North-East Independent Economic Review

Julie Elliott Excerpts

Thursday 5th September 2013 Commons Chamber

[Julie Elliott (Sunderland Central) (Lab)]

I endorse what my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) said about wanting a regional Minister again. Having worked very closely with the regional Minister before coming to this place, I know that it was a huge asset to have somebody in the House who was responsible for our region. As somebody who was very involved in the campaign for a north-east assembly and regional government, I found it interesting to hear a Conservative politician calling for a mayor—an elected politician to speak up on behalf of the region.

The report identifies many of the problems in the region, but a lot more work needs to be done on the solutions. It demonstrates that the north-east economy has a solid foundation on which long-term growth can be built. The north-east has a good record of creating jobs. Some 67,000 jobs were created between 1998 and 2008, which was more than in any other region. The north-east is also a trading powerhouse for the UK economy. In 2011-12, it was the only area in England to record a goods trade surplus. That is a real achievement. Our excellent export record is a result of the high levels of foreign direct investment in the region over the past 10 years.

Of course, the north-east economy has several key structural weaknesses that will continue to hinder economic growth and job creation if they are ignored. The two central problems are that there are too few private sector jobs and too few highly skilled, highly paid service sector jobs. That leads to lower productivity and income levels across the region that are simply too low. The north-east has just 38 businesses per 1,000 working-age residents, whereas the national figure is 60. That lack of businesses is a major factor in the high levels of unemployment in the region.

Despite the abjectly chaotic regional growth fund and the dissolution of our successful regional development agency, One North East, the north-east continues to be a driving force in the re-emergence of the British automotive industry. As the hon. Member for Burton (Andrew Griffiths) said, Nissan is a huge success story. It is based in Sunderland, but it benefits not only Sunderland but the entire region.

The Nissan plant employs 7,000 and a further 30,000 people are employed in the supply chain. In the main, those are very highly skilled jobs. In 2011, the Nissan plant in Sunderland produced more than 480,000 vehicles. Nissan has invested more than £3.6 billion in Sunderland since 1984 and it continues to invest in innovation, most recently with the Nissan Leaf, bringing further investment and jobs to our region. Having lived in the region all my life, I have to say that Nissan was brought there not by one person, but by all the parties and all the people who are involved in industry in the north-east. The Nissan plant demonstrates the importance of the UK’s membership of the European Union to the creation of jobs in the north-east. The uncertainty around a referendum is not helping investment and is creating problems.

Universities have a huge role in bridging the gap between education and graduate employment. I have no issue with the Russell Group, but we have excellent universities in the north-east and not all of them are Russell Group universities. As is noted in the report, the Institute for Automotive and Manufacturing Advanced Practice and the university of Sunderland have developed a centre of excellence in low-carbon vehicle technology, which trains graduates with the skills that large employers such as Nissan require. AMAP has introduced the first master of science qualification in low-carbon technology, allowing engineers in the LCV industry to study part time and gain vital advanced qualifications in that fast-growing industry.

On the banks of the Wear, on the site of the old shipyards, the university of Sunderland hosts the Institute for International Research in Glass and the Ceramic Arts Research Centre. The National Glass Centre is part of the university and it offers a glass and ceramics degree in which students can work with professionals in state-of-the-art facilities. That is a fine example of education working with industry to develop the right skills, abilities and network of contacts to build a career.

As has been said, participation in higher education is lower in the north-east than in the UK as a whole. Something needs to be done about that. The increasing adoption of science, technology, engineering and maths qualifications is vital if we are to provide the highly skilled work force that our advanced manufacturing sector needs. Employers often report problems in recruiting people with the right skills. It is vital that we enable more employers to take on long-term apprentices to produce people with the qualifications at level 3 and above that are needed.

Rebalancing the economy is not a meaningless platitude, nor does it mean hampering London’s competitive advantage in banking and finance. It simply means recognising that growth, jobs and rising productivity in regions such as the north-east are vital if we are to see sustainable, long-term economic growth nationally. I urge the Government to take note of the report, empower councils and give LEPs the powers and access to finance that they need to form partnerships with SMEs and universities, so that they can help make the north-east the economic powerhouse it clearly has the potential to become.