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Budget Resolutions and Economic Situation

I will deal shortly with some of the measures that have been made available for the north-east. Many measures in the Budget will have a negative impact on people's income, including that of 8,000 families in County Durham, who will lose out from the changes in tax credits. There is no action to tackle youth unemployment, despite the fact that it is much higher by several percentage points in the north-east than elsewhere in the country. The Government should have set out a coherent strategy in the Budget to get the north-east economy back on track. Instead we have a measure to reduce regional pay, taking £78 million our of the north-east's economy. There is no evidence to support the contention that the current position inflates public sector salaries or acts as a disincentive to the private sector. Business leaders have been calling for some sort of holistic strategy, which we simply do not have. I say to the hon. Member for Suffolk Coastal (Dr Coffey) that there have been several small measures, but they are outside any coherent framework. Seventy-three per cent. of successful bids from the first two rounds of the regional growth fund, including 40% from the first round, have not yet been signed off. They are therefore not delivering anything for the north-east, and £14.25 million of the regional growth fund supports only 91 jobs. I emphasise to the hon. Lady and her colleagues that that is a drop in the ocean compared with what is needed. We also have enterprise zones and local enterprise partnerships. In doing research for my speech today, I had to try to determine what was happening through two enterprise zones, two LEPs, two regional growth fund allocations, the business enterprise network in the north-east and the chamber of commerce. It is difficult to get a flavour of what is happening in the region, in great contrast with the position under the regional development agency, when it was easy to monitor the impact of what was happening with investment and jobs in the north-east. It is now extremely difficult to get that information. Without a coherent framework and an overall strategy, the economy of the region is simply not growing and not enough investment is going into key sectors for economic growth, including those that had been identified under the RDA. It is not only me who is making that point; our business leaders say that, of all the policies the Chancellor could have introduced in the Budget that would have had an impact on the north-east, measures on investment allowance and employment taxes would have been the most important. They say also that, although the target to double UK exports is commendable, there is absolutely no detail on how it will be achieved. Rather, Government Members have today given us a complete fantasy land, where they somehow think that the measures in the Budget are going to deliver growth for the north-east. But there is simply no plan. We want instead to see measures to create jobs for young people, a tax on bankers' bonuses which would create 5,500 jobs for 16 to 24-year-olds in the north-east and a temporary reversal of the Government's VAT increase which would put £450 back into family budgets. Labour would give 58,000 small businesses in the region a tax break if they took on extra workers. That is the challenge I throw down to the Government today.