Amendment of the Law

Part of Budget Resolutions and Economic Situation – in the House of Commons at 8:03 pm on 21st March 2000.

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Photo of Rosie Winterton Rosie Winterton Labour, Doncaster Central 8:03 pm, 21st March 2000

I am grateful for the opportunity to speak in the debate. It is a Budget that will be welcomed in my constituency and in south Yorkshire not only because of the extra money that it puts into health and education, but because of the emphasis on full employment—what welcome words they are for my constituency—and on tackling social exclusion. One of the major challenges that the Government face is to ensure that areas such as south Yorkshire, which suffered industrial devastation under the previous Administration, as my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) said, can reap the benefits of a Government who are putting economic regeneration at the top of their agenda.

So severe were the consequences of the previous Government's actions that GDP in south Yorkshire was at such a low level that the area now qualifies for objective 1 status. During the Conservative Administration between 1979 and 1997, poverty and unemployment rose dramatically in south Yorkshire. That is why measures such as the national minimum wage and the working families tax credit are so important for people in Doncaster and south Yorkshire. The action to tackle unemployment is crucial to regeneration in the area.

The fact that youth unemployment has fallen by 79 per cent., long-term unemployment by 65 per cent. and overall unemployment by 30 per cent. is due largely to the new deal, but the establishment of Yorkshire Forward, the regional development agency, has also been an important catalyst in regenerating the area. Indeed, a survey of 1,500 leading business men in the area by the Yorkshire Insider magazine showed that Yorkshire Forward was considered the most influential body in the region.

In the Yorkshire and Humber area, sub-regional economies can vary greatly. That is another major challenge for us to tackle. For example, Leeds has become a boom town, but, only a few miles away, there is quite severe deprivation, which was recognised by the designation of south Yorkshire as an objective 1 area. In my constituency, affluent streets lie almost alongside streets with high levels of poverty, poor housing and the poor health that go with that. Tackling social exclusion means ending that huge disparity in people's wealth and opportunities—people who live close together, but who are far apart economically. The regional development agencies have been tasked to iron out inequalities not just between regions, but within regions.

Objective 1 status will be crucial in ironing out the inequalities in south Yorkshire. That means a cash injection of around £90 million every year for six years, but it is important that match-funding be found. I know that that is something that Treasury Ministers are aware of. I hope that, during discussions on the Budget, they will feel able to give us some reassurances about that. I hope that they can look at how money, for example, from the Coalfields Regeneration Trust could be used to match objective 1 fund money.

One of the things that the Doncaster chamber of commerce has been examining closely is how to use objective 1 money to regenerate our area. Yesterday, I spoke to its chief executive about the Budget and local businesses' attitude to it. He emphasised how vital it would be for the Budget to assist small and medium businesses if the Government were serious about regeneration.

As my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) said, the changes in capital gains tax, the permanent extension of capital allowances and the crucial steps to ensure that venture capital funds are used at regional level mean that it is a Budget for small and medium businesses. In an area such as south Yorkshire, that will help the economic base to diversify from traditional industries, which the previous Government ripped the heart out of, to important new industries. It will also help to attract new business start-ups and inward investment to sites that have been developed, such as the one at junction 4 of the M18, which is now attracting new businesses, thanks to the work of the local chamber of commerce, the local council and Yorkshire Forward.

One important way in which the regional development agency has been able to capitalise on the lead given by the Government is by encouraging partnership between local businesses and the community. That has resulted in a much greater awareness of what is required and of the importance of regenerating the local economy.

In my constituency, Peglers, a company that makes bathroom fittings and employs more than 900 people, also helps other local companies to flourish. It is trying to get one of its suppliers of coatings to open a subsidiary on its site in Doncaster as an offshoot from its other office in the north-east. It is considering how to help the smaller company with finances, personnel and research and development, so that it will grow within Yorkshire and help the local economy. That is an example of a business becoming involved in the community and using factors such as purchasing power to help other local enterprises

We are increasingly making demands on businesses to become involved in local communities. Perhaps we should consider providing a fiscal incentive for businesses that invest in deprived communities. I know that there are special incentives for businesses to give money to charities and it may be possible to extend that principle.

The Red Book refers to the Government's national strategy for neighbourhood renewal. It says: The Government is committed to ensuring that the most disadvantaged neighbourhoods are given the support they need to maximise their economic potential. I hope that we can do much more to develop partnerships between local businesses and communities. Perhaps the Government could assist businesses to invest in severely deprived communities.

Danum school in my constituency is looking to raise some £50,000 from the private sector to kick start its efforts to become a specialist technology school. Perhaps we could do more to encourage local businesses to invest in such projects. Danum school has placed strong emphasis on new technology, realising that such knowledge is vital if south Yorkshire is to compete in the changing industrial world. The regional development agency has emphasised that too. One of its requests for the Budget was that it would include measures to assist companies to get online and invest in new technology. Today's announcement of 100 per cent. capital allowances in respect of information technology for small firms and the £50 million package to get more small firms online will be welcomed in south Yorkshire by the regional development agency, the chamber of commerce and larger industries that want smaller businesses to get on-line too.

Today's announcement will also enable local communities to put together a coherent strategy, which may need more work, to look at how information technology can be spread further. Technology and training are vital for regions such as south Yorkshire, which is moving away from traditional industries and towards the new industrial world. That means a change of culture, with companies being encouraged to take more responsibility for investing in the future of their local communities and helping to provide better training. That change in attitude comes across strongly because the Government have taken the lead and stressed the need for partnership.

Good transport links are at the heart of helping businesses to grow and attracting new businesses to an area. Doncaster is well served by transport links. Last week, I spoke to representatives of a company who told me that they had come to the area particularly because of the motorway and rail networks. Transport is important to us, so we welcome today's announcement of extra investment in transport. Getting the go-ahead for Finningley to become a commercial airport would provide an enormous boost, not only because it would improve airport links for passenger and freight services, but because it would provide enormous potential for employment and lay solid foundations for future regeneration.

In addition to its objective 1 status, Doncaster will benefit from the new deal for communities. The Doncaster regeneration partnership is establishing business forums that bring together the local authority, the health authority—and all the social partners—and local businesses to give us an idea of what businesses want and to give the regional development agency better feedback about what skills are needed so that the skills action plan can effectively meet the needs of business. That is crucial for training and developing skills and is an example of partnership in practice. The new deal for the community will also enhance town centre communities.

The hon. Member for East Worthing and Shoreham (Mr. Loughton) talked about stamp duty. The review of stamp duty relief in respect of new developments on brownfield sites is most welcome. I hope that the proposed stamp duty relief will extend to refurbishment—for example, where a warehouse is converted.

Since the Government came to power, my constituents, who were neglected by the previous Administration, have witnessed a sea change in their economic prospects, individually and regionally. The lead shown by the Government has meant that businesses are focusing on their contribution to the community. Companies, the council and the community are working together to turn round the local economy. Hope has replaced despair. Whereas there was a crisis of confidence under the previous, Tory Administration, we now have a climate of confidence. I believe that this Budget will build on that new-found confidence, and I welcome it wholeheartedly.