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Regional Economy (Tackling the Recession)

Thank you, Mr. Cook. I echo others in welcoming the opportunity to be here in Middlesbrough town hall under your chairmanship at this first meeting of the North East Regional Grand Committee. It is a great initiative and I want to congratulate our Government on bringing about these Grand Committees, particularly here in the north-east, which is probably one of the most successful held so far. It is a great initiative, though no substitute for regional government for which many of us in this room campaigned long and hard. We cannot make decisions here but we can draw attention to the region’s problems and its potential in our debates. It is also interesting, if not a pleasure, to follow the right hon. Member for Berwick-upon-Tweed. I agree with much, though not all, of what he said. It will be interesting to read the transcript of his speech because much of what he said is needed for the future of the region will involve a great deal of public expenditure, which does not fit too well with the savage cuts announced by his leader at the conference last week. The north-east has a proud and, for too many workers, sometimes a painful history in manufacturing and mineral extraction. These industries dominated over centuries and painted a picture of a grimy and scarred landscape—of ships and trains belching smoke, of noisy and dirty factories, of coal heaps and the residual waste that created black hills to challenge the beauty that the north-east countryside and coast are now able to showcase to the world, encouraging the growth of the visitor economy referred to earlier by the Minister. Most of our grimy history has gone and we are faced with the challenge of replacing the thousands of jobs it supported with new employment and new opportunities. Too often in the past when hard economic times hit the United Kingdom, the north-east took an unfair share of the consequences. North-east industry, along with the jobs it supported, was often the first to suffer. Today, however, having worked to replace the old industries with new, our region is much better placed than ever to weather the storm and to come through the economic downturn with optimism and hope for the future. But is the storm over? Reading the pages of the regional business press—which I often do as I am sure do other Members—we can see just in the past couple of weeks, comments such as, ““the long term outlook for the region’s exporters looks buoyant”” from the Newcastle Journal of 16 September. We read of our region’s excellence in chemicals and biotechnology, pharmaceuticals and auto-engineering and that regional businesses are optimistic that we are ““well placed to take advantage of the recovery when it comes””. If economic forecasters have it right, the recovery may well be on the way, thanks to the actions of our Government at home and the lead given by our Prime Minister to the rest of the industrialised world. However, we cannot be complacent and just lie back and hope that the recession is over and wait for orders to come and jobs to follow. We have to get out there and win orders, and sell our businesses and our skills in order to build the prosperous future that our region deserves. That is the call made recently by the north-east chamber of commerce and the Newcastle Journa l—the need for increased overseas trade to boost our economic prospects. Of course, much of that trade will be with Europe. Businesses in the north-east currently export to Italy, the Netherlands, Spain, Poland, Germany, Belgium, the Irish Republic and so on. It is therefore in the best interests of our region and regional employment and business that we remain an integral and committed member of the European Union, something the Euro-sceptical Conservative party and the anti-Europe United Kingdom Independence party would jeopardise given the opportunity. We learn from local companies, such as Stockton Building Services, of the need for public spending in education, health and defence to provide work opportunities for our people. The Labour Government are committed to continuing the economic stimulus that has helped us through the recession and will eventually see us on the upturn. In my constituency, British Aerospace on Scotswood road is awaiting the announcement of MOD orders that will maintain its work force and its excellent apprenticeship scheme. In a recent question to a Defence Minister in the House of Commons, I was assured that the announcement would come soon. I urge the Minister for the North East to ensure that it does. As we are approaching a general election and discussing the future of our regional economy, it is relevant to examine what that future might hold. The Conservatives are hellbent on putting a stop to public investment and cutting the important social provision brought in by this Government over the past 12 years. Although the Prime Minister acknowledged at the recent TUC conference, as did the right hon. Member for Berwick-upon-Tweed a few minutes ago, that efficiency savings and cuts in waste and unnecessary programmes would have to be made, he was equally clear that continued public investment remains crucial to a lasting and sustainable recovery. The Prime Minister was also clear that important front-line public services should not be threatened. The right hon. Member for Berwick-upon-Tweed will see that the Prime Minister accepts that there is a need for public restraint, but that is a far cry from the savage cuts referred to by the Liberal Democrat leader at the party conference last week. Under the Liberal Democrats’ proposals, even important front-line services could be threatened by cuts. Their Treasury spokesman, the hon. Member for Twickenham (Dr. Cable), has said that nothing should be ruled out and that there should be no ring-fencing. The Conservative party has not yet spelled out the full extent of what cuts it would make, apart from increasing the price of beer in the House of Commons, but we can glimpse what a Conservative Government would mean by reading the recent report published the party’s friends in the Institute of Directors and the TaxPayers’ Alliance. Stockton Building Services will be concerned to hear of the proposal that the Government’s Building Schools for the Future programme should go, as well as the education maintenance allowance that has encouraged so many youngsters from poorer families to stay on at school and gain the qualifications that will help them in future employment. So too would Sure Start, one of the Labour Government’s major achievements, which helps parents of pre-school children with their development during the opportune early years. The Conservatives would scrap Labour’s plans for extending the school-leaving age to 18, cut £687 million from grants to voluntary organisations, freeze the basic state pension and abolish interest subsidy to student loans. Add to this their recommendation that universal free bus travel to the elderly and free TV licences should be scrapped, and it can be seen that no one would escape the painful consequences of their policies. In a region where public spending accounts for 53 per cent. of GDP, we must take threats of such cuts seriously. Avoiding them will be in the hands of the electorate in due course. In the meantime, when the economic downturn finally becomes an upturn and employment begins to grow once more, we in the north-east need to be ready to take full advantage of it and ensure that our region is at the forefront of the recovery. I believe that we are better placed to do so today than we have ever been. I have mentioned our excellence in various fields of industry, but others are waiting in the wings or emerging even now, such as renewables, clean coal technology, low-carbon energy technologies and electric vehicles. I point out to my right hon. Friend the Minister that one firm at the cutting edge of battery technology is Sevcon, in my constituency. I urge him to visit the firm to hear what it has to say about the great potential of electric vehicles for the future. We are well placed to forge ahead in those areas and provide a boost to our region’s economy, as well as to make our contribution to the green agenda and the nation’s energy needs. We have the coal, offshore specialists, technological expertise and manufacturers to do so. Ironically for a region that has boasted some of the nation’s most skilled workers, we face a shortage in skills that could jeopardise our progress. That is why it is so important to continue to invest in education and training, and why our young people should have every assistance to access the excellent further and higher education and training opportunities available to them right here, in this region. We will need help from the Government as well, of course, not least to improve our internal and external transport links, to which the right hon. Member for Berwick-upon-Tweed referred. Proposals that the next major extension of high-speed rail should occur on the west coast are not acceptable to our region, although I notice that Network Rail suggests in more recent publications that that should be followed by routes through Sheffield and Newcastle. However, those are proposals made by others, not the Government. To be fair to the Secretary of State for Transport and the Government, no decision has yet been taken. The various opinions touted will be taken into consideration when the body set up to report on high speed 2, the next phase of high-speed rail, finally presents its report to the Government. So we need to ensure a strong voice for our region in that process. But, public spending on other capital projects is also vital to this region. Our major road network needs to be upgraded to provide safe and efficient links to the north, south and west. The A66, A69 and Al north of Newcastle are three examples of this. I have long banged on about our region being isolated from the country’s motorway system and at least that is now being addressed by the Government. Works are under way as we speak to link the A1(M) in the north-east to the Ml by replacing the current dual carriageway between Scotch Corner and Dishforth with motorway. That is very welcome public investment which, while it is not in our region as the Minister pointed out, will nevertheless be a big improvement to our motorway links with the midlands and the south. Also welcome is the new Tyne crossing; it will be of huge benefit to the travelling public and to industry and commerce. Public investment, properly directed, has been, and will continue to be, a vital element in our region’s future prospects and development. We have a proud and sometimes painful history here in the north-east. We have built the nation’s ships and provided its energy and we have felt the pain of recession and economic downturns too often. But we have come through all of that and we now have the determination and ability to build on what we have learned. This is a great region, a great place to live, to learn and to work. I believe we are better placed than ever before to take the region forward to a brighter future if we work together and make best use of the opportunities available. We have a proud past, but the best is yet to come. I believe the north-east can now look forward with confidence to an even greater future.