Industrial Strategy — House of Lords, 2018-01-08
Topic: Macroeconomics
Josephine Valentine (Crossbench, Unknown): I am honoured if somewhat hesitant to follow the noble Lord, Lord Heseltine, and I am pleased to say that I will pick up a few of those themes in my remarks. I congratulate the Government on bringing forward their industrial strategy. I believe that it has largely struck the right balance in setting a post-Brexit economic direction and in recognising government’s role as a facilitator rather than a director of growth. However, as ever, the challenge will be in its implementation. As the 19th-century head of the Prussian army famously observed: "No battle plan ever survives first contact with the enemy" I want to focus my remarks primarily on the chapter on places, but before doing so I particularly welcome two themes in the document. I have long been an advocate of transport investment facilitating economic development. I am now on the board of HS2 and see the benefit this is already bringing to Birmingham. More broadly, I believe it will create an economic and social spine for mainland Britain. It will improve national productivity by connecting businesses across the country to a wider source of skills, professional services, collaborators, supply chains, and finance and markets May I also encourage the Government to progress the long-awaited expansion of Heathrow? I should declare an interest as chair of Heathrow Southern Railway, which is seeking to build a railway line from the south, both aiding connectivity and reducing air pollution. Secondly, as a council member of UCL, I welcome the commitment to continuing investment in research and innovation. The uncertainty caused by our future exit from Europe provides challenges in attracting and retaining the international talent we need to lead this activity, but well-founded and stable investment in research funding can help diminish that risk Let me now turn to the chapter on places. The responsible business network, Business in the Community, has recently launched a "pride of place" initiative to bring businesses together with the local community, local government and stakeholders to tackle some of Britain’s forgotten areas. They have asked me to lead a pilot programme in Blackpool. From Blackpool’s perspective, a top-down industrial strategy is all very well but I ask myself: is it really going to make any difference? Without the commitment to "prosperous communities" across the UK in the final chapter on places, I am not sure it will. Even then, it will be a struggle to achieve—indeed a heroic struggle to achieve everywhere in Britain. So let me make a few general points about inclusive growth in left-behind areas, to use government vernacular I believe that to be successful the Government must: back local cross-sector leadership in natural socioeconomic geographies; maximise devolved decision-making and provide associated funding; and provide targeted investment, at the same time as confronting and addressing complex factors where Whitehall policy is causing problems locally I use Blackpool as an example to expand upon these points. Blackpool is one of the most deprived areas of the country. Among local authorities it has the most children in care and the highest rate of people too sick to work. It has poor-quality housing in its centre and its secondary schools are struggling. On the other hand, its tourism sector is seeing a resurgence, with visitor numbers increasing from 10 million to 17 million over the last decade. It is investing in a new conference centre and hotels and its sixth-form colleges are excellent In economically fragile places such as Blackpool, it is essential to take a holistic approach, working with the public, private and voluntary sectors. Social and economic issues go hand in hand and while the Government may focus on certain industrial sectors top down, going with the grain of what works locally is essential. I therefore welcome the aim of encouraging local industrial strategies. However, county council and local authority boundaries rarely reflect economic geographies. In Lancashire, there are in effect three: east Lancashire, the Preston area and the Fylde coast. Having worked in both Blackburn and Blackpool, I know how different they are. One has a large Asian minority, who came to the UK originally to work in textiles, while the other has a predominantly white community with a strong Victorian tourism legacy. Therefore, while I welcome the focus on local enterprise partnerships as a vehicle for local strategies, each natural socioeconomic geography needs its own leadership within this framework, and the Government need to have a way of providing a measure of devolved decision-making and funding to regions which do not fall into convenient boundaries or political structures Targeted investment which the Government could usefully make in Blackpool and the Fylde coast includes: in skills, backing an institute of technology and consolidating Civil Service jobs in a mini hub in Blackpool town centre; to support the tourism sector, providing tangible incentives for the private sector to invest in hotels, restaurants and attractions; and in infrastructure, reopening the railway line to the isolated town of Fleetwood and improving Blackpool North station once the welcome electrification of the main line is complete. All these investments put together would not be expensive in national terms and would indeed pay dividends. I welcome the existing investment in the opportunity area and urge the Government to continue to do everything they can to make sure that Blackpool and other opportunity areas have the best possible leaders in their secondary schools Conversely, Blackpool’s housing is an example of where amending unhelpful national policy could even save the Government money. Blackpool has at its heart a private sector slum, fuelled by public money. Properties in wards such as Claremont and Revoe are largely privately owned and their occupants are on benefits. From the landlords’ perspective, there is little incentive to keep the quality up but much incentive to house the maximum number of tenants with guaranteed housing benefit. As a result, Blackpool attracts, and landlords advertise for, a disproportionate number of people with complex needs from all round the UK. At the crux of the problem is housing benefit paid according to a Whitehall formula which would not reflect the real market rate for such poor-quality housing Although the problem is extreme in Blackpool, it is reflected in other seaside towns. This is a problem which government needs either to help solve or provide the tools for the local council to manage. If it remains unsolved, it is difficult to conceive of a successful and sustainable local industrial strategy. As a recent FT article put it: "Blackpool is a net importer of ill health", and "unemployment" But turning to the positives, any industrial strategy for Blackpool would need to include tourism. The tourism sector always seems to be the Cinderella of government business sectors, yet with a burgeoning middle class in India and China it would seem an obvious candidate for exploiting post Brexit. Indeed, Blackpool hosts the world ballroom dancing festival, which attracts large numbers of Chinese, alongside, of course, "Strictly Come Dancing" I conclude by saying that Blackpool would be keen to be regarded as a tourism zone in any sector deal, provided of course that this comes with real incentives for private sector investment, as well as being considered for one of the first pilots for a local industrial strategy. Perhaps the Minister would kindly answer two questions in his summing up. First, how are the pilots for local industrial strategies being determined? Secondly, do the Government intend working with partners such as Business in the Community and the Big Lottery Fund, which both have place agendas and could help to bring business and the community to the table?