Business and Trade Committee
Oral evidence: Industrial strategy, HC 727
Tuesday 29 April 2025
Ordered by the House of Commons to be published on 29 April 2025.
Members present: Liam Byrne (Chair); Antonia Bance; John Cooper; Sarah Edwards; Gregor Poynton; Matt Western.
Housing, Communities and Local Government Committee member also present: Florence Eshalomi (Chair).
Science, Innovation and Technology Committee member also present: George Freeman.
Treasury Committee member also present: Lola McEvoy.
Questions 585 - 615
Witnesses
I: Andy Burnham, Mayor of Greater Manchester, Greater Manchester Combined Authority; Kim McGuinness, North East Mayor, North East Combined Authority; Howard Dawber, Deputy Mayor, Business and Growth, Greater London Authority.
Witnesses: Andy Burnham, Kim McGuinness and Howard Dawber.
Q585 Chair: Welcome to today’s session of the Business and Trade Select Committee and our inquiry into industrial policy in the UK. Today we are looking at the role of the key institutions in our country in helping make sure that industrial policy is a roaring success. We are absolutely delighted to be welcoming some of our key mayors to the House of Commons today. Thank you so much for joining us. Andy Burnham is running slightly late, so he will arrive through that door in about 10 to 15 minutes’ time. We will also hear from some of the key finance institutions in our country, and then I am delighted that the leaders of our key research and development institutions are going to join us for our third panel.
Kim, maybe I could start with you. In your view, can the Government achieve their very ambitious growth objectives without mayors? How important are mayors in helping the Government deliver that overall growth objective?
Kim McGuinness: In my opinion, mayors are fundamental to the delivery of growth in all parts of the country. I firmly believe, as the mayor for the region that is furthest away from Westminster in England, that we have to be going for growth in all parts of the country. Through combined authorities and local areas, mayors are effectively the delivery vehicle for that growth.
We are able to do that in a number of ways. We provide the bridge, oftentimes, between national and international investors in our region, with central Government joining the picture together. We are leading our regional growth plans, which feed directly into the national industrial strategy, looking at what key sectors of growth we can excel at, putting in regional resource to accelerate those and providing a link with Government so that we can draw in national investment as well. Because of the scale of the powers that we have around skills, transport, infrastructure and housing, as well as those investment levers, we are able to join up and break down the silos. We can use those tools to drive growth.
All those things are fundamental to our ability to deliver growth across all parts of the country. To do that, crucially, we need the support of Government. In particular, we need investment in things such as infrastructure alongside the drive for growth.
Q586 Chair: Howard, Kim is the furthest from Westminster; you are probably the closest to Westminster. Can Government achieve their growth objectives without mayors?
Howard Dawber: Kim is exactly right. If you look at the strongest economies across the G7, one thing they have in common is that they all have very strong and stable regional government systems. That is one of the ways to have a greater local focus on place, which is a key part of the industrial strategy, so place-based developments, place-based regeneration and clustering. In our case, we are calling it a galaxy of clusters in London, so a multicentric city.
mayors enable engagement with businesses directly and can also bring to bear some of the regional support that Kim mentioned. If you did not have mayors, you would have to invent them to deliver a good national growth strategy.
Q587 Chair: Kim, you have gone through a long list of things there. Why can mayors do things that Ministers cannot? What makes mayors special, contrasted with Ministers? What can you do that Ministers cannot?
Kim McGuinness: A lot of it is about that place-based proximity. You live and breathe, in your area, a specific understanding of what is needed in that place: the skills gaps, the key industries that you can drive in your region, and the transport and infrastructure requirements in order to get that growth. Effectively, we are in it—we live it, we breathe it. We are part of our regions in a way that a Minister could not hope to be across the whole country. That is one of the key things.
On top of that, with the devolved powers—I will caveat what I say with the fact that we need more devolved powers and more devolution into regions—you can draw together those levers and really enhance the role that Government can play by leading from a region and making those links.
Howard Dawber: That is exactly right. I will give an example. We have recently discussed with the Government the position of Oxford Street. This might surprise people; Members around the room might visit Oxford Street from time to time, but it is still the No. 1 shopping street in Europe by footfall, despite the fact that it has had a rough few years. You have seen a proliferation of American candy stores and some empty shops. There has been quite a bit of change. It has been hit by covid. It has had the big benefit of the Elizabeth line going in, which was obviously championed by successive mayors and delivered by the Mayor of London.
A local authority could not have taken on the transformation of Oxford Street by itself. It is not something that would have been a priority for national Government. Where we have something as regionally important as an Oxford Street, that is where we can put in a mayoral development corporation, which is subject to a consultation that is happening this week. We can work with the local authority on plans for transformation of the street. We can bring landowners, retailers, investors and philanthropists together and do a deal on the redevelopment of the street.
We can focus on an area that, in this case, is relatively small. This is an MDC-type area, which necessarily national Government would not have the time and the focus to concentrate on.
Q588 Chair: It sounds like it is a combination of intelligence and insight plus the brokerage role that you are able to both perform.
Kim McGuinness: Yes. On top of that, it is the direct delivery. As a mayor, you get in there with your elbows out. You bring the convening power within the region and bring Government to the table at the right moment.
We are now getting used to the different roles of local government, regional government and national Government. Where there is a mayor and a combined authority, there is the capacity to develop business cases and to think things through. If you were looking at cluster development for offshore wind, for example, we would be best placed to identify the gaps in the supply chain that we need to fill. We are best placed to support that kind of clustering and convening. We are best placed to know when to knock on the door of DBT or the OFI and say, “This is an investment that is really worthwhile. It is fully worked through and ready to go as a growth proposition for Britain alongside our regional investment”.
Q589 Chair: You can also bring kinetic energy to get stuff done.
Kim McGuinness: Absolutely, yes. We get stuff done. That direct delivery role on behalf of mayors cannot be overlooked. It is really crucial.
Q590 Matt Western: As you may be aware, one of the first things that the Committee did after it was formed last December was to do a tour of the UK. I am afraid we did not get to the north-east, but maybe that is something we can do in the future. We did go to Manchester and we did spend some time in London, Scotland, Wales and other regions. What came across consistently were the same messages about energy costs, skills, infrastructure particularly, and a lack of access to finance as the distance increased from London.
I am really interested to hear how you see the role of national policy, its impacts on you as local leaders and how mayors can have a greater role in influencing policy and affecting these opportunities.
Howard Dawber: I will take skills as an example. We are in an interesting position in London. Skills were not originally part of the remit of the Mayor of London. They were delegated to the mayor six years ago under the previous Government. That means we get the money, but it comes with lots of strings attached.
For example—this is part of my responsibility as deputy mayor—we are running some programmes that are not really working, but we cannot stop running them and take the money off them and give it to another programme that is working, which to me seems counterproductive, frankly.
Q591 Chair: You can be candid, Howard. You are among friends here. If you think it is mad, you should just say it.
Howard Dawber: It is not good. We need to have full devolution of that budget so we can target the money at the things that we know are needed—at courses that will deliver the people employers want, as well as changing the lives of those people who are going through them. That is really important. We need full devolution of skills.
Having a long-term settlement would be really good. We are asking for a single settlement of the entire budget from central Government to enable us, again, to focus on our local priorities.
Q592 Matt Western: On skills, have LSIPs worked?
Howard Dawber: LSIPs are working. We have adult skills. Again, this is another fragmentation. The 19-plus bit is delegated to us. The adult skills bit is delegated to us. The 16-to-19 bit is not. We have very little say over that. We have colleges with which we work where we represent a part of their income but not all of it. We also do not have responsibility over apprenticeships or higher education.
We are providing a convening platform. In our growth plan—I will leave a copy with you—we talk about setting up an inclusive talent strategy for London, which we are engaging and consulting on at the moment. That is looking at the whole thing in the round, including the things that we do not have responsibility for. The more engagement that we have with those other parts of the education system, the more we will be able to co-ordinate better and deliver what our employers need.
Q593 Chair: I just want to nail this. Basically, post-16 education and training spending should be devolved.
Howard Dawber: Ideally, yes. If not, we would like more say over it so we can co-ordinate it better with adult skills.
Kim McGuinness: I will just say yes. I do not know why we do not do that.
To address the question, a lot of this is about giving people in their local areas agency over what they want to see. That is about access to training, jobs and the right level of public transport and infrastructure. To drive that, we need more investment in more parts of the country. We all know that.
On the specific question of skills—it is a really good one—businesses will say to us, “We have skills shortages in these places”. You cannot drive that from Westminster. You need to be able to drive it locally. You need a system that is properly joined up. At the moment, as we know, there are too many people who are not in work or education in that 16-to-19 bracket. Economic inactivity in young people is not at a sustainable level. That will absolutely affect our ability to grow as a country. We have an education system that separates post-19 and 16-to-19. People are falling through the gaps.
Andy will talk about his MBacc, but, if you do not want to do a traditional route—if you do not want to go to school, do your A-levels and then go to university—it is too difficult to forge your own path at the minute. If you miss the opportunity for an apprenticeship, we cannot pick you up again until you are 19.
Q594 Chair: Would the devolution of skills funding allow you to fix that?
Kim McGuinness: It would allow us to pick up skills—not traditional education and A-levels—from 16 and join up that system right through into adulthood. We could make sure it was directly responsive to employers, directly responsive to the needs and wants of residents, and in keeping with our regional growth plans. It just makes more sense. We also do that kind of delivery already.
Going back to Howard’s point, having a single settlement is crucial for us to be able to respond properly to the needs of a region without, frankly, having 73—that is not an exact number—different funding streams.
Chair: It sounds like the Total Place programme introduced by a pioneering Chief Secretary to the Treasury some years ago.
Q595 George Freeman: I should declare that I also agree. Having done 30 years in this space, the decentralisation of skills is key.
My questions are to you both. First, in your cluster, ecosystem or place, have you looked at the pace of creation of new jobs over the next five or 10 years? Secondly, have DfE and the local skills unit plugged in with you to ask the same question and take your answer?
I ask because in all the clusters I have been to over the last 10 years I have found that place-based leaders normally, with their companies, had a good sense of, “Yes, we are going to create 50,000 jobs in green”. These are big numbers. When I turned to DfE, it did not recognise them. It was much more focused on very local implementation of DfE initiatives. Do those observations ring true?
Kim McGuinness: Through the local growth plans, yes, we have done exactly that. We know we could create 24,000 jobs in green energy along the Tyne. In order to do that, we will need welders and painters. We will need all the green energy and offshore wind capacity and skills. We will create a green energy and engineering super academy in order to do that. I do not believe that any conversation has been had directly with DfE about what that means in terms of the join-up between skills and education through to how we might deliver that growth plan.
As mayors, that is one of the things we are really trying to drive. By our very nature, we run very joined-up organisations. The people in our organisations are thinking about job creation, skills, transport and housing. They are thinking about it in a joined-up, place-based way, whereas Government naturally work in Departments and silos.
For us, when we drive into Government, we are trying to do that with the people of our place in mind. What are the needs of our community? How do we deliver the growth plan? What are the tools that we need to do that?
Q596 Antonia Bance: Skills England is about to come into being. Are you appropriately represented in the governance of Skills England? How does it need to work in order for you to deliver on the type of vision that you have set out?
Howard Dawber: First, I will just say I completely associate myself with Kim’s comments. I will give you another example, which is DWP. DWP also needs to be lined up because jobcentres are one of the vehicles for delivering engagement with employment services and careers services. At the moment, we do not even currently have access to DWP data. If you asked us how—
Q597 Chair: You cannot do any labour market planning because you do not have access to DWP data.
Howard Dawber: We can do labour market planning, but we do not know whether it has been successful because we do not have access to DWP figures. That is a conversation that we are having.
Q598 Chair: How long have you been having that conversation with DWP?
Howard Dawber: The Ministers have been very forthcoming in terms of engaging at the start of the process of setting up Skills England. We have had a lot of engagement over the last year on the policy development process. We feel like we have been brought in at the right time. We could have had a little bit more, but we have had some engagement on the setting up of Skills England.
Chair: I am going to come to the chair of the Housing, Communities and Local Government Committee in a moment. Andy Burnham, welcome. Thank you very much for joining us.
Andy Burnham: Thank you, Chair. My apologies for being late.
Q599 Chair: Not at all. Let me just catch you up and put the questions to you that the others have just answered. It sounds like it is quite difficult for Government to hit its overall growth objectives without mayors. Manchester has been growing at 3.1% for the last decade. To date, you have presented pretty ambitious proposals for the northern arc. Give us your view on whether Government can succeed in becoming the fastest-growing economy in the G7 without mayors playing a bigger role.
Andy Burnham: Chair, the Government have rightly made the conclusion that they need mayors and devolved arrangements across the country to get that growth. It is a prerequisite, I would say.
If you look at the Greater Manchester journey, you and I were in Parliament in 2015 when the coalition Government at the time signed the big first devolution deal with Greater Manchester. It was a couple of years before I came in. That is when the change started. You can really see it in the data.
Having been in the Treasury today, and I checked this. No one disputes the data now. It is accepted that a real growth story has been happening for 10 years in Greater Manchester and could go even further in the next decade.
Our argument is that we are ready. I can say more about the northern arc and the plans we have in place to go further and deeper in the next decade, but we absolutely believe that will help Kim, Tracy, Oliver and Steve. The idea of the northern powerhouse was to cluster these northern city regions and the agglomeration impact of that would bring through growth.
The evidence is in. That is exactly what it will do because everywhere is beginning to show the same growth. It is now a question of accelerating it.
Q600 Chair: What have been the biggest frustrations during your tenure as mayor around the powers or the resources that you have not had and felt that you needed?
Andy Burnham: I heard the discussion about DWP. We work closely and well with it. On the data point that Howard was making, it is a madness that data is held in silos. As a country, we have to get our heads into place-based, bottom-up delivery. That is what the combined authority model does. We have stumbled upon this model, but it is actually the right model.
The devolution of the Government that you and I were in, with that layer across a region, was not the right model. It is much better to work through the local government base. We have the right model. The evidence is very clear that it delivers the growth.
The biggest frustration, to answer your question, is the Department for Education, without a shadow of a doubt. I am not just speaking alone here with a pet grievance of my own. All the mayors feel this. Why are we remaking the case for devolution to this Department now? I have been doing it for eight years. It stands to reason, Chair, that you can create stronger technical education pathways when you can work with the actual employers in your city region who will be employing the young people or older workers who will come through. We are the only ones who can create those meaningful pathways and who can commission colleges according to the actual sectoral strengths of our economy, yet that is still being resisted.
The position of the Department for Education on this issue risks becoming an anti-growth policy. It risks pulling back the growth that we have. I have done a lot on this. I have created a thing called the Greater Manchester baccalaureate, which I describe as an equal alternative to the university route.
As part of that, I have been working hard to get those T-level placements in. We believe they are a real game changer that the last Government brought in. The 45-day work placement linked to the T-level really changes the way that young people see those opportunities. More than 50% of young people who have taken those placements end up working for those employers. If we are really going with that model, we believe we are the only ones who can do it. We know our employers. I am convening our employers to get those work placements and to create those extra pathways for our young people. We are still having to argue for that and get permission to do that. It seems to me like we are wasting time.
Q601 Chair: I was expecting you to say the Treasury is the biggest blocker.
Andy Burnham: No.
Chair: It is very helpful to hear that you think it is the Department for Education.
Q602 Florence Eshalomi: Good afternoon. I am gatecrashing from the Housing, Communities and Local Government Committee. Just listening to you, I was thinking about my time serving as a councillor, as an assembly member and now here. All Governments of all political parties have talked a good game on devolution, but, when it comes down to it, some of that power is still retained locally.
In the English devolution White Paper launched on 16 December, it was right that the Government took a really ambitious approach to devolving some of those areas, including strategic powers. Does the White Paper go far enough in terms of helping with that growth agenda? Are there any glaring omissions in it?
Andy Burnham: I will come back to education. The Greater Manchester devolution deal is a jigsaw that has been filled in to a considerable degree, but there is still a big missing piece. It is all-age. That is where it leans into the DWP agenda. We want an all-age technical education system that is employer-led.
As part of this, I have created a tool called Beeline, where young people can go through our sectoral gateways. We identified seven sectoral gateways into the GM economy. These are our strengths. We know that the good jobs are there. By going on that tool today and clicking on “digital and tech”, kids are able to explore the jobs that we have in our economy. They can see the jobs and they can begin to think about whether they could do them. Software developer is one job that comes up. If you click on it—it is an open system—you will find about 450 vacancies for software developers in Greater Manchester.
Here is the real issue. That becomes a risk to growth. This is what I really want to get over to the Committee. If we cannot bring the talent through to meet those opportunities, that is a problem. The reality of Greater Manchester today is that kids can see skyscrapers from their bedroom window, but—this is probably true for London, to a degree—they cannot see a path to those places. They cannot see or feel those jobs and start saying, “Right, I could get that job”.
If we carry on as we are, with an approach to this that is very top-down and not connected to our employers or employer-driven, is it a surprise that we have almost 1 million young people who are not in education, employment or training as a country? Clearly, something different is needed.
I do not want to make this a big moan about the Department for Education. The Department has moved a bit, to be honest, down this path with us. There are some encouraging noises. Skills England could be a good innovation here, if it is created in the right way and is an enabling organisation for what we are trying to do.
I want to leave the Committee in no doubt. The reason there is urgency in my voice is that we are growing fast, but we could quickly have a vacancy problem that turns investors away. That is why it is mission critical for this Government.
Q603 Chair: It was very striking. When we were touring the country at the end of last year, workforce was the number one issue for businesses. It was an even bigger issue than industrial energy costs. Kim, what is your view on Flo’s question?
Kim McGuinness: I agree with everything there about education, and I will not repeat any of it. The devolution of education is critical for growth. We have heard that loud and clear.
The devolution White Paper is a really good starting point. In context, we are in a position where we have a very pro-devolution Government. In a very short space of time, we have started to change the way the country is run and to move power closer to people. There is still a long way to go.
We would consider it a really good starting point with some really clear ambitions that we have as mayors for the future. Some of those would be around housing and the ability to drive more social housing, in particular, in our region. We have already talked about skills.
On innovation, both Gregor and George were on the Science, Innovation and Technology Select Committee, which I was present at a couple of weeks ago. We talked about the devolution of more innovation funding.
There are other levers that would help us tackle some of the social issues that are barriers to growth. For example, in our region we are doing an awful lot on child poverty. We are doing that because it is disgusting that any children in this day and age should grow up in poverty.
Those interventions, as far as I am concerned, are absolutely economic. They are about securing the long-term future of a workforce and making sure that those kids have access to the opportunity they deserve. In order to do that, we have to weave and duck around the powers that we have.
Finally—this is something that mayors universally agree on but would be a big step for us—we need to get some fiscal devolution powers. We need to move devolution into that space quickly.
Q604 Chair: Can you spell that out for us, Kim? What would that entail?
Kim McGuinness: We have suggested, for example, a tourism tax. If we had the ability to levy taxes on hotel rooms and overnight stays, we could recycle that money into our regional economies. We know that would be new money into our local economies. We know that is a pro-growth policy. We know that it will work. There is resistance to doing that at the moment.
We are having positive conversations. We are getting there. It is a really good start, but there is a long way to go. These are things that will absolutely help us get growth in the regions.
Q605 Chair: Howard, what is the London perspective?
Howard Dawber: I associate myself with those comments. Andy is absolutely right. We support the northern arc programme and the principle there because that is going to help the whole of the country, including London. We are not in competition with Manchester. We are not in competition with the other regions.
Our competitors are places such as New York. I will give you an example. In New York, the mayor spends about 50% of the tax that is raised in the city. He does have additional responsibilities. He has responsibility for things that the Mayor of London does not have, but 50% of the tax take is under the control of the mayor. That gives him enormous room for manoeuvre. In Tokyo, 70% of the money is spent by the mayor. Only 30% goes to the national Government level. There is very strong regional Government.
In London, it is 7%. That is not just Sir Sadiq, the Mayor of London; it is the boroughs as well. Between the boroughs and the mayor, it is 7%. Some 93% of the tax raised in London goes to the national level. We cannot, for example, designate an area as a low-tax zone in order to promote people to move into that area in the way that New York or Paris can. We cannot designate somewhere a high-tax zone, if that place is doing really well and we want to generate some benefit for Londoners.
We cannot borrow against VAT in the way that they can across America, which is how they fund a lot of tax-incremental financing projects in the states. We do not have full control of additional business rates in the way that Andy does and all regions should.
In the international context, we are fighting with one hand tied behind our back. We do not have the levers or the money, even though the money is there. It is not that there is not investment and money flowing through London. It is just that we are not able to capture it in the way that other cities around the world do.
Q606 Antonia Bance: We have had a number of local strategies and plans over the years, including local industrial strategies. How will local growth plans avoid the same problems that these plans have had in the past?
Chair: Andy, this might be the moment to tell us a little more about northern arc as part of your answer.
Antonia Bance: Shall we start with Andy then?
Andy Burnham: From leaving this place and taking up the role that I do now, I have learned that the local approach does not change. GM has never changed. Greater Manchester has had its plan and it goes back a long time. They have been working together for a long time. They were very fixed on what they wanted and what needed to be done. Going back to when I was an MP, I was lobbied by Greater Manchester incessantly. “Can we get the power to regulate buses?” It took too long.
Greater Manchester has known what it is wanted to do. The way I would describe it is that the weather comes and goes in Westminster, but we keep going. The plan that Theresa May asked us to do, the local industrial strategy, remains our industrial strategy. It will be the strategy that we hope will come through in the new industrial strategy.
Just to say something about that, I would encourage the Committee not to pigeon-hole one area as being about advanced manufacturing and another area as being about life sciences. We are all a mix of all these things now. It is quite layered. That is what our industrial strategy in 2017 said. If anything, it has become more sophisticated. We stick to the course.
The interesting thing about the northern arc is that this is the third time the country has come back to this concept. As the Chair will remember, John Prescott did the northern way in the 2000s. Then we had the northern powerhouse in 2014 when George Osborne made that speech. The concept was the same. You pull these big cities across the north together and connect all the way up to Kim in the north-east and Hull. There is new mayor coming through in Hull by the end of the week. That clustering is the right thing to do.
The evidence is that the northern arc—particularly for the north-west part of it, where we will need a new rail line to support the growth that is in train there—will deliver more in terms of GVA than the Oxford-Cambridge arc. That is the clear evidence that we are presenting to Parliament today, alongside a fairly stunning set of figures around growth, not just in Greater Manchester but in the north-west end of the northern arc. We have all been growing more quickly than the UK economy. For 45 of my 55 years on this planet, the north of England was not growing more quickly than the UK. It was growing more slowly than the UK, with all the social problems that fell out of that and the sense of unfairness across the country.
Finally, we have turned it around. You could argue that it is the same plan that John Prescott put forward. It is the same plan that George Osborne put forward with different tweaks here and there. The question is why the country has never backed this plan. It goes to structural things such as the Green Book. You cannot grow an economy because we are still giving out public investment according to where the strongest economies are right now. Which economy is delivering more now? I learned that as Chief Secretary, and I am sure you did as well. That is a real frustration. You do not get patient capital to grow areas that could be bigger.
Since the demise of big industry in this country, in the north and the midlands, in the 1960s and the 1970s, there has been a sense that the north cannot not be much anymore. It has to be in some form of managed decline. That is how it feels to your part of the world and to us. The Whitehall system has not had the belief that the north can be something more. It has taken the mayors and the combined authorities to come along and say, “No, we can be something more, and we will prove to you we can be something more”.
We have built a public transport system pretty much ourselves, to be honest. We had to fight for the support that we have had, but the Bee Network is now there. That is our foundation for growth. The tram system was built almost in the teeth of opposition at times from Westminster.
That is where we find ourselves. This idea is coming back for a third time. It will deliver more growth than the Oxford-Cambridge arc, according to the evidence. We are not positioning ourselves against Oxford and Cambridge. Greater Manchester Combined Authority has signed a collaboration agreement with Cambridgeshire and Peterborough.
This is the interesting thing with Howard as well. How do you start to get a more collaborative country? If Cambridge is doing the R of R&D, we can help do the D. We can locate some of those spin-outs on the land that we have. That becomes a coherent industrial strategy for the country, doesn’t it, Howard and Kim? We all feel this. When you draw the links between the different regions of England, you can start to bring through that collaboration. Growth in one area starts to lift another. That is how it will be done.
Third time lucky, Antonia, is what I would say. This idea has come back three times for a reason. The issue is Whitehall. Are you backing this or are you not? Are you backing the north of England to succeed now or are you not? We have the growth. We have built that growth. It is a big decision for the country as to whether it is going to do it. I have confidence, as Kim said, that this Government will. We will see that in the spending review.
Q607 Chair: Kim, what is your view?
Kim McGuinness: Yes, that is absolutely right. Where we are now, we have growth plans that do not just zone up the country into lists of sectors. Quite often, we would have seen that in past iterations. Mayors are leading growth plans that tell the story of a place or a region. They are joining up the housing, skills and infrastructure needs and the social issues, and how we might solve them, with the sectors where we excel.
They are making sure, crucially, not only that we get growth by joining up businesses and knowing when to bring Government into that conversation, but that we deliver growth that people can feel, that changes their day-to-day experience of living in the place and that helps them to feel like they have a bit of ownership and political agency over what is happening to them. Rather than everything being directed by a Government in Westminster, which to too many of them remains faceless, they can feel like it belongs to them.
On that point around collaboration and breaking down the competition, as regions, we should never be in competition with each other. It is completely unnecessary.
Andy Burnham: They make us bid too much.
Kim McGuinness: We have to bid too much and too often for small pots of one-off cash. Going into a spending review, I feel like I have to get in front of Treasury more quickly than my colleagues. That is ridiculous. It is a ridiculous way to do things when our ambition is growth in all parts of the country.
If we think about those joined-up areas of collaboration, we will be launching the great north very shortly, which is about looking at how we can get growth right across the north—of course, the northern arc is part of that—and how we might drive investment, particularly in green energy, culture and the other things that separate us as the north. We can do this together in a way that we perhaps cannot alone or even as the sum of our parts. Those growth plans are really key to that.
The final thing that I would say—Andy has made this point as well—is that this will only be any good if it drives national policy change. It will only be any good if Government accept that these growth plans are bottom up and driven by what our communities want, need and feel, the strengths in the regions and what will get growth. If they feed them into an industrial strategy and they say, “That is how we direct investment. That is how we change policy”, that will enable us to get that growth and capitalise on the opportunity that we have through the regions, provided by mayors and delivered in such a way that the public feel the change and feel that it is for them.
Howard Dawber: We have produced our growth plan. Sadiq had this in the manifesto. He was re-elected, along with other mayors, before the Government came in. It was already on the stocks. Half of this is stuff that we can do ourselves. It is the other half where we need the Government to support us.
We have been saying, “Let London be London”. You know what London is capable of. Andy is right. The Green Book will often say that money spent in London will give you more bang for your buck. Often that is true, but that does not have to be money that could be spent in other ways in other parts of the country. We would like to get access to the money that is already in London. Let us do what we know we can do by devolving some of the taxation that is already in London and already generated by growth in London to support the growth that needs funding.
Chair: I want to come on to the way in which industrial policy money is allocated, but let me bring in Matt Western first.
Q608 Matt Western: Andy, it is nice to see you. I have not seen your northern arc proposals. Will cohesion in the north be delivered better through better transport infrastructure between the cities in the north than by having HS2 go up to Manchester, for example? Is it more important that you have connectivity across your northern arc or between Manchester and London? It is not a trick question.
Andy Burnham: It is a question that I have often been asked. If pinned to the corner of this room and forced to choose, I would say that east-west connectivity across the north is awful. If you are going to travel from Manchester to Leeds today, you are looking at a disrupted train journey or sitting in your car on the M62 as it goes past that farmhouse in the middle of the M62. That is basically your choice. When we are doing meetings across the north, we spend hours trying to get to our different places.
Kim McGuinness: It takes me longer to get to you than it does to get to here.
Andy Burnham: Yes, exactly. This goes back to my theme about how the country treats the north. That question is always put to me because we are meant to choose. “You cannot have everything, so which one are you having, north-south or east-west?”
We are patriotic people. We are proud of what has happened in the capital city. We support Sadiq and Howard with what they are doing, but London was never forced to choose. “Do you want north-south or do you want east-west?” I know that because I put together the funding package for the Elizabeth line because London needed better east-west in the days gone by. Why is the north forced to choose?
We are currently facing a position—this is why the northern arc is so crucial to us—where we are the fastest-growing city region in the UK outside London by some margin, yet we have HS2 coming halfway towards us. Those trains will trundle on to the west coast main line on the current plan. They will have to go slower than the Pendolinos because they will not be able to tilt. That is number one.
From the other angle, the trans-Pennine route upgrade will bring trains over the Pennines into Manchester. My transport adviser, Vernon Everett, who is ex-TfL, says that is like building a motorway into a car park. That is the reality. It is insulting to the people of the north of England. They were promised HS3, as it used to be called, across the north and all those other things. Here we are 10 years on and none of it has come through.
It has to be both. We need a plan for both. If you choose to leave the west midlands to connect to the north-west of England via the M6 motorway in its current form and via the west coast main line in its current form, those are two anti-growth policies.
Chair: The midlands MPs on this Committee would agree with that wholeheartedly. Let me bring in Sarah Edwards to talk about the money.
Q609 Sarah Edwards: It is really important and interesting to hear from all of you as mayors, but, before I move on to my question, at the moment we have quite a lot of constituencies that are not covered by the devolution plans at all. That is coming but, given the time that it might take to get there, I am concerned that the growth that we want to see is not necessarily going to be spread as evenly as we would all like.
That is not a criticism of the work that you are doing. It is just a challenge about how we parcel up that funding that we want from Government and get it out into the regions where we do not necessarily have the structures in some places to make the most of it. Tamworth is a non-voting constituent of the West Midlands Combined Authority, so fantastically I can work with Richard Parker on housing and skills, which is great. We have had a good conversation about that.
If I turn to the industrial strategy now, thinking about how you are going to deliver what you want to, how should the money be split between the national pot of money, including the strategic work that the Government are doing, and what you are going to be doing more locally? I will start with Howard.
Chair: It is quite unclear how much money is earmarked for industrial strategy. It is quite difficult to find that out. We are trying to get a sense of how much the Government should invest directly in sectors and how much it would make sense to invest spatially through bigger devolved settlements.
Howard Dawber: You have to do both. The spatial bit of the sectors is crucial. We have no say over R&D expenditure, for example. We have no say over tax credits. There is a whole load of policy where more involvement from devolved Administrations could make a real difference.
I am not challenging Andy on the Elizabeth line, but one of the reasons we got the Elizabeth line across London was that we had a mayor.
Andy Burnham: Yes, I supported that.
Howard Dawber: Yes, absolutely. You were literally there at the time. Thank you.
Andy Burnham: I have to be careful who I admit that to in the north.
Howard Dawber: It was the right thing to do. We should have followed on immediately by rolling the Crossrail team into HS2, and gone ahead and built it while the team was running hot. We are paying for it because we got saddled with the whole cost of the overrun, which we got as a loan from the Treasury that we are still paying back and will be for another 10 years.
Chair: I am going to move you back to industrial strategy, if I may.
Howard Dawber: Giving the mayors the power and the responsibility of delivering some of the sectoral work at a spatial level is crucial. It makes a real difference.
It goes back to the power infrastructure that you need for growing things with high power needs, such as datacentres, AI or life sciences. It goes back to skills, which can only be delivered locally because it is the local people who are going to go into those jobs. Mayors can identify physical spaces and bring those together, using CPO powers where necessary. They can bring land together to create the space where things can happen. That can be done only at a local level and not top down from Whitehall.
Kim McGuinness: Yes, that is absolutely right. We want to have more ability to invest in those spatial elements of the industrial strategy. I used green energy and offshore wind clustering as a really good example of that. Channelling that through us would make a great amount of sense and would help to get growth. Of course, we need to be able to create that join-up so we are attracting inward investment and innovative start-up businesses that are pioneering in these growth sectors. Combined authorities and mayors are best placed to do that.
I would argue that you have asked only half of the question. We are able to look right across the piece. For example, in our region, the culture and creative sector is really big in our growth plan. It is also really big in the national industrial strategy. We want to be able to use devolved money through the industrial strategy to develop that sector, but we also need to have more control over, for example, Arts Council funding. If we start to treat some of these sectors that have been grant-funded as grown-ups and say, “We are going to fund you properly, in the way you should be funded, help you to develop and help you to grow as clusters of economic entities”, that will change things.
The same is true, in a different way, of Homes England. More devolution of Homes England’s money and power will help us to get growth and channel the right investment in and around key housing sites. We are best placed to determine that locally.
Of course, you are always going to need to have a place for regional and national collaboration over major inward investment, major infrastructure investment and so on. The more we can devolve to the regions, as levers to pull to get growth right across those sectors, the better.
Q610 Chair: Andy, you said it does not make as much sense as it did because the sectors have intermingling needs. Presumably, you would argue that it makes more sense to devolve spatially than earmark most of the money for sectors.
Andy Burnham: I absolutely would say that, Chair. If we do it nationally, the risk is always—I have been here before with you; we have discussed these issues over many years—that you get quite a simplistic, top-down approach to the industrial complexity of Britain.
You have to start with the clusters. Where is the real world-class strength? If we are being honest, there is a degree of everything everywhere. I know we all feel that. I used to feel it as an MP. You have to be honest and—Mr Freeman used to have very strong views about this, and I agree with him—go with where there are real clusters. Then you can work on how they expand. Essentially, it is a bottom-up process. It really is not a top-down process.
To give you some encouragement—you are asking the right question—we had a very strong life sciences strategy in Greater Manchester. That came through in Theresa May’s strategy of 2017, Predating that, we had worked with our colleagues in Cheshire East over many years because of the AstraZeneca site at Alderley Edge. We had a cluster collaboration with them. Over the years, we have been arguing, along with them, for them to get a devolution settlement, and now it is coming through. They will have a mayoral election next year.
Q611 Chair: How far could you go with this? Is there a case for saying that all the industrial strategy money should be routed to devolved authorities?
Andy Burnham: At this spending review, Chair, my argument is increasingly that it makes more sense to route through devolved authorities. We have an integrated settlement with Government now. We have a block of funding. The silos have gone for Greater Manchester and west midlands, and hopefully they will soon go for the others as well.
Kim McGuinness: It will be next year, yes.
Andy Burnham: It just makes sense. As Kim was saying, you cannot live in the silos of Whitehall when you are out in our world. You have to link R&D spending to regeneration. On the Oxford Road Corridor, for instance, we have invested heavily in infrastructure, but it links to transport spending and the housing around it, as Kim was saying. Places are complex. You have to do place-making. Industry needs to sit within that wider master plan for what you are trying to do.
I would not necessarily say that it should be all. At times you need to build national capability in industries or sectors where we are behind. Where you can, devolution by default should be the principle.
Q612 Florence Eshalomi: I am mindful of time, Chair. Just coming back to the SDSs, we are saying there should be a national one. Will there be problems securing local agreement for local spatial development plans, especially when we are talking about the money? Bear in mind that we have devolution going on at the same time as local government reorganisation. I know some councillor colleagues in local government have some concerns.
Andy Burnham: Florence, we are the only ones to have agreed a city region spatial plan, unless anyone can correct me on the panel.
Howard Dawber: We have our own plan.
Andy Burnham: You have a plan. It is an outside-of-London point that I am making. I am sorry not to get that right. Nine of our 10 got over the line in a plan called Places for Everyone. We could not persuade Stockport, sadly, to stay part of it. Political capital was expended, for sure.
We can stand before you today with confidence about the GM 10-year pipeline as part of the northern arc. There is the Old Trafford regeneration, which some of you may have heard about.
Chair: It is much needed.
Andy Burnham: There is a huge and much needed strategic site off the M60 called Atom Valley in Rochdale, Oldham and Bury, which will be an advanced materials and advanced manufacturing cluster. The reason that we can do that is because of that plan. We have done it. We have allocated it. Hard as it was, it was the right thing to do.
Given the politics of the country, how many more areas will be able to get regional spatial plans over the line? I honestly do not know. We would do it again because we are passionate about Greater Manchester, its potential and where it is going. We are now set up for this decade of growth because of it, but it has been politically challenging every step of the way.
Q613 George Freeman: I know we are going to get into the balance of vertical and place in the finance and the R&D sessions. While we have the three place leaders, I wanted to ask about transport. If we are going to do place-making and build clusters, it seems to me that connectivity is completely key. In my part of the world, East Anglia, we have 52 railway stations; 48 have plants growing through the ceiling because they are thought of as waste land, not little business incubators. That is different from the south-west. Governments nationalising railways is a sign that privatisation, as it was, was not working.
Is there an argument for a much bolder regional ownership of infrastructure of rail? For my part of the world, I would love an East Anglian railway company. The south-west could do it, but not all geographies work. Is there an argument for not nationalising into Whitehall or privatising on the wrong structure but regionalising and letting local leaders take the subsidy?
Howard Dawber: Yes, there is absolutely no doubt whatsoever. I was born in Andy’s area. The deregulation of the buses brought me into politics in the first place. My mum voted for you.
Andy Burnham: I have brought them back.
Howard Dawber: Thank you. There is absolutely no doubt at all. If you compare the London Overground network to what was there before, for example, there is no doubt whatsoever that that has been run in a more efficient and profitable way. It is better for passengers and better for the country than it was before. There is absolutely no doubt. The more we have been able to extend TfL’s operation of rail, buses and the Elizabeth line, and to work with Network Rail and the national rail companies, the better it has been. There is no doubt at all that regional-level transport makes a huge difference.
That includes new railway lines. Three of the key projects that we have put into the spending review are the extension of the DLR to Thamesmead, the Bakerloo line extension and the western orbital. These things should have been done years ago. We are competing with countries around the world that are building two or three new tube lines across their capital city in a year, heavily subsidised by national Government in most cases.
We get no subsidy from national Government for TfL, but, if we were able to capture the value of the housing, the land and the extra taxation that is generated by those new railway lines, we could easily pay for them ourselves.
Q614 Gregor Poynton: One thing that we have been really seized of throughout our inquiry into industrial strategy is how this works in practice. There are bodies that are either being created or folded in to deliver this. Two of those relate to you all: the Mayoral Council for England and the Council of the Nations and Regions.
I have two questions. First, how confident are you that the right mechanisms are in place to get that co-ordination and, frankly, deliver on the industrial strategy? Secondly, the Green Paper said that they plan to work in lockstep with you all in terms of working through the sectors and the businesses with which they are engaging. Has that happened to date?
Andy Burnham: In our case, yes. We worked with civil servants for a long time on the industrial strategy. It predates this. We have been building it for a long time. The evidence base for GM is really clear.
In terms of those structural changes, just to say something about this, there has been only one meeting of the Council of the Nations and Regions, although another one is coming soon. I do not think the Mayoral Council has met yet.
Kim McGuinness: We have had one.
Andy Burnham: I missed it, I think.
Kim McGuinness: It was in Newcastle.
Andy Burnham: I was on Zoom.
Chair: I appreciate east-west connectivity is not what it needs to be.
Andy Burnham: I did want to make a point about the Council of the Nations and Regions. It was in Edinburgh. It brought to life what I was trying to say before: we need a more pragmatic UK. We were talking to the First Minister of Scotland: “Oh, you are doing that”; “Yes, maybe we could collaborate with Northern Ireland on that”. These were conversations that the UK has never had among itself. It has always been through the prism of Holyrood, Westminster and Cardiff, and there is all the tension and politics that comes with that.
If this council really comes through, I get the feeling that it will bring that pragmatic place-to-place collaboration. It will start driving the industrial strategy outside of Westminster, to be honest. We will just start doing it together. That will be the best thing that we could achieve.
Far be it from me to tiptoe into Scottish politics, but, as I look at Scotland and the way things have gone since devolution, I observe that power has been taken out of the cities of Scotland up to the national level. It feels like they are a bit underpowered to me when I look at that at the moment. It is Police Scotland or the Scottish Fire and Rescue Service. It is all brand Scotland. If there was an elected provost or mayor of Glasgow, Steve Rotheram and I—this would be true for you with an elected mayor of the city region of Edinburgh—would be on the phone to them every couple of weeks. It would just be a different dynamic—a much better dynamic, I think.
Q615 Chair: If there is a join proposed between the Industrial Strategy Council, the Council for the Nations and Regions and the Mayoral Council for England, is that in the right place yet? Is that clear enough to you?
Andy Burnham: Possibly not, no. We hosted the Industrial Strategy Council last week. I am really excited by that grouping of people. They have a great take on all this. They could play a really influential role.
If I think about some of the members of the council, Dame Nancy Rothwell, as vice-chancellor of the University of Manchester, really drove our industrial strategy. George remembers that. They have seen it, lived it and done it. There are many others on the council I could mention.
We ned to bring those two pieces of infrastructure together. I believe the Industrial Strategy Council is going to be a standing council. If we were to put that behind the Council of the Nations and Regions and put it really into a delivery mode, it would be tremendously exciting.
Kim McGuinness: Mayors met with the Industrial Strategy Council and had a really productive conversation about what regional growth looks like. Interestingly, to loop us back, the post-16 skills conversation was pretty massive. Sitting between industrial strategy and the regional growth plans, they can see that that is one of the key drivers for growth. Bringing together mayors and nations to harness that cross-border working is crucial.
For us, we should be looking north so much more, but the system has always compelled us to look to Westminster. We need to look north a lot more. We probably need to look to our key friends in Glasgow and Northern Ireland as well, because of the industrial crossover that we have. That is hopefully what will come out of the Council of the Nations and Regions. We all felt like it was very much a big move.
It is important to remember that, until that point, that meeting had never happened at all, even informally. I do not think until even after the last election the whole grouping of mayors and the Prime Minister had sat together before. It should not be like that, but that is where we started.
Can I be cheeky and answer a little bit of the last question about trains as well?
Chair: Yes, of course.
Kim McGuinness: For us, more regional control of trains is massive. We would really like to control elements of Northern in our region, working with the Tees Valley and North Yorkshire to do that. We know we could deliver that service better. We know we could integrate it with our metro and with our wider services in the way that Andy has done with the Bee Network. I would go a step further and say not only that, but devolve those train stations. We would treat them as incubators.
They are absolutely huge assets. They are gateways to our regions. Network Rail has an absolute tonne of land—so much land that, at the moment, we have to access that commercially. Just transfer it.
Andy Burnham: It is as simple as this, Kim. Network Rail sees them as liabilities. We would see them as assets. Our plan at this spending review is to bring eight Northern lines into the Bee Network. That will be our equivalent of the TfL Overground. The cap is in place now on tram and bus in Greater Manchester. We have a tap-in, tap-out system over trams and buses. Eight lines are coming in. There are 64 stations on those eight lines in Greater Manchester.
Back to Sarah’s point, some of them are outside our borders to Glossop and Buxton. The benefits of the city region start to spread. They become more attractive places to invest immediately when they are inside the Bee Network cap. Then you get the residential development around, because there is spare land around these stations and we are asking for that land to be transferred at this spending review to us at no cost, so we can regenerate.
We can build the residential stuff around it, but then capture some of the planning gains, take out the weeds growing in the roof and give them full disability access. That would be something, wouldn’t it, to have train stations that many of our fellow citizens can access?
Kim McGuinness: It is absolutely that transfer of the land. It is bonkers in this world that we would commercially buy that land. It is inside the public sector. It is there as development land. It sits alongside major national infrastructure and it would help us to get growth. When we are devolving railways, we should be thinking about the whole picture.
Chair: That is brilliant. That takes us out of time. That has been ambitious, clear and punchy. What has emerged is a manifesto, Andy, in your words, for a more pragmatic United Kingdom. That has been a brilliant session. That concludes this panel.