Industry (Government Support)
Chris Heaton-Harris Excerpts(14 years, 5 months ago)
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Mr Campbell
No. The hon. Gentleman has had his chance.
One NorthEast has been a leading player in the New and Renewable Energy Centre in Blyth and along the north bank of the Tyne, in low-carbon vehicles at Nissan on Wearside, and in the Printable Electronics Technology Centre in County Durham. Every one of those developments had at their heart a level of operation between private investors and the public sector. There may be support for small businesses for local authorities to pick up, but I am concerned that without such strategic action, the big national decisions will go elsewhere. My fear is that that will be bad news for the north-east.
If the Government are getting rid of RDAs in England, as has been suggested, have they spoken to the devolved Administrations in Wales and Scotland about them getting rid of their RDAs? One of the first issues that I took up in 1997 was the case of LG Electronics. That company went to Wales because we in the north-east did not have the money, but the Welsh Development Agency did. LG did not stay there, but Wales pinched the jobs.
Cuts in the RDA budget are already affecting jobs in my constituency: the Seafood Training Centre looks as if it will close its doors. Again, a troop of Conservative spokespersons went to that training agency and said how important it was, but now it is closing its doors, which is another bitter blow for the local fishing industry. That is why the Government need to be much clearer than they have been today about their plans for RDAs.
The Business Secretary said that
“changes depend very much on the reaction of local business and local authorities.”—[Official Report, 3 June 2010; Vol. 510, c. 556.]
I can tell him that One NorthEast has the support of local authorities, five universities, the Northern Business Forum, the CBI, the chamber of commerce, the Federation of Small Businesses and the Engineers Employers Federation, so let us see him get on and back it.
Of course, we know why there is dither: there is disagreement at the heart of the coalition. The Communities and Local Government Secretary—the man with the money—wants the money to go to local enterprise partnerships, but the Business Secretary, who is in charge of the sponsoring Department, favours regional economic enterprise partnerships, rather like RDAs. As my hon. Friend the Member for Sedgefield (Phil Wilson) said, this afternoon we have simply heard confirmation of uncertainty. That adds to confusion, and it is not good for business.
Mr Campbell
Not at the minute. I will if I have time later.
The Government need to accept, as the Opposition accept, that although deficit reduction is important, so too is economic growth. If we do not have the latter, we cannot have a better-balanced economy, including in respect of the regions and London. The north-east remains hopeful, but not expectant, because the Prime Minister said in that interview with Jeremy Paxman that of all the English regions, the north-east can expect to bear the brunt of the cuts. The problem and the danger is that in taking too much of an orthodox approach, involving cuts but very little else, we risk mirroring the policies of the last peacetime coalition Government, who turned a recession into a depression. They were not balanced in their approach to the regions, and the effects were not even, because the depression hit regions such as the north-east hardest. We must not, and we will not, allow that to happen again.
Chi Onwurah
I would thank the hon. Gentleman for his intervention if I could understand the line that he is drawing between bingo and the huge questions that we face. I support the bingo industry—I support all service industries—but he may not have followed today’s debate, which is about Government support for industry, particularly manufacturing and engineering industries. I would appreciate being able to stick to that subject for the rest of my contribution.
Labour’s industrial activism means that there are appropriate grants to support industry across the country. Under Labour, the regional development agency One NorthEast was able to take strategic regional decisions and support new technologies and the complex supply chains necessary to make them successful. I share the utter confusion of my hon. Friend the Member for Sedgefield (Phil Wilson) about Government policy with regard to the RDAs, which are to be abolished but allowed to re-grow in some form that is not entirely clear. That uncertainty is damaging jobs and industry in Newcastle and across the north-east, and I urge the coalition to provide clarity and send signals that a regional strategic decision-making authority will continue to exist.
Chi Onwurah
I am afraid I will not give way. I have very little time and I know that other Members wish to speak.
Let us be clear. Active support for industry is not a uniquely Labour policy. Across the world, Governments who know the benefits of long-term investment support their industry. I do not believe that China is a political model for us, but it has invested aggressively in technology and is reaping the rewards for doing so. Its wind power industry has doubled in output in the past year. In Singapore companies planning to relocate are asked how many graduates they need, what kind of grants they want and what kind of infrastructure would help.
Toby Perkins
No, I should like to make progress. Other Members wish to speak.
My background as a small business owner and now as an MP in the east midlands, in a coalfield and manufacturing area, gives me a broad perspective on the debate. That broad perspective is one of the things lacking in the arguments that we hear from the Government Benches. People seem to fail to understand that the private sector and the public sector do not live in two entirely opposite worlds that never have anything to do with each other. As a business man, I rely on people buying products from my firm. Some of those people might be doctors, some might be teachers, some might work in private industry. What all of us who run a business need more than anything else is a strong economy and a strong environment in which to do business.
Of course, everyone running a business and everyone in society wants to pay less tax. More important than a small cut in corporation tax is an economy supported by Government to run successfully. Hon. Members should remember that corporation tax is 5 per cent. lower now for big firms than it was in 1996-97. All the parties are talking about manufacturing, yet only Labour has put in place the financial means to support manufacturing and to boost industry, which is what should be happening.
I was pleased to hear the contribution by the hon. Member for Stratford-on-Avon (Nadhim Zahawi), who I think might be joining the proud tradition of Tory rebels over the years in his call for more support for industry. He said that the British Government should support our manufacturing firms in the way that the American Government support theirs. I hope that he will continue to stick to that line after he has spoken to his Whips.
In our area, the East Midlands Development Agency is not, of course, the whole solution, but it is an important contributor. In Chesterfield, there is an organisation called CPP that employs 270 staff. When I went to visit it before the election, people there told me that they were able to carry out the initial set-up only because of the support of the development agency, which put in £1.7 million.
The east midlands engages in more manufacturing than any other area. The Secretary of State has said that he wants his Department to be the Department for growth, but cutting investment allowances will not speed the growth that we need in our economy. I was horrified to hear the hon. Member for Loughborough (Nicky Morgan), who is not with us at the moment, say that she keeps speaking to people who tell her that the East Midlands Development Agency is not contributing and is not doing a good job, and they want to get rid of it. In fact, for every £1 the development agency puts into the local economy, we get £9 of benefit coming back. I do not know who the hon. Lady can have been speaking to, because local businesses and business organisations are queuing up to support it.
Chris Heaton-Harris
As a fellow east midlands MP and a former east midlands Member of the European Parliament, I thank the hon. Gentleman for giving way. Will he at least acknowledge that lots of the money that is invested by the East Midlands Development Agency goes to the so-called golden triangle, which his constituency falls within, and that areas in Northamptonshire and Lincolnshire have suffered because they have not been getting the inward investment that they might well have got had there been a local enterprise partnership?
Toby Perkins
I am sure that the hon. Gentleman knows his local area better than I do. I do know, however, that Derbyshire and Nottinghamshire chamber of commerce has spoken out strongly in saying that it would like the East Midlands Development Agency to be left in place. It is up to Members in other areas to ensure that they get schemes before the agency and try to work with it in a positive way. The current lack of certainty from the Government will not lead any organisations to think that they should be talking to the development agency, as they cannot be sure that it will even be there in a few months’ time.
Pat Zadora, the chair of the east midlands business forum, has said:
“We can’t speak for other areas of the country, but there can be no doubt that”
the East Midlands Development Agency
“has been extremely effective. The all-important private sector has forged a strong and helpful relationship with the agency and we believe it has made a positive contribution to the regional economy. There are a number of instances where we believe Emda’s intervention has been crucial in resolving key issues and unlocking opportunities to develop strategically important sites.”
The hon. Member for Mid Worcestershire (Peter Luff), when he was Chair of the BIS Committee, said that every business organisation that he had spoken to, from the Federation of Small Businesses to the CBI, said that development agencies help the economy, and that abolition would send completely the wrong message. We absolutely support his comments. The manufacturers’ organisation, the EEF, argues against a more local approach, saying:
“Local authorities lack the critical mass, the funds and the ability to step outside local politics to identify the priorities for their region, to set out how best meet them and to make it happen.”
What we need now is consistency from the Government. We need to see that there is support for our industries. Business wants Government to take a proactive role, but it also wants support to be there through measures such as investment allowances and the excellent car scrappage scheme that the Labour Government put in place—an example of Government investment supporting private industry. The Secretary of State is saying that he wants to send a clear and decisive message, but in fact he is painting a confused picture. His approach is not supported by manufacturing companies, which want to see Government driving growth, or by local businesses and business organisations in the east midlands, which are saying that we need investment in allowances, in development agencies, and in our manufacturing sector. They need a strong and unequivocal message from the Secretary of State, and in that regard he is failing them.
Mr Anderson
No, I won’t—I’ll tell you the orders, right?
The Robin Hood tax—a tax on banks’ international financial transactions—was rubbished by Government Members, but it would take care of a big chunk of expenditure on public services. Public sector workers are asking me, “Why should we pay Dave? Why should we carry the can for the failures of the banks? Why should we have to lose our jobs? Why should we have to stop looking after people we want to look after, when people who have robbed this country blind are getting away with more robbery?” Everyone in this House should agree with that.
I will say it: we should put the national insurance contribution charges on employers as well as on the work force. Why should it be the work force alone who carry the can? If the Liberal Democrats have a voice in this place, I would like to ask them what they would do to pay for the £17 billion of tax cuts. I am all for giving tax cuts to the low paid, but why should people at the level of pay we get also benefit from those tax cuts, when we will be shutting hospitals and schools and sacking home care workers? We keep hearing that we are all in this together. It is like a vuvuzela sounded every week by George Osborne, or a rattle in the background. No one in the working class believes that we are all in this together—nobody who works in school meals or hospitals. They know that those with money will be looked after and those without will go to the wall. That is the way that it has always been in this country. Saying something often and loudly does not make it any truer.
Should my party say sorry? No, it should not, because it stopped this country going into depression as a result of the failures of global finance and capitalism. We stopped that being any worse. The G20 said clearly that the actions we took brought the country into recovery more quickly than would otherwise have been the case.
The most ludicrous suggestion is one in, one out for regulation. That is daft. Who decides which regulation should be done away with to bring in another one? It is nonsense and it should be abandoned now.