Economy (North-East)

Debate between Helen Goodman and Jo Swinson

Tuesday 13th November 2012 Westminster Hall

[Jo Swinson]

I hope the hon. Gentleman will appreciate that I face a challenge in responding to the debate as it is, and giving way to him would just reduce my ability to respond to the points made by him and his hon. Friends.

No one is under any illusions about the scale of the wider economic challenges we face, but the Government have taken the tough decisions needed to tackle the deficit, and we are working hard to make sure that effective action is taken in our economies, not only internationally, but locally.

Far from being all doom and gloom, however, the debate has also been positive, in that it has focused on the real asset the north-east economy is to the wider UK economy. Many of the stories we have heard today are a real sign that a transformation is under way in the north-east and that many businesses are thriving. Members have touched on the fact that various sectors are moving away from the manufacturing of the past, important though that still is to the north-east; there is now a wide range of sectors, including health care, life sciences, petrochemicals and low-carbon technologies, although the area still has a strong base in things such as motor vehicles and steel. There is also a positive story to tell on export levels in the north-east, which increased to £14 billion in the year to June, up 7.8% on the previous 12 months. Indeed, the north-east is the only English region with a significant positive trade balance. We therefore have fantastic assets in the north-east.

The right hon. Gentleman started with the theme of connectedness, and I quite agree about the importance of infrastructure. I represent a constituency in the west of Scotland, so I recognise the importance of rail infrastructure. I also recognise the important points he made about our connectedness internationally, in terms of the movement of human resources between different countries. Students play an important part in our universities, and many of them, delighted to experience living in the UK, may continue in highly skilled jobs, if they get one after graduating. It is important to recognise that there is no cap on student numbers; while the Government are committed to reducing net migration, we recognise the important role that workers and students can play across countries. On immigration, I would gently tell the right hon. Gentleman that it was his colleague, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), who made a point, as Prime Minister, of speaking about protecting British jobs for British workers, so perhaps the attitude in the Labour party could sometimes be changed to reflect a more positive approach towards the benefits that immigration can be bring to the economy.

The right hon. Member for South Shields also touched on the importance of long-term investment in energy policy. I wholeheartedly agree that clarity and certainty are vital; the Government recognise that the private sector will need about £110 billion of investment, and we are committed to making sure, through the energy Bill, that that certainty is provided. My right hon. Friend the Secretary of State for Energy and Climate Change will obviously lead that work, and I appreciate that the Opposition will want to work constructively on a cross-party basis. As the right hon. Gentleman said, these decisions will ultimately span decades, so it is important that one Government do not make a decision that might be changed after a subsequent election if a different colour of Government are elected.

The right hon. Gentleman talked about public spending crowding out private spending and about the false choice that is often presented to us. We can have a debate about that, and I appreciate that there are differences in our parties’ approaches to the cuts that are needed, or otherwise, to tackle the deficit. I did not come into politics to make cuts, and I do not think anybody enjoys making them, but I recognise that tough fiscal discipline is important to make sure that we have the historically low interest rates needed for economic recovery.

[Helen Goodman]

Will the Minister give way?

[Jo Swinson]

I have a lot to get through if I am to answer as many points as possible, so I hope the hon. Lady will understand why I want to continue.

The right hon. Gentleman is absolutely right that the partnership between the private and public sectors is important. That is why we are developing an industrial strategy to make sure that businesses, investors and the public can have more clarity about the long-term direction. We are planning for the long term, but initially focusing on five areas: sectors, technologies, skills, access to finance and procurement. The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) mentioned the Heseltine review, which has made 89 recommendations, to which the Government will respond in due course. However, the industrial strategy and the approach the Government are taking go with grain of the overall approach in the Heseltine review.

The regional growth fund has been able to invest a significant amount as part of the partnership between the private and public sectors. It has invested £2.4 billion, of which £280 million has been offered to projects across the north-east. There was some criticism of the speed with which the money has gone out, but it is obviously important that the Government do due diligence, and I think people would recognise that. It is also important to note that certainty of public funding sometimes means that a project can go ahead once the funding has been allocated, even if the funding does not come until a later phase of the project. In addition, there is the Growing Places fund, which will help to unblock stalled local infrastructure projects. North East LEP has received £25 million from it, and Tees Valley has received £8.5 million. It is also important to remember that, in the north of England, £1 billion of European regional development funds were awarded in the most recent finance round.

The right hon. Gentleman and others raised the important issue of youth unemployment, and we all share the absolute desire to make sure that a generation is not left behind. We know the long-term scarring effect that unemployment has when young people are unemployed. I know the right hon. Gentleman has been in discussions with my right hon. Friend the Deputy Prime Minister, and I know the work he has been doing on the issue. He makes various critiques of the Government’s approach in the youth contract, but it is important to recognise that, for example, enabling young people to take up work experience placements without losing access to benefits, as happened under the previous Labour Government, means that people can get out of the trap of not having experience and therefore not being able to get job, but not being able to get the experience because they would lose their benefits. That is an important part of the youth contract. Although the right hon. Gentleman is rather dismissive of wage subsidies, they will deliver private sector, lasting jobs, in contrast to the schemes that were in place under the Labour Government.

Of course, not all apprenticeships are for young people, but 51% of them were last year, and they are an important part of the solution to youth unemployment. We are not complacent, and we recognise that there is a lot more to be done. Overall youth unemployment figures are coming down, which is good news, but we are absolutely committed to keeping a very close eye on the issue.

The right hon. Gentleman’s fifth point was about finance for innovation. The Technology Strategy Board, and particularly the new network of Catapults—technology and innovation centres—are a really important part of how we can develop technologies for the future and grow our economy.

A wide range of points were made by other Members; I will not get to them all now, but I have made a note of them, and I will endeavour to write to Members about them. I would, however, like to mention the city deals, which my hon. Friend the Member for Stockton South (James Wharton) referred to. Obviously, the Newcastle city deal is excellent news for the city, and it will unlock £1 billion of extra investment and create 13,000 jobs; indeed, wave 2 could have benefits for other parts of the north-east.

I welcome the comments by the hon. Member for Blyth Valley (Mr Campbell) about the fantastic innovation going on at Narec. I appreciate he is unhappy with the 14 hectares of enterprise zone, but he has campaigned hard to get the enterprise zone, and I am glad that he at least acknowledged that the Treasury listened and granted the request.

The hon. Member for Hartlepool (Mr Wright) talked about how we can make sure we get engineering skills, and the employee-owner pilots, which are putting funds in the hands of local employers to work out how best to get the skills they need, are an important part of that. I also welcomed the hon. Gentleman’s comments about girls studying science. That is important, and the Inspiring the Future project, which I would encourage Members to become involved in, will help to build on the links between businesses and schools, and indeed the experience that Members of Parliament may be able to bring to schools.

I appreciate that I will not be able to get round to the rest of the points that have been made, but I welcome hon. Members’ contributions.