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.

Economic Affairs and Work and Pensions

Chi Onwurah Excerpts

Tuesday 8th June 2010 Commons Chamber

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

Thank you, Mr Deputy Speaker, for giving me the honour to follow so many excellent maiden speeches.

I would like to start by paying tribute to my predecessor. To be able to say on the doorsteps of Newcastle upon Tyne Central that I was the new Jim Cousins was a huge asset. Perhaps one in five constituents knew him personally, and had a tale to tell about how he had helped them. As a constituency MP, he could not be bettered. He was also a champion of Newcastle and the north-east, and his long service on the Treasury Committee was of great benefit to his country and his city. His role in saving Northern Rock will be long remembered.

In the boundary review, Newcastle Central gained the wards of Elswick and Benwell and Scotswood from the old Tyne Bridge constituency. I want to thank David Clelland for his dedication to his constituents in those historic areas of my city.

The Romans chose Newcastle as the lowest bridging point of the Tyne, and later built Hadrian’s wall, which runs through the constituency. In the centuries that followed, we guarded England from the attacks of Scottish raiders. How times change! But as a port, we were ever open for trade. Newcastle played a huge part in the major industries—wool, salt, shipbuilding, coal and engineering. We were at the leading edge of the first industrial revolution.

If history is merely the story of great men, I need mention only some of Newcastle’s favoured sons to prove our place: Earl Grey, who has found such favour on the Government Benches; Armstrong, the great industrialist and founder of Newcastle university; and my own hero and fellow engineer, Stephenson, who built the railways.

But I believe that it is the contribution of those whose names are not recorded that it is most important to remember. It was the unnamed, ordinary men and women of Newcastle who built the ships that enabled this small island to wield global influence. My own grandfather worked in the shipyards of the Tyne. The men and women of Newcastle built the trade union and Labour movements, to which we owe so many of our working and voting rights. They built the co-operative and the Fairtrade movements, which combined the best of international idealism and local realism. Closer to home, they fought to protect the unique environment that is the heart, or rather the lung, of Newcastle.

Newcastle’s town moor is justly famous—a vast expanse of open moorland, kept in common and grazed by herds of cows. In London, cows in the centre of the city are considered installation art. In Newcastle, our councillors debate the future of our city within spitting distance of cowpats, an arrangement that I recommend to the House as ensuring a grass-roots sense of perspective.

With this history and community, it is no wonder that I felt a huge sense of privilege growing up in Newcastle. Yes, we were a one-parent family on a poor working-class estate, North Kenton, but good local schools, great public services, great housing and the health service meant that I could fulfil my ambition of becoming an engineer. But just as I was deciding to enter engineering, the country was deciding to leave it behind. We were going to become a service economy. I believe in a strong service sector, but time has shown that an exclusive focus on services left our country weaker. Certainly, I had to spend much of my career abroad. Still, I saw first hand the devastation brought about by the loss of the great northern industries of mining, shipbuilding and steel—whole communities robbed of a purpose. Let us be clear, that loss was not just a north-east loss; it was the country’s loss. Although we remain the sixth largest manufacturing economy in the world, building and making things is no longer a part of our culture. That has to change.

I know that I should not touch upon controversial subjects, which is why I am so glad that what I am going to say is entirely uncontroversial. During the election, all parties were in agreement that the economy needs to be rebalanced in favour of manufacturing. Newcastle, with our great universities, specialising in medicine, design and engineering, our industrial heritage and strategic assets, has an essential role to play. We can help the UK to meet two of the great challenges that face us—securing sustainable energy resources and supporting an ageing population. These sectors need to be part of the new economy. We need to build up our science and manufacturing base and foster the spirit of innovation that led George Stephenson to invent the steam engine and make his fortune.

I know from my own experience that building a business takes vision, courage, blood, sweat and tears. But manufacturing is particularly difficult. It needs long-term investment. I recently visited BAE Systems and Metalspinners, two engineering firms in my constituency. I saw 60-tonne pressing and cutting machines that cost millions of pounds and are expected to last for decades. We must continue to help these companies invest. They need a strong public sector. They need apprenticeships, good transport links, a strong regional development agency and tax allowances for manufacturing and innovation.

We are a small country and it is no longer our ships that set the boundaries of the world. But even as a small country, we can set the direction of the new industrial revolution if we equip ourselves to grasp those opportunities, and I will fight to make sure that the Government do just that. My career in Parliament will be dedicated to ensuring that Newcastle upon Tyne Central is an economically and culturally vibrant contributor to the UK and the world.