Spending Review and Autumn Statement

Baroness Chapman of Darlington Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

My hon. Friend is right that we have been able to boost skills in his Yorkshire constituency. We have been able to fund the great national parks of Yorkshire. We have also been able to invest in one of our great British industries, which has not always got a mention in Chancellors’ speeches in the past—farming. The big investment that we are making in agri-tech science with those four centres around the country, including one in York, will be very welcome.

[Jenny Chapman (Darlington) (Lab)]

Can the Chancellor explain why the OBR has just forecast that household debt to income levels are set to rise to above pre-crash levels?

[Mr Osborne]

The OBR is forecasting a rise in household debt which is partly reflected in a rise in house prices and therefore household assets, against which the debt is secured. But of course there is a big difference from the unsecured debt that we found in 2008. The big difference we now have is a Bank of England with a Financial Policy Committee, which is able to step in when it sees debt levels reach worrying levels. The Governor of the Bank of England signalled before the Treasury Committee yesterday concern about buy-to-let prices, for example, and he is receiving the powers to do something about it. That is a big change from the situation five years ago.

Tax Credits

Baroness Chapman of Darlington Excerpts

Thursday 29th October 2015 Commons Chamber

[Jenny Chapman (Darlington) (Lab)]

It is a privilege to follow the hon. Member for Stevenage (Stephen McPartland). Other than the last sentence or two, it was a tremendous speech. I hope that those on the Treasury Bench listened to the words he uttered, because there is widespread agreement in this Chamber and out in the country with the points that he made. He made a detailed analysis of the situation and gave some sensible suggestions that we can all support.

I hope that the hon. Gentleman is able to return to the fold, because we would like the Chancellor to dig himself out of the hole that he has created for himself. He has certainly got himself in quite a situation. We are all fascinated to watch how he gets himself out of it. I think that the Lords did him a favour because had all these changes been passed, the anger in the nation would have been something that we have not seen in my adult life. The Government are being let off the hook in a sense, because they have an opportunity to dream up some mitigation and put this awful mess right.

However, the Government need to hurry up because the fear and uncertainty over what is going to happen are already out there. I spent Saturday morning on High Row in Darlington talking to residents about the changes to tax credits. They already know what is happening. They are already worried. They are already looking at their incomes. They are already changing their decisions, plans and financial commitments and making decisions on employment. The Government need to get on with coming up with decent ideas that will mitigate the damage that is being done, which was outlined so cleverly and succinctly by my right hon. Friend the Member for Birkenhead (Frank Field) in opening this debate.

[Yvonne Fovargue (Makerfield) (Lab)]

Is not one of the major problems the speed with which the tax credit cut is coming in, when balanced against the speed at which the national minimum wage will rise? It has been said to me that it feels like the Government are removing the lifebelt before the life boat has arrived.

[Jenny Chapman]

That will probably end up being one of the quotes of the day. That is a good way of putting it.

I am speaking on behalf of the 7,200 families in my constituency who care for the 3,900 children who will lose out as a result of these changes. When the Government bring forward whatever ideas they come up with to mitigate the impact, we must have the information that we need to assess whether they will be effective.

My right hon. Friend the Member for Birkenhead outlined what data he would like to see. I would like to see a regional distribution, because I suspect that communities such as the one I represent, where wages are low, will be impacted more heavily than other parts of the country. I am also interested in the gender impact of the changes. I would like to see how much debt the Government believe is being serviced by incomes that are in part made up of tax credits. I suspect that mortgages, car loans, credit cards and other personal debts are being repaid on the back of tax credits.

[Mr Jim Cunningham (Coventry South) (Lab)]

The problem is actually worse because there are people, particularly women, on zero-hours contracts who cannot get tax credits. What does my hon. Friend think about that?

[Jenny Chapman]

My hon. Friend makes a good point. It is for Ministers to respond to that intervention and I look forward to hearing the reply.

This debate is about children. It costs an enormous amount to raise a child, as many of us know from personal experience. I have read that it can take between £100,000 and £150,000 to raise a child. Child benefit meets only about 10% or 15% of that cost for people who claim it. Tax credits are a contribution from the state towards the cost of raising children.

[Mr Anderson]

There are some children in this country who will benefit from the Government’s changes: the children of dead millionaires. They will get an extra £1 million tax free. Does my hon. Friend think that that is a fair transfer from the poorest to the richest in this country?

[Jenny Chapman]

No, I do not. That is a pertinent point. I know that we will be challenged to find the money that is needed to reverse the change. We could find it through changes to pension tax relief or, very quickly, by reversing the changes to inheritance tax that we opposed and to which we remain opposed.

I want to illustrate the points that I have made in the limited time I have left. We have had quite a high-level discussion so far, but this debate is about real people. It is rare to find a constituent who is willing for their name and personal information—particularly on a financial issue—to be shared in the House of Commons, but I had no difficulty finding people in Darlington who were willing to share their names and details, and to become the poster people for this campaign because they are so angry about what the Government are trying to do to them.

Becky in my constituency lives on Red Hall estate and earns around £16,500 a year. She is a single parent, and her son is eight years old. She stands to lose £1,951 in tax credits per year. She told me that she is already struggling and has difficulty paying for essentials such as heating and electricity. Her salary will not change when the minimum wage increases, and she will not benefit from changes to childcare because her son is eight years old. I can tell the Minister that an eight-year-old is no cheaper to support than a four-year-old.

[Mr David Lammy (Tottenham) (Lab)]

Amen!

[Jenny Chapman]

Becky has already had to cut out extras. She can no longer buy herself clothes, and the reduction in income will have to come from money that she spends on food or heating her home. She said:

“The Government told us that working was the way forwards out of poverty, yet these changes will put myself and my son into poverty.”

Her very real choice will be between heating and feeding her son. Many people will also have to choose between working and not working, and that is what concerns me most. I want everybody who can work in my constituency to get out and get a job because that is good for them, and good for their kids. People should never be better off on benefits than they are in work, yet that will be the effect of this change.

[Mr Lammy]

My hon. Friend’s speech follows in the tradition of Eleanor Rathbone who was one of the earliest female MPs in this House from 1929, and campaigned for family allowances. Some of the anger that my hon. Friend is conveying via her constituents is because in this country successive Governments have topped up incomes, understanding the position of poor people and children. Churchill extended the system of family allowances. My hon. Friend is making a fantastic speech, but, on her last point, does she also accept that people will take one, two or three jobs, and that we will have latchkey kids raising themselves?

--- Later in debate ---

[Jenny Chapman]

I am grateful to my right hon. Friend for that intervention, although I wish it had been a little shorter.

In conclusion, I am speaking on behalf of the cooks, cleaners, street cleaners, shop assistants, staff in cafes, restaurants and call centres, and factory workers. The Government must use the opportunity that they have been granted by the other place to put this issue right.

Tax Avoidance (HSBC)

Baroness Chapman of Darlington Excerpts

Monday 9th February 2015 Commons Chamber

[Mr Gauke]

My hon. Friend raises a good question, and this Government have closed 42 loopholes. We inherited a tax system in which not enough had been done to tackle tax evasion or avoidance, and we have addressed that over the past four and a half years. That is partly why the yield from HMRC’s activities has risen from £17 billion in 2010 to a forecast £26 billion this year.

[Jenny Chapman (Darlington) (Lab)]

Will the Minister confirm that he first received the files on this issue in 2010, and explain why in the past five years he has not seen fit to come to the House and share information about it? Indeed, he would not be here today had he not been dragged here by the Opposition.

[Mr Gauke]

This information about HSBC has been in the public domain since 2007—that is when the leaks occurred. The whole story may have come as a surprise to the hon. Lady, but it should not have done.

Income Tax

Baroness Chapman of Darlington Excerpts

Wednesday 5th November 2014 Commons Chamber

[Kate Green (Stretford and Urmston) (Lab)]

I hope to be very brief, Madam Deputy Speaker. I am grateful to you for calling me early in the debate. I apologise for the fact that I will have to leave for some of it, but I will be back for the winding-up speeches.

I want to make a few points on behalf of my constituents. I do not know the exact numbers, but I would guess that only a handful of my constituents are going to benefit from a tax cut on the basis that they earn £150,000 a year or more. In fact, it is quite possible that nobody in Stretford and Urmston stands to benefit. Therefore, my first question to the Minister is about the geographically distributional impact of this proposal. In this House, we talk repeatedly, and rightly, about our concern to rebalance our economy, our wealth and our resources around the country, but nowhere have I seen an analysis of where, physically, the beneficiaries of the cut in the 50p tax rate are. I would very much welcome seeing that information by constituency.

[Jenny Chapman (Darlington) (Lab)]

I am grateful to my hon. Friend for giving way, because she might save me the trouble of making my speech. Only 8% of taxpayers in the north-east of England pay the higher or additional rate of tax—I imagine that the situation is very similar in her part of the world—in comparison with the south, where about twice as many people pay the additional or higher rate.

[Kate Green]

I agree with my hon. Friend. Mine is not by any means one of the poorest constituencies in the country, yet we stand to benefit relatively little. I would therefore be grateful if the Minister said something about the geographical context.

Finance Bill

Baroness Chapman of Darlington Excerpts

Wednesday 2nd July 2014 Commons Chamber

The Minister must tell us more about who can claim the relief if he is to convince us of its effectiveness. He also needs to understand that we will not accept that it completely cancels out the effect of the public spending cuts that the present Government have imposed on the theatre. Yesterday, Arts Council England announced its new set of national portfolio organisations; it has had to cut the number because the Department for Culture, Media and Sport has taken a £70 million cut.

[Jenny Chapman (Darlington) (Lab)]

My hon. Friend has spoken about how the changes might apply to the National Theatre. Is she intending to move on to talk about regional theatre and how those changes may or may not benefit somewhere such as the Darlington Civic Theatre?

[Helen Goodman]

I am, because I know that my hon. Friend has a keen interest in that, as do people up and down this country.

So we have had big cuts to the Arts Council. The Government have also imposed big cuts on local government, and from answers that I have received to freedom of information requests, we now know that on average local authorities are cutting their arts provision by even more—some 14%. So, given the estimates in the Red Book of the value of this tax relief rising from £5 million to £20 million per year, we can immediately see that it does not compensate for the reductions that have been experienced in public support.

My hon. Friend is right: there is a big issue about what is going on in the regions. The “Rebalancing our Cultural Capital” report suggested that the Government were supporting cultural institutions to the tune of 14 times as much per person in London as elsewhere, and that is not conscionable in the long term for this country. It is clearly because of that concern about regional imbalance that the Minister has decided to provide a slightly more generous relief for touring.

Finance (No. 2) Bill

Baroness Chapman of Darlington Excerpts

Wednesday 9th April 2014 Commons Chamber

[Tim Loughton]

My hon. Friend is right. He has been a pioneer in this area for a long time. The previous Government abolished the recognition, and they had 13 years to try to do something about recognising families in the tax system. Despite the easy words of the hon. Member for Newcastle upon Tyne North, the previous Government did absolutely nothing in practice. That is the record on which they should be judged.

[Jenny Chapman (Darlington) (Lab)]

If the hon. Member for Enfield, Southgate (Mr Burrowes) is correct about his party being pro-marriage and wanting to prevent divorce, how does he account for the decline of divorce between 2003 and 2009? The divorce rate only started to go up again after 2010.

[Tim Loughton]

Very simply, because the number of marriages went down. The change in the divorce rate is a simple statistical manifestation of the number of marriages.

The Liberal Democrats, who are heroically represented here today by the lone star hon. Member for Redcar (Ian Swales), have perhaps been more honest about the married couple’s tax allowance, which they have never supported. Their leader has some bizarre reasons for not supporting it, but they have been absolutely honest. If they had not been involved in some sort of deal, of which we are completely oblivious, they might have been here to vote against the measure, and of course we are very disappointed that they are not here.

The measure will benefit 4 million couples, including 15,000 in civil partnerships and hopefully a good many who adopt the new status that the hon. Member for East Lothian (Fiona O'Donnell) mentioned earlier. My hon. Friends and I welcome the last-minute inclusion of the transferable married couple’s tax allowance in this Finance Bill. The allowance was promised in our manifesto, and it will initially be worth up to £210, but I contrast that with the up to £10,000-worth of subsidies rightly being made available for child care assistance—albeit that that will be available also for higher rate taxpayers whose household earnings may be as high as £300,000—which is still very far from a level playing field. That is why some of us, when the economy has recovered to the extent that it needs to recover after the car crash of 13 years under Labour, ultimately want to see a fully transferable married couple’s tax allowance—the full £10,500-worth, not just 10%. The married couple’s tax allowance is linked to the personal allowance in the Bill.

--- Later in debate ---

[Cathy Jamieson]

My hon. Friend makes an interesting point. I suspect that if I were to stray into a long debate on what happened in the US versus what happened here, I would see—yes, I do see—Mr Bone’s eye upon me to ensure that I did not yield to that particular temptation. However, I say to my hon. Friend that that could usefully form the subject of another debate at some point, but he makes an interesting point about the will to take on the banks. I want to choose my language carefully because I want to avoid getting into that whole thing of our being seen as aggressively pursuing the banks. I recognise that there are some in the banking sector who understand how badly they got it wrong and who want to see change, but the scale of the problem has not been universally accepted, and nor has the degree of culture change that is required. The Minister has heard Opposition Members talk about that issue many times when discussing other legislation.

Returning to the initial imposition of the levy, the Chancellor also wanted to generate more than £2 billion in annual revenues. One problem was that, as was pointed out earlier, the more the banks changed their behaviour and remodelled their balance sheets, the less money the levy generated. Was the Chancellor unable or unwilling to decide whether he wanted behavioural change or a targeted revenue sum? Was it possible to do both? Some evidence suggests that it was not, because it has not brought in the amount of revenue that he intended.

Not content with devising a levy the dual aims of which are somewhat contradictory, the Chancellor also proceeded to cut corporation tax annually, arguably handing the banks a tax break. In order to ensure that the banks do not benefit from the tax break, the Chancellor has had to increase the levy every time he cut corporation tax. We have consistently raised doubts about the levy’s ability to raise sufficient funds, especially in the context of the cuts to corporation tax. During consideration on Report of the 2011 Finance Bill, my hon. Friend the Member for Nottingham East said:

“The sector will have a tax cut of £100 million in 2011-12, £200 million in 2012-13, £300 million in 2013-14, and £400 million in 2014-15. That is a £1 billion corporation tax cut over this Parliament.”

He continued:

“The Treasury ought to supplement its very modest bank levy plan with the bank bonus tax because it is only fair that those who played such a central role in the global economic downturn make a greater contribution to help to secure the economic recovery by supporting jobs and growth.”—[Official Report, 5 July 2011; Vol. 530, c. 1383.]

I would have thought that that sentiment—that those involved in making some of the decisions that caused the problems have a responsibility to do what they can to secure economic recovery and a change in culture—would be shared by everyone in all parts of the House. A combination of two factors—contradictory objectives and corporation tax cuts—means that the levy has increased on no fewer than seven occasions. It is important for me to lay this out so that the House understands the time scale for what happened with the levy, because it adds weight to our call for a report to consider that in more detail.

Back in February 2011, it was confirmed that the rate would be higher than originally proposed. That was change number one. In March 2011, at the Budget, the levy was increased to offset the effect of the 1% cut in corporation tax and by the autumn statement in November 2011—autumn was already beginning to be stretched as far as we thought possible, although of course, autumn is now in December as far as the Government are concerned—the rates were increased to ensure that tax would raise at least £2.5 billion a year. I think that was a tacit admission that the initial rate was perhaps somewhat timid. In March 2012, at the next Budget, the levy was increased again to offset the 1% cut in corporation tax.

In the next autumn statement, when the autumn had been stretched as far as possible into the first week in December, the levy was increased again to offset the 1% reduction in corporation tax. At the March 2013 Budget, the levy was increased again—guess why: to offset the 1% reduction in corporation tax. In December 2013, again at the autumn statement, in what appeared almost to be a desperate attempt to get somewhere near the £2.5 billion target, the Chancellor increased the levy again and broadened the tax base in an apparent attempt to mitigate the impact of the very behavioural change that the tax is supposed to encourage.

[Jenny Chapman]

Has my hon. Friend done the calculation? I am doing it as she speaks and it sounds as though the Government have raised about £3 billion less than they wanted to from the combined measures.

[Cathy Jamieson]

My hon. Friend makes a valuable point. I stress that we have proposed today that this report should be undertaken and brought to the House so that hon. Members can be fully informed about what has happened, what has been successful, what has not worked and how we can best look to the future. My hon. Friend might well be interested to know that I was about to say that, following the Chancellor’s latest projections for the bank levy, a contributor to the Tax Journal stated that the continued difficulty in raising the expected yield

“should become a lesson in the problems of saddling a new tax aimed at managing behaviour with a fixed revenue target”.

It seems to me and my right hon. and hon. Friends that the Chancellor has not fully learned the lessons, because he is now consulting on wholesale changes to the levy that would lead to the introduction of a band-based system under which the tax of individual banks would be capped at an upper limit of £375 million. As I said earlier, although the Government claim that that will be cost neutral, there is speculation already that it might lead to a tax cut for the banks that pay the larger share of the levy. That issue was raised in a report in The Daily Telegraph that said:

“Last year, Barclays paid £504 million in levy charges, while HSBC paid £544 million, the most of any bank. Under the draft proposals, Barclays’ bill would have been £129 million lower and HSBC’s would have been £169 million less.”

We are struggling to understand whether that is really what the Government intend. Why do they intend to do things in that way? If we do not see the figures or the working and if we do not understand the overall impact of what the Government are trying to do, the only conclusion we can draw is that this is essentially a secret tax cut for some of the big banks that has been hidden away in the Budget. I look forward to hearing what the Minister has to say about that and why it is not sensible to publish the report that we have reasonably requested. Confidence in the banking system and financial services has not been fully restored, and people in the real world will want to know why it is a priority to give such a tax cut to some of the biggest banks, at a time when working people are worse off and banks are still paying massive bonuses—indeed, in some instances, bigger bonuses than in previous years.

Finance (No.2) Bill

Baroness Chapman of Darlington Excerpts

Tuesday 8th April 2014 Commons Chamber

[Jonathan Edwards]

I am grateful to you for that clarification, Ms Clark.

New clause 4, tabled in my name and those of my right hon. and hon. Friends in Plaid Cymru and the Scottish National party, would have the effect of requesting the Treasury to commission a report into reinstating the 50p tax rate for earnings above £150,000 a year, or £3,000 a week, as I prefer to explain the policy to my constituents. I look forward to pressing the new clause to a vote at the appropriate time.

This is an example of bad timing, as I understand that the President of the Republic of Ireland is about to address Members of the Commons and the Lords in the other place. I am disappointed to be missing that. However, there is little doubt that the decision in the 2012 Budget to scrap the 50p top rate and reduce it to 45p is the signature fiscal policy of the current Administration. However, I recognise that the 50p rate existed only for the dying weeks of the previous Labour UK Government, even though they were in power for more than 13 years with a top rate of only 40p. That of course leaves the impression that it was merely an election gimmick for the 2010 general election rather than a matter of deep principle.

Labour’s 13 years of the 40p rate reflected what Lord Mandelson said on behalf of the Blair Government about being

“intensely relaxed about people getting filthy rich”.

None the less, it was expected that the 50p rate, which existed for the first half of this coalition Government, would be set in stone while the UK Government maintained their plan A fiscal strategy of cutting the deficit. Despite disagreeing with the UK Government’s fiscal strategy since entering the House, I accept that the “We’re all in it together” slogan coined by the Chancellor was politically very successful. It was based on the notion that all parts of society were equal partners in a moral crusade to reduce the annual fiscal deficit of the state; that rich and poor, young and old would have to feel the pain as the only remedy for the excesses of the past—or so the story went.

The decision to cut the 50p rate was therefore a political miscalculation in my mind because, whatever way it is dressed up, the Chancellor offered a tax cut for those earning more than £3,000 a week. The notion of “We’re all in it together” was blown apart with one act. How can the Chancellor and the Treasury expect the most disadvantaged in society to stomach reductions in their social security support while the richest get a tax cut? It was an act that confirmed that we are not all in it together.

Let us not forget that in the 2012 Budget a further cut of £10 billion in the social protection budget was announced from 2013 onwards, on top of those announced in the 2010 emergency Budget. Those are the cuts that we are living with today, leaving the clear impression that the tax cut from 2013-14 onwards for the highest earners in society was being paid for by cuts in welfare provision for the poorest.

[Jenny Chapman (Darlington) (Lab)]

Does the hon. Gentleman agree that it is the scale of the tax cut that is most galling for our constituents, when on average it will be a £100,000 a year tax cut, which is something beyond the imaginations of most of our constituents?

[Jonathan Edwards]

I can certainly assure the hon. Lady that not many people in Carmarthen East and Dinefwr are enjoying that tax cut. That is why I am speaking in such fervent opposition to it.

National Insurance (Contributions) Bill

Baroness Chapman of Darlington Excerpts

Tuesday 10th December 2013 Commons Chamber

[Jenny Chapman (Darlington) (Lab)]

Welcome though the measure surely is, does my hon. Friend not feel, as I do, that with almost 1 million young people unemployed, it might be too little, too late?

[Shabana Mahmood]

I am grateful to my hon. Friend for her intervention and agree with her entirely. I was going to move on to that point. We disagree with the Government’s approach because we do not think that the proposal is bold enough, but we are also concerned about the timing—I will return to this later—because it has a direct impact on our proposed amendment to the new clause.

Youth unemployment is nearly 1 million—around 940,000 young people are unemployed—and the most recent figures, published in November, show that long-term youth unemployment has increased. Given the scale of the problem and the impact that every single day of unemployment has on a young person’s overall life chances, I believe that the Government should have come back with a much bolder offer in the autumn statement. It was a missed opportunity to go further and faster.

The Minister will not be surprised to hear that I think the Government should have adopted our alternative proposal for a compulsory jobs guarantee for every young person under the age of 25 who is out of work, funded by a tax on bank bonuses. [Interruption.] It has been spent only once—Government Members should look at the detail. The young person would have to take up the job or risk losing their benefits.

Oral Answers to Questions

Baroness Chapman of Darlington Excerpts

Tuesday 11th September 2012 Commons Chamber

[Danny Alexander]

My hon. Friend is absolutely right. We can use the strength of the balance sheet that has been built up as a result of this Government’s fiscal credibility to provide, for example, £40 billion of guarantees to infrastructure investment and £10 billion of guarantees to registered social landlords. The Labour party may oppose these guarantees, but they have been widely welcomed by infrastructure providers, by the business community and, in the latter case, by housing associations. That shows precisely the benefit of the tough fiscal policy decisions this Government have taken.

[Jenny Chapman (Darlington) (Lab)]

Will Ministers look urgently at the length of time it is taking to process tax credit applications? My constituents are being declined their tax credits simply because they are on fixed-term contracts that come to an end before the tax credit application is considered.

[Mr Gauke]

I certainly take the hon. Lady’s comments on board. It is our intention to deal with tax credit applications as swiftly as possible. We will look at individual cases, so if she wants to contact me or the permanent secretary at HMRC, either of us would be happy to take the case up.

Unemployment (North-east)

Baroness Chapman of Darlington Excerpts

Wednesday 20th June 2012 Westminster Hall

[Grahame M. Morris]

I do not, but I know that in my area I have lobbied hard on behalf of a number of companies that could bring substantial benefits to a hard-pressed area, and we are still waiting for decisions. That aspect of Government policy needs to be addressed.

The other issue that I am worried and upset about is that a Liberal Democrat occupies one of the highest offices of state, and the hon. Gentleman mentioned that Ministers often visit the area. They do not afford me the courtesy of saying when they are coming. When the Secretary of State visited my constituency, I was not advised in advance and I was not in a position to lobby him with bids from my area. However, I have taken that up separately. I will now try to make progress because I know that many hon. Members want to contribute.

I remind hon. Members that unemployment in my region is up by 8,000 to 145,000—a rate of 11.3%, which is higher than the national average. Under the Labour Government, the gap between the economy of the north-east and those of other regions was closing, with private sector business growth and employment. The Member for Redcar quoted some figures. In fact, after 10 years of Labour Government, the unemployment rate in the north-east was 5.7%—Labour came to power in 1997, and in November 2007 to January 2008 it was 5.7%—which was only 0.5% higher than the UK average. Now, though, it is 11.3%, which is 3.3% higher than the national average.

I did want to start on a positive note—[Laughter.] I am sorry about this, Mrs Brooke. I wanted to welcome the invaluable contribution that Nissan has made to our regional economy. Nissan is located in the constituency neighbouring mine to the north, represented by my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson). Nissan’s presence has some benefits for the supply chain in east Durham. I commend Nissan for its tremendous commitment to our area. It is a shining example of what the north-east is capable of achieving with the right support from local and national Government. As hon. Members will be aware, the two new car models that are to be built will create more than 3,000 jobs across the UK over two years. Some 600 of those will be at Nissan’s Sunderland factory, with the remainder in the supply chain. I do not wish to criticise that success story.

I am looking to the Minister—[Hon. Members: “The Whip.”] Well, I will afford him the courtesy of calling him Minister. Welcome though they are, those new jobs do not come close to countering the job losses in my constituency. Over the past few weeks, I have referred to the haemorrhaging of private sector jobs in east Durham. That should be a real concern—it certainly is for me and all those who are affected. I cannot remember so many job losses in my constituency since the pit closure programmes, which is indicative of the desperate situation faced by many constituencies such as mine.

The Government’s Work programme does nothing to address the fact that unemployment is often focused in communities with the weakest local economies. The problem in the north-east is not so much one of joblessness as one of worklessness. My hon. Friend the Member for Hartlepool mentioned the ratio of the number of people out of work and the number of vacancies, which is limited. I refer the Minister to an excellent report on that subject published by Sheffield university, which makes some positive suggestions about what could be done.

The Work programme has been in operation for one year, during which time the number of people in Easington claiming jobseeker’s allowance has risen by 20%. About 1,000 job losses have been announced in the past month, and that will affect my constituency, where 3,195 people are out of work. Companies closing down include Cumbrian Seafoods, JD Sports, Dewhirsts, Reckitt Benckiser and Robertson Timber. Some of those companies—all private sector—are closing as a consequence of the decline in the building and construction industry, but mostly it is a consequence of a reduction in demand.

There is yet another side to the story. Easington has a strong manufacturing tradition, with companies such as NSK, Caterpillar, GT Group, Actem UK and Seaward Electronic. Those companies are looking to the RDA replacement bodies and the Government for signs of support that will enable them to take on more workers. There are some large-scale private sector regeneration projects in the offing, but again we need leadership and support from the Government, because many of those programmes are suffering unjustifiable delays.

I will not embarrass the Government by mentioning the centre of creative excellence that could have created 500 jobs south of Seaham, but I will mention retail developments such as a new Tesco supermarket on the former site of East Durham college. That would create 400 new jobs and a new library—a much needed community facility at a time of spending restraint in the public sector.

Dalton Park phase 2 also offers a glimmer of hope for my constituency. Once the development is complete, it will support more than 100 construction jobs and 450 new retail jobs. It will provide new facilities that will greatly benefit the local community such as a new supermarket, hotel, cinema, and associated leisure facilities. Such planning applications are often controversial, but—incredibly—this one received the unanimous support of the local authority, as well as massive support from the local community and other county MPs, and I am thankful for that support. The development was also passed by the Secretary of State for Communities and Local Government. It is a rare phenomenon in that everybody seems to support it, but it is being delayed as the result of an application for a judicial review by Salford Estates, which owns Peterlee town centre. As I understand it, the founder of Salford Estates is a tax exile based in the tax haven of Monaco.

My point is that the communities in the north-east continue to be hit the hardest by Government policies that are driving down demand across the region. The promised private-sector led recovery has simply failed to materialise in our region, and the austerity and cuts agenda is taking money out of our local economies and making any potential recovery harder to realise. A decade of progress made under Labour to reduce the north-south divide is being reversed.

[Mrs Jenny Chapman (Darlington) (Lab)]

Is my hon. Friend alluding—perhaps not this explicitly—to the fact that problems of entrenched unemployment are very hard and take an awfully long time to fix? The north-east probably knows that better than any other region. The problem is not only worklessness but crime, mental ill health, homelessness and all the other associated problems that we know occur when there are high levels of unemployment.

[Grahame M. Morris]

Absolutely. My hon. Friend makes an excellent point much more forcefully and directly than I could, and I completely agree with her.

It is up to this Government to learn lessons from those things that worked in terms of regeneration and growth and saw our region prosper in sectors such as exports over the past decade. I find it quite offensive when members of the governing coalition denigrate Labour’s efforts over the past decade, as if that Government produced no overall success.

I did not intend to quote statistics, but I shall put a couple on the record. Based on gross value added per head, the rate of growth in the north-east went from being the lowest of all regions during the 1990s to the second highest during the past decade. Let me also put to bed another myth propagated by the Tory party which claims that our public sector was squeezing out the private sector. That is just not true. As other hon. Members have indicated, in our view the public and private sectors are not mutually exclusive but mutually supportive. Between 2003 and 2008, private sector employment rose by 9.2% in our region, while at the same time public sector employment grew by only 4.1%. Between 1999 and 2007, the number of businesses in the north-east rose by 18.7%—a huge increase that compares favourably with London’s business growth of about 19.6% over the same period.