Economic Regeneration in Barnsley

Dan described securing his adjournment debate speech on Economic Regeneration in Barnsley as one of the proudest moments of his professional life. Here is a transcript of what he said...

It gives me great pleasure to secure today’s debate on an issue that is extremely important for Barnsley and for the whole country.

The cuts and changes to welfare pursued by this Government are hitting the most vulnerable parts of the country the hardest, and Barnsley is on the front line. More than 25% of our jobs are in the public sector, one of the highest rates in the country. The loss of many of these jobs will take tens of millions of pounds out of the local economy just as benefit changes start to bite. We have taken huge strides to overcome the stagnation and decline that hit us the last time the Conservatives were in power, but these cuts have the potential to push us back years.

The legitimacy of the Government’s programme depends on its fairness. Before they go further down the road they have embarked on, they have a duty—an obligation—to stop and think about the effect it will have on places such as Barnsley. That does not mean that we reject reform to our public finances or to our public services, but the deficit needs to be tackled in a way that corresponds to sensible economic policy, not to the demands of ideology. Welfare needs to be reformed in a way that does not kick the genuinely vulnerable in the teeth. The question is how far and how fast the cuts and changes are made and what is done to make the process a transition, rather than a reckless abandonment of our communities and a gamble with our economic future.

First and foremost, places like Barnsley need targeted support to help drive development and employment—a coherent, responsible regional development strategy that has the resources to succeed. That does not mean giving unsustainable handouts. What is holding Barnsley back is not the fundamentals—we have the location, the work force and the will to thrive—what we need is the investment to overcome the entirely man-made barriers to our progress.

Dan gave way for an intervention from Michael Dugher – Labour MP for Barnsley East: I thank my hon. Friend for giving way and for securing this important debate. Does he agree that there is proof that the area still has something very significant to offer in ASOS’s announcement last year of 11,000 new jobs for Barnsley, specifically in Grimethorpe in my constituency? Is it not the case that those jobs and that investment came about because of decisions made by previous Governments to ensure that we had in place infrastructure such as the facilities, warehouses and roads to attract such firms, and that we need a real partnership with government?

Dan Jarvis: I thank my hon. Friend for that constructive and useful intervention. I believe that the ASOS model provides a useful example of how the Barnsley development agency, working with the metropolitan borough council, can aggressively seek to target other industries and businesses. The ASOS model is a useful one that we need to learn lessons from and employ in future.

As I have said, what we need is the investment to overcome the entirely man-made barriers to our progress. Without that, as my colleague the shadow Business Secretary recently said,

“the government’s belief that the retreat of the state is automatically matched by the expansion of the private sectors is going to be tested to destruction.”

The Government have dispensed with the strategic investment fund, with grants for business investment and with regional development agencies. The new regional growth fund has only a third of the money that was available under RDAs. I accept that RDAs were not without their failings, but the local enterprise partnerships that have replaced them are short on funding and short on power.

Dan gave way to an intervention from Bob Stewart – Conservative MP for Beckenham: Does the hon. Gentleman honestly think that any Government Member or in this country wants to cut jobs just for the sake of it for some reason of politics? The fact is that jobs have had to go because we just cannot afford them any longer and we cannot just plough money into the public sector all the time.

Dan Jarvis: I thank the hon. Gentleman for his intervention. I do not believe that Government Members side think of these issues in such ways but this is a matter of policy. Barnsley is the kind of place that will go into a recession first and come out of it last and I believe that when the Government are making significant cuts to public services that will have an impact on jobs and livelihoods across Barnsley, they have a duty and an obligation to pause and consider the effect that those cuts will have on the people in Barnsley.

Where public sector cuts are made and jobs in the public service are lost, I do not believe that it is a given that the private sector will come in and fill the void. That should not be a natural assumption. In order to promote the kinds of conditions that allow the private sector to invest in places such as Barnsley, there needs to be a targeted programme of investment and development. I do not believe that the policies that the Government are putting in place will do that, but I thank the hon. Gentleman, as ever, for his useful intervention.

The LEPs, which have replaced RDAs, are short on funding and short on power. They are not even guaranteed the money for their own start-up costs, never mind for investment to support business. They will have to apply to the regional growth fund, whose first round of funding is already 10 times oversubscribed, and they have been denied access to cash from the European regional development fund, which is being centralised at the desk of a Whitehall bureaucrat. Perhaps the Minister can explain how that fits with the Government’s supposed localism agenda.

I believe that we can and must do better than that. First, we can strengthen the LEPs and make them much better able to co-ordinate and lead a strategic approach to regional development. Among other things, that means giving them access to the ERDF and allowing them to join together to secure investment for cross-regional projects. It means giving them a stronger, more formal role in the development of local economic growth plans. It means removing or reducing the £1 million threshold for RGF bids so that smaller companies can apply and LEPs can work with them to bring in the investment projects needed to spur growth. Will the Minister consider these changes?

Dan gave way for an intervention from The Minister of State, Department for Business, Innovation and Skills, Mr Mark Prisk: I am pleased to say that small businesses can participate in the RGF. The £1 million programme for the second phase will allow small and medium-sized enterprises to participate, and in the first phase we saw that they were able to participate in Merseyside and Plymouth, so I am happy to give the hon. Gentleman that assurance.

Dan Jarvis: I am grateful to the Minister for that assurance.

One area where LEPs have real influence is the creation of enterprise zones. I commend the Government on the proposal being put forward by my local LEP, but I hope that the Government will not penalise proposals from several LEPs, including my own, for enterprise zones that are spread across several sites. The Government must be ready to listen to LEPs where there is a clear rationale based on the complexity of the local economy and the real needs of businesses. The uncertainty on this question reflects the over-simplistic and unclear nature of the criteria for enterprise zone site selection. Will the Minister ensure that those problems are rectified as a matter of urgency so that the work of LEPs such as mine is not inhibited by a lack of flexibility?

In any case, enterprise zones are a limited tool. They can offer reduced business rates, fast planning and fast internet, but a far greater concern of entrepreneurs in Barnsley is the lack of skilled workers. I will talk about the shortcomings of the Government’s skills policy in a moment, but given that the skills problem is one of the biggest barriers to private sector growth, would it not make sense to mandate the LEPs to oversee a locally adapted skills strategy, in partnership with businesses and local authorities? At the very least, we should take up the suggestion made by the Centre for Cities that enterprise zones should include special support for training and skills development.

For Barnsley, another vital issue, of which I know the Minister is aware, is the Government’s position on transferring the assets of the regional development agencies to LEPs or to local authorities. Those assets were built up by the RDAs with the specific aim of supporting local development, and in many cases they are critical to projects for transforming our local economies. That is the case in Barnsley, where the keystone Barnsley Markets project has been premised on the use of land belonging to the RDA. That is not some bureaucratic black hole; it is the future of Barnsley as a town—a project that is ready and waiting to move forward, and exactly the practical purpose for which the asset was originally acquired.

In total, the future of some £500 million in RDA land and property assets throughout the country is in doubt. I firmly believe that local authorities or LEPs should be given the first say on the use of those assets, and that is not just a Labour view; it is one echoed throughout the House. I am greatly concerned that the Government may be contemplating a fire sale at reduced prices, which would bolster central coffers at the expense of regional development and be deeply short-sighted. Will the Minister reassure the House that this will not happen, and will he allow LEPs to use the assets as they were meant to be used?

An active LEP is important, but it is not enough on its own, and the recent figures on bank lending bear out what I hear in person from businesses in my constituency. The problem is especially severe for small and medium-sized enterprises, exactly the sort of businesses that are most important for driving job growth. Research shows that south Yorkshire has one of the highest concentrations of SMEs with high growth potential anywhere in the UK. Keep that in mind, Madam Deputy Speaker, if anyone ever tells you that Barnsley does not have untapped potential.

There is, however, a steady stream of reports that SMEs are being held back by the lack of credit, even when the business case is sound. I was glad to hear that the Business Secretary did not rule out more action down the line if targets continue to be missed; I was not so glad when he told me that banks miss their targets more by choice than by chance. That is not acceptable for businesses in Barnsley or anywhere else in the country.

What plans do the Government have to ensure that banks meet their small-business lending targets? At what point do the Government take firmer action on the two state-owned banks? Would they accept the banks meeting their lending targets but failing to meet their small-business lending targets? What will Ministers do if the banks continue to claim that the demand is not there? It is a claim that many small businesses contest. Is the Minister going to wait to the end of the year to do more than lecture the banks if they are at fault? And what will happen next year if the Project Merlin agreement has not delivered? The Government have admitted that the lack of lending still threatens the entire recovery, but that problem needs to be resolved now.

The market is the foundation of our economy, but the Government have to play a role in helping it develop in a way that matches our strengths and builds the society that we want. If Barnsley is to thrive, it must be at the cutting edge of high-tech, high-value manufacturing and of the new digital and green economies. Instead, the Government are axing the zero-carbon homes initiative, which was helping to develop the next generation of British manufacturing. What are they going to do to support the development of the new economy that we need?

Dan gave way for an intervention from The Minister of State, Department for Business, Innovation and Skills, Mr Mark Prisk: On the zero-carbon homes initiative, in fact we have completed that definition, we have published it, and we intend to implement it.

Dan Jarvis: I am grateful to the Minister for that confirmation.

Part of the effort is developing the infrastructure that is needed to bring growth anywhere outside the south-east—especially high-speed rail. The plan that Labour put together in office will bring Leeds within 80 minutes of London, and that could have a major positive impact in Barnsley. However, it is not yet clear that the Government are serious about bringing high-speed rail to the areas that most need it. If they were, why has the Secretary of State for Transport so far declined to include the northern branches of the planned Y-shaped network in the transport Bill?

Will the Minister reassure the House that that will change, and will the Government reconsider the scale of their cuts to rail transport generally, which threaten a repeat of the under-investment of the previous Conservative Government and fare rises that threaten to put rail travel out of reach for the less well off?

Better transport will particularly help another sector with great potential in Barnsley—tourism. Indeed, that sector has been a key driver of job creation across the country. As the Government say, in the current economic climate those performances make the tourism sector a particularly important part of the UK economy. Barnsley is a great town with a proud history. When I look around the metropolitan borough at places such as the Elsecar Heritage Centre in the constituency of my hon. Friend the Member for Barnsley East (Michael Dugher), Cannon Hall and Wentworth castle in the constituency of my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), and the new town hall museum project in the heart of my constituency, I see enormous potential for tourism in Barnsley.

I am glad that the Government’s tourism strategy acknowledges the need for some Government help when market failures mean that tourism is not properly promoted. But they should also consider providing some support for places that have a clear tourism potential but are not yet established destinations. I am thinking especially of areas particularly in need of growth, such as Barnsley. Will the Minister outline how the Government plan to help us achieve our tourism goals?

I believe that the most fundamental barrier to aspiration and economic development in Barnsley is a lack of skills. I recently spoke to a major employer and asked him the three most important factors to consider when relocating or setting up a business. His reply was simple: “Skills, skills and skills.”

Dan gave way for an intervention from Michael Dugher – Labour MP for Barnsley East:I am grateful to my hon. Friend for giving way again; he is typically generous. He rightly identified the issue of skills and he is right that we need to lift the level of skills in Barnsley if we are going to attract the jobs of the future. Does he agree that certain Government policies such as the scrapping of the education maintenance allowance and the trebling of tuition fees will make that harder, not easier?

Dan Jarvis: I am grateful to my hon. Friend for those useful points. The Government’s decision to abandon EMA, treble tuition fees and remove the Barnsley-inspired future jobs fund provide a triple whammy for the hard-working people of Barnsley seeking to secure employment. I ask the Government to consider the impact of those decisions on places such as Barnsley.

The Government’s strategy on skills leaves a lot to be desired. I am glad that they plan to build on Labour’s investment in apprenticeships, but despite the urgent problem of youth unemployment, 16 to 18-year-olds will not be able to access a single one of the extra places that they are funding.

Dan gave way for an intervention from Angela Smith – Labour MP for Penistone and Stocksbridge): With your forbearance, Madam Deputy Speaker, I should like to place on the record the delight of the House in the MBE awarded to my hon. Friend in the Queen’s birthday honours last week. Is it not the case that significant numbers of young people want to leave school at age 16 and do not want to engage in full-time education, but would benefit from a mix of work and training that is typically represented by a good, solid apprenticeship? Is it not a fundamental mistake to deny young people that opportunity, especially given that it develops the work habit from the very earliest point of entry into adult life?

Dan Jarvis: I am very grateful to my hon. Friend for her kind remarks and for the useful and constructive contribution she has made to this debate. I completely agree about apprenticeships. They are a vital pathway for young people, bridging the gap between the classroom and the world of work. I am proud of the work that the Labour Government did in increasing the number of apprenticeship places. I hope to work constructively with Members across the House to persuade businesses across the country, not only in Barnsley and South Yorkshire, to take on more apprenticeships. An apprenticeship is a valuable opportunity for young people that gives them vital experience of the world of work.

The Government have axed Train to Gain, which provided work-based training to 575,000 people in 2009-10. They have also scrapped fees remission for people over 25 who are doing level 2 and level 3 courses. That is partly why the Minister for Further Education, Skills and Lifelong Learning has had to admit that adult apprentices may have to borrow up to £9,000 to fund their training.

(Dan gave way to an intervention from Nigel Adams – Conservative MP for Selby and Ainsty): The hon. Gentleman is making a great case for Barnsley, which is a very proud town. I appreciate that he has not been in the House for all that long since his magnificent victory a few months ago, but it probably has not escaped his notice that the Labour Government were in power for 13 years. If there is a big skills shortage in Barnsley, does he not therefore accept that his own party has to take some of the responsibility for that?

I am incredibly grateful to the hon. Gentleman for that intervention, which gives me the opportunity to remind the House—although there will be no need to remind people in Barnsley—of the impact of the policies of the Conservative Governments led by Margaret Thatcher in the 1980s. People in Barnsley will recall the damage that the Conservative Governments who were in power until 1997 did to such places. I will be very happy to walk through Barnsley with the hon. Gentleman, who is always welcome to come and visit—it is not terribly far from his constituency. I will be delighted to show him the real, long-lasting structural improvements that were made in Barnsley as a result of 13 years of Labour government.

In effect, the cuts made by the Conservative Governments of the 1980s and 1990s created structural, long-lasting, generational decay in Barnsley, and that takes a significant period to overcome. I believe that the Labour Government made considerable progress during the 13 years when they were in office, and that is clear to people when they walk through the streets of Barnsley. The Building Schools for the Future programme is a classic example; it has provided state-of-the-art infrastructure for kids to get to school in Barnsley. We can be proud of that record. I am grateful to the hon. Gentleman for the opportunity to make that point.

As I said, the Government have axed Train to Gain, which was a valuable scheme that provided a significant amount of work-based training to hundreds of thousands of people. They have also scrapped fees remission for people over 25 who are doing level 2 and level 3 courses, and the Minister has had to admit that adult apprentices may have to borrow £9,000 to fund their training. As Labour Members will be well aware, the Government have also cancelled the Barnsley-inspired future jobs fund, pioneered by Councillor Steve Houghton, the leader of Barnsley metropolitan borough council. I remind the House that the FJF provided jobs for 100,000 18 to 24-year-olds, with a valuable training element. Overall, I believe that those decisions represent a reckless underinvestment in the skills needed for economic regeneration and are a body blow to the aspirations of young people not just in Barnsley, but across the country.

Barnsley stands to be particularly affected by the changes in benefits made by this Government. I fully agree that welfare needs to be reformed, but I do not believe that we are going about it in the right way. Above all, the changes do nothing directly to support new jobs. Across the country, there are five times as many claimants as there are open positions. We risk the injustice of penalising people for failing to get jobs that simply do not exist.

There are several ways in which the reforms undermine job creation and stop people getting off benefits. The assumption that the unemployed are earning the minimum wage in the calculation for universal credit will make it virtually impossible for many people to set up a business. The new enterprise allowance cuts out anyone who has not been on jobseeker’s allowance for six months. People coming off disability allowance and people who have just been made redundant who want to set themselves up in business are being told that they have to waste six months uselessly claiming jobseeker’s allowance before they will be eligible for the new enterprise allowance. That costs taxpayers more for people who want only to stand on their own two feet. Will the Government look again at their welfare reform programme as it clearly needs improvement?

The problems facing Barnsley are indicative of those facing towns across the country. The message seems self-evident: we can either sacrifice everything to balancing the books in a way that undermines the economic stability of the country or we can tackle these problems head-on. This is not a request for unlimited spending or an end to reform; it is just a request for the Government to do their bit so that we in Barnsley can fulfill our potential. For now, the Government’s approach is ensuring that places such as Barnsley bear a disproportionate burden. If this Government are to live up to their promises, if they are to make a claim to the basic principles of fairness, and if their cuts and reforms are to have any legitimacy with the British people, that must change.

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