North of Tyne devolution

The draft Order formally establishing the North of Tyne Combined Authority and process for directly electing a North of Tyne Mayor was debated and agreed in Parliament yesterday. Catherine spoke during the debate and you can read a copy of her speech below. A full transcript of the debate is also available here, and the session can be watched online here. You can also find out more about the North of Tyne devolution deal here.

Catherine McKinnell: It is a pleasure to serve under your chairmanship, Sir David. Last week, I held a debate in Westminster Hall on the £3 billion investment required to make the East Coast Main Line fit for purpose and thereby ensure it helps to deliver the economic potential of communities served by the route, including in Newcastle, North Tyneside and Northumberland, which we all want to happen.

During that debate, I touched on the proud and pioneering role that Newcastle and the wider North East played in the development of Britain’s railways, and therefore our country’s rapid industrial development. I also highlighted our region’s advanced manufacturing future, and the need to look forward to ensure that Newcastle and the wider North East region can once again be part of a world-leading industrial powerhouse. I therefore broadly welcome the Order as an important step in the right direction towards achieving that aim. That is not only because I am firmly in favour of the principle of devolving funding and powers to local areas, but because the combined authority is an important vehicle for delivering the sustainable economic growth that communities in Newcastle, North Tyneside and Northumberland – and, indeed, the wider region – require.​

I am very proud of my home city and all it has to offer. A recently published survey by startups.co.uk rated Newcastle as the best place in the country in which to work, from a list of 66. Newcastle and the wider North of Tyne area have so much to offer UK plc if tools, funding and powers are provided to allow them to fulfil their potential. As the Minister noted, the North of Tyne devolution deal is worth £600 million over 30 years. It is forecast to generate £1.1 billion for the local economy, create 10,000 new jobs, and leverage £1.2 billion in private sector investment over that timeframe. I sincerely hope that these changes make a difference to the lives of people in my constituency and beyond. The desire to make young people in Newcastle and the wider North East feel that they do not need to go elsewhere to get on in life is largely what drove me to come into politics, and for that reason, creating good, skilled, well-paid, long-term job opportunities and meaningful apprenticeships must be central to the Combined Authority’s work.

I take issue with the Minister’s claim about the level of investment in the region. Significant economic development, funding and spending powers were available to the wider North East region for some time under the Regional Development Agencies, which were scrapped by the Coalition Government in 2012. Like many other colleagues in the region, I fought hard against the abolition of One North East, because I knew how well it supported economic growth and jobs in our area. To put the Order in some context, I and many others have campaigned hard against the punitive funding cuts meted out to local authorities in our region since 2010. Alongside the rising cost pressures, those cuts mean that Newcastle City Council alone will lose £283 million by 2020 – a situation that we all hope the Chancellor will address in his Budget next week.

The fact is, however, that what is on the table today is what is available now, under this Government. We are ploughing headlong towards Brexit. I very much agree with the analysis of our frontbench spokesperson, my hon. Friend the Member for Oldham West and Royton. The Government’s analysis indicates that Brexit will hit the North East’s economy hardest, even under the Prime Minister’s preferred outcome of a comprehensive trade deal, so the ability to support the creation of good, skilled jobs in our area matters now more than ever. It is disappointing that other local authorities within the North East Local Enterprise Partnership (LEP) area will not be part of the process. I sincerely hope that the door remains open to them, should they decide to reconsider. Other colleagues on this Committee, and indeed the Minister, may want to comment on that.

I would be grateful to receive confirmation from the Minister that the current devolution deal is part of an ongoing process, with the agreement being approved today simply a first step towards achieving further powers and funding in the coming months and years. It would be particularly helpful to know whether that will include taking control of our allocation of the Shared Prosperity Fund, due to be established by the Government to invest in areas such as the North East that have benefited so significantly from EU structural funding. I certainly hope it will.

My final ask of the Minister is to review the myriad different organisations that now exist at a sub-national or sub-regional level, with varying geographies, and to ​consider how that makes it more challenging to achieve the closer partnership working – ‘place-based’ decision making and spending – that we all want to see between the public and private sectors. In my region, that means that Newcastle and Gateshead are working together on tourism, inward investment and future housing strategy and on some aspects of NHS provision, such as the Clinical Commissioning Group, but not on others. The North East Local Enterprise Partnership incorporates seven local authorities, including Newcastle, North Tyneside and Northumberland. It will operate alongside the North of Tyne Combined Authority, as well as the newly reconfigured North East Combined Authority. Public transport decisions will continue to be made across the wider Tyne and Wear area, while our Police and Crime Commissioner naturally serves the communities covered by Northumbria Police, namely Tyne and Wear and Northumberland.

Those are just a few examples, but another recent one is the £24 million Opportunity North East fund announced earlier this month by the Education Secretary. I understand that it will cover the whole North East region—that is, the areas covered by the North East and Tees Valley LEPs. Despite its aims of improving social mobility, opportunities and job prospects for young people and appearing to fit neatly with those of the North of Tyne devolution deal, it remains unclear who will be responsible for managing the funding. Again, it creates more complexity when what we need to see is place-based decision making. If the Minister could provide some clarity on those issues, it would be very welcome.