Education and Local Government — House of Commons, 2020-01-14
Topic: Macroeconomics
Kevin Paul Hollinrake (Conservative, Centre-right): Congratulations on your election, Madam Deputy Speaker—although there was no need for an election. It is always a pleasure to speak when a fellow Yorkshire MP is in the Chair I have been casting my mind back to when I made my own maiden speech. I found it a daunting experience, and I am pretty daunted now by having to follow some of these amazing maiden speeches. They have been truly exceptional, and I congratulate all those who have made their speeches today, and the rest who will make theirs over the next few days. I give them my very best wishes for their future in this place I would like to speak principally about levelling up. That is something that clearly encompasses the two main themes of today’s debate: education and local government. "Levelling up" is an excellent phrase that has come from somebody who is very good at articulating phrases to achieve their political ends. It is something that I and many other colleagues on both sides of the Chamber have been banging on about for years. It is based not on grievance but on sound economics. It is about opportunities for people in the north, but it is also a huge opportunity for UK plc. The solution to levelling up is pretty simple. It is about more public sector investment and more private sector investment. However, "simple" and "easy" are two separate things. The Government are now committed to a huge, £100 billion investment in infrastructure. It has not been easy, over the past four and a half years, to persuade the Treasury to do that, but it is committed to doing it now. However, the trickier problem is ensuring that we get private sector investment, too. Public sector investment on its own simply will not do Investment in the north—and not just the north but the regions of England and the other nations of the United Kingdom—is not about political opportunism. It is about sound economics and has the support of some of the economists that I have a great deal of faith in. Jim O’Neill, for example, is an ardent remainer, but he said earlier this year that being in or out of the EU was not the most important thing, and that our productivity performance and our geographic inequality were the most important issues we needed to deal with. Andy Haldane, the chief economist at the Bank of England, noted in a recent speech that the regional income gap between the richest and poorest regions in terms of average incomes was now larger than it had been at any time in the early 20th century. That gap narrowed in the first 80 years of the last century David Smith, the economist who writes in The Sunday Times, has welcomed the £100 billion investment in infrastructure and talked about the change we need to make to the Green Book to ensure that northern and midlands projects, and projects in the south-west and other parts of the country, are stacked up better. He identified the fact that the GVA—the productivity—in London is about £50,000 per person per annum, whereas in Yorkshire and Humberside and the north-east, it is just over £20,000 per annum. There is a clear relationship between average incomes and productivity, so it totally follows that if we get the productivity right, average incomes will grow. However, as David Smith said in his column this weekend, public investment works only when it is in harmony with private investment. Another very good economist, Mark Littlewood of the Institute of Economic Affairs, has been quite scathing about infrastructure investment. He has pointed out, for example, that Doncaster has very good road and rail communication links but still has a long way to go to match the productivity and prosperity levels of London and the south-east. So infrastructure alone will not solve this tough, long-term and expensive problem If we are to repay the trust of all the people right across the north who voted Conservative, including in places such as Darlington, where I spent a lot of time campaigning over the election period, we must ensure that real incomes grow and that we get better jobs, and all that can be derived from higher productivity. We must see higher public sector investment and higher private sector investment The public sector is relatively straightforward. We have been campaigning for some time to get £120 billion spent right across the north with a 30-year plan. That is what will hopefully be announced at the Budget, but we need a raft of other policy ideas to encourage private sector investment in some of the left behind towns. Free ports are a great policy, but Darlington and many other constituencies will not benefit from them. We perhaps need enterprise zones in town centres rather than business parks, and incentives to retrain the long-term unemployed. We need an SME-first policy. Preston City Council, for example, has radically shifted the amount of money it spends with SMEs, and we know that SMEs invest a much larger proportion of their income back into the local community. We need more public sector jobs. We need to consider our high streets and business rates. Building homes at a discount is an excellent Government policy Key to all that is devolution. We must ensure that we hand powers back to the people who know the towns best and will represent them most effectively. We need to do all these things to get private sector investment as well as public sector investment.