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Industry (Government Support)

Part of Opposition Day — [1st allotted day] – in the House of Commons at 4:40 pm on 16th June 2010.

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Photo of Phil Wilson Phil Wilson Labour, Sedgefield 4:40 pm, 16th June 2010

First, I thank hon. Members on both sides of the House who have made their maiden speech today, especially my hon. Friends and neighbours the Members for North West Durham (Pat Glass) and for Middlesbrough South and East Cleveland (Tom Blenkinsop). They reminded me that the north-east of England is probably the most beautiful part of the country and that we discovered Australia as well, so we have a lot going for us.

Today's debate is mainly about how we reduce the deficit and how to grow ourselves out of the problems that we have at the moment. My big worry about all the doom and gloom that we are getting from the Government, who are basically talking down the economy and talking down the country, is that we will end up in a spiralling, self-fulfilling prophecy where it is all doom and gloom. It is not just me who says that. On Sunday, a recent business survey by the Centre for Economics and Business Research was on the BBC's online news website. It stated:

"Business confidence among UK firms has seen its biggest drop since 1995 due to the government's rhetoric on spending cuts, a survey suggests...there is a significant risk that the rhetoric has begun to impact on business confidence, and fears of the economic impact of spending cuts may be causing businesses to rein back on growth plans."

So, it is not just the Labour party and the Opposition saying that; it is business itself, which will be fundamentally affected by the Government's current programme.

Let me say something about employment. Previous Government intervention has meant that even though we are going through what is apparently the worst recession for 60 years, unemployment is nowhere near what it was in the 1980s and 1990s. Today's statistics put the figure for people claiming benefits at about 1.4 million or 1.5 million. In my constituency, the number of people who are out of work has fallen by 600 in the past year and by 140 in the past month. In the 1980s, that figure was 5,500, and 40% of those people had been out of work for 12 months or more.

We all know the quote that has been mentioned twice today about the Tory Government of those days saying that unemployment was a price worth paying, but we do not need to go back to those days. We can look at last Thursday's Department for Communities and Local Government questions to find the Government's default position on their programme for cuts. When my right hon. Friend Mr Blunkett asked,

"is it not inevitable that those in greatest need will take the biggest cuts?", the Under-Secretary of State for Communities and Local Government, Robert Neill, without hesitation, stood up and said:

"Those in greatest need ultimately bear the burden of paying off the debt".-[ Hansard, 10 June 2010; Vol. 511, c. 450.]

That proves to me where the cuts are going to hit the most-local communities not just in the north-east of England but throughout the country. We have to be prepared for that, and one thing that prepares us for it is the regional development agencies.

I must say that I am more confused now than I was at the beginning of the debate about what the Government's position is on RDAs. "The Coalition: our programme for government" document says on page 10:

"We will support the creation of Local Enterprise Partnerships-joint local authority-business bodies brought forward by local authorities themselves to promote local economic development-to replace Regional Development Agencies (RDAs). These may take the form of the existing RDAs in areas where they are popular."

After the Secretary of State spoke earlier, I kept asking myself, "When is an RDA not an RDA?" It seems, from what the Government are saying, that the answer is-when it is an RDA.

Let us get some facts right about RDAs. First of all, they have trained more than 400,000 people and created more than 850,000 jobs over the last 10 years. They have helped nearly 60,000 businesses to start up and more than 110,000 businesses have benefited from a free business health check. RDAs brought forward funding of £100 million for regeneration projects, and they have launched transition loans to help businesses access finance. We are talking about a strategy for growth, but RDAs helped to deliver it.

In my constituency, the RDA helped businesses such as Rock Farm Dairy to set up a new bottling facility. The RDA is creating jobs in the north of the constituency. The Printable Electronics Technology Centre-PETEC-is in Sedgefield village, at NETPark, the North East Technology Park. Dr Lee was on about space and science. From what I see at NETPark, I know that today's science fiction is tomorrow's reality. That work was being done with the help of the RDA and a Government who invested £12 million to promote it. The research and development facilities at PETEC have helped to protect more than 600 jobs at Thorn Lighting, just over the border in the constituency of my hon. Friend Helen Goodman. That is creating high-value jobs, making sure that manufacturing jobs stay in this country and do not migrate to the far east or to eastern Europe.

One NorthEast put investment of £10 million into NETPark to help set up headquarters for global science and technology companies, such as Kromek-global headquarters in the north-east of England. We should be proud of the fact that such companies are basing themselves in an area that in the past was used to deprivation and high unemployment. That investment was under a Government who were thinking ahead for the future well-being of local people.

Newton Press is a small company in Newton Aycliffe that has just invested in £100,000-worth of new equipment. It is a family firm, going back over many years, employing 11 or 12 people; I know the owner, Syd Howarth. He had a phone call from One NorthEast to tell him that he could not have the £20,000 grant they were working on to fund a further two jobs, because the Government said that One NorthEast can no longer award grants. That may be only two jobs, but it would be two people off the unemployment total in my constituency. If those grants are being withdrawn all over the region, how many other people who could be in work will not be in work?

The cuts are undermining growth in areas such as the north-east of England, which has suffered in the past. We should be thinking about the future, and ensuring that there is a future for people in places such as Sedgefield. One person's cut is another person's front line, especially in business where the front line could be the bottom line, too.

What we have learned from the debate is that there is total confusion in the Government. What is their strategy for growth? The Government started the debate by saying that RDAs were safe, then they said that RDAs could be safe, then that they were not and now they are again. We need consistency and clarity from the Government, because the people I represent want certainty.

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