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25 December 2000

Set up an IT ministry in the north

NS/Fabian Society Second-Term Agenda - Set up an IT ministry in the north

By Peter Dunn

Tony Blair needs a Big Idea if he is to make his second term as Prime Minister a success. I’ve got one for him. I know where he could put it, geographically speaking. It’ll cost him billions, but it could make him loved throughout the realm, a renaissance prince at the cutting edge of world technology.

It is quite extraordinary to think that the English north-east is a region stuffed with Cabinet ministers past and present – Nick Brown (Newcastle East and Wallsend), Stephen Byers (North Tyneside), Jack Cunningham (Copeland), Peter Mandelson (Hartlepool), Alan Milburn (Darlington), Tony Blair (Sedgefield) and Mo Mowlam (Redcar) – and yet it remains cynically neglected, its MPs squabbling for possession of the occasional sweatshop call-centre tossed into the chronically unemployed Geordie market place.

Each week, there is some new example of how the government identifies with the prosperous south. Its failure to direct the Meteorological Office to relocate its headquarters from Bracknell (Berkshire) to the north-east caused anger and dismay in a region that desperately needs the 1,500 highly skilled jobs. Instead, the jobs will go to Exeter, where an oversubscribed housing market will cause serious resettlement problems.

There’s more of this stuff. The government has just launched a scheme that offers recycled computers to people looking for jobs. Guess what? The north-east has been excluded, and the Tory leader, William Hague, has jumped in with a quick gloat about the PM’s “digital divide”. Not that the Tories are any better. Earlier this year, amid much hilarity, their strategists produced a website that redrew the north’s political map. It got all the constituencies in the wrong place, including Mandelson’s seaside seat, which ended up in Durham. But with the prospect of large-scale Labour abstentions looming, some MPs are thinking the unthinkable: that, on election night, the haughty Mandelson could be out, his face a picture of frozen disbelief like Michael Portillo’s four years ago.

Ronnie Campbell, MP for Blyth Valley for 14 years, says: “The economy in my constituency’s falling to bits. We haven’t had a start-up business in Blyth for more than two years. Stephen Byers [the Secretary of State for Trade and Industry] made his own constituency an enterprise zone and left everyone else out, so all the call-centre jobs go to North Tyneside. It’s true that unemployment’s dropped [to 10.2 per cent in Blyth] through the New Deal, but it’s really just a massage exercise. You hear lads and girls say: ‘I’m on a scheme. It’s a waste of time.’

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“I keep telling Byers: ‘Are you giving us up to the Liberals?’ But he’s hardly spoken to me since we got to power. We asked him to extend the enterprise zone, but he won’t. He thinks I was born in a banana tree, Byers does.”

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Campbell is notoriously off-message, but even Blair’s most loyal MPs, such as the thoroughly modern Dari Taylor of Stockton South, are pleading with the PM to give the region’s young people something tangible to hope for.

And perhaps they are pushing at a half-open door. A year ago, in a posh area of Leeds, Blair announced that the north-south divide was history, “except for pockets”. Since then, he seems to have undergone some kind of conversion on the road if not to Damascus, then at least to Newcastle- upon-Tyne. The divide is back. Regional newspapers have suddenly started running government-inspired stories with triumphal headlines such as “Pledge of millions to bridge the divide”.

Alas, there’s more about regeneration quangos than about jobs. Regional rhetoric comes by the bushel, not least a cataract of Dalek-speak from the development agency One NorthEast, blathering pump-primers to the government’s vision. “Regional partners”, goes one recent bureau gem, “are seeking to set up high-quality, client-focused workforce development services to support individuals, strategically important industrial sectors, small and medium-sized businesses and new investors.” The truth is that the region’s small businesses have dismissed government support schemes as entirely naff. One NorthEast, I suspect, inhabits the kind of fantasy office world that never answers its voicemail and creeps home in the evening for a good cry.

Indications are, sadly, that Blair has settled for this gunk. On the regional election trail recently, he went to MetroMail House in Peterlee to celebrate the opening of a new mailing centre for old folks’ holiday brochures. The ceremony was attended by the Horden colliery band, and Blair took as his text the slogan from the long-dead colliery’s banner, “Our Future We Build From the Past”.

Who was he kidding? “The kind of business he saw is temporary,” says one regional academic. “Like the call-centres, they’ll be eliminated in five or ten years’ time by internet-based services, direct digital ordering and voice-response computers. You won’t need people to make these things work. It’s as simple as that.”

Yet there is no doubting Blair’s commitment to the new global world of e-commerce. He could turn this to his advantage in the north-east, where there is a crying need for a new identity and purpose in life, after Thatcherism wrote the obituaries for shipbuilding, mining and steel. So here comes the Big Idea: this is what Blair should do:

l Create, in Thatcher’s north-east graveyard, a brand new industrial incubator, a Ministry of International Information Technology (MIIT), with a senior Cabinet minister answerable directly to the Prime Minister. The ministry would have a big budget to accommodate a portfolio straddling the political, social, philosophical and economic problems associated with the global information highway. The department would pull together and dominate a host of conflicting but essentially allied issues, from co-ordinating wider access to the internet in schools and homes to dealing with privacy and the net’s potential for crime.

– Create alongside the ministry a new university or college campus to specialise in research (like the Massachusetts Institute of Technology’s media lab in the US) and develop a library of advanced technology. The university would create new degrees up to PhD level in all relevant subjects, with government-sponsored scholarships for students from existing technical colleges within the region.

– Persuade leading e-commerce companies (handsomely grant-aided) to set up a silicon community of businesses alongside the campus.

– Summon a huge press conference to the Stockton campus next March. Announce the above as a new government initiative to rescue the north-east, to be preceded by a major feasibility study. Mean it from the bottom of his heart.

I have the people who would carry out the study. Professor Andy Gillespie, the executive director of the Centre for Urban and Regional Development Studies (CURD) at Newcastle University, says his department would put its expertise at the disposal of any government inquiry. He adds: “Where the idea might be pushing at a door [that is] ajar is in Blair’s wish to make Britain a leader of the international e-economy. Places like the north-east need to be a part of that . . . A year ago, the Cabinet Office was saying, ridiculously, that the north-south divide didn’t exist. Clearly, you’ll find pockets of real affluence in the region, but if you walked across it you’d find endemic problems based on a lack of dynamic policies, and that’s been the case here for the best part of a century.”

The Big Idea would address one of the region’s most serious problems: the desperately low expectations of many of its young people. David Charles, principal research officer at CURD, says that, educationally, the region has the weakest workforce in Britain. Yet it also offers some of the finest education in the country at universities such as Durham or Newcastle. “We import students from other regions,” he says. “Unfortunately, we can’t retain them because there aren’t the jobs for them. Typically, when they leave here, they are among the most successful of migrant students in Britain and get very good jobs.”

So, where is the regeneration fuse to be lit? Blair could do worse than start a feasibility study in Stockton, on the banks of the Tees. Here, there are office blocks built or planned with government support, including one called Dunedin House that, until recently, housed Inland Revenue workers, now high-tailing it to new premises in Leeds.

Even more importantly, Stockton has a new campus attached to the University of Durham. The development of the Stockton college over the past decade – under an inspirational provost, John Hayward, a former bursar at Durham – has been one of the most remarkable success stories of postwar education.

Stockton has 2,000 students, many of whom are local and might not otherwise have gone to university at all. Hayward’s staff are in buoyant, expansionist mood, raring to bridge the Tees and continue development on the opposite bank. Roy Boyne, a professor of sociology, says they would support the Big Idea whole- heartedly. “There’s a crying need for investment in information technology. It’s also absolutely clear that the participation rate in higher technology in the region is the lowest in the country, that the number of funded university places for local people is also the lowest in the country. It’s essential to address these issues if more people are to be persuaded to stay in the region to contribute to its economic regeneration.”

The MP Dari Taylor brings to the debate all the passion of a woman born in the Rhondda Valley. “The north-east’s desperately in need of a new tomorrow,” she says. “People are looking for a revolution and are frustrated at the slowness of change . . . Stephen Byers’s ministry has got to find something more proven than call-centres. It won’t be easy to persuade Tony . . . He keeps saying: ‘We mustn’t make government expensive.’ But the great thing about the MIIT initiative is that it would create wealth. And there’s a general election coming up and Tony’s going to want to know: ‘What’s the Big Idea?’ This is the Big Idea. I think it’s stupendous.”

Peter Dunn is the New Statesman‘s north of England correspondent. This is the fourth in a series prepared by the NS and the Fabian Society on ideas for a second Labour term