Economic Development (North-East)

Lord Beith Excerpts

Tuesday 15th February 2011 Commons Chamber

[Mr Brown]

Not immediately. I am more than happy to ask around on behalf of my hon. Friend and the Government, but I suspect that the response that I will get from local businesses is: they pay their taxes and they are entitled to road improvements from those tax payments in just the same way as other parts of the country expect these things. The local authorities and representatives of regional organisations were particularly strong on the importance of the A19 corridor, and they were aware of the potential for a bottleneck in the dualled tunnel under the Tyne and its effects at the Silverlink roundabout, as well as at the roundabout further north. I was able, in the last Labour Government, to secure an agreement with the Secretary of State for Transport that any underspend in what was then our little regional pot could be carried over and spent on the improvements that my hon. Friend has just advocated—perfectly correctly, because they are important to the flow of traffic. All that—local discretion and end-of-year flexibility—has been taken away. The idea that local business men should put their hands in their pockets and pay for that themselves will be met with outrage, if the Government ever get round to asking them.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

Will the right hon. Gentleman give way?

[Mr Brown]

Of course—if it is about the A1 north of Newcastle.

[Sir Alan Beith]

I am grateful to the right hon. Gentleman for giving way, and I recognise the personal efforts that he made as the regional Minister. However, as well as being the regional Minister, he was a senior Minister in a Government who found by the end of their time in office that they had engaged in a massive overspend and had to make severe reductions in capital spending, as well as cuts on a scale comparable to that on which the coalition is now implementing its cuts, albeit on a slightly different time scale. He cannot really talk as if we are in the same financial situation now as we were five years ago.

[Mr Brown]

I accept that, and I am making two points—perhaps I have not made them very well. I accept that we are in a different economic climate: times have changed and things have moved on. Although I believe that what we put in place—particularly the administrative structures—was cost-effective, efficient and focused, and delivered well for the region, it would be more rational, even for the Conservative-led coalition Government, to do more to preserve the consensus that we used to have in the region. They could do that by appointing a regional Minister to keep the core functions of a perhaps scaled-down One North East; it could then handle its own residual functions, apart from anything else. We could keep a presence from the major Departments in the region, not embark on the LEPs and keep the private sector engagement that is so important to getting the private sector-led job creation that we all seek for the region, rather than the structures now being put in place.

Therefore, as well as defending what we were able to do when we were the Government, I am also—and separately—making a plea for a much more rational use of what few resources are available under the current regime. I do not agree with scaling them back as far as they have been, but even if I did accept that—I did not intend to embark on the broader quarrel that the right hon. Gentleman tempts me to pursue—I would say that whatever resources are available could be spent in a better, more focused way and bring about better outcomes. That is my key point.

--- Later in debate ---

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

The right hon. Member for Newcastle upon Tyne East (Mr Brown) has done the House a service by having this debate and by mysteriously working out in advance that we would finish our other business early tonight, leaving more time for other Members to participate in an Adjournment debate. He put forward a number of constructive points. In that spirit, I shall not dwell on the things that I think the previous Government should have done in their time of office, although we need serious recognition that we face a very difficult financial situation in which the money is simply not there to operate on a basis that seemed feasible just a few years ago.

Those who tried hard to get the region to adopt the idea that it should make its own decisions and, indeed, have a democratic mechanism with which to do so found that the voters in the region were not persuaded, so our attempt to have a regional assembly was firmly rejected by them. We have to take proper account of that, along with the rejection of the unitary authorities that the Labour Government went ahead and created. We have to recognise that in straitened financial circumstances the scale of the apparatus in the form of the regional development agencies and the Government office for the north-east is just not suited to the time. We cannot afford to use resources in that way. When we have much more limited resources, we have to focus more, so let me put some quick points to the Minister about what I believe the Government should do.

First, they should ensure that the important development sites that One North East had in its possession remain available for development purposes, using the resources of the local authorities and the economic partnerships. Not all the sites or all the buildings owned by One North East fall into that category—it owned all sorts of properties—but key development sites purchased and assembled for that purpose must remain with organisations that can develop them in partnership with the private sector.

Secondly, as the right hon. Gentleman pointed out and others have said, bidding for European funding remains crucial. We need some facility to do that, so it is vital that an appropriate small team of people is retained within the public sector to lead the bidding process. Whether my hon. Friend the Minister can yet say whether discussions on that have been completed, I do not know, but I think it vital, as I have said, to have a team located within the public sector structure to lead that bidding process and to use some of the people who were employed by One North East and developed the relevant expertise. I look to my hon. Friend to find a way of doing that.

Given the removal of One North East’s tourist responsibilities, we need to encourage new, more locally based tourist organisations to work on behalf of the region. I remember just how controversial it was when One North East took over tourist responsibilities, as many small businesses in my area did not want that to happen. We have suffered from the fact that One North East did everything in-house, so the ban on Government advertising hit our region immediately, whereas other regions had contracted out the work so that advertising continued.

I welcome some of what the Government are doing. I welcome the regional growth fund, for example, but I do not believe that it will be able to stick with a £1 million threshold for all projects—that is, I am sure, just an initial stage. I also welcome the national insurance holiday.

Our region has great potential in its work force and great potential in that it is an area of relatively reasonable housing costs in comparison with other parts of the country. It is a beautiful region in which to live and to which to attract people, whether they be business men or future employees. We have a region with tremendous prospect, but one that desperately needs to shift the balance to a much larger private sector element, with less dependence on the public sector. There is consensus across the House that we need private sector-led growth. I look to Ministers to ensure that they direct the necessary support—in more economical ways than were possible or that, perhaps, were rather wastefully possible in earlier times—to enable that to happen.