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Regional Economy (Tackling the Recession)

It is a pleasure to serve on this Committee under your chairmanship, Mr. Cook, on this unique parliamentary occasion. May I also say once again that it is a pleasure to be in the constituency of my hon. Friend the Member for Middlesbrough? We all go back a long way in the public life of our region. I welcome my parliamentary colleagues and thank them for coming to take part in our proceedings. I also welcome those who have come to listen to the questions, answers and debate. As I said, it is a unique parliamentary occasion and all parliamentarians have an obligation to ensure that it serves the communities that we have been elected to represent. There could not be a more appropriate topic for debate than ““Regional Economy: Tackling the Recession.”” When I was appointed regional Minister, I made it clear that the focus of my activities would be acting as the region’s champion at the heart of Government, and that my core policy would be to drive up the prosperity of the region. My method of doing so has been to engage with both the public and the private sector in the region, not least to ensure that I am representing the opinions of the region to the rest of the Government. The region’s economy has undergone a remarkable transformation in the past 30 years. The dominance of large employers in traditional industries such as coal mining, shipbuilding and heavy engineering has been replaced by a far more diverse economic base. We have also seen significant economic growth in recent years. In 2005-06, we had one of the fastest growing regional economies in the United Kingdom. It has doubled in size in the past 10 years, adding nearly £13 billion to overall output and contributing more than £40 billion to the UK economy. The past 10 years have seen historically high numbers of people in employment. Despite the effect that the downturn is having on the labour market, about 55,000 more people are in employment in the north-east than in 1997. The region has also seen a higher rate of business registrations than the UK average for the past six years. The manufacturing sector, which continues to be important to our economy, contributes about £6.9 billion to the region’s economy and employs around 128,000 people. Our economy is much more diverse nowadays, with new sectors such as the offshore industries, biotechnology and the automotive industry. Until I prepared for today’s debate, I had not realised that a third of all UK biotechnology companies are based in our region. We need to diversify the region’s economy, strengthen the service sector, including hospitality and tourism, and focus on our historic strength in manufacturing, especially engineering. We also need to understand enterprise, and to treasure and support the process sector and the real opportunities for private-sector led inward investment. In the long term, I want the region to build on recent progress by increasing the quality and quantity of business start-ups and the number of highly value-added and internationally competitive businesses. The growth and development of the renewables and energy sectors should be embedded in the region. We must continue to increase labour productivity, which requires investment, as those of us who have been involved in industrial issues know. I want to further encourage the visitor economy. I pay tribute to the work of my hon. Friend the Member for City of Durham (Dr. Blackman-Woods), one of my parliamentary secretaries, in trying to house the Lindisfarne gospels in Durham so that they will be in our region permanently. That campaign is backed wholeheartedly by the region’s public representatives and this is not a party political issue; we all speak with one voice. The association of this artefact with our region is so clear and undeniable that it ought to be located here. Although there are a number of obstacles to that, I believe that they can be overcome. I reiterate my wholehearted backing of that campaign and praise the efforts of my hon. Friend and other parliamentarians from the region. If we could do only one thing to underpin the visitor economy in the region, it should be relocating the gospels here. The Government’s national initiatives such as ““Real help now”” and Building Britain’s Future, which was introduced with the last Budget, are impacting on our region, for example through the value-added tax cut, the jobs guarantee for every young person who is out of work for 10 months or longer and the mortgage protection initiatives. More than 5,000 businesses in the north-east have benefited from the tax deferral arrangements announced by the Chancellor, to the tune of £89 million. As the region’s Minister, I act as its advocate in Government. I have met a wide range of sectors and groups, including representatives of business, tourism, education, health, the voluntary and community sectors, and, of course, local government. One the most important relationships I have as regional Minister is with the leaders of the 12 strategic local authorities that represent the region and I pay tribute to the constructive, enthusiastic and energetic manner in which they come together to support our region and do what is right for the communities that have asked us to represent their interests. Again, that is not a party political point. The economic downturn has affected our region probably more starkly than other English regions. That is principally, but not solely, because of three shocks or potential shocks to the employment base that are unique to the region. The first, of course, is Northern Rock. The Government intervention and the stewardship of Ron Sandler and his successors, have led that important financial institution through a difficult, if not impossible, time. Although progress is being made, that episode led to a major redundancy round in the region. That was followed closely by the loss of 1,200 jobs at Nissan, including people on short-term contracts, because of the downturn in the automobile trade. It has been hard for the region to absorb those shocks. In both cases, Jobcentre Plus intervened. It has an effective and well-tried mechanism for intervening in such situations, which is getting us through the difficulties. We can look to a strong future based on the same industry, but making electric cars rather than petrol-driven ones. The third issue was referred to during Question Time, particularly by the MPs who represent the area. To be candid, the situation at Corus is the greatest single problem facing our region. As the Minister, I am in touch with all the parties concerned, but my hon. and learned Friend the Member for Redcar (Vera Baird), who acts as my deputy, undertakes most of the work on this issue. She has put an enormous amount of time, energy and effort into trying to find a way forward and I know that it is a labour of love for her. If anyone here has an ingenious idea that we have not already thought of and explored, I would be willing to hear it. Please speak to me at the end of the sitting.