all sectors mirror the same boundaries, we can, through our common endeavours, focus better and muster our resources.

We have a real opportunity in the south-east. We are not only well placed to lead the UK in a strong recovery, but we can ensure that it is part of a sustainable green recovery. By maximising the benefits from our strong R and D and hi-tech base, by promoting resource-efficient industry and by developing cleaner energy and power, we can gain a strong foothold on the global stage and equip our economy for a low-carbon future, and the Government are working to maximise that growth potential.

The chair designate of SEEDA, Mr. Rob Douglas, recently said:

“It is the private sector which generates the wealth in the South East. In the public sector we need to be efficient and effective in helping the private sector to generate that wealth”.

I agree. That is why the Government are taking forward the low-carbon industrial strategy, which will see the UK become a world leader in the technologies that will deliver a low-carbon future. It is why we are taking forward the “New industry, new jobs” initiative, through which we are backing businesses in a range of markets and sectors, from pharmaceuticals to life sciences and plastic electronics. It is also why we have launched the “Backing Young Britain” campaign to ensure that our young people have the necessary skills and opportunities and that there is not another lost generation, as we saw in previous recessions.

All those initiatives will benefit the south-east economy. SEEDA, Jobcentre Plus, the Learning and Skills Council and the other key regional players are already responding, as are our local authorities. In our debate today, I hope that we can be positive about the opportunities for the region and share a vision of future prosperity for all.

The Chairman: Before I call the next speaker, let me say that I hope to call Mr. Howard and Sandra Gidley as the spokesmen for the two main Opposition parties and then to call Dr. Ladyman and Evan Harris, who gave prior notice. I will try to get everybody in. I will call Theresa May to speak on behalf of the Opposition at about 12.45 pm, and I will invite the Minister to wind up at about 12.50 pm. We have very little time—the Minister spoke for nearly 40 minutes, although that was not his fault because he took a lot of interventions—so I ask everyone to keep their interventions short as a courtesy to other Members who have taken the time and trouble to come here today.

11.54 pm

Mr. Michael Howard (Folkestone and Hythe) (Con): First, I join the Minister in thanking Reading borough council for the hospitality that it has afforded us in making this venue available.

I congratulate the Minister on his choice of subject for today’s meeting. It has met with a certain amount of criticism from some of my hon. Friends, but I think that

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he deserves to be congratulated on it. It was his choice, and my right hon. Friend the Member for Wokingham was rather too generous to the Minister when he said that he should not be blamed for the motion and it was the responsibility of others: it was the Minister’s choice of motion, and I think that it was a very brave choice.

Hon. Members on both sides of the Committee who have had the privilege of serving in government will not have found it hard to picture the scene in the Minister’s office when he announced the subject that he had chosen. There would probably have been a pause—probably quite a long one—and the officials might have ventured to say, “Do you think, Minister, that it is terribly wise to choose a subject that refers to growth sectors and maximising growth, when everyone knows that the south-east is mired in the deepest recession that we have had since the 1930s?” The Minister, all credit to him, stuck to his guns and deserves to be congratulated on that—so we are discussing this subject today.

I am afraid that the words of the motion, with its talk of growth sectors and maximising growth, and, indeed, the complacency with which the Minister began his remarks this morning, will ring hollow in the ears of all those who are suffering as a result of the recession. The Minister criticised one of my hon. Friends for discussing unemployment in terms of percentages rather than numbers, so I shall give him the numbers and suggest that his words and the motion will ring hollow in the ears of the 86,000 people—at least—in the south-east who were in work in the period April to June 2008, and were, alas, not in work in the period April to June 2009. Those are the figures according to the labour force survey. The figures according to the seasonally adjusted claimant count were a little different. According to that measure, there were 82,100 more claimants in July 2009 than in July 2008.

Behind those figures lie the individual stories of the pressures that unemployment always brings in its wake—the sharp drop in income, the fear that the family home may be endangered and the loss of self-respect. Against that background, it will be cold comfort to our constituents in the south-east, who bring those problems to us in our surgeries week in and week out, that the Minister wants us to talk about growth sectors and maximising growth. They and we know—everyone knows—that their and their families’ futures depend not on the words selected by the Minister for the subject for discussion today but on the general condition of the national economy.

When the national economy recovers and we pull out of recession, there will be hope for the thousands in the south-east who have lost their jobs. Until that happens, all the growth sectors in the world will not help. Everyone knows that we shall not be able to build a sustainable recovery until we have a Government who are prepared to put forward a credible plan to reduce the monstrous amount of debt that the present Government have saddled the country with. That would have been far more relevant to the prospects of our constituents in the south-east than the words that the Minister has chosen for our debate today.

Let us for the moment put all that to one side and examine some of the schemes, which the Minister seems very proud of, that the Government have introduced to try to alleviate the effects of the recession to which their own actions have contributed on such a massive scale.

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Mr. Rob Wilson (Reading, East) (Con): I agree with my right hon. and learned Friend that it is brave of the Minister to choose this subject, but does he agree with me that the irony is increased by the fact that the dark lord is today making a speech talking up the prospect of a double-dip recession? Perhaps he knows something that the Minister does not.

Mr. Howard: I hesitate to express a view on the relative states of knowledge of the Minister and the Business Secretary, but my hon. Friend makes a cogent point.

Before I turn to some of the schemes that the Government have proposed in an attempt to alleviate some of the worst effects of the recession, I ought to return to the sentence from paragraph 91 of the Select Committee report that I quoted earlier, which referred to the confusion and uncertainty that existed in the Government’s own schemes. I was absolutely astonished by the intervention of the hon. Member for South Thanet, who, in his rebuke to me, advanced a completely novel reason for the existence of regional development agencies. He said that if I had read the rest of the paragraph, I would have seen that SEEDA had taken steps to correct the uncertainty and confusion that have been created by the Government. So now we know that regional development agencies exist to remedy the uncertainty and confusion caused by Government. Would it not be better, and save a greater deal of money, if that confusion and uncertainty had been avoided in the first place?

Let us look at some of the Government’s schemes, such as the capital for enterprise fund. The fund was announced in the pre-Budget report on 24 November 2008, implemented on 14 January 2009 and took until May 2009 to make its first investments. It has £75 million available to provide equity and what is described as quasi-equity for companies with a turnover of up to €40 million—I am sorry to have used the designation of euros, but that is apparently the currency in which the limit has been designated by the Government—and have viable business models and growth potential. The first investment was six months after the scheme was announced—six months. The answer to a written parliamentary question on 20 May 2009 indicated that £9 million of the £75 million had been provided to eight businesses—not an impressive record. But as is so often the case with this Government, things are not quite what they seem.

On 13 August—the parliamentary answer having been given on 20 May—Lord Mandelson announced that a software firm based in Bedford had become the first business to receive investment from that fund. I should like to know what the truth is behind that obvious and blatant inconsistency. Did all eight businesses referred to in the parliamentary answer on 20 May refuse the money that had been apparently provided to them, or was Lord Mandelson, carried away by the need for a headline during his week in charge of the Government and guilty, not for the first time, of a lapse of memory when he claimed credit for the first such investment on 13 August? I hope the Minister can shed some light on that inconsistency, and perhaps he is able to tell us the truth. If Lord Mandelson is right, it does not say much for the scheme—it took nearly nine months since the

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announcement of the scheme in November 2008 for the first investment to be made. That is the sad story of the capital for enterprise fund.

What about the automotive assistance programme? The scheme was announced on 27 January 2009 and was intended to make available £2.3 billion in loan guarantees and £35 million for training. Various parliamentary answers show that there have been many requests for information about the scheme, in which some are being “taken forward in more detail”, and some projects are said to be “in the pipeline”. But as yet, or at least as at the date of the parliamentary answer on 21 July, no money—not a single penny—has reached a single firm that might be eligible for assistance under the scheme. So here again, a grandiose Government scheme, launched with great fanfare, is not making any contribution to growth sectors, or to maximise growth or to alleviate the effects of the recession.

Mr. Redwood: Did my right hon. and learned Friend know that the hon. Member for Milton Keynes, South-West complained bitterly about the failure of the banks to supply credit for south-eastern businesses—something that we all have experience of? Does my right hon. and learned Friend think that she meant it to be a criticism of the Government? Of course, two of the biggest banks are largely nationalised and under strong guidance from the Business Secretary and others, and from British regulators under the Government’s control.

Dr. Starkey: Will the right hon. and learned Gentleman—

Mr. Howard: May I reply to my right hon. Friend? Not only is there the point made by my right hon. Friend, which is highly relevant to the question asked by the hon. Member for Milton Keynes, South-West, but there is also the fact, as we know from the Select Committee report, that the uncertainty and confusion was in large measure created not by the banks, but by the Government. It was the South East England Development Agency that had to sort out that confusion and uncertainty, so the Government should indeed be held responsible.

Dr. Starkey: Since my words have been taken in vain and the right hon. Member for Wokingham has attempted to re-represent what I was saying, may I offer a clarification? My criticism was of the banks, and it had been made to me by constituents. I believe that one major function of this Regional Grand Committee is for me to pass on to Ministers and other hon. Members the views that have been expressed to me by the businesses and constituents whom I represent. I do not take it kindly that Opposition Members choose to reinterpret and try to get inside my mind when I think that I am usually pretty clear.

Mr. Howard: The hon. Lady may not take kindly what I am about to say, but I am going to give her a piece of advice. We all have experience of constituents bringing problems to us, and it is our responsibility as Members of Parliament to dig a little deeper when we receive complaints. Our constituents may think that it is the fault of the banks, but if she, and we, had dug a little deeper, we would have found in this instance, as confirmed by the Select Committee report, that the fault did not lie with the banks, but with the Government.

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Mr. Taylor: Obviously, it needs to be checked more carefully, but I suspect that the company that benefited from the Government support on 13 August through SEEDA, or whoever did the analysis, has subsequently been found to have accounting problems in its companies and subsidiaries.

Mr. Howard: My hon. Friend makes a telling and cogent point, and I agree with him. The credit insurance scheme was announced in the 2009 Budget on 22 April, implemented on 1 May, originally backdated to 1 April and then, on 9 June, backdated to 1 October 2008. Some £5 billion was allocated to that scheme. Then, on 26 July, a survey of 100 member firms by the Construction Products Association found that only one had taken advantage of that scheme, which it found

“very expensive with very limited cover.”

Little wonder that the Financial Times on 21 August described the take-up of the scheme as “paltry”. Those are some of the schemes on which the Government have pinned their hopes to alleviate the effects of the recession and to encourage a revival of growth. They are clearly a very long way from achieving their desired outcome.

Further light was shed on the failure of the Government’s policies in the answers we heard to some of today’s questions. We heard about housing, which is of particular concern in the south-east, and the growing shortage of social housing is perhaps the most acute manifestation of that concern. Waiting lists have almost doubled since 1997, which is hardly a surprising development given the fact, as I pointed out earlier, that fewer units of social housing were being built after 1997 than before. Neither is it surprising that, in a belated response to the crisis, the Government launched with their usual fanfare another grandiose scheme—a £1.5 billion housing programme—but in order to finance it, they have had to take nearly £590 million from existing housing and regeneration budgets, which will have a particular impact on the south-east.

Dr. Harris: The right hon. and learned Gentleman is right to draw attention to the Government’s lamentable record on both council house building and overall social and affordable house building. It is telling that in his earlier response, the Minister used 1990 as the baseline. Whether one is a Thatcherite or not, nobody would argue that 1990 was the peak of affordable house building and social housing. That is a measure of how poorly this Government have performed; their performance is worse than that of the 1990 Government.

Mr. Howard: We all look forward to the graph that the Minister promised us. He said that it would make it clear what has happened to the provision of social housing during that period.

The south-east, together with the rest of our economy and the rest of our country, is in crisis. We remain mired in recession. What we need from the Government is a co-ordinated plan to help us recover from that recession and policies that will work to deliver that plan. I am afraid that we have had neither from the Minister this morning, and we are not likely to get them from the current Government in the few months that remain to them. What the south-east and the rest of the country need is a new fresh Government, and I am confident that in just eight months’ time, that is what we will have.

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12.10 pm

Sandra Gidley (Romsey) (LD): I shall try to keep my comments brief. I apologise to the Committee that, due to a prior engagement, I cannot stay for the closing comments. In our debate on the growth sectors of the south-east economy, it is worth starting off with a comment about SEEDA. Whenever I meet SEEDA, the first thing it does is moan about how little money it is given compared with other regional development agencies. That seems rather strange because, as the Minister himself has said, the south-east is the powerhouse of the economy. When I quickly flicked through the document that landed on our desks this morning, I was delighted to see paragraph 132. Moreover, the South East Regional Committee, which is wholly composed of Labour members, seems to agree with it. It says that

“it is arguable that investment in the South East can more quickly generate revenue for the public purse than investment elsewhere. We recommend that the RDA funding formula is revisited and some evaluative work undertaken to determine the best way of dispersing RDA budgets to optimise value for money.”

I was delighted to see that statement from the Committee, because I have long felt that the south-east has not received a fair share of the available funding and it could do so much more if it had a little more money. It is worth reminding ourselves of the regional economic strategy 2006-16 [ Interruption.]

The Chairman: Order. I thought that a Member was leaving the room. I just want to make it clear that at all times we must have 17 Members present in the Committee. If we fail to have 17 Members, we have to adjourn. I hope that hon. Members bear that in mind before they leave the room. I am sorry that I had to interrupt.

Sandra Gidley: The three main indicators are an average annual increase in gross value added per capita of at least 3 per cent., increased productivity per worker of 2.4 per cent—it will be interesting to see what happens if we have fewer workers affecting the overall mix—and a reduction in the rate of increase in the region’s ecological footprint. In July, the “South East Plan Supplementary Guidance: Employment Land Reviews” released by the South East England Partnership Board pointed out that regional total employment forecasts had decreased by 48 per cent. between the autumn of 2006 and the autumn of 2008. It is odd that the Minister is talking up growth at a time when that latest report seems to be indicating that the very opposite is happening in reality. The decrease in the forecast has to be taken with a slight pinch of salt, but it will have an impact on building—I am talking about not just building for employment but also for the housing to go with that employment.

Mr. Arbuthnot: On a point of order, Mr. Hancock. Now that the Minister himself has left the room, is it appropriate for this Committee to continue?

The Chairman: Rather than adjourn—I will not give chapter and verse on why the Minister has left, but it is for something that we all have to do now and again—can we just accept that one of his colleagues will brief him on anything that he has missed? If we adjourn, it will mean that hon. Members who want to take part in this debate will not have a chance.

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Sandra Gidley: It is a pity that the Minister cannot hear all the comments being made, because it might be helpful if he could respond to them. However, I shall move on. If there is less building, the proposed infrastructure improvements that we hear so much about could be affected. Many Members here today have raised concerns about the fact that there is no corresponding development of infrastructure to cope with the planned increase in housing. Those concerns have not been addressed.

Some of the growth in all sectors is being hindered by the banks. I want to concentrate most of my remarks not necessarily on what the regional development agency is doing, but on what impact such decisions by local government and national Government could have on the grand plans of the RDA. It is important that we talk about banks, because the subject was raised by the hon. Member for Milton Keynes, South-West.

The banks claim to be lending money—indeed, many business men and women in my constituency have said that banks will lend them money. However, the reality is that people who are asking for money have to raise greater amounts of collateral themselves and have to jump through far more hoops than they previously thought they would have to when initial requests for money were made. The interest rates being offered are very high, much higher than 0 per cent. or 1 per cent.—well, 0 per cent. is not an interest rate. Quite often, the banks are offering a rate that is five or six per cent above the base rate. That is quite a lot of money for a business to find in a time of recession.

The common factor seems to be that contracts are actually signed on the dotted line, but new terms and conditions are introduced at the eleventh hour. The hon. Member for Milton Keynes, South-West was right to say that the banks cannot absolve themselves of all responsibility without taking some of the risk. The scales have been weighted far too much in favour of those organisations. That is having a real impact on development.

Dr. Starkey: I am grateful to the hon. Lady for her support. May I add to her list the fact that banks habitually ask for business people to use their own personal homes as guarantees against loans or overdrafts when they previously did not do so and when it does not reflect the viability of the business?

Sandra Gidley: I thank the hon. Lady for that intervention. It is also my experience that loans have to be secured with much more than was previously understood. Some people may think that that is a good thing, but it is clearly hampering new businesses from developing at a time when many people, who might have some capital and have an idea for a business, are being made redundant. People in their 50s cannot find employment. It is quite right that there are schemes for young people, but I have had a stream of people towards the older end of the work force age who find that little or no help is available to them. The Government need to address that—unless they are not going to help older people to become entrepreneurs either.

Mr. Redwood: Does the hon. Lady agree that the Government have got the power to address that issue? I have no wish to put words in the mouth of the hon. Member for Milton Keynes, South-West, who made her own point very well, but the issue surely is that two of

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the big banks are owned by the Government. The Government regulator is telling the banks to hold more cash and capital and to lend less. Should not the Government sort that out?

Sandra Gidley: There is an element of that. The Government have allowed the banks to get away with far too much. I hope to see that addressed in the future. Some of the agreements made with the banks were probably made with too much haste, as is the case with so many things. However, the lending policy of the banks has a particular impact on the sort of jobs that do really very well in the south-east. We have some good universities, with strong intellectual capacity, and a large number of small start-ups spinning off from those universities. Chilworth Science Park, for example, has some incubator units, and they are also mentioned in the document published today as a way forward. At the moment, the take-up of those units is still good, but obviously many businesses have put their expansion plans on hold, and some are staying small when in normal times they would be moving forward and providing more employment. The banks’ lending policies also have an impact on unemployment in the area. I want to mention the sustainable economy because there has been much publicity about Vestas on the Isle of Wight, but not much attention is paid to investing in some of those businesses, which could help us tackle some of these problems in the long term.

The rural economy also needs to be mentioned briefly, because I am disappointed with the Minister’s response to my earlier question. It was not a nimby question; it was a real question about our limited food resources for the future. Plenty of land is available for building on, should that be required—in some cases and some places, it is—but that does not mean that we should build over land that could support future food growth, and I strongly believe that the Government need to look at that. The regional economic strategy implementation plan says that it wants to foster

“Dynamic food, farming, and forestry sectors, enhancing and exploiting the countryside’s assets with increased adaptability and resilience”.

Building on parts of the countryside that can most contribute to that runs counter to the strategy that SEEDA wishes to produce.

I was going to talk about housing in the countryside, but I will curtail my comments because I have my eye on the clock and many more Members wish to speak. However, the current planning system often runs counter to a more organic type of growth. Large developments are often plonked on the edges of towns because we can get more planning gain from that type of development, rather than people thinking about what will actually help a small community to survive and thrive.

Other rural problems that need to be highlighted and addressed are the availability of broadband and the increase in teleworking. It would be a shame if the aspiration in the strategy to increase teleworking did not take into account the needs of those in more rural areas who could do a lot of their work in that way and reduce the impact on the local road infrastructure.

The final thought that I wish to leave the Minister with is that I have been surprised by the slightly schizoid attitude to regional government. On the one hand, the Minister has said that regional organisation is a good

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thing and that a lot of national companies have to set up a regional organisation because national is too large a scale and the regions can have a greater handle on what is going on. However, on the other hand, when tackled about the decrease in RDA funding, his response was, “We have taken the money away so that we can allocate it to housing and various other projects.” That may be laudable in itself, but if the regional development agencies are such a good thing, why does he not trust them to make those decisions, and why does he think that central Government know best in those situations?

Several hon. Members rose —

The Chairman: Colleagues, seven Members want to speak before we start the wind-ups. I intend to try to get everyone in, but that will happen only if people are courteous to each other, do not take interventions and take approximately two to three minutes each. I am sorry about that. The order in which I will call people so that I can keep people in the room and maintain a quorum is Dr. Ladyman, Evan Harris, Maria Miller, Dr. Whitehead, James Arbuthnot, Mrs. Starkey and Mr. Bottomley. In that order, please.

12.25 pm

Dr. Stephen Ladyman (South Thanet) (Lab): Thank you, Mr. Hancock. I will try to be brief and try to keep to your stricture of speaking for just two or three minutes. Unfortunately, I will not take any interventions.

I was struck by the comments of some colleagues on the Opposition Benches about the nature of our recession. I am always a great believer in listening to people who have first-hand experience of a subject. Of course, several Members on the Opposition Benches have first-hand experience of creating not just one recession but several recessions, so we should listen to them when they talk about recessions. However, they fail to recognise that, whereas the recessions that they created when they were in government were caused by inflation, which they allowed to get out of control—that forced them to put up interest rates and take money out of the economy, which caused recession and huge growth in unemployment—the recession that we are in today was not caused by that phenomenon. The recession that we are in today was caused by a global financial crisis, which means that finance is no longer available. The solution is therefore to put money into the economy, which is exactly what the Government have been doing.

The debate that we should be having is not the old-fashioned debate about what caused the recession and what we need to do to fix it, but a debate about when we can start pulling back on some of the investment that the Government are making in the economy. We cannot do that until the economy is robust and, in particular, we cannot do that until the economy in the south-east is growing again, because, as we all recognise, the south-east economy is one of the engine rooms of economic performance in the whole country.

We are debating the south-east region today. Let me say straight away that, whatever criticisms might be made of this Grand Committee, which is, so far as I am aware, a first in the history of Parliament, we are having

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a debate about south-east issues that is restricted to Members of Parliament whose constituencies are in the south-east. Surely that has to be a step forward.

We are talking about south-east issues. There are certain issues, some of which are mentioned in the report that we managed to table today to inform Members for this debate, that must be addressed regionally. It is quite clear that some issues are very difficult for local government to address by itself and that some issues are not well addressed by national Government and need to be addressed on a regional basis. Some of those issues are about the identification of growth areas and sectors that we need to support.

In my constituency, for example, the biggest employer is the pharmaceuticals sector. It might be easy for me to say that pharmaceuticals is an important sector of the south-east economy, but one can only see that it is important for the whole regional economy by looking at the whole region and seeing how many people are employed in it and how many businesses are involved in biosciences and pharmaceuticals, in which case one can direct resources into those businesses. One cannot determine growth areas by simply looking at one’s own local community or at one’s own local authority area.

Clearly, another sector where we need regional co-operation is housing. Housing has been mentioned several times today. However, one of the reasons that we have not addressed the housing issues in the south-east is because local authorities continually try to undermine the efforts of Government to produce the level of housing that is needed in the south-east. So, one of the things that I hope will come out of this debate and out of the future debates on the South East Regional Select Committee report, if Parliament grants us a debate on that report, is that we must start thinking as a region and working together on regional issues.

Let us put aside silly, partisan views and attempts to undermine regional policy simply because the Opposition did not think of introducing regional structures. Let us work together on addressing the needs of the south-east region. For that reason, I welcome this debate today.

12.30 pm

Dr. Evan Harris (Oxford, West and Abingdon) (LD): I shall try to make one point per 30 seconds. If the Minister cannot respond to them in his speech, I ask him to agree to address them in writing.

We have had a debate about the need for housing supply. The key factor that the Minister did not address in his opening remarks is the massive increase in waiting lists and housing need relative to performance on new build housing, particularly for affordable and social housing. In my area in Oxford, we want more housing. My constituents recognise the need for that, and the right hon. Member for Oxford, East (Mr. Smith) and I hold a common position that we will generally seek to support housing, which often goes against the Conservative party’s opposition to new housing in our area.

We also recognise that there must be a balance between housing and jobs in Oxford. As the leader of Oxford city council has said on many occasions, the huge gap between average wages and average house prices in Oxford and the shortage of houses mean that many Oxford workers live outside the city and have to commute in. That leads to huge problems of traffic congestion in

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Oxford. The priority must be for housing to be where the jobs are, and for the jobs to be placed where the housing is in Oxfordshire. There are new housing developments in some of the county towns in Oxfordshire around and within my constituency, which is why it was right for the regional spatial strategy to say that the growth area for central Oxfordshire is exactly that—central Oxfordshire, not just Oxford city.

I note that PPS12 and the documents and Government guidance on local development plans require local authorities to work together in determining their planning policy for economic growth. That is why, having sat for two full days at an examination in public of the Oxford core strategy regarding development for employment land in my constituency, it was disappointing to see that the employment land study that Oxford conducted, and its core strategy document, made no reference to the needs and strategies of other local authorities in the area. The proposal for employment land to the north of Oxford was essentially a dog’s breakfast.

In his response, will the Minister reiterate that in the absence of county structure plans, there is a requirement for local authorities to work with other local authorities to co-ordinate themselves? I must finish, but I ask the Minister to reiterate that as it is crucial. I pay tribute to my constituents Jonathan Gittos, Robert De Newtown, Rosemary Harris and others, for the work that they did in opposing the flawed plans for new economic land in that area. The figures from the south-east partnership board show that the projected job growth in our central Oxfordshire region, which we all want to see, can be met within existing land supply sources, especially given the downgrading of growth predictions over the 2006 to 2026 period. I am aware that, hopefully, the recession will be short lived, but those figures apply to that whole period.

Finally, I would like to reiterate to the Minister the need to ensure that the massive and welcome investment in the Diamond Light Source is maximised by not having what would be short-sighted cuts in the availability of that facility for use by universities and businesses. There may need to be cuts and tough decisions, but what is the point of spending hundreds of millions of pounds on a facility and then cutting—as has already been done—the amount of time that it is available for use? I am grateful for the opportunity to have made those points.

12.33 pm

Mrs. Maria Miller (Basingstoke) (Con): The south-east is the most important part of the powerhouse of the British economy, and contributes £188 billion to the gross value added in this country, or contribution to the GDP. My constituency, Basingstoke, is at the heart of that with 60,000 jobs and almost 4,000 businesses. As a result, I spend a great deal of time talking to the Federation of Small Businesses, my local chamber of commerce, important national local employers and small and medium-sized enterprises. They raise many of the issues that we have discussed today, but there are some issues that are not included in the report, which I would like to touch on briefly in my contribution to the Committee.

The three issues that businesses raise with me time and time again when it comes to their perspective on how to maximise growth—as opposed to that of the

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Government—are how to get access to the right number of skilled workers, how to ensure accessibility and good transport links from one part of the south-east to other parts, and how to retain the quality of life which, as the Minister said earlier, makes the south-east such an attractive place for multinational companies to come and set up in.

In short, those issues should have been covered in the report that we have had so short a time to consider this morning. The Minister, and perhaps the hon. Member for South Thanet, need to think further about that. In my constituency, where such issues are being raised, manufacturing plants have been closed and unemployment has doubled. That is happening in one of the most prosperous parts of the south-east. The Minister would do well to examine the experience of Basingstoke.

Specifically, in the matter of training and skills, many of the organisations that choose to do business in our part of Britain want people with a significant scientific background. The recent physics department closure was a great loss to the university and the region, and there is a shortage of science and maths teachers throughout the south-east region. Perhaps the Minister will explain what is being done to deal with those issues, which are causing great problems in my constituency and others. It is standards in schools and the teaching of maths and science that will provide our skilled work force for the future.

I want briefly to touch on congestion and accessibility. One reason for Basingstoke’s success as a location for businesses is its good transport networks and links. However, congestion has increased by 20 per cent. in the past 10 years, with little or no investment in our key arterial roads, and we are concerned that that advantage is fast being eroded. The Minister may be aware of representations that I have made to his colleagues on that point, and of the need, in particular, for improvements to the M3, around junction 6. As I pointed out in my oral question, £128 million has been cut from growth point funding, and I am concerned that the growth that the Government want to happen in the area will be undermined, or perhaps curtailed, by the funding cuts.

I welcome the proposal made by my hon. Friend the Member for Chipping Barnet (Mrs. Villiers) for a high-speed rail link network connecting London and the south-east to Birmingham, the north and the channel ports. Such initiatives will help businesses in the area.

Last but not least is the issue of quality of life. The report presented to the Committee today completely ignores one of the most important issues for the region—the sustainability, or lack of it, of the proposals on house building and economic development. I would like to set out more thoughts about that, but time does not permit. I am sure that the Minister understands the point that I am making.

12.38 pm

Dr. Alan Whitehead (Southampton, Test) (Lab): I want to deal with the motion with particular respect to the city of Southampton, and discuss the position and future of Southampton port.

Southampton port is not just the port of the city of Southampton, or even the sub-region. It is a key element in the maintenance and prosperity of the south-east, and, indeed, considering the wider canvas, a key element

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in our national prosperity and future prospects as a major trading nation, with all that goes with that. It is responsible for a fifth of UK trade outside the EU, supports about 78,000 jobs and contributes about £5.5 billion to Britain’s gross domestic product.

Of course, the role of the port is sometimes mired in controversy. It is wholly within the curtilage of the local authority, while its influence and the necessity of its development clearly extend far beyond the borough. If a future regime were to atomise planning and development to local authorities, it could be possible for the development of such a major port to be regarded as the sole responsibility of one local authority, rather than of the sub-region or region.

One small example—I congratulate my hon. Friend the Minister on having a substantial hand in this—is the development of the freight rail link between Southampton and the midlands, which is using £52.2 million of investment from the transport investment fund. The link was jointly, strongly and physically supported by SEEDA and Advantage West Midlands. I wonder how far we would have got with it if the whole of regional development were regarded as the province of a number of different local authorities. We would probably have got about two and a half miles towards the boundary of Southampton, after which containers from Southampton port would have collided with the bridges.

Southampton port has produced its master plan for the next 20 years. It is predicted that the volume of container handling, which is currently 1.3 million 20-ft equivalent units, will reach more than 2.5 million TEUs by 2020 and more than 4 million TEUs by 2030. Similarly, passenger numbers will double. It is vital that the region supports the port’s development, given what the port means to the region. My hope is that the port’s master plan and the developments that it entails—the increase in sustainability through additional rail and short-sea handling—will secure the support of all regional MPs. Unlike some regional MPs—I will name no names—I do not see the development of the port as exclusively the province of Southampton or as something to be sniped about from the sidelines by those who do not understand that this is a regional and national issue, which the region has a substantial hand in promoting and developing.

12.42 pm

Mr. James Arbuthnot (North-East Hampshire) (Con): In oral questions earlier, I raised the issue of the massive Pyestock warehouse development, which will generate lorries and fumes, clogging up the locality and damaging residents’ quality of life and the environment. I say that because that is what the Secretary of State’s own planning inspector said, but some Minister—we do not know who—knows better than the 12,000 local people who opposed the application, better than local councils and better than local Members of Parliament. In that respect, my hon. Friend the Member for Aldershot (Mr. Howarth) and I have been working closely together on the issue.

The reason why this anonymous Minister chose to contradict all those people was that despite the damage that the Government admit will be caused to the environment, despite the harm that they recognise will

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be done to the gap between settlements and despite the serious effect that they accept the project will have on the area’s character and appearance, the development will generate 1,500 jobs, which should outweigh all that damage. That would almost be a persuasive argument, if it were true; unfortunately, it is not. As the Campaign to Protect Rural England has devastatingly pointed out, the development may produce 1,500 jobs, but they will not be new jobs; they will simply result from the closure of other, more local distribution centres. In fact, there will be probably be a reduction in jobs, because of the economies of scale. That is why we are damaging the environment and destroying local people’s faith in the planning system. Why should put people spend thousands of pounds and years of their lives submitting arguments that are then thrust aside almost at the whim of some Minister? To take a recent quote from a Cabinet Minister, Pyestock is a perfect example of “government by fiasco”.

The Chairman: I call Dr. Starkey. There will then be one minute for Mr. Bottomley. We will then move on—sorry about that.

12.44 pm

Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): I will of necessity be brief, but I want to make three points about my constituency. First, the Milton Keynes and south midlands growth area crosses three different RDA areas. I commend the three RDAs for getting together to identify the key growth industries in the area. I ask the Minister to ensure that he co-operates with the two other regional Ministers on the matter.

The second point is that the welcome move of Network Rail’s headquarters to Milton Keynes provides an opportunity to develop further rail industry jobs and create a rail industry cluster around Network Rail and the old Wolverton rail works. I commend that to the Minister. I also welcome the fact that Milton Keynes is one of the cities taking part in the electrification project, which the Government are funding. That is exactly the sort of project that is needed to tap into the expertise that we already have in order to position us with the industries of the future, so that we are ready to take advantage of that as we come out of the recession as a country and as a region.

12.46 pm

Peter Bottomley (Worthing, West) (Con): First, I congratulate people on the reprinting of the Select Committee report and on getting the pagination right. In the first half of my remarks, I want to refer to paragraph 15, which states that the South East England Development Agency has to achieve two Government objectives: the first is

“to increase the growth of every region”

and the second is “to reduce the disparities.” If the south-east were growing and the other areas were contracting, SEEDA’s job would be totally impossible. That is a schizophrenic instruction that should be revised.

Let us consider the report. Two of the first 10 witnesses in the list of written evidence are linked to the colleges fiasco. Northbrook college in Worthing is still teaching people in hospital huts from the first world war. Worthing college, which is also covered by our constituencies, was built for 600 and now has 1,500 people. I would like to

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know whether any of the Minister’s colleagues will talk to him about that and the funding that is needed to replace those, because we cannot get people into training—whether young or old—unless we have colleges that are worthy of them.

My final point is that level crossings in our constituencies and along the south coast are very bad indeed for the economy, the environment and for safety. Will the Minister please talk to his colleagues and bring in a programme, so that in our constituencies a level crossing is replaced at least once every ten years? While he is thinking about that, will he tell us how this meeting has helped our constituencies or our region?

12.47 pm

Mrs. Theresa May (Maidenhead) (Con): By definition, we have had something of a limited debate today in this Regional Grand Committee, because of the time available. Nevertheless, hon. Members have managed to discuss a wide range of subjects. The hon. Member for Romsey (Sandra Gidley) ranged from the banks to broadband availability. The hon. Member for Oxford, West and Abingdon (Dr. Harris) talked about the need for local authorities to work together in housing projects. We heard about further education colleges from my hon. Friend the Member for Worthing, West (Peter Bottomley), and my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot) talked about the Pyestock development. The crucial point is that people will no longer trust the planning system when such decisions are taken. The hon. Member for Southampton, Test (Dr. Whitehead) understandably spoke particularly about Southampton port. Skills and the sustainability of development were issues raised by my hon. Friend the Member for Basingstoke (Mrs. Miller).

The speech that was in many ways most interesting was that of the hon. Member for South Thanet (Dr. Ladyman), who told us that he wanted us not to be partisan, having opened his speech not only with an attack on Conservative Governments of the past, but on individual Conservative Members. He went on to tell us that the situation that the county is in at the moment in terms of the economic recession is entirely global in its nature. I have to say that such comments relate to the nub of the problem and this Government’s inability to address the economic recession in this country. The Government, their Members and their Ministers are unable to recognise the role of decisions taken by the Government—particularly by the Prime Minister when he was Chancellor of the Exchequer—and how that has contributed to the depths of the recession that we now have in this country. That has meant we have seen record rises in unemployment in this country and the number of job vacancies falling to a record low.

In his excellent opening speech, my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) talked about ministerial complacency and referred to the delay and failure of business support schemes introduced by the Government. Of course, the Government also delayed implementing schemes to help unemployed people—as I speak, half the country is not covered by specific programmes for unemployed people. There was not a word on that from the Minister in his speech. Indeed, I thought that the Minister’s complacency was compounded by the complete lack of reference to the real problem of the recession and, again, to the role played by the Government.

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We all want this country to move out of recession, and we all hope that that will start to happen by the end of the year. In the short time that I had to look at the Select Committee report, however, I was struck by the comment by the Federation of Small Businesses in paragraph 88 on SEEDA’s role:

“We believe that the Government is putting too much pressure on SEEDA to demonstrate the ‘green’ shoots of recovery within the South East economy.”

I say to the Minister once again that unless the Government are realistic about the situation and recognise the problems and their source, they cannot hope to be the answer to those problems. If we are to maximise growth in the south-east in the future, we need a Government who understand the region’s role as a powerhouse of economic growth for the whole country, yet the Government’s policy fails to accept that for the south-east. Their only policy for the region appears to have been to increase housing targets.

As was clear from many of the questions asked by my right hon. Friend the Member for Wokingham earlier in the debate, the Government do not understand the importance of looking at infrastructure needs before housing development takes place. In 2004, Wokingham borough council commissioned Ove Arup to look at the cost of the infrastructure work that would be needed to support the housing target in the area through to 2026, and that cost was £800 million.

In my constituency, the former Secretary of State for Communities and Local Government agreed to the development of several hundred houses in Badnell’s Pit, despite the fact that the local schools cannot cope. What is worse, the Secretary of State refused to ask the developer to give any money to provide for more school development in the area, thus putting pressure on the local council. Sadly, the state of the public finances means that it will be difficult to address those infrastructure problems in the short term.

The Government have ignored the infrastructure needs of the south-east, despite study after study, from multi-modal studies to regional spatial strategies, sub-national reviews and local development frameworks. They have failed to understand the south-east’s importance in the economic development of our country, and that mirrors their failure to understand the role they have played in bringing us to a recession that runs deeper here than it does in many other countries and that will be harder for us to get out of. They have failed to see the role that the south-east can play.

Sadly, the south-east will only see real growth in the future with a Government who can come forward with a credible plan to deal with the public finances and reduce our national debt, and the only way that will happen is with a Conservative Government.

12.52 pm

Jonathan Shaw: I thank hon. Members for their contributions. Many referred to the work of the Select Committee and its report, which is a useful tool. I have not had time to read the report, but I will. The report would have benefited from the contributions of Opposition Members, so it is a crying shame that they were not involved. This forum tends to be more partisan, but members from all parties know that meeting in Select Committees allows us to get to the nub of the issues in a

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non-partisan way, interviewing all the people who make such an important contribution and discussing the matters with them, from the RDAs to the small businesses, as the right hon. Lady has mentioned. However, Opposition Members chose not to be involved. I think that the report is good, but it would have been richer and benefited from the Opposition’s contribution. That was their choice, but they are here today, and obviously this is a more partisan arena.

I would like to respond to the right hon. and learned Member for Folkestone and Hythe. He presented, as he frequently does, an effective speech, but it did not say very much—it was good on style but lacked content. I do not blame him for being selective with the statistics. He did not say, for example, that although 36,227 people became unemployed, 34,000 went off unemployment. Do we think that the hon. Gentleman would have made that point when he was Employment Minister? I think that he would have done so. I do not blame him—if he wants to be selective, that is his approach. I do, however, call into question his failure to present anything at all as an alternative. He then complacently says, “When the Conservatives get in…” I think that the electorate will hear that complacency and think about it, particularly when he has little to say about investment in infrastructure. We have heard from both sides of the Committee that there has been no investment, but hon. Members know from their constituencies that that is not true. The transport spend in the south-east has increased by 18 per cent. in 5 years to £2.3 billion.

The right hon. and learned Gentleman did not mention the channel tunnel rail link. I think that he would agree that the domestic services that will be provided to his constituents in Folkestone and throughout the county are going to make a huge difference. He did not choose to make that remark despite the £3 billion investment and £6 billion of grants for the CTRL.

There are many other examples to which I have referred. The Learning and Skills Council has invested £400 million in colleges and £800 million in total, and 53 out of 63 colleges have received investment. Opposition Members are nodding their heads, but those buildings are not a mirage, and the students and teachers say that there has been a huge investment in further education and skills.

Peter Bottomley: On a point of order, Mr. Hancock. Normally, it is not important to correct what a Minister has said, but he said that we were nodding our heads when we were actually shaking them. We disagree with him.

The Chairman: That is not a point of order.

Jonathan Shaw: Our area generates a great deal of wealth. We have invested hugely in the infrastructure not only for buildings, but for people. People are now waiting 18 weeks, rather than 18 months, for an operation. We have invested in all our primary and secondary schools, the teaching work force, the police, other security

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services and police community support officers, whom Opposition Members did not welcome originally although they welcome them now.

It is also important to remember that, while we have areas of wealth, we also have areas of poverty. Indeed, we have some of the highest levels of poverty in the country. If we look at coastal regions such as Hastings or Thanet, we see that unemployment is more than 5 per cent. That is why we introduced the working neighbourhoods funds, and I commend the authorities concerned. Both Conservative councils are working in partnership with the RDAs and county councils to ensure that we use the additional millions of pounds in those communities to assist people in finding and securing work.

So very often, as the hon. Member for Basingstoke has said, the issue is about skills. Skills are crucial not only for this region, but also for the country, if we are going to grasp the available opportunities. That is why we provide essential support for kids from less well-off families through the education maintenance allowance. It is a question for the Opposition whether they will continue that sort of payment, which is important if we are to have social justice. It is not only about importing skills, but about growing our own skills to ensure that youngsters can take their place in the future industries to which members of the Committee have referred. Low carbon technologies will be essential to our resources.

The hon. Member for Romsey referred to Vestas. It is, of course, disappointing that the company chose to close its facility because the market was in America. However, the Government are providing £10 million to ensure that the research and development facility on the Isle of Wight can provide expertise and put us at the leading edge.

There are competing demands within the south-east, and we are interdependent on one another. It is important that we work across the region so that businesses and the public and voluntary sectors can harness our energies and resources to ensure that quality of life continues for the 8 million people in the various communities in this part of England.

I hope that people who have listened to the debate will take from it the positive that we all agree that it is important to continue to see investment and growth in this great part of the UK.

The Chairman: Order. I am sorry, Mr. Shaw, but time has beaten us. There are three clocks here—the bell outside, the one on the wall, which is wrong, and the one that the Clerk has provided. At least one thing is consistent in that the time here is the same as it is in Westminster—it is never right. I thank all members of the Committee for their participation. We have outdone any other Regional Grand Committee that has met so far; everybody who wanted to speak did so and every question was answered. Thank you very much indeed.

1 pm

The Chairman adjourned the Committee without Question put and the motion lapsed (Standing Order No. 117A(6) and Order of the House, 25 June ) .


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