(10 years, 11 months ago)
Commons ChamberI might be slightly biased, but I have to say that the north-east has the best cohort of right hon. and hon. Members anywhere in the country in terms of their passion, commitment and determination for their local area to succeed. We have certainly seen that today. [Interruption.] You should always get them on-side first!
I pay tribute to my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown), who was an excellent Minister for the region. It would be wrong to suggest, as has been suggested several times today, that the north-east comprises solely Tyne and Wear, Northumberland and County Durham. The true quality of the region as regards its people, industry and scenery can be seen best of all in Hartlepool—and to some extent, I have to concede, in Middlesbrough, Stockton, Darlington and Redcar.
What has been particularly striking and welcome about the debate is that no speaker has been negative or despairing about our region. It is not a failed region suffering inevitable or irreversible decline. As we heard from my hon. Friends the Members for Sunderland Central (Julie Elliott), for Newcastle upon Tyne Central (Chi Onwurah) and for South Shields (Mrs Lewell-Buck), it has real potential. That is reflected today in the great news that Nissan will be spending £250 million on expanding its factory in Sunderland and increasing its work force by 1,000 in order to become the first Nissan plant in Europe to produce the luxury Infiniti model. The onesies in Wansbeck are also good news.
The biggest single problem facing the north-east is skills and unemployment. Unemployment in our region is 10.3%, and getting worse. The gap between the region and the rest of the country is widening. This needs to be an urgent priority for Government. What is the Minister going to do about it? Will he explain how the abolition of the future jobs fund has helped young people in the north-east to get a foot on the career path? How has the cancellation of the education maintenance allowance helped young people in the north-east to stay on in education or training to get a skill or a trade that will get them a better job? How have savage cuts in the public sector helped demand, economic activity and public sector employment in the region?
Investment and access to finance are essential if businesses in the north are to succeed and grow. Yet the north-east is suffering just as much as other regions, if not more. Notwithstanding the great news from Nissan and Hitachi, the gap in foreign direct investment between London and the regions is widening. The Ernst and Young attractiveness survey for 2013 found that investments in England outside London were 24% below their level in 2010. The north-east secured 26 projects, which represented 4% of the UK market share of FDI—better than the likes of Yorkshire and the east of England but trailing behind comparable regions such as the west midlands, the north-west and, crucially, the devolved nations, and well behind London, which alone captured 45% market share of total FDI. Ernst and Young concludes:
“It appears that the abolition of the RDAs may be starting to undermine not only the regions in which they operated, but also the UK’s ability to sustain its overall leading position for inward investment.”
Will the Minister comment on that? Will he also address a theme that has emerged throughout the debate—that this is not so much about structure or process but about our need for outcomes on employment, innovation and productivity, not at some distant point, but now, to help the people of the north-east immediately?
Very often, the absence of business investment is because firms have no access to finance. Speaking this week to northern MPs, the managing director of the Tees valley local enterprise partnership said that that is the single biggest factor affecting firms and their ability to grow. I mentioned this in a Westminster Hall debate yesterday. Every initiative that the Government have attempted to put in place has failed. Net lending to businesses has contracted in 21 of the past 24 months. That is confirmed on the ground in the north-east. John Anderson, chairman of the North East Business and Innovation Centre, said bluntly in an interview with the Newcastle Journal last month:
“In the North East, Government lending channelled through banks has not been reaching businesses.”
Will the Minister acknowledge that none of the Government’s initiatives have worked? Will he pledge to change policy and come up with schemes that will succeed in securing access to finance for small and medium-sized firms in the north-east that have the potential to grow?
Does the hon. Gentleman at least accept the report’s recommendations on the business bank? Specifically, does he now accept—he did not when he voted against them in April 2012—that community banks are the way forward for the north-east?
Businesses do not have confidence that the Government’s business bank is having any impact whatsoever. It is slow off the mark—[Interruption.] If the hon. Gentleman would stop chuntering and allow me to speak, I will respond to his question. The business bank is not working. It has had no impact in the regions. It is merely a desk in the Minister’s Department in Whitehall. A proper British investment bank would help fast-growing, innovative businesses, working together on proposals for a network of regional banks, to spark activity and economic growth in the north-east as well as other regions.
A number of hon. Members have discussed Government spending and infrastructure. The north-east has been singled out for particularly savage cuts. My hon. Friend the Member for North Durham (Mr Jones) mentioned the more than £200 million-worth of cuts in the local enterprise partnership area over the next two years. Hartlepool and Middlesbrough have been particularly badly hit.
The Institute for Public Policy Research has set out clearly:
“The North…suffers from weak public investment: government spending per capita on science and technology and transport in the North is almost half that spent in London and the south east.”
As my hon. Friend the Member for Gateshead (Ian Mearns) said, that has a long-term cumulative effect: lower spend and investment lead to weaker demand, competitiveness and economic growth, which in turn undermines a justification for additional spending and investment.
As my hon. Friends the Members for Gateshead, for South Shields and for Bishop Auckland (Helen Goodman) have all said, the north-east did not do well in the Government’s announcement in June on infrastructure. That has been exacerbated by the capital spend cuts of northern local authorities. The North East chamber of commerce said at the time:
“One disappointing element of today’s announcement is the lack of investment in projects in the Tees Valley, which requires significant infrastructure upgrades.”
Will the Minister explain why that was the case?
In the three months since the announcement, there has been precious little evidence of work commencing. When will the construction of the A19 Testos flyover start? When will the A19-A1058 coast road improve access to the Port of Tyne? When I used the A19 last week to visit Ford Aerospace in the Port of Tyne in the constituency of my hon. Friend the Member for South Shields, I saw precious little evidence of work on the ground. There seems to be a big lag between Government announcements and actual work starting. Will the Minister display a sense of boldness, priority and urgency and deal with those matters now?
Will the Minister comment on yesterday’s announcement in the World Economic Forum’s global competitiveness report—[Interruption.]
(11 years, 9 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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I agree with my hon. Friend. A balance needs to be struck, with the UK being the centre of the world’s financial operations through the City of London, between moving unilaterally and providing for a multilateral approach to ensure that we can adopt my hon. Friend’s suggestion.
My hon. Friend the Member for Falkirk mentioned something in which I am particularly interested: ensuring that valuable resources such as rare earths, or minerals in general, are not sold for a fraction of their real market value. There is an argument, as we heard, that if developing nations received the fair market share for those important and valuable resources, the international aid budget could be reduced, because those mineral and resource-rich nations could develop their own economies and societies, and make progress along the value-added chain.
When dealing with reporting and regulatory requirements, critics often say that any additional requirements would be too onerous and would impose additional costs. It is often argued that it would be wrong to increase costs for mining companies at a time when the long-term global boom in commodities is coming to an end. However, an interesting article in The Economist earlier in the year stated that, in 2011, Angola awarded several new deep-water oil concessions to firms covered by the Dodd-Frank requirements with no apparent difficulty. It said that no oil company had cited increased openness as a material risk in its Securities and Exchange Commission filings.
My hon. Friend the Member for Falkirk talked about how hedge funds want improved transparency and reporting requirements because they want, to use his vivid phrase, to know where the money is going. Paul Bugala, a senior analyst for extractive industries at Calvert Instruments, which manages a $13 billion fund, states that such improved disclosure and reporting requirements would help him and the market better to assess political and regulatory risk, and would therefore allow for better investment and stock selection, improving share prices in the sector in the long term.
Companies already collect such data for internal use, so there is a strong argument that such a process would merely make the data public. The additional costs that are often cited would therefore be minimal, if not non-existent. If all companies had to fulfil this additional requirement, no competitive advantage would be lost. The article in The Economist concluded by saying:
“'The expense has been minimal for the few, such as America’s Newmont Mining, that already provide country-level reporting.”
In July 2011, in a speech in Nigeria, the Prime Minister said:
“It is not enough to import labour, extract Africa’s resources and move on. It’s vital that when foreign companies invest in a country, the benefits of that investment reach the African people, so they become less reliant on aid.”
The Prime Minister complimented the United States for introducing legally binding measures to require oil, gas and mining companies to publish key financial information for each country and project they work on. He said in the same speech:
“I'm calling on Europe to do the same. We want to disclose the payments our companies make to your Governments so you can hold your Governments to account for the money they receive.”
Although the Prime Minister made that speech and that pledge 16 months ago, there has been slow progress at a domestic or European level. One of the first replies that the Minister gave in her new job, with her shiny red box, was to state in mid-October that the Government are engaged in EU-level negotiations on transparency laws. She added that the European presidency would soon begin discussions with the European Parliament and the Commission to try to achieve some agreement on improved transparency in the payments that extractive industries make to foreign Governments. I will support her in that.
I appreciate that the Minister is relatively new to her post and her response was made only six weeks ago. However, there had been some movement in the month prior to her appointment. I am not suggesting for one moment that the Minister’s appointment has stalled progress—I hope she will not take offence; it genuinely was not intended—but a Committee of the European Parliament passed a vote in September requiring a European version of the US system through which oil, gas, mining and timber companies should publish their payments to foreign Governments. Will the Minister outline any progress that has been made in the six weeks or so since she answered that parliamentary question, together with any time scales that she is pressing on her European counterparts to reach European-wide agreement?
It seemed to me that the Prime Minister’s speech in Nigeria suggested that he wanted country-by-country reporting. The Minister’s parliamentary answer of six weeks ago seemed to confirm that stance. When the International Development Committee investigated tax in developing countries, it recommended:
“The Government should enact legislation requiring each UK-based multinational corporation to report its financial information on a country-by-country basis.”
In their response to that recommendation, the Government dismissed the idea of unilateral positioning on this matter, stating that they merely support mandatory reporting requirements at the EU level. I can understand that approach but, as I said in response to an intervention from my hon. Friend the Member for Islington North, what is the correct balance between moving in a unilateral fashion—given our financial importance in the world with the City of London—and moving at a European level? Is there anything that the UK and the Minister can do outside the EU? I would be interested to hear her opinion of the appropriate policy balance.
One of the areas of today’s debate has been the extractive industries transparency initiative, about which my hon. Friend the Member for Falkirk and the hon. Member for Worcester spoke particularly eloquently. As we have heard, the EITI was established a decade ago by the UK Government with the clear and specific aim of addressing corruption in the extractive industries. As the hon. Member for Worcester said, the UK has never signed up to EITI, despite being at the forefront of founding the organisation, so that seems to be a mismatch.
When the then Under-Secretary of State for International Development, the hon. Member for Eddisbury (Mr O'Brien), gave evidence to the International Development Committee investigation that I mentioned, he said that the UK’s reason for not signing up to the EITI was that we as a country are not “resource-rich”. I have looked at statistics from the Office for National Statistics, and disregarding the City of London’s position in terms of UK-listed mining companies, 16.4% of the UK total economic production constitutes mining and quarrying. That seems fairly resource-rich to me, given that we also have North sea oil. Will the Minister comment on that? Does she agree with the then DFID Minister? Does she not agree with the suggestion made today that the UK, as the founder of EITI, should lead by example? Does she agree that the UK’s joining would encourage other countries to join? Does she also agree that as this country is the world’s acknowledged centre for financial services and accountancy standards, and at the forefront of world-class corporate governance, and given that the City of London is the headquarters for so many multinational mining corporations, the UK should and could send out a powerful message by joining the EITI?
In response to the investigation, the Government said that they welcomed the strategy review of the EITI, which is looking at developing a broader standard for consideration by the EITI board, with a view to possible introduction in 2014. Has the Minister any thoughts on the criteria that would need to be met as part of the strategy review that would satisfy her enough to recommend to her DFID counterparts that EITI membership should be sought?
My hon. Friend the Member for Hayes and Harlington mentioned the London Mining Network. Has the Minister seen the network’s report on UK-listed mining companies and the case for stricter oversight? It is incredibly interesting reading. Will she comment on whether the Government would be amenable to the eight recommendations put forward in the report on such matters as the reporting of non-compliance with IFC and OECD standards, as well as ensuring—we have heard about this many times in the debate—that the FCA has powers to enforce section 172 of the Companies Act 2006 with regard to corporate reporting requirements relating to environmental and social impacts?
That report also raises interesting points about the reporting requirements of companies listed on the alternative investment market. I fully accept the differing reporting and regulatory requirements between AIM-listed companies and those listed on the FTSE 100, but it would be interesting to hear the Minister’s thoughts on the Government’s policy on whether AIM requirements for mining companies should be changed.
The hon. Member for Hexham talked about open-cast mining in his constituency and made the important point that the north-east was at the centre of mining. It has a rich heritage and helped the industrial revolution to come about. He mentioned two important points that I hope the Minister will address, including about individuals who want to sue mining companies because of what might be happening in their communities. Is the Minister concerned about the effect of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which makes it virtually impossible for any UK citizen to seek redress in such a respect?
The hon. Gentleman also mentioned planning and, quite rightly, the importance of the green belt in the planning system, and he cited what the Secretary of State for Communities and Local Government said in a speech in September. Will the Minister address the comments made by the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles), in the past 24 hours, when he said—I paraphrase—“Let’s just build over the green belt”?
I assure the hon. Gentleman that the planning Minister did not say, “Let’s build over the green belt.” He specifically said that we should not build on the green belt, but look at other land, which is a perfectly reasonable proposal.
May I briefly ask about one of the hon. Gentleman’s points? The legal aid changes would not have affected the several cases that I brought as a lawyer against such planning applications. Such action would still be available and, because of what we did, there is now a protective costs order to protect litigants bringing such actions. Does the hon. Gentleman accept that successive Governments have allowed applications for developments to be made by companies that are UK-based, but ultimately hiding behind a parent company? That cannot be right.
(11 years, 10 months ago)
Commons ChamberI will go on to address the Löfstedt report in specific terms, and say where we agree with it and where we disagree, particularly with regard to the new clause, and if the hon. Gentleman will allow me, I will expand on that point. I am conscious that my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), a proud member of the Union of Construction, Allied Trades and Technicians, also wants to intervene, but I will first give way to the hon. Member for Hexham (Guy Opperman).
I am most grateful. All hon. Members will support the fact that the Olympics produced a death-free environment during the construction phase. However, changing laws on limited civil issues from strict liability to a balance of proof civil liability would not necessarily have affected or changed that. I hope that the hon. Gentleman will agree with and acknowledge that.
(12 years, 9 months ago)
Commons ChamberI absolutely agree, and my hon. Friend and I share the view of my right hon. Friend the Member for Wolverhampton South East that we should be bold and ambitious about manufacturing. We do not hark back to the past, but we want to engender that spirit of enterprise, innovation and ambition to ensure that we are the best engineering nation anywhere on the planet, that people can go into a career in manufacturing engineering secure in the knowledge that it is rewarding and produces products that we can sell to the rest of the world, and that Britain leads the world in that area.
May I take the shadow Minister back to the future? Does he agree that the idea of local banks, as outlined by several hon. Members, and an industry bank such as KfW, should be supported by Opposition Members?
I listened closely to what the hon. Gentleman said in his excellent contribution, and in a moment I will mention the problems that companies—especially manufacturing companies—have in accessing funds that would allow them to grow, especially in export markets. I have a particular suggestion to put to the Minister on whether the Government are trying to do anything about that.
I hope that I have mentioned the huge potential and the enormous scope for us to be a leading player in manufacturing and engineering in the 21st century. None of that is inevitable, of course, and nor will it happen by chance. In the era of the most intense global competition imaginable and with economies such as China—known for its low-cost manufacturing—anxious to move up the value-added chain, Britain needs to put in place the best possible policy framework to ensure that our ambitions are realised. In the words of Richard Lambert, the former director-general of the CBI, the Government, particularly the Department designed to champion British growth, enterprise and industry, need to provide
“a vision of the kind of economy we want to have in ten years time and what it’s going to take to get from here to there”.
Instead, however, a leading global manufacturer has stated flatly:
“The government is not giving us a reason why we should be in the UK in 10 to 15 years’ time.”
The Government are not doing all that they can to allow British manufacturing to fulfil its potential. Worse than that, decisions taken by Ministers in the Department for Business, Innovation and Skills in the past 18 months have ensured that British manufacturing has taken a backward step. Our economy has grown by just 0.5% in the past year compared with 1.5% in the US and 2.3% in Germany. Export activity is stalling, and both output and sentiment are at their lowest levels since the height of the recession two years ago.
That situation is confirmed by today’s publication of the CBI’s industrial trend survey, the briefing on which reported:
“UK manufacturers reported a weakening in order books in November, with export orders in particular deteriorating significantly… As a result, firms expect a fall in production over the coming quarter”.
Not all of this is the Government’s fault, but an awful lot of it is—far more than BIS Ministers will acknowledge. BIS, charged with being the Department for growth, is weak and out on a limb in Whitehall. Whether trying to secure a stimulus for the economy—we will see what happens on Tuesday with the autumn statement—or support for the UK train manufacturing industry, the solar panel industry, Sheffield Forgemasters or long-term investment in oil and gas, the Secretary of State always plays the game but always loses. Worse than that, though, he always loses by putting the ball in his own net. The CBI’s director-general, John Cridland, described the appalling decision, which the House debated yesterday, on feed-in tariffs and the threat to the solar panel industry as
“the latest in a string of government own goals”.