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Regional Economy (Tackling the Recession)

I am grateful to be called and I am very pleased that we are having our first Grand Committee in Teesside. I am sure that my right hon. Friend the Minister would agree that today he is in the cream of the region. I want to start by making a statement about the regional Select Committee. We have held meetings over the last four months and have met many people from the universities, the regional development agency, the business world and the employers’ associations. It has been a valuable period of exploration. My hon. Friend the Member for Blaydon, who is a member of that Select Committee, is sitting alongside me. One statement that came through loud and clear in all our investigations and our evidence taking is that the RDA is performing an excellent job. That was said not just by the universities, as might be expected because they and their research and development are supported by the RDA, but by the employers. The Federation of Small Businesses said that if the RDA was not there to co-ordinate all the important parts of our commerce and industry, a similar body would have to be invented. That was a clear and positive statement. We are getting value for money from the £240 million. The Regional Select Committee travelled to Blyth to look at the offshore wind development. It is exciting stuff. The people there believe that they are leading not only nationally, but globally and they need more and more support from the Government. We are delighted that they recently received £4 million. They explained how Clipper is taking off in a very imaginative way. We need to have things explained to us: we are politicians, not scientists. They told us that when their offshore wind farm is developed, one of the wings of the wind turbine will be as long as our football field here in Middlesbrough. It is an incredible size and an incredible delivery of energy. It is very exciting. We also went to Nissan and heard a similar story. I will comment later on the way in which Whitehall works, and I hope that the Minister will take my comments on board and help to rectify the situation. We are seeing exciting developments that will be significant for future employment in the region. There is NETPark and its innovative electronics—startling stuff. Furthermore, we are not talking about just one university: Newcastle is involved in Blyth; Durham in NETPark; and Sunderland in Nissan. The universities and the whole of the north east are linked and work together purposefully. We ended our travels here in Wilton where we looked at the work on technologies such as clean coal and biofuels, fronted, in particular, by NEPIC. This is a very clear and seriously important gathering of information and evidence. The right hon. Member for Berwick-upon-Tweed, who is a friend of mine, said that we are talking about the region during a recession. I accept that it is a difficult time, but we have so much to be optimistic about and so much that is contributing to the development of a great future for the northern region. We are on the starting blocks with many different developments in many different areas of green energy technology. However, there are problems, and I would like the Minister to acknowledge them and, hopefully, help overcome them. The first problem relates to Whitehall. The Regional Select Committee is to take evidence from Whitehall officials from the Department for Business, Innovation and Skills. As we saw again and again, throughout the region, there is no doubt that Whitehall has brilliant ideas and very capable and clever people. Invariably, however, they seem to be stuck with Oxford university, Cambridge university and Imperial College London. What about us? We will make that case loud and clear. Billions of pounds are being invested, and we want some of it. We are as good as other regions, and should not be excluded. As has been stressed loud and clear, we are two and a half hours—three hours maximum—away from Whitehall, but we could be on a different planet from some people there and we are not prepared to accept that. Secondly, we heard an impassioned plea, particularly when we visited Nissan: ““Whitehall came up here with brilliant ideas about the formation of a new committee to bring together the sub-region of Sunderland, but we had a committee already and it was working. But they had a better idea and imposed their committee on us.”” It took 18 months to bed in and was an awful waste of time, and many people involved in the process, giving vast amounts of their own time, felt thoroughly cheated. Whitehall thought that it had a brilliant idea, but it was not so brilliant, because the region was already delivering the necessary research and commercial development activity. I hope that the Minister will take that point back to Whitehall. We will be speaking to people from BIS and requiring much more effective liaison with our regions. There is a third problem that will not surprise anybody here, but I repeat it to the Minister with a keen sense that it is critical not only to define the problem, but to seek a resolution. The point concerns getting money—anything from £100,000 to £1 million—for new product manufacturing. The research might be good, and the product proving its efficacy, but getting banks to accept the risks is monumentally impossible. However, we need the impossible. NEPIC would give us chapter and verse about good products that we could develop and benefit from, but which are left on the table because it cannot secure those amounts of money. If more than £1 million is needed, the banks are much more interested, which strikes me as inordinately funny. However, if less than £1 million is needed, there is a serious problem. The Minister will know that Ensus, a £300 billion green energy company, will open its doors in Teesside this autumn. It is a phenomenal piece of delivery and we are thrilled that Ensus management has achieved that private industry, with the support of One NorthEast. We can do such things, but we must have venture capital that can support small product development, otherwise we would be missing so much from our economy. I also want to say to the Minister—I am not the best at criticising my Government, and it is painful to make this criticism—that a road transport fuel agreement for biofuels of 5 per cent. by 2010 had been established. However, the publication of the Gallagher report caused everybody to reconsider the matter, because it was thought that the food and fuel debate had not been answered. It said that we, as greedy westerners, were pushing the fuel side of the debate, and that we were denying food to third world. The Government took on board the argument made in the Gallagher report, but the problem is that if Government policy is not clear, absolute and unequivocal, as it should be, getting private money is monumentally problematic. We understand the debate on food and fuel, but the fact is that Teesside answered that debate clearly and purposefully. There is no way that we want to take food off tables so that we can drive our limousines—we do not want that and would not support it. I hope that the Minister can get a clear and carefully articulated policy that does not change halfway through. If policies change, it is seriously problematic for investment. The innovative schemes that have been introduced have been very valuable. I have received letters, as I am sure have many of my colleagues, about the car scrappage scheme. I have one from Benfield, a motor group in the northern region, that states clearly that the scheme has been an unmitigated success, that it has maintained employment and that it has been incredibly valuable. The letter goes on to say that car scrappage has been an ““incremental”” scheme, because it has generated extra funds in VAT for Her Majesty’s Revenue and Customs, which more than match the amount of money that the Government have put in. I am sure that the Minister will know what I am going to say next: 1 January 2010 is fast approaching and we would like the scheme to be extended. This has been a no-cost scheme for the Government, and I would like the Minister to please keep it going. I also want to thank the Minister and the Government for the innovation whereby companies have been allowed to pay national insurance contributions and VAT at a much slower rate, over a period of time. I have received letters from companies that tell me that the scheme is giving them breathing space and allowing them to survive. Please keep that going. The Minister has given a lot in the debate on council tax, but we want more. We would prefer to spend money to create employment than simply to support empty property, so will the Minister look at the matter again? I shall end by referring quickly to the next inquiry of the Regional Select Committee, which will be on tourism. We will publish the innovative industry report in October, and then begin the report on tourism. There is an absolute belief that, of everything we do, tourism is one of the major areas in which employment opportunities are seriously undermined. We know that with a better and more focused tourism policy, employment opportunities will zoom. Although we have not been to Berwick and further into Northumberland than Blyth so far, we will be asking the right hon. Member for Berwick-upon-Tweed to welcome us to his constituency so that we can talk about, and take evidence on, tourism. The Minister made a statement about the Lindisfarne gospels. I could say much, but will not, because time is tight. He is right to say that they belong in the northern region. The British Library has had a tremendous run with the Lindisfarne gospels and they should now be back in the north.