Finance (No. 2) Bill

Jim Cunningham Excerpts

Tuesday 1st April 2014 Commons Chamber

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

I am grateful for the opportunity to speak in this debate. I want to begin by focusing my remarks on the north-east economy: the challenges that we face and why my constituents will struggle to recognise the picture presented earlier by the Chief Secretary to the Treasury as he set out the measures in the Finance Bill.

The need to secure a stronger, more balanced economic recovery is pressing. My continued concern is that, unless the Government are willing to act to address the imbalance, the north-east will continue to be left behind. The north-east economy has many strengths and is an asset for the United Kingdom. We are one of the leading export regions in the UK, and in 2011, 2012 and 2013 we were the only English region to achieve a positive balance of trade.

A large contributor to that surplus is Nissan. Its plant on Wearside is one of the world’s most productive, producing a car every 60 seconds. Nissan’s continued success and the skill and determination of the work force are sources of immense pride to us all. We have long been a region with an identity rooted in manufacturing and engineering, and with Nissan, Hitachi and many others we will show just what we can achieve. For that reason, I welcome the measures on investment allowances in the Bill. However, it is a U-turn from previous cuts to allowances and, for all his refusal to acknowledge it, the Chief Secretary must accept that it was a mistake to have made those cuts in the first place. None the less, the measures are to be welcomed.

The automotive industry continues to show great strength, providing high-skilled jobs and investment. However, it is important to acknowledge that, particularly over the past decade, growth has come about through active Government involvement, by working with Nissan and the work force there. Over the past decade Nissan has rightly enjoyed many accolades. At times, sadly, jobs were lost at the plant, but we now enjoy the largest work force there on record, which is of course to be welcomed.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend mentions the automobile industry. I am sure she would appreciate that the previous Labour Government did a lot to encourage Tata to invest in Jaguar Land Rover, which is one reason why we are starting to get great success in the manufacturing industries, including in her region.

[Bridget Phillipson]

I agree entirely with my hon. Friend’s point. I was about to come on to look at the Labour Government’s record on the automotive industry and on industrial strategy. It is simply not right to begin looking at the sector only from 2010. A lot of work went in, over a long period of time, with the work force and the trade unions as well as through Government, to make sure there were the right skills and the investment needed for the industry to compete in the future. The Labour Government took that seriously; I hope this Government will take that forward.

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[Bridget Phillipson]

That is absolutely the case. One of the ways in which Sunderland has diversified its economy has been to move towards software. The number of new small software firm start-ups is among the highest in the UK. Many of them are looking to expand into and open offices in Europe and I have no doubt that they do not find helpful the constant discussion we are having about Britain’s role in Europe. They want to expand what they export and their role in Europe by opening offices there. They do not want to have a pointless debate about Britain’s role; they just want to get on, create jobs, invest in our region and continue to diversify our economy. I have no doubt that my hon. Friend, like me, will recognise the fact that there was a big shift in the north-east economy in the 1980s and ’90s. We have transformed our industries, although that has not been entirely of our own choosing—we had to transform them. In fact, given the transition that had to take place, we have been remarkably successful. The fact that the software sector in Sunderland continues to grow, including in Rainton Bridge in my constituency, shows what we are capable of in the north-east, but we need the Government to work with us to achieve it.

[Mr Jim Cunningham]

On the point about companies investing in this country, I am sure my hon. Friend will agree that a lot of companies, such as Nissan and Jaguar Land Rover, initially invested in this country because we are in Europe. If the Government continue to undermine that confidence, they will create some major problems in the west midlands and, as she has indicated, in the north-east.

[Bridget Phillipson]

We should not underestimate the scale of the challenge that companies such as Nissan face. It is incredibly productive and has a wonderful work force, and the Qashqai, which is produced on Wearside, was recently voted car of the year. There is so much good news in terms of Nissan and other big companies in the north-east. However, companies such as Nissan require long-term stability and the ability to make decisions about where investment will come from in the years ahead. The prospect of an in/out referendum hanging over our heads until 2017 and the constant discussion about it are simply not helpful when it comes to jobs and investment in the north-east.

The most recent unemployment figures reveal that the north-east still has the highest unemployment rate in the country, standing at 9.5%. It is clear that the recovery has yet to deliver fully for my area. The picture of youth unemployment is even more troubling. Across the three parliamentary constituencies covering Sunderland, nearly 2,500 young people aged 18 to 24 have been out of work for more than 12 months. In my constituency, that represents an increase of 1,650% in four years.

Our region has seen in the past the economic and social damage caused by long-term unemployment, destroying communities and draining hope from countless good people and their families. Ministers, however, appear to be complacent about the scale of the problem. They should act now and implement Labour’s plan for a jobs guarantee for all young people who have been out of work for more than a year, because it is clear that the Youth Contract and the Work programme are failing. This Bill is another missed opportunity to tackle the scourge of youth unemployment and long-term unemployment in constituencies such as mine.

I speak to many people in my constituency who are desperate to work and who are applying for job after job and getting nowhere. They do not even hear anything or get an interview—they make no progress. It is hard to underestimate the despair that that causes among young people who are without hope for the future and not sure where things will take them. One man who came to my constituency surgery last week told me that he faces the prospect of getting up and looking for work every day, but he has been doing it for too many years now. He is desperate to work and has a lot to offer, but it is a highly competitive jobs market in which lots of highly skilled people who have lost their jobs in the public sector are able to compete and are chasing too few jobs. The Government must address the matter urgently.