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North-East England: Socio-Economic Prospects

My Lords, I have been privileged to serve the people of the north-east for the past 11 years. I, too, am grateful to the noble Lord, Lord Bates, for initiating the debate. The north-east is indeed a very special place. Over the past 11 years, the region has experienced a considerable amount of change. I will make four brief points as we look to the future. Some of the change has been very visible: new developments and new cultural projects that are important symbols of renewal, such as the quayside along both banks of the Tyne, mentioned by the noble Baroness; the Sage and the Baltic; the Institute of Modern Art in Middlesbrough; Alnwick garden; and the Angel of the North. Just as important, though less dramatic and less obviously symbolic, are the new schools, hospitals, colleges, redevelopments of brownfield sites, residential developments and business parks throughout the region. At least parts of the region look and are very different from 10 years ago. Other changes are less visible, but highly significant. The economy has changed: we now have a post-industrial economy that previous generations would not have recognised and could not have imagined. There has been the dramatic decline in manufacturing and the expansion of the service sector, especially public sector services. The largest employers in Newcastle are the hospitals, the universities, the DSS—known locally as "the Ministry"—and the local authority. According to recent research by Fred Robinson of St Chad’s College in Durham—this is a sobering thought—more people in the north-east now work in shops than in factories. There is little doubt that the growth of the public service sector has saved us from even more serious economic difficulties. As the noble Lord, Lord Bates, indicated, that makes the north-east particularly vulnerable and likely to be badly affected by the cuts in public expenditure that we all fear in the coming years. Thirdly, there is still the north-south divide, which is getting ever wider. The north-east still lags far behind the south of England on all the indicators. Within the region, too, there are great contrasts, perhaps greater than ever. Put simply, Easington and Hexham live in different worlds. The north-east is still the least prosperous region in the United Kingdom, and has a great deal of catching up to do if it is to become more aspirational, more entrepreneurial and more open to, and accepting of, change. The Barnett formula is still a major handicap and urgently needs revisiting. It is particularly notable how disadvantaged our region is in relation to our neighbour immediately to the north. In summary, I am excited by what has been achieved, but anxious about some parts of the future, because we are the least prosperous region and our economy has structural weaknesses. The recession, together with rising unemployment, is a major threat to our future. I am anxious, too, because of the difficult circumstances faced by many of our young people. Today, 25 per cent of children in the city of Newcastle live in poverty—that is one in four. The figure for the whole region is even higher—29 per cent. That is why government initiatives like Sure Start and New Deal have been so welcome. Yet in some of my parishes—this is not unique to the city of Newcastle—three generations of some families have never worked. On some of our estates, 80 per cent of males over 16 are in receipt of benefit. Poverty remains the stubborn, overriding problem—the awful, grinding, multiple deprivation that so many experience, not only in the inner-cities and on the outer estates, but, increasingly and often hidden, in the rural parts of the region. What do we need for the future? We need a new Barnett formula, a regional development agency—established by whoever forms the next Government—with focused regional policies to support and develop some of the new industries, not least in renewable energies, that are beginning to be developed. We need investment in transport. When is the A1 going to be dualled? We must be the only region in the country that does not even have a dual carriageway running through it. Above all, we need the recognition that the people are our most precious and important asset. The sense of identity, place and community still survives. All our policies—local, regional and national—must put our people first, to give them hope and confidence to develop the new and essential skills that will be needed for our region in the future.