Economic Growth and Employment

Angela Smith Excerpts

Wednesday 23rd November 2011 Commons Chamber

[Mr Umunna]

I will in a moment.

Last week I met one of the first-round bidders, who told me that on learning of their successful bid in April they immediately sought to progress due diligence but, despite chasing the Secretary of State’s Department, received no further documentation for four months. When they got it, they immediately responded but, again, heard nothing for another three months—until around the time that my right hon. Friend the Leader of the Opposition raised the issue of the regional growth fund at Prime Minister’s questions. I am sure that the timing was totally coincidental.

Even now, formal due diligence is not complete, and the matter is due to go to the permanent secretary’s committee for approval on 2 December.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

On that important point, the Institute of Chartered Accountants believes that one reason for the length of time taken on due diligence is the disappearance of the RDAs’ expertise in following up the process, and the efficiency savings within the Department, meaning that the skills base there has evaporated, too. Is that not the case?

[Mr Umunna]

It is clearly the case, as we saw from the evidence of the Department’s permanent secretary to the Business, Innovation and Skills Committee a couple of weeks ago.

--- Later in debate ---

[Roberta Blackman-Woods]

Indeed. We also know that as a consequence of Government policies—and according to independent forecasts—it is very likely that borrowing will have to increase. That is having devastating consequences. Unemployment is rising, particularly among the young, although women are also being disproportionately affected.

The headline figures should concern us, but what should also trouble us greatly is the uneven way in which the consequences of the Government’s disastrous economic policies are being felt across the country. Once again the north-east seems to be bearing the brunt of the Conservatives’ economic policies, but this time—and I hope that this point is not lost on the voters of the north-east—they have the collusion of the Liberal Democrats.

The current unemployment rate is 11.6% in the north-east, but only 6.3% in the south-east. Similarly, the claimant count is highest in the north-east and lowest in the south-east. As I have said, the situation is even worse for young people. In the north-east, unemployment among young people increased by 106.3% between January and October 2011, prompting real fears that the region would return to the economic dark times of the 1980s. Yet this dire situation is so unnecessary.

Contrary to what the Secretary of State said—it is unfortunate that he is not present, because I wanted him to hear this—in the north-east gross value added actually grew between 1989 and 2008, as did GVA per head of population. That was primarily because money channelled through the regional development agency One North East levered in £9 for every pound spent—much more than the national average—and skills levels also improved year on year.

[Angela Smith]

The first technology innovation centre, Sheffield’s advanced manufacturing park, was established by a Labour Government through a regional development agency working with the private sector. Such arrangements have been criticised by Government Members, particularly Liberal Democrats.

[Roberta Blackman-Woods]

My hon. Friend has made an excellent point. It is interesting to note that before the general election, in my region at least, the Liberal Democrats were apparently in favour of regional development agencies.