Economic Development (North-East)

Tom Blenkinsop Excerpts

Tuesday 15th February 2011 Commons Chamber

[Roberta Blackman-Woods]

The hon. Gentleman has to realise that within the umbrella of green energy and manufacturing, many different skills are needed. The regional skills strategy was able to bring together universities, employers and the further education sector. They could then decide between them who was best placed to deliver those skills, but the structure that enabled that to happen has simply been removed. The Government are telling us that there is no need for those strategies, but I dispute that.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

The North East Process Industry Cluster was set up by One North East and was an exact expression of devolution to industrialists and local authorities. In the past two years, NEPIC has engaged with large industries, as well as with small and medium-sized enterprises, to get them to take on board apprentices—something which, at the end of this week, is very important.

[Roberta Blackman-Woods]

My hon. Friend gives an excellent reason why we need to continue with regional skills strategies.

I want to raise a few other issues relating to the skills agenda. The Government have also got rid of the 14-to-19 commission for skills, which is absolutely devastating. That body brought together all the deliverers of vocational education and made sure that apprenticeships were promoted in the region and in the correct areas. Again, there is absolutely nothing to replace that body and it is unclear how we are to ensure that apprenticeships are delivered in the region and that enough placements are available.

Lastly, I want to discuss the abolition of RDAs. We have to recognise that even in straitened times, the RDA could have delivered funding in the key areas that have been identified, particularly green energy and manufacturing. The money that is available—£61 million in 2011-12—has to be spent on existing projects, so there will be no new investment. As my right hon. Friend the Member for Newcastle upon Tyne East has said, all 320 employees are to be made redundant, with all that skills base going to waste. We do not know whether those people are going to get jobs in the region or will be able to pass on their expertise. That is a dreadful loss to the region and we do not think that LEPs will have the money to give employment opportunities to those people. We are all asking the Government to reconsider whether the structures they are putting in place will deliver the economic regeneration we want in the region, whether the structures are at the right level and whether too much of the infrastructure that will bring about the improvement that we all want has been removed.

--- Later in debate ---

[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.

--- Later in debate ---

[Mr Davey]

All Governments have to make choices, and my right hon. Friend was saying that the Labour Government failed to choose to upgrade the road that serves his constituency, so again I am afraid that they do not have as good a record as some Opposition Members would like us to believe.

[Tom Blenkinsop]

On choices, can the Minister say how many Liberal Democrat local authority group leaders agree with the Government’s current policies?

[Mr Davey]

I believe that they all do, and I will explain why. They know that this coalition Government are improving the public finances, which is vital for the stability of our economy and for investment in the north -east and other regions, and are prepared to take the tough decisions which, if one were to believe what Labour Members have said, their party would have ducked.

I share the desire of the right hon. Member for Newcastle upon Tyne East to ensure that the north-east can share in sustainable, long-term economic growth. He made that case with passion, and the Government agree that we need to make such growth our overriding priority. We want to forge a new model for growth—one that is based on rebalancing the economy, both geographically and in terms of sectors, and which promotes innovation and boosts exports, not merely relying on consumption that is, in many cases, fuelled by public debt. That is why we have set up the growth review, which is a root-and-branch analysis of the barriers that impede business growth, and the structural reforms that we believe are needed to boost economic growth across the country. The initial phase is focusing on immediate priorities for business by improving the competition regime—on which I am leading—increasing exports, reforming the planning system, and cutting red tape and regulation. That will underpin this year’s Budget. A huge amount of work is going on in that context.

When my right hon. Friend the Business Secretary recently made a statement to the House about the trade and investment White Paper, the hon. Member for Bishop Auckland (Helen Goodman) said that she was worried about where inward investment would come from. I refer her to that White Paper, which talks a great deal about the importance of inward investment for all regions of our country. Many excellent firms in the north-east contribute to this country’s manufacturing exports, and I believe that they will strongly welcome the policies and framework that the White Paper sets out.

In the meantime, we are introducing a range of policies intended to support enterprise so that companies can grow and create new jobs. Let me highlight just a few of those. We are cutting the main rate of corporation tax from 28p to 24p by 2014. We are reducing the small companies rate from 21p to 20p—not increasing it as the previous Administration had intended. We are cutting the unnecessary red tape and bureaucracy that hinders, rather than helps, UK firms. We are boosting adult apprenticeships funding by up to £250 million by the end of the spending review period to create up to 75,000 more places a year. We heard nothing about the apprenticeship scheme from Labour Members. It is a huge success. I do not know whether any of them took part in national apprenticeship week, as I did in my constituency. At many of those events, we noticed the enthusiasm of employers and their potential apprentices, with large numbers of people getting really excited about this new opportunity that the Government have provided.

[Mr Davey]

I apologise to the hon. Lady if I did not listen when she was talking about apprenticeships, but I did notice her reliance on strategies for skills. What I found rather odd in several policy areas under the previous Government is that they spent a huge amount of money on forming strategies, and then, a year or two later, they were looking at another strategy. In my view, if we have a strategy, we should stick to it and implement it rather than keep changing it, as happened so often under the previous Government.

We are also striving hard to bring about a renaissance in the UK’s industrial base, which has had some serious problems in recent years. Sectors such as advanced manufacturing are critical in creating a more diverse, resilient economy in future. That sector, among several others, is very much part of the growth review that my right hon. Friend the Chancellor will talk about in the Budget.

[Tom Blenkinsop]

The current GDP figures in Britain are incredibly worrying, although admittedly there has been an increase in manufacturing. However, that increase is down to inventory and raw material spending. At many manufacturing sites, short-time working agreements have been taken away, bringing the work force back to their previous contractual hours, which had been reduced.