Mark Prisk
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The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) not only on the debate, but on an interesting contribution. We may disagree about the outcomes and the analysis, but a debate on how to enable different parts of the United Kingdom to grow sustainably is important. This is the first time I have been described as a McCarthyite zealot, but I shall work my way through it, and the hon. Gentleman hinted that he was perhaps not fully serious. Nevertheless, I shall put that comment up on the wall and remember.
I thank other hon. Members for their contributions. We have had an excellent and balanced debate, and it has been helpful, not least because I shall be travelling to the north-east tomorrow night, and I am looking forward to meeting some of the businesses that have been referred to. On the tourism front, if I am allowed a couple of days off during the Easter holidays, I am hoping to start at the north-eastern end of Hadrian’s wall and to head westwards.
Alex Cunningham
I am pleased that the hon. Gentleman will spend some of his money in our tourist industry in the north-east of England. Is he aware that money to promote tourism in the north-east was choked off through the regional development agency this year, and that we saw an increase in the number of visitors to Yorkshire and Cumbria to the detriment of the north-east?
Mr Prisk
The hon. Gentleman started well, before coming to a money issue. We are looking not only at the need to deal with public finances, which my hon. Friend the Member for Hexham (Guy Opperman) accurately described, but at how they are organised as we change the landscape for public bodies. We must revisit the regional approach to tourism, allied with the RDAs’ work, which is what VisitEngland will do with local enterprise partnerships and so on. I greatly value the role of tourism, but I want to move on.
The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) referred to airports, and she will understand that as it is just 24 hours before the Budget, I would be wise not to pre-empt the Chancellor, not least if I hope to continue to be Minister of State, Department for Business, Innovation and Skills.
We all share the wish of the hon. Member for Middlesbrough South and East Cleveland that the north-east enjoys sustainable and long-term economic growth, which is certainly our overriding priority. We are seeking not only to tackle the public finances, as any incoming responsible Government would need to do, but to ensure that we have a new model for growth. In practice, that means not just rebalancing the geography, challenging as that will be—I will come to RDAs and LEPs—but ensuring more sustainable roles in different sectors.
The hon. Member for Wrexham (Ian Lucas) was a Minister, and we jousted when he was, but he and his colleagues were right when they established, for example, the sector skills council, Automotive Skills, so that the Government could be a better partner. We have continued it, and that sectoral role is important. In the Budget tomorrow, we will seek not merely conventional tax and spend, but to set out the detailed work that has been undertaken throughout Whitehall on a growth review looking at manufacturing, construction, retail and other core parts of the economy, so that we have an agenda and a strategy that is the most comprehensive, pro-enterprise and pro-growth Budget for a generation.
The hon. Member for Middlesbrough South and East Cleveland mentioned both at the beginning of his comments and later the role of small and medium-sized enterprises. Before I go into the specifics of the north-east’s economy and LEPs, it might be worth reminding hon. Members of the key changes that will help, and have already been announced, irrespective of what may or may not be said tomorrow. As hon. Members know, we are reducing corporation tax to 20p. We are doubling the threshold for small business rate relief, which is very important for businesses outside the greater south-east, so that for more smaller businesses that fixed overhead will fall instead of remaining as it is. Six months ago, we introduced the national insurance contribution holiday for new firms.
As the hon. Gentleman rightly said, we must encourage more entrepreneurs in the north-east. I have spoken to many SMEs throughout the country, and the shift in relief for entrepreneurs—10% capital gains tax—has given a boost to people who start a business, build a business and create jobs. Taking the limit up to £5 million is an important improvement.
Mr Prisk
With respect to the hon. Lady, other hon. Members have spoken and I should first respond to their points in the five minutes remaining.
The tax changes are important, and I hope that hon. Members recognise that they have been matched with a clear commitment to the Federation of Small Businesses on Friday that, for three years, microbusinesses—those with up to 10 employees—will have a three-year moratorium on all domestic regulation. Many SMEs have told me that the problem is not just one measure, but the fact that the Government constantly provide things to do when they want to get on and grow their business. That moratorium will be important, and it has been warmly welcomed. More will be said about the regulatory issue later.
My opposite number, the hon. Member for Wrexham—for a moment, I thought there had been a geographical shift when he referred to my hon. Friend the Member for Hexham as the hon. Member for Wrexham—talked about finance. He was right to say that there are issues. We have extended the enterprise finance guarantee, which is a scheme that needed to be extended, and we are proud that we have ensured an additional capital opportunity of some £2 billion. That should help about 6,000 additional viable businesses. We have gone further and put another £200 million to one side for capital for equity investment programmes. Those are important plans to help high-growth businesses throughout the UK. In addition, we have managed to secure from the banks a £1.5 billion growth fund to inject into SMEs. I hope that the hon. Gentleman recognises that those are important changes.
Mr Prisk
With respect to the hon. Lady, I have three minutes left. She did not make a contribution to the debate, and I must respond to hon. Members who spoke.
On the balance, there are challenges in the north-east, and no one denies that, but we should recognise that manufacturing there is doing well. A survey by British Chambers of Commerce shows that for the most recent quarter manufacturing grew most quickly in the north-east out of all the regions. Hon. Members have rightly referred to the decision on Tata Steel and Sahaviriya Steel Industries, and we hope that it will progress in the next few days or weeks, so that the agreement that was tragically mothballed a while back will be developed. Some 800 jobs will be created at the site, which will sit alongside the existing 700 jobs, but that is not all. There is a £420 million investment by Nissan, and the Hitachi development in County Durham, which are very welcome and very important.
I turn to RDAs and LEPs, where there may be a difference. No one denies that the RDAs, including One NorthEast, made successful and worthwhile ventures during their time—I accept that—but in 11 years, that agency received £2.7 billion to spend, and the reality is that the gap between the north-east and elsewhere grew. The reality of the gross value added—the measure per person—is that when it started it was approximately 83% of the national average in the north-east. Eleven years later, having spent £2.7 billion, it fell to 78%. It has not only not improved, but gone backwards.
There is a challenge, and the two partnerships that have been created, which I greatly welcome and am looking forward to meeting tomorrow and Thursday, have an opportunity to address their local priorities rather than what we think is best for them, which is an important shift. They can work together, as my hon. Friend the Member for Redcar (Ian Swales) has rightly pointed out, because they do not need Government permission to do so. I have every confidence that the business and civic communities will make that alliance and work together. We will set out the specific actions that they will be able to undertake. I will respond to my hon. Friend the Member for Redcar in writing about the regional growth fund.
The enterprise zones, which my hon. Friend the Member for Stockton South (James Wharton) has campaigned on—
