Unemployment (North-east)

Chi Onwurah Excerpts

Wednesday 20th June 2012 Westminster Hall

[Mr Wright]

I absolutely agree with my hon. Friend. Some of the measures the previous Labour Government put in place, against the most severe global financial crisis the world has seen for at least a century, did to some extent mitigate the savage effects of unemployment.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I congratulate my hon. Friend on securing this debate on an issue of such great importance to the north-east, even if it is of less importance to the Government. Newcastle has seen its unemployment rate go up by approximately 20% in the past year. In addition, its national unemployment ranking has gone up by 30 places. A year ago, it had the 76th highest unemployment rate in the country; now it has the 47th highest. Does that not suggest that the Government’s measures are feeble and are leaving the north-east and Newcastle behind?

[Mr Wright]

I absolutely agree with my hon. Friend, and I will go on to mention some job losses that her constituency is facing. The region still, and by a considerable margin, has the highest unemployment rate in the country at 11.3%. The figures published today show that unemployment has increased by 8,000 in the past quarter, to 145,000 in the north-east. The number of people claiming jobseeker’s allowance has increased by 900 on the previous month. In Hartlepool, the number of people unemployed stands at 4,612, a rate of 11.6% and the 30th highest of all the UK constituencies. That jobless figure of 4,612 is more than 10% higher—503 higher—than it was a year ago.

Today’s statistics also show that the number of people who are economically active in the north-east has gone down, from 75.4% to 75.2%, as has the proportion of the adult population in employment, from 66.6% to 66.5%, whereas the national rate for England is 70.8%. On unemployment and economic prospects, the gap between the north-east and the rest of the country is getting wider and should be a huge cause of concern for the Government. From their actions—or rather, the lack of them—and from the priorities we have seen today in their not sending a Minister, I do not get the sense that that is the case at all.

--- Later in debate ---

[Ian Swales]

I have hardly started. I will give way in a moment, when I have got further into my speech.

Solutions to the problem have to be bottom-up and top-down. My local council—before an Opposition Member points it out, it is a Labour council—deserves praise for its infrastructure work, adding new seafront work and leisure investment to the huge Environment Agency spend on flood defences, as well as the Government investment in MySpace, which is going on in Redcar. It was good to see the Association of North East Councils visiting Redcar a few weeks ago to see what is happening. However, it is disturbing how many of the construction jobs are not going to local people. I have raised that with the council, because it is important for the north-east to help itself as much as possible and not to have such jobs going to people who travel into the area. My local council is taking a high risk, however, because the Audit Commission says that at the end of the work it will have the highest debts in the country for the size of the council, but at least it is doing something.

I praise the Government for investment in local infrastructure, in the Teesside railway system and, in particular, the recently announced refurbishment of stations, including all six in my constituency. House building is obviously a good option, but in areas such the one I represent the population is static or declining. We need to upgrade our housing stock. That is true throughout the north-east, but as I keep reminding my council, if we do not plan for the overall stock we get market failure. That has already happened in three parts of my constituency: South Bank, Grangetown and West Dormanstown.

We need a lot more focus on enterprise by our councils. I cannot speak for other areas, but my local council of Redcar and Cleveland often proves to be difficult to deal with. We recently lost 200 jobs when a potential new investor simply gave up and went somewhere else. I welcome the new enterprise zones, including three in my constituency, which are already attracting interest. I hope that we will prove to be easy to deal with and get companies into those zones.

These debates always lead to a lament for the RDA at some point, and the hon. Member for Hartlepool has already touched on that. It is interesting to note that, in a sense, RDAs were not a regional policy; they covered the entire country and all got large sums of money. I salute the bravery of the present Government in supporting only projects in hard-pressed areas such as the north-east with the regional growth fund. That is one reason why the north-east is getting a large share of the regional growth fund money.

[Chi Onwurah]

The hon. Gentleman says because all the RDAs were abolished, the abolition of One North East was not a regional policy. As a member of the Liberal Democratic party, however, does he not agree that his party stated specifically that One North East would be saved, because it was admired by both public and private sectors? Its demise has been regretted ever since its abolition.

[Ian Swales]

That was never party policy, but it was a remark made by the Business Secretary. I think everyone recognises that One North East was the best of the regional development agencies. My point was that giving money to every region will not rebalance the economy. I salute the bravery of our Government in not giving money to regions that do not need help.

A month or two ago, I said in this Chamber that in the two years before the general election, the RDA approved 96 projects, worth £148 million, in which One North East directors had to declare an interest. Of those, only eight projects and £6 million related to the Tees valley. The Tees valley got a poor deal from One North East. Experian assessments place Hartlepool, Middlesbrough, Redcar and Cleveland in the weakest 10 economic areas of the country, so I welcome the local enterprise partnership and its work.

The LEP is doing a lot of good work, part of which is defining clusters—we have process industries and automotive clusters, and we are now developing a steel cluster. The welcome news is that Sahaviriya Steel Industries has bought the Redcar steelworks, and is now producing; Tata is still in the area, and opened a new research centre just two weeks ago, which had some Government support; Siemens has its worldwide centre for steel processing development in Stockton; and Teesside university is opening up a new department, so a good cluster is developing there. We also have clusters in green technology, and I welcome new initiatives in renewables, with the industry forming the Energi Coast group—20 companies getting together to exploit the new market jointly—and Narec has been included in the new technology innovation centre for renewables. Clusters attract like-minded companies. Global Marine Systems has just relocated from Essex to Middlesbrough, and last month it hired the Riverside stadium to recruit people.

Manufacturing is having some success in the area. International trade is booming with record exports— the best ever—from the region during the 12 months to March, including 20% growth in exports outside the EU. Jonathan Greenaway, a partner at PricewaterhouseCoopers in Newcastle, recently reported those successes and said:

“This is a great time of opportunity for manufacturers, and…UK companies are really rising to the challenge.”

We have some problems with the public sector, to say the least, with job losses and so on. I believe that taxpayers expect efficiency in public services and that they do not see them as job creation exercises, but there has been a worrying trend of relocation of jobs, certainly out of the Tees valley. Under the previous Government, the ambulance service was lost—it still baffles me that an area of 750,000 people is not deemed capable of running its own ambulance service, but that was moved out of the area. We also lost the office of Her Majesty’s Revenue and Customs in Middlesbrough, and thus 400 jobs. There are other potential problems, such as the Insolvency Service office in Stockton. I urge the Whip to reverse that trend and to move jobs to hard-pressed areas in the north-east such as Teesside.

I note that some agencies are looking at Yorkshire and the north-east as a region. I point out to them that the Tees valley is exactly the midpoint—I measured it this morning—and an ideal location for headquarters. The regions are massive, however: Sheffield in South Yorkshire is as close to Southampton as it is to the constituency of my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith).

For 13 years, the north-east had a Labour Government—almost all MPs and councils were Labour—but between 1997 and 2010, the number of unemployed people in the region went up by 7,000, and the rate remained approximately the same, despite the unprecedented amount—

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 6th March 2012 Commons Chamber

[Mr Gauke]

So he is an ex-Harry Redknapp fan.

Complexity in the tax code can provide opportunities for avoidance, but, equally, much of the complexity that exists is a consequence of attempts to crack down on avoidance. The Government have set up the Office of Tax Simplification, and we are determined to do what we can to simplify the code and address avoidance and evasion.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Stamp duty land tax avoidance schemes cost the Exchequer hundreds of millions of pounds a year, but my questions on the subject have been met with complete complacency by Ministers. I was told:

“HM Revenue and Customs… is aware of a number of marketed… schemes. HMRC considers that none of the schemes… is effective in reducing… liability”.—[Official Report, 17 January 2012; Vol. 538, c. 708W.]

Now we hear that the Chancellor is going to crack down on such schemes. Which is it?

[Mr Gauke]

There are many marketed schemes that HMRC is convinced do not work, and that will be established in the courts. I suggest that those who are sometimes persuaded by claims that a particular scheme will work should treat them with caution. However, the Government are determined to crack down on stamp duty land tax avoidance. We took steps in the last Budget, we took steps in the autumn statement strengthening the disclosure regime, and there may well be more to come.

Connecting Europe Facility

Chi Onwurah Excerpts

Thursday 19th January 2012 Commons Chamber

[Chris Leslie]

I really do not think that anybody was proposing a telephone tax in the sense that the hon. Gentleman characterises it. We have to find ways to fund improvements in broadband communication, but my question to him and the Government is this: what exactly is their target for broadband roll-out? They have still not said. The EU is talking about some 30 megabits per second and 50% at 100 megabits per second by 2020, which is quite an ambitious target, and we had our targets for 2012. Perhaps the Minister can consult his colleagues on that.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Will my hon. Friend give way?

[Chris Leslie]

I will give way to my hon. Friend in a moment, but perhaps the Minister can listen to this. What exactly is the Government’s 2015 target, by megabits per second, for broadband roll-out? I would be very interested if he could elaborate on that. I will give way to the Minister if he has an answer to that, but perhaps my hon. Friend can also help me.

[Chi Onwurah]

My hon. Friend is making some excellent points. It should also be pointed out that the Labour party’s target for universal broadband was fully funded from the digital switchover. The Minister talks about the need for targeted infrastructure investment. Does my hon. Friend agree that what businesses need right now, particularly rural businesses up and down the country, is a decent broadband speed to enable them to get online and contribute to growth as part of our recovery?

[Chris Leslie]

My hon. Friend is absolutely correct. It is imperative that rural businesses should have that connectivity and that level of dialogue, e-mailing and information exchange as soon as possible. The data must be able to get out from those businesses and their localities. This delay and prevarication from the Government, in a strategy that does not even seem to have a target, is entirely atrocious.

On transport, no one would disagree—there is quite a lot of cross-party consensus on this—that we have to tackle bottlenecks and missing cross-border links, and promote new ways of improving the single market. We agree with the Government that there are potentially added elements of bureaucracy in the proposed project management of the core networks which conflict with the principle of subsidiarity. There is a risk that the comprehensive networks, and not just the core corridors that the EU is focusing on, might lose out if structural funds are not available for UK transport infrastructure projects. We want the trans-European network policy to concentrate not just on jobs and growth, but on decarbonising the transport sector—a modal shift from road to rail, particularly for freight—on greater connectivity within networks and, of course, on improved transport safety. A transport infrastructure that addresses economic disparities, and is aimed at delivering jobs and tackles the pinch points, gaps and capacity constraints in the EU networks is essential to tackling Europe’s continuing economic issues.

The Commission is probably correct to highlight the infrastructural deficiencies in our collective electricity and gas networks. However, there are some highly prescriptive elements of the Commission’s proposals, which may not allow the right degree of flexibility to accommodate some of the domestic UK projects and procedures that are already under way. For instance, there is a danger of overlap of activity on the North sea interconnector, which is currently being examined for feasibility. As for planning issues, much of the streamlining process has already been dealt with through the Planning Act 2008, despite the fact that the Government have already stepped away from some of the benefits of the Infrastructure Planning Commission. We see no benefit in overlaying anything on that, leading to duplication and slowing processes down. We suggest that the Commission should instead concentrate its energy infrastructure proposals on the carbon capture and storage agenda.

Existing procedures for bidding for EU funding are under way, but the value of the funding is affected by the carbon trading regime. In recent months it has fallen, making the available investment worth less. Carbon capture and storage could make a significant difference to the viability of fossil fuel electricity generation, and has yet to be proven on a commercial scale. The role of EU funding in this area is becoming more significant since the collapse of domestic carbon capture and storage projects here in the UK in the past year. Despite the Government’s promise that the £1 billion funding would remain available for CCS, it has now been reallocated to the wider infrastructure fund announced in the autumn statement, leaving carbon capture strategy in the UK in some doubt.

The Minister mentioned the fact that the proposals touch on innovative financial instruments. There is a serious lack of clarity on what exactly the Commission is proposing, and what exactly the Government’s principles are on innovative financial instruments. We need more substantive debate on this matter, and more information ahead of the discussions. The Commission needs to reduce its proposed budget, and the Minister needs to get off the sidelines and step into the negotiations. The Government should be doing far more to reorder the phasing of the capital infrastructure schemes here in the UK and across Europe. Above all, they should develop more effective deficit reduction strategies at home and across the EU, with an urgent and credible plan for growth.

Regional Pay (Public Sector)

Chi Onwurah Excerpts

Tuesday 10th January 2012 Westminster Hall

[Hywel Williams (Arfon) (PC)]

I am grateful for the opportunity to speak in this debate, which is important for my constituency and that of my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards), in that we have large numbers of public sector workers. I am glad that my hon. Friend was successful in securing the debate, and I draw hon. Members’ attention to my early-day motion.

Regional pay would institutionalise lower pay in countries and regions of the UK such as Wales compared with London and south-east England, and it would magnify the unfairness of the current economic situation. Whether it is called zonal pay, local pay or regional pay, in the present constitutional position and economic climate, it would go completely against the supposed policy of the UK Government to rebalance the UK economy, which is sorely needed. Regional pay would badly impact on Wales and other countries and regions with a weaker private sector, which is certainly the case in my constituency, as well as in other parts of Wales, the north-east and north-west of England, Scotland and Northern Ireland.

When the Government refer to rebalancing, they are referring to something different from what my party means by rebalancing. When the UK Government refer to rebalancing, they are referring to growth in the south-east, as we have seen from the implementation of various policies such as the huge high-speed rail proposal, which will be outlined today, the Olympics or a number of others, which I will not go into this morning.

Our version of rebalancing is to increase support to sectors of industry and locations that have not benefited in the past from Government benevolence and support, which means support for countries and regions that have lost out over previous decades. As my hon. Friend has said, the economic situation has led to the growth of the financial sector in the City of London to the cost of other industries; in Wales, we look in particular at the decline of manufacturing. We have a much more fragile and non-diversified economy because of the centralisation of the UK economy on London, which has produced the overheating of housing costs and pressures in and around London. Anyone who lives in the south-east knows what I mean, and we have seen an increase in inequality between London and the south-east of England compared with the rest of the UK. If the proposals go through—if they are discussed and decided upon—I fear that that inequality will be exacerbated.

The annual survey of hours and earnings published by the Office for National Statistics last month showed that Welsh workers are already among the lowest paid in the UK, while workers in many parts of London and the south-east earn double our average salary. I would be the first to complain about the large pockets of inner-city poverty that I come across when down here in London, and they are scattered throughout the inner cities of England, Wales, Scotland and Northern Ireland, but generally we have seen the north and west of the UK suffering, while the south-east has benefited. That leads me to what might be a soundbite but which has a certain truth: we have regional pay already, but in favour of the south-east. In part, that is because we have too weak a private sector, which needs support and investment to develop, as we in Plaid recommended in our economic renewal plan.

Support for the private sector in Wales may seem a peculiar position for a lefty nationalist to take, and I can see some eyebrows rising around the Chamber already. Unlike the Unionist parties, however, we see no long-term benefits in being continually tied to fiscal transfers from London. That is not the position in which we want to see our country. We want to be as successful as any other part of the UK or of Europe. It is a mark of the failure of the current Unionist settlement that parts of Wales have a gross value added that is low enough to take advantage of European convergence funding. Many parts of Wales have a GVA of less than 75% of the average, so we get large transfers from Brussels. Such transfers are welcome, but we do not want to be in that position at all. That situation is the result of the major economic decisions made in London, where the main economic levers are held. To thrive, the private sector in Wales needs support for it to grow. We need much better infrastructure and the Government to give the support and advantages that will allow companies the opportunity to develop. That has not happened over a long period, and it requires a broad mix of Government policy and a fair economic wind.

Chopping back the public sector in all the guises introduced by the Government—real-terms pay cuts, 710,000 job cuts according to the Office for Budget Responsibility, and the pickpocketing of pension contributions—will not improve the private sector in Wales one jot. Clearly, as anyone who has looked locally at the economy in Wales or elsewhere knows, there is a strong relationship between the public sector in our areas and the private sector. Cut the public sector and the private sector is hit hard.

The effect of any regional pay policy would be to depress wages in the public sector throughout Wales, which will have a strong knock-on effect on the private sector, because families will have less disposable income. Families with less income will purchase fewer goods and services locally, therefore providing less circulation of income for the local private sector.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I thank the hon. Gentleman for giving way and the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) for securing the debate. As well as depressing salaries in the public sector and therefore in the private sector, and given that many of the people affected are already not well paid, will not regional pay cost the state more in working tax credit, housing benefit and the other benefits with which we subsidise low-paid workers?

[Hywel Williams]

The hon. Lady makes a fine point. As so often with the policies of this Government and at times, I fear, of her own Government previously, there is no apparent understanding that the system is such that if we cut off a large branch, the tree itself will be affected. I agree with her entirely.

--- Later in debate ---

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to speak under your chairmanship, Mr Chope. I congratulate the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) on securing this debate, and on the many excellent points he made in his introduction. Other excellent points were made by my hon. Friends the Members for Bishop Auckland (Helen Goodman), for Easington (Grahame M. Morris), and for Middlesbrough South and East Cleveland (Tom Blenkinsop), and by the hon. Member for Arfon (Hywel Williams). I do not intend to speak for long, or to repeat the many points made about the implications for regional pay and the regional economy. I intend to focus on what the plans say about the economic policies of this Tory-led Government.

The Tory-led Government talk a good talk about the key challenges facing our economy: the rebalancing away from the service sector towards manufacturing, and away from the south and London towards the regions, including the north-east, where my constituency is. Those challenges are important because of the huge consequences of the financial crisis, which was brought about by an over-focus and over-concentration of the economy on financial services. It will be remembered that when we went into the financial crisis, we had the second lowest deficit in the OECD, but we suffered more greatly because of over-dependence on financial services.

What do the proposals mean for the economy, and particularly for rebalancing it towards manufacturing and the regions? My hon. Friends have made some excellent points about driving higher-paid workers in the public sector away from the regions, and about the impact on the ability of the regions to attract higher-paid private sector workers. I want to focus on what the proposals will mean for those on lower pay.

The evidence shows that the disparity between public and private sector wages, such as it is, is focused on the lower section. The Policy Exchange, in its analysis, admits that the pay advantage, as it calls it, is not evenly distributed and is higher in lower grades, particularly among the bottom 10% of public sector workers. From my experience of working in the public sector as a chartered engineer, I know very well that at the higher end, professional engineers, for example, are much better paid in the private sector than in the public sector. Seeking to equalise pay rates in the private and public sectors in the regions will inevitably reduce the wages of the poorest-paid. What does that say about the Government’s policies and intentions?

We may disagree about the exact causes of the financial crisis, and where the blame for it should lie, but I think we all agree that the poorest people in the country did not cause it, so why are Government policies again targeting the poorest people? The poorest people will pay because, as the hon. Member for Arfon said, depressing wages at the lower end of the public sector will inevitably have an impact on the private sector. Indeed, in their proposals, the Government intend to reduce salaries in the public sector, which must have a knock-on effect on the private sector.

We should remember that salaries at the lower end of the public sector, as in the private sector, are not those on which a family—or often even an individual—can live. The minimum wage is not a living wage, and for that reason, Newcastle city council is working towards a living wage in the most difficult economic circumstances. Low-wage and minimum-wage employers often have to be subsidised by the state, in that working tax credit and housing benefit are needed to enable their employees to live decently, so depressing private sector salaries will cost the state more in benefits.

Let us consider how the private sector will react. We know that the ideological basis of much of the Government’s approach to the economy is that destroying the public sector will provide space for the private sector to leap in, create jobs and new opportunities, and drive the economic recovery forward. I believe that the economic recovery must come from a growth in private sector jobs, but it is clear, after more than a year and a half of this Government, that the private sector cannot create the necessary jobs and growth without the support and partnership of an active public sector, which, by its very nature, includes experienced, well-paid and secure employees who are able to support private sector activities.

I speak regularly to local businesses in my constituency, and they all want to play a part in driving forward growth and creating a resurgence of jobs in the region. People tell me not that wages are too high, but that they need: more public sector support in areas such as skills; investment in shared resources, infrastructure, and transport; and measures to increase confidence and buying power among the public. Reducing the salaries of public sector workers in Newcastle will reduce people’s confidence and lessen the prospect of private sector employers increasing employment and stoking growth.

How can the Minister justify targeting the poorest people in our society to pay back a deficit that is due to a crisis caused by a rampant financial sector? We have had 18 months of an ideological experiment, on a national basis, that clearly has not worked. Depressing local wages will not only drive out more skilled constituents, but will hit the private sector in regions that are already vulnerable and most greatly affected by public sector cuts. This ideological experiment has run its course, and the Government’s proposal yet again takes it too far.

The Economy

Chi Onwurah Excerpts

Tuesday 6th December 2011 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Last year the Chancellor boasted, with barely contained glee, that it would be necessary to make cuts deeper and faster than any Chancellor in history in order to clear the deficit in four years. In the process, we were told that the private sector would be freed, that the economy would soar forth just in time for general election tax cuts and that we would all be in it together.

One week ago, the Chancellor came to this place to admit that growth had flatlined, that he would be borrowing £158 billion more than forecast, that further cuts had to be made and that the deficit would still be there at the next election. And it certainly does not feel like we are all in this together, as many of my right hon. and hon. Friends have said this evening—not when there are 1 million unemployed young people, not when two thirds of the cuts are being borne by women and not when manufacturing, the regions, education and innovation are all suffering.

This has been a lively and, at times, passionate debate, and there have been many excellent contributions. I am only sorry that I do not have the time to mention all my hon. Friends who have spoken so eloquently. I shall only mention my hon. Friends the Members for Blaydon (Mr Anderson), for Bishop Auckland (Helen Goodman), for Birmingham, Hall Green (Mr Godsiff), for Middlesbrough South and East Cleveland (Tom Blenkinsop), my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), my hon. Friends the Members for Islwyn (Chris Evans) and for Glasgow North East (Mr Bain) and my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke), who explained with passion and determination how the pain being experienced in their constituencies was but inadequately matched by the dry, outdated ideological dogma of too many on the Government Benches. [Interruption.] Yes, and we see it again this evening.

One week ago, the Chancellor came among us neither cowed nor humbled, and although his policies were discredited, he delivered a lecture and a series of ad hoc announcements but no proper plan for growth. Rather, he seems to think that if he talks about it, it will happen. But what we needed from him last week was a proper plan B. We need a short-term plan to kick-start the economy and create jobs such as—now let me think—Labour’s five-point plan for jobs and growth: a tax on bank bonuses to fund up to 100,000 jobs for young people; genuine long-term investment in infrastructure such as roads and schools; a temporary VAT cut giving families with children a boost of about £450 a year—[Interruption.] Government Members may laugh but that is a lot of money in my constituency. The plan also includes a year-long cut in VAT to 5% on home improvements and repairs to help small business; and tax breaks for small businesses to take on extra workers. It is a very good plan.

As well as a short-term kick-start, however, we need a long-term strategy, a vision for the future of the economy. On “Newsnight” on the evening of the autumn statement, Lord Heseltine claimed that it was the beginning of an industrial policy. I fear that he might have to explain to the Chancellor what an industrial policy is. Indeed, he should probably explain what an industry is—and, while he is at it, perhaps he should explain that to the Business Secretary too. Both are ideologically opposed to using active government to ensure that industry has the environment it needs to flourish. Both fail to recognise that we need a long-term vision for an economy that is competitive, resilient and fair, and that we need strategies to promote those sectors in which we have a competitive advantage and where businesses pursue long-term, inclusive and socially responsive strategies for the good of themselves and the rest of us.

Let us look at how the key drivers of our economy are doing under this Government. Lee Hopley, the chief executive of a manufacturing employers group, says that

“short-term confidence has all but fallen away”.

That is why this week the manufacturing sector cut its growth forecast to 0.9%, down from 2.2% just three months ago. And still the Government talk about a manufacturing-led export-driven recovery! Today the Deputy Prime Minister was busy announcing an extra round of the regional growth fund. We support its aims; in fact, they are similar to those of the regional development agencies, except that its fund is only half what theirs was, and it is controlled from Whitehall, not the regions, where it belongs. As of today, just a quarter of the successful bidders in round one have received their money. There can be no better example of the Government’s inept and out-of-touch approach to regional growth.

Let us look at higher education. Universities—the centres of knowledge and ideas—should be the drivers of both growth and social mobility. In 2009, the sector contributed £7.9 billion to the economy. In 2008, the higher education sector created almost 700,000 jobs. It is our seventh largest export industry, but almost exactly a year ago this Government pushed through the most damaging and disruptive changes to the higher education system, tripling tuition fees and then changing the rules after universities had set their fees. At the same time, the Government introduced changes to student visas that, in effect, tell the world: “Britain is closed”. All this is hugely damaging to universities and students.

So what about innovation, the “engine of growth”, as the Business Secretary likes to call it? The Chancellor likes to say that he is protecting science, but research from the Library shows that the science budget is being cut by 15%. If this Government truly believed in putting science at the heart of the innovation economy, they would protect our position as one of the world’s leading science nations. Indeed, a recent report from the Department for Business, Innovation and Skills says that our position is at risk because of this Government’s lack of investment. It is true that yesterday the Government produced a life sciences strategy, but why has it taken them 18 months to produce a plan for one sector? Eighteen months and we still do not have a plan for innovation. That is because this is a “stand on the sidelines” Government, letting companies, industries and whole sectors fail in the absence of action.

Today the shadow Chancellor of the Exchequer said:

“The argument is whether it is better to be borrowing billions more to keep people out of work on benefits or whether action now to get our economy moving will get more people into work paying tax and help to get the deficit down in a fairer way.”

In March, the Chancellor ended his Budget statement —he may remember this—by saying:

“We want the words: ‘Made in Britain’, ‘Created in Britain’, ‘Designed in Britain’ and ‘Invented in Britain’ to drive our nation forward”.—[Official Report, 23 March 2011; Vol. 525, c. 966.]

Wanting is not enough, however. The Government need to act. There are millions up and down the country who want to drive our nation forwards by making and building things. Instead, they find themselves chasing far too few jobs with far too many others. There are hundreds and thousands of young people—young men and women—who want to learn the skills to make and build things, but instead are consigned to a life without education or employment. For how long will this Government continue to pursue a bankrupt ideological vision in the face of every economic indicator and so many broken lives? The Chancellor of the Exchequer is capable only of driving our nation forward into year after year of rising unemployment, flat growth and higher borrowing. We ask—we demand—that he change course.

Northern Rock

Chi Onwurah Excerpts

Monday 21st November 2011 Commons Chamber

[Mr Hoban]

The decision to dispose of Northern Rock was taken in isolation from consideration of other banks. A particular set of circumstances appeared, which enabled us to sell while providing a good deal for the taxpayer, a good deal for the future of Northern Rock and a new competitor on the high street. That is why we sold Northern Rock to Virgin Money. I think it is a good deal for everyone concerned.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I welcome the end of some of the uncertainty that has been blighting many of my constituents’ lives, and Virgin Money’s commitment to keeping Northern Rock’s headquarters in Newcastle, but the people of Newcastle and the country want a return to a longer-term, more responsible form of banking to ensure that this never happens again. Given that the Government ignored the possibility of mutualisation, choosing a complex financial arrangement instead, what confidence can the people of Newcastle have that they will achieve that aim?

[Mr Hoban]

No one put forward a workable plan for a stand-alone remutualisation of Northern Rock. No mutual came forward in the final round with a bid to acquire Northern Rock. There is no point in hoping for a white knight to appear to remutualise Northern Rock when the reality is that none was forthcoming. I hope that the hon. Lady shares the view of Councillor Nick Forbes, leader of Newcastle city council, who said that he was

“delighted that the future of Northern Rock has now been decided with its sale to Virgin Money”.

Regulatory and Banking Reform

Chi Onwurah Excerpts

Thursday 16th June 2011 Commons Chamber

[Mr Hoban]

I would just point out to my hon. Friend that last night the Chancellor did not read out the White Paper—the blueprint for reform that we have before us today. That is the centrepiece of today’s announcement. We have engaged fully with Parliament on this and he will be aware that what we are doing is starting a process of pre-legislative scrutiny to ensure that Members across the House can take part in debate on this. Throughout this whole process, we have sought to keep Parliament informed of the actions we are taking and to ensure that Parliament has a chance to scrutinise the decisions that the Government have made.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Northern Rock is headquartered in my constituency and my predecessor MP, Jim Cousins, played an important role in saving the bank when the Conservative party had no understanding of the crisis and would have let it go to the wall. Could the Minister explain how the auction will be structured so as to promote Northern Rock’s mutualisation, which he says he wishes to see? Could he also say what guarantees he will offer on the name, headquarters, jobs and community contribution of Northern Rock?

[Mr Hoban]

The hon. Lady raises some important points about how a potential bidder would seek to maintain employment in the north-east, how they would use the Northern Rock name and how the headquarters would be structured. That is a case that the bidders will need to make in putting together their bid. I would encourage all those who have an interest in bidding for Northern Rock to engage with the people of the north-east and present to them why they believe that their deal would secure the best future for Northern Rock and its employees.

Amendment of the Law

Chi Onwurah Excerpts

Monday 28th March 2011 Commons Chamber

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Let me start by saying that I did not recognise the Secretary of State’s position. In my county of Northumberland, we have just cut £44 million, with more to be cut next year and hundreds of people sacked throughout the United Kingdom, and we have cut services—or, if we have not cut them, we have charged people for them. Unfortunately, he never mentioned that, so I thought that I would put that one to right.

Let me talk about the enterprise zones. We have seen them in the north-east, where we had them last time, under Thatcher—they were called “Thatcher zones”. Although they were partially successful, they were not all successful. I would say that, at a good guess, most of them stood empty. They were not filled by anyone—in fact, anyone who went around the north Tyneside and Newcastle area today would find that a lot of the buildings are still empty.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Is my hon. Friend aware that during the period of the last enterprise zone in Newcastle, there was a jobs increase of only 0.7%, whereas in eight years of the last Labour Government, there was an increase of 18%?

[Mr Campbell]

Of course that is right, and that is part of my point. I would like the zones to be targeted in unemployment blackspots, which we have in the north-east. Unfortunately for Blyth Valley and Wansbeck—my hon. Friend the Member for Wansbeck (Ian Lavery) is not here—those zones did not come into our areas. If they are going to be in Tyneside, we have to get the people from our area into Tyneside, but the only transport we have is buses and people’s private cars—we have a rail link, but we do not have a train on it. If we target those blackspots, the enterprise zones might see some success.

Let me turn quickly to what I have heard since this Government came to power about how the last Government are to blame for the mess we are in. We hear all the time—we have heard it this evening—about the bankers’ mess, and that is indeed what I would call it: the bankers’ mess. The one thing that we never hear from the Government Benches is any criticism of the banks and the crisis that the bankers put us in. This country was going on wheels until 2008, when the bankers created the crisis. Government Members are not blaming the last Labour Government for the crisis in America, the crisis in Greece, the crisis in Spain, the crisis in Portugal or the crisis in Ireland. They are not blaming the Labour Government for all that—or would they in fact want to blame them for it?

I will tell the House why Government Members are not blaming the bankers: because since the Prime Minister was selected as a candidate for the leadership of the Tory party, the City has put £42 million into the Tory coffers to fight elections. That is why we do not hear anything from the Government side about the banks. That is why the banks and the bonuses are allowed to flourish, because the Tories are in the pay of the bankers. Make no mistake about it: that is a fact. The fact is that the Conservatives are in their pockets, and the banks are in their pockets.

--- Later in debate ---

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I want to declare an interest. From 2004 to 2010, I worked for a regulator—the bogeyman of Conservative Members. I worked for Ofcom. Working in that area, I was very aware of the dangers and limitations of regulation. However, I am also influenced by my time spent in the private sector in countries that have little or no regulation. It would make for an interesting reality show-type experiment to take Conservative Members who decry all regulation and place them in an entirely unregulated environment to see how they would fare without established property law, civil protection, guaranteed quality standards, working rights, planning control or health and safety.

But enough fantasy. I want to focus on why we need better regulation and the role of regulation in growth. All Governments promise to reduce regulation. I am quite sure that every Byzantine emperor came to power on a platform of less regulation. When Labour was elected in 1997, one of the first things we did was set up the Better Regulation Task Force, and later the Regulatory Enforcement and Sanctions Act 2008 put in place a requirement to remove unnecessary regulation. However, regulation often has unforeseen consequences or is interpreted in bureaucratic and inflexible ways. The solution is not to call for a war on all regulation, but to examine existing regulation imaginatively and to ensure that more public servants have experience of business.

Having worked for a UK regulator with European regulators, I know that we often translate into English law and then interpret European directives in ways that are much less flexible and more burdensome than those in other countries. I welcome evidence-based proposals, therefore, to reduce and/or improve regulation. The improvements to clinical trial regulations proposed in the Budget should lead to better regulation, which is good for business and innovation. However, the sleight of hand by which the Government have delayed green building regulations will actually add to the uncertainty in the building industry and reduce our energy efficiency.

We should not forget that the financial crisis would have been even worse had Labour heeded Tory calls for more deregulation of the City. As the shadow Chancellor has said, we should have been tougher with the City, but the Conservative party was certainly not calling for more regulation in that case. Since coming to power, the Department for Business, Innovation and Skills—the self-styled department for growth—has introduce 26 new regulations in six months, of which several will impose a burden and substantial costs on businesses.

The Government’s repeated calls for reduced regulation are yet another example of their rhetoric exceeding their reach. We know that the Government are recklessly cutting too far and too fast, but they are also entirely failing in leadership. Labour believed that the Government had a duty not to pick technology winners, but to deliver the coherent business, academic and political environment in which the best can win.

Recently I visited a small but growing, innovative high-tech manufacturing company, Kromek, which is developing colour X-rays for security applications. It is based in NETPark—the North East Technology Park—in County Durham, a business park supported by the RDA and the local authority. However, the company is finding it hard to get the talent that it needs, because of the Tory Government’s visa policies—an example of new regulation preventing growth. As the north-east chamber of commerce recently said:

“Since the Government came to power, business have seen the reversal of plans to recycle Carbon Reduction Commitment revenues; the Feed-In Tariff capped; and a delay to the expected start date of the Renewable Heat Incentive. These changes are delaying investment in low carbon technology.”

That regulatory uncertainty means jobs being lost in new industries, including in the north-east. As NESTA—the National Endowment for Science, Technology and the Arts—said when discussing regulation:

“Removing barriers to innovation is important, but on its own it is not enough. Innovation happens in an ecosystem and Government has a role to play in constructing that environment.”

To conclude, rebalancing and growing our economy requires vision, leadership, regulatory imagination, coherent policies and targeted investment. This Government are offering up a few regulatory sacrificial lambs to distract from the vacuum at the heart of their strategy for growth.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 13th July 2010 Commons Chamber

[Mr Gauke]

If I may help my right hon. Friend, at the time of the Budget we did publish our Budget policy costings, setting out the exact details. That information is available to him, and it was, indeed, touched on in last night’s debate.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

T3. The Chief Secretary justifies massive cuts to the public sector through fears of a sovereign debt crisis as the credit rating agencies downgrade our debt, but those same agencies were giving triple A ratings to junk financial instruments right up to the crash. Can he explain whether credit rating agencies, discredited as they are, or Tory ideology is driving these cuts?

[Danny Alexander]

The measures we have taken in the Budget are necessary to tackle the mess that the previous Government left. The degree of denial that the Opposition are in about the mess they created, the huge debt they built up and the fact that this country has the largest deficit in the European Union outside Ireland never fail to surprise me, although they probably should not surprise me. The measures we are taking are necessary to clean up that mess and to establish jobs and growth in the future.

Banking Reform

Chi Onwurah Excerpts

Thursday 17th June 2010 Commons Chamber

[Mr Hoban]

It is important to make sure that debates on regulation are co-ordinated at the global level, and my right hon. Friends the Chancellor of the Exchequer and the Prime Minister take an active role in those debates in the G20. I have recently taken part in ECOFIN’s summit, at which we discussed new supervisory arrangements in Europe. I am absolutely certain that we will engage in the debate both in Europe and globally to ensure that the structure of regulation supervision going forward is right to make sure that the system is stable and to ensure that decisions that have a fiscal impact are taken here, by UK regulators, and not in Europe.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I will accept that the banking reforms will make it more likely that if exactly the same problems happened in exactly the same way in exactly the same countries, we might be able to spot them, if not to do anything about them. Does the Minister accept that by failing to address the institutional failures in the banking system that are outside regulation—such as pay incentives within banking, the role of the rating agencies, the failure of international information flows and the lack of transaction costs in international financial markets—our country is just as vulnerable as ever to banking failures?

[Mr Hoban]

I do not agree with the hon. Lady. The package of reforms makes a significant improvement to the regulatory architecture in the UK, and there is further work that we can do at the European and the global level to make it more effective. She is right, in part, to say that institutions need to change their behaviour. We need to look at the structure of banking, which is why we will set up the Banking Commission that the Chancellor announced yesterday. Those reforms will help to improve structure, but let us look at what is important. Let us get the architecture right in this country, let us remedy the flawed system that her party’s Government introduced in 1997 and let us ensure that the Bank of England has the tools to do the job. That will make a significant contribution to improving financial stability.