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Regional Economy (Tackling the Recession)

I first took an interest in the issue because my hon. Friend raised it with me, and as a result of him and other hon. Members raising it, I took it up at the Council of Regional Ministers, which is our formal input into central Government. Other regional Ministers raised it as well. He knows that there was a heated national debate about it because we were on the receiving end of a pretty ignorant attack from those who claimed to represent the interests of property holders—essentially based in London, and no doubt with the right-of-centre politics sometimes found in our capital. They alleged that we simply sought further regional concessions for ourselves; that was not the representation that he or I were making. I am happy to return to the issue by making the same representations within Government to get a concession focused on former industrial property, so that demolishing the buildings—the way to avoid the tax—would be disproportionate. First, because there is a cost in doing so, and secondly because buildings that could be brought into economic use should not be demolished because of the pressures of the tax system. I am happy to give it another go, and I know that I will have my hon. Friend’s support. I am convinced of the merits of the case as it applies to the old industrial areas. Of course, I understand that the turnover of the companies that he mentioned is too high to benefit from the concession that we have secured, but the concession is none the less welcome to the small and medium-sized companies that benefit from it. To move on, from a national pot of £127 million, five local authorities in our region have secured £11.75 million for the provision of new social housing, and again I offer congratulations to those local authorities that submitted a bid. Construction will begin before March 2010, and as every public representative in the room knows, there is pressing demand for affordable housing to rent in our region. As part of the Building Britain’s Future announcement, an additional £40 million is available for affordable housing grant in the region for the period 2008 to 2012, and I urge those local authorities that have not explored that yet to do so, because the demands are pressing. It is a subject of regret that 27,200 young people are on jobseeker’s allowance in the north-east. We must not let them down. From October 2009 all 18 to 24-year-olds who have been claiming jobseeker’s allowance for 10 months are guaranteed six months of activity—a job, work placement or work-related skills training. To date, we have got five organisations, all local authorities that have been successful in their future jobs fund bids, to create up to 2,800 jobs for young people and the long-term unemployed. I have already congratulated my hon. Friend the Member for Gateshead, East and Washington, West on the exceptional and well thought-through bid that Gateshead college and the local authority submitted. It looks to the future and gives young people hope of permanent employment, and of using the skills that it is well within their grasp to gain. Another way in which we are investing in the region to revitalise some of our former coalfields and rural communities is through the local enterprise growth initiative. Be Enterprising, which is the County Durham one, although there is a smaller one in Northumberland as well, is benefiting from a £4.1 million pound part finance package from the regional development fund. That funding will create 370 jobs, safeguard another 190, and assist in the creation of more than 500 small local businesses. In other words, as the labour market has loosened, my priority has been to try to tighten it. To do that, I have tried to support specific projects and help to push them on. I will just romp through my list: the region is to become the first low-carbon economic area, specialising in ultra-low-carbon vehicles, and that is easily the largest of the projects. The programme is driven by the partnership approach that works so well in our region of regional and sub-regional bodies; it will focus on supporting a transformation of the automotive industry, provide support for innovation and demonstration, support the skills training that I have mentioned and encourage the clustering of manufacturing. There is a great opportunity for us here of a development around the Nissan car plant. It is hard, as I said earlier, to overstate the impact that the new factory and the potential of the electric car will have on the economy of Sunderland and east Durham. That is the most significant example, but not the only one. It is matched by the exciting developments on the north bank of the Tyne, which could not have taken place without the investment of the Shepherd family. Again, the development will have a significant impact on job opportunities for the next generation of Tyneside engineers. Those are the two great economic development projects in the region, but they are not the only ones. It is estimated that a £20 million expansion of a printable electronics technology centre in the north-east of England will stimulate the creation of up to 250 jobs in the region and up to 1,500 jobs nationally in the next four years. The centre, at the NETPark in Sedgefield, County Durham, is to receive £12 million from the Government’s advanced manufacturing strategy, along with a further £8 million that will be channelled by the regional development agency. The global market for that technology—it is a technical world and many people will not be familiar with it, although I have been to see for myself the remarkable things that can be done with the new technology—is estimated to grow to £15 billion by 2015, so having our region in at the forefront will be of huge importance to us. There is a £12 million investment by Government in open-access demonstrator facilities for industrial biotechnology at Wilton. The Government will also provide £2.5 million to support companies using the demonstrator facility and match funds from the Technology Strategy Board for new projects related to industrial biotechnology. Another big opportunity for our region is carbon capture and storage developments. The north-east is obviously in a strong position because we are geographically next door to the North sea. We have strong offshore and process industry sectors and we have energy-intensive industries. We could deliver an early demonstration of carbon capture and storage, and that is what we are bidding for. Our plans were given a boost recently by the Prime Minister’s visit. He came to look at the site which would be at the heart of one of our BIDs—business improvement districts—and we were able to get our message over to him. In total, the proposed investments in this sector could amount to more than £3 billion over the next 10 years. I can confirm today—it is nice to have some good news, Mr. Cook—that, in part thanks to Government support, we hope to have the main part of the Findus factory in north Tyneside up and running and employing, initially, 230 people before Christmas. There are other smaller, but no less important, projects, which seem to me worth backing, and I want to speak specifically about two in County Durham. The proposal for a renewable energy village on the site of the old Blue Circle-Lafarge cement works at Eastgate in Weardale is a unique development opportunity. If it goes ahead, it will be a demonstration project for renewable energy. The project could create 350 new jobs—150 in research and development and renewable energy, and 200 in hospitality and leisure-related businesses. The proposal would also provide a significant tourism offer, utilising existing hot springs. Similarly, I want to refer again to the project supported by Easington district council for the development of a centre for creative excellence on a 72-hectare site in Seaham. The development will include film studios, a film school, a university with student accommodation—I understand that discussions are under way with Sunderland university about this aspect of the proposal—a four-star hotel with leisure facilities and accommodation for production staff, etc. I know this sounds quirky, but I think it is really exciting. We need to diversify our region’s economy into the service sector, and this could be a real winner for us. Don’t tell me that people in the north-east cannot do these things, because I am absolutely certain they can. People will set to with a will if a new industry comes here; it would really be a huge boost. The local authority has been very imaginative, and I want to praise again the work that has been by One North East and the Government offices for the regions for trying to nurse this project through and bring it to fruition. It has my strong backing, as I know it has the backing of my hon. Friend the Member for Easington. I also want to praise the work that he has put in to try to make this happen. A cluster of creative industries could create up to 1,900 construction jobs and 2,400 operational jobs, and could contribute £67 million to the region’s economy. These are not the only examples, but I highlight them to show the range and the dynamism of the activity that is going on in our region—a region that has done more over the last decade to help itself than any other region of our country. We have come a long way in the last 30 years. We are working together to tackle the immediate impact of the recession—supporting people, supporting jobs and supporting businesses. There are quite a lot of things that give me hope and encouragement, but nothing more so than the constructive, open and energetic way in which other partners in this region have been willing to work together—not just to come to meetings and go, ““Yes,”” and ““Mmm,”” and then go away again, but to play their part in a positive way to try to make these things work and happen. Our approach was the right one before the economic downturn struck. We have been hit harder than other English regions, but we have the policies, the commitment and the sense and unity of purpose to get through our present difficulties and out the other side.