Budget (North-East)

Ian Lavery Excerpts

Tuesday 17th April 2012 Westminster Hall

[Mr David Anderson (Blaydon) (Lab)]

I shall break with the habit of a lifetime and say something good about the Government. I welcome the news about what is happening with Nissan, but the context is that without intervention from our Government four years ago, Nissan might not have been in the position that it is in now. We introduced the scrappage scheme and reduced VAT. We gave grants so that battery electric cars could be developed and brought forward the training budget, which kept people from being laid off. Compare that with what the present Government did in respect of the building schools for the future fiasco. In Gateshead alone, £80 million was earmarked for five schools in March 2010, but the Secretary of State for Education took that money away in May, despite recognising, in meetings with me and my hon. Friend the Member for Gateshead (Ian Mearns), that the schools needed to be refurbished and rebuilt. The crazy thing is that, although the money would have gone to Gateshead council, it would just have passed it on to the private sector to build and furnish the schools and put the infrastructure in. So now everybody loses, including the public sector, the children and the private sector.

The RDAs have been mentioned a lot. The RDA was successful in the north-east of England. We have been here before; this is not new for us. Exactly the same programme and attitude that we saw in the 1980s and ’90s is being repeated now. People are being thrown on the dole with no hope or support, no way forward and no framework for intervention. The RDA worked because people came together—unions, employers and the public sector—partnership building, working together, bringing in international support and making things work. That is why it is a real shame that the RDA has gone and has been replaced by the regional growth fund, which is nothing more than a farce and a joke.

[Ian Lavery (Wansbeck) (Lab)]

My hon. Friend tells me that during discussions on the RDAs in the main Chamber, on more than one occasion senior Ministers—in fact, the Secretary of State for Business, Innovation and Skills—said that the RDA in the north-east was the flagship RDA and was working very well indeed.

[Mr Anderson]

I could not agree more. People will remember when they could believe what the Liberal Democrats said, although that was some time ago. The Secretary of State for Business, Innovation and Skills now says that he supported the RDAs, but the leader was not sure. It is now clear that the Liberal Democrats are being dictated to for ideological reasons. Anything that smacks of being positive about the public sector has to go. That is why we are suffering in our region.

Look at chaos and incompetence that has come from the Budget. People at the bottom have been hit: people with disabilities, old people, vulnerable people, children and women. Benefits have been cut. Millionaires have had tax cuts while pensioners’ tax levels are frozen. Government Members talk about taking people out of tax. They have taken a lot of people in Gateshead out of tax: 1,600 people have been taken out of tax because they have been put on the dole by the cuts, and 710,000 people from the public sector are being put on the dole and will not be paying tax or national insurance and will not be buying goods and services. Lessons from the past have not been learned. These things will have an impact on the economy.

The pasty tax is, to some extent, a joke. However, I am worried that it is classed as a harmonisation and simplification of the tax system; if that is so, will the Minister tell me what else she is going to simplify and harmonise that does not have VAT on it? Are there any other plans to increase the scope of VAT? Will she give us a guarantee today that VAT will not be extended to any other part of the tax system?

We all know about the impact of the charities tax. Because the Government cannot control the people who are avoiding and evading tax, the charities that the Government expect to cover for the job and service cuts in the public sector will not be able to do so. Charities in my region tell me that they are already suffering because of funding cuts and that, if money does not come from private investors, they will go even further down that road.

The application of VAT to listed buildings has had a disastrous impact. Ryton Holy Cross church in my constituency magnificently raised £300,000 in 15 years. Now, it would have had to raise £360,000 to do exactly the same work. People are telling me that that fills them with despair.

This Budget exposed the Government’s incompetence. They are not up to the job. The best thing that they could do for our region and our country is to go now.

[Ian Lavery (Wansbeck) (Lab)]

The Budget is a great missed opportunity, not only for the north-east but for the whole country. It should have been a Budget for jobs and growth, but instead it was a Budget for tax cuts for the rich and the toffs.

Unemployment rates in the south-east of Northumberland—in my constituency—are alarming. According to the Library, statistics revealed last week showed that, on average, 22.2 people were applying for each jobseekers’ vacancy. Earlier this year, according to the Office for National Statistics, that figure was 55.5. Every time we mention the problems faced by unemployed people in our area, we are told that we should look at the positive signs, such as Nissan. Nissan has been and is tremendous, but it is a million miles away from where I live.

[Grahame M. Morris]

I am sorry to stop my hon. Friend in full flow, but it is important to place on the record that, although we welcome the additional jobs and the announcement about Nissan, it must be put in context. Does he agree that although 250 jobs are welcome, they do not go anywhere near even offsetting the private sector job losses in my constituency alone? Reckitt Benckiser has lost 500 jobs; Fortress Doors has lost 100; Carillion, Cumbrian Foods and, most recently—

[Sir Roger Gale (in the Chair)]

Order. I am terribly sorry, but the hon. Gentleman is beginning to make another speech. This must be an intervention. I remind hon. Members that each of the first two interventions adds a minute to the time that the speaker is allowed. Hon. Members are in danger of pushing one of their colleagues off the end of the list, if they are not careful.

[Ian Lavery]

Thank you, Sir Roger. I agree with everything that my hon. Friend said.

We in the south-east of Northumberland are a million miles away from Nissan. The perceived jobs bonanza at Nissan is two bus journeys, a Metro journey and a further bus journey away. We wish that we had the same opportunities as there are at Nissan. We hope that they will come. We have not even got a rail service in my area: there is a railway line but no trains to run on it. We cannot even get to Newcastle, Sunderland or Middlesbrough city centre from where we live, because there are not the transport links and the much-needed transfer links.

I want to focus on a strong appeal to the Minister to hear the case of the people in south-east Northumberland. If we in Wansbeck are to have an opportunity for growth, a Northumberland extension of the North Eastern local enterprise partnership enterprise zone—the port of Blyth and the estuary—needs to benefit from capital allowances and rate relief at the same time. It is not enough to extend the enterprise zone without the provision of the additional allowances and incentives necessary to attract businesses and jobs. We need those guarantees. In addition, with the appropriate allowances and incentives, further extension to the enterprise zone is desperately needed, so that it stretches through Wansbeck as far up the coast as the Alcan site. A failure to do so will place Wansbeck and south-east Northumberland at a distinct disadvantage, by further damaging employment opportunities for our communities.

[James Wharton]

On a point of regional, cross-party unity, I echo the hon. Gentleman’s calls. The enterprise zones are a good initiative of the Government, and I should like to see them extended. Anything that we as a region can do to put pressure on Ministers to extend the enterprise zones and to give us further opportunities for growth is welcome.

[Ian Lavery]

Having enterprise zones surrounding areas such as mine only compounds the entire problem; basically, they incentivise people to stay away. May I appeal to Ministers, on behalf of the young and the old? Please listen, visit the area, help the anxious communities that we represent, give them fairness and a level playing field and give them hope and access to aspiration. Although not the most wealthy people in the country, we are most honest and most sincere. We need the Minister and the Government to act now to save what might be lost future generations.

--- Later in debate ---

[Chris Leslie]

The jobs crisis worries people, and all contributors today have talked about that, including my hon. Friends the Members for North West Durham (Pat Glass), for Hartlepool (Mr Wright) and for Wansbeck (Ian Lavery). The statistics that 22 people apply for every vacancy, and that youth unemployment in the north-east is rising by 155% are shocking. The Minister must react to that crisis.

[Ian Lavery]

What does my hon. Friend think about the fact that the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling) refused to meet me to discuss the severe problems facing unemployed people in my district, saying that it was inappropriate at this point?

[Chris Leslie]

I have heard of similar cases. What sort of Minister refuses even to discuss such issues, and turns a blind eye to the problems? A pointless Minister, so what is the point of having that individual in that post.

Many issues have been raised—too many to mention. My hon. Friend the Member for Gateshead and others referred to the case for investment and infrastructure. There is the impact on the so-called big society, with major charitable trusts and others losing out. The Chancellor is taking away from them while staff who are being made redundant from Alcan and elsewhere have dug into their own pockets for their works welfare fund donations to local charities. Their example contrasts so much with that of the Chancellor of the Exchequer.

Greggs was founded on Tyneside in 1939, and if ever a part of the country should be astonished at the Chancellor’s move to extend VAT, it is the north-east. The hon. Member for Redcar (Ian Swales) referred to the temperature of his sausage roll, and he will have the opportunity to vote on the matter in the House this week. We hope that he will join us in the Lobby.

I do not want to take up any more time, because we want to hear from the Minister. She should listen to these exceptionally powerful voices from the north-east. People know what they are talking about. She should recognise the warning signs for jobs and growth, and change course now before it is too late.