Economic Development (North-East)

Helen Goodman Excerpts

Tuesday 15th February 2011 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

First, I congratulate my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) on securing the debate, and on having been such an excellent regional Minister, defending the interests of all our constituents when he had that responsibility. I want to reinforce his central point about regional economic development being operated through consensus in our region, and how valuable that consensus and those partnerships have been.

When the global recession hit our region, manufacturing suffered in particular, and it seemed deeply unfair that our constituents in engineering, for example, were losing jobs because of the foolishness of bankers in London—but thanks to the action that the Labour Government took at both macro and micro level, we saw a number of improvements in 2010. For example, the future jobs fund produced 500 jobs in Durham. There was also the investment and support for Nissan, which other Members have mentioned. That had a knock-on effect throughout the automotive sector supply chain in the region.

There was also the work of the regional development agency, and I press the Minister to take to heart its important role in securing inward investment. That is not a power that local enterprise partnerships have; it has been taken back to Victoria street. I urge him to ask his officials to have a proper presence in the north-east on inward investment, because we are not confident that when sitting in Victoria street they have a clear picture of the nature of the region and its differences.

Thanks to the previous Government’s work, a brand-new Thorn electric light bulb factory has opened in my constituency, which has secured 700 jobs. It works in partnership with Durham university and other private sector partners, and makes a huge difference. Things improved throughout 2010, to the extent that a £45 million retail development site was opened in the constituency, and manufacturing is clearly past the bottom of the recession, now that customers have stopped de-stocking and things seem to be improving. I visited the Berco factory in my constituency, for example, which opened only last Friday.

However, just as things seem to have turned around thanks to all the efforts of the Labour Government, our region is facing deep spending cuts. I want to draw to the Minister’s attention the impact that the cuts will have not only on the public sector, but on the private sector. In my constituency alone, Building Schools for the Future cuts amount to £100 million, which would have been £100 million-worth of business for the local construction industry. The same is true with cuts in the Home Office and Ministry of Justice capital programmes. All that will have a knock-on effect on firms in my constituency, and I could take him to those firms to show him the jobs that are likely to be lost as a result. In addition, cuts in benefits and working tax credits will have an impact on the retail sector. Cuts in tax credits will have an impact on small businesses such as those involved in child care. Those will all have knock-on effects that Ministers must take into account.

[Mrs Mary Glindon (North Tyneside) (Lab)]

Will my hon. Friend give way?

[Helen Goodman]

In a moment.

The pathetic little tweak to national insurance contributions owed far more to politics than it did to economics. Everyone knows that the big barrier to small businesses is securing equity. That is what they need, not a little reduction in their national insurance contributions. It is not surprising that that initiative did not succeed, and I support wholeheartedly the Federation of Small Businesses, which wants it to apply to all new jobs and not just to wholly new businesses.

Ultimately, this is really a question of values. In my constituency, the Decent Homes programme has another 1,000 homes to complete, and for that it needs only £5 million—as much as one banker’s bonus. We know that the Government have failed to tackle the banks and bankers’ bonuses properly, which has an impact in our constituencies. In the week when Barclays announced yet again massive billion-pound profits, it has closed a branch in Shildon in my constituency.

[Tom Blenkinsop]

Does the Government’s flagship policy of reducing corporation tax not actually aid financiers in London far more than it will any self-employed business in the north-east, as the majority of those businesses do not pay corporation tax?

[Helen Goodman]

My hon. Friend is right. Moreover, to cut corporation tax while cutting investment allowances is to bias the tax system against manufacturing, and I thought that everybody agreed that we needed to strengthen our manufacturing base.

One of the most important elements in economic development is for people outside the region to have confidence in us, and I have two examples of organisations that do have confidence in us. The first is GlaxoSmithKline, which wants to build a new plant. One of the shortlisted sites is at Barnard Castle in my constituency, and that would produce 1,000 jobs.

The second example is in tourism development, which my hon. Friend the Member for North Durham (Mr Jones) mentioned. Only this week, the director of the National Gallery said that if we could keep the Zurbarans at Auckland castle, he would be able to lend more paintings, develop a centre of artistic excellence and build our tourism industry. How much better it would be if, in addition to such support, we had the wholehearted support of the Government.