General matters

Phil Wilson Excerpts

Tuesday 21st December 2010 Commons Chamber

[Phil Wilson (Sedgefield) (Lab)]

I take this opportunity to talk about an important issue that affects the economic welfare of my constituency and the north-east of England.

The Government recently postponed a decision on the intercity express programme. A final decision is to be made in the new year. The intercity express programme will replace the rolling stock on the east coast main line and the great western line. The previous Government appointed Hitachi as the preferred bidder, and Hitachi selected Newton Aycliffe in my constituency as its preferred site at which to build a new fleet of trains if the contract goes ahead. That means the creation of British jobs, a much-needed boost to the private sector in the north-east of England and the arrival of a major manufacturer in the region.

The Government are also considering an alternative train system that would entail coupling diesel engines to electric trains, an option that would more than likely mean that the trains would be imported from abroad, offering none of the benefits to the UK economy and adding further delays as the whole project would have to go out to tender again.

If there was ever a reason why the existing rolling stock needs to be replaced, it is evident today. The east coast main line is suspended between King’s Cross and Peterborough, with trains breaking down here, there and everywhere. The trains rely on overhead electric cables, and when they are down the trains stop. The Hitachi trains are bimodal, which means that they can switch from diesel to electric and vice versa when the need arises. Southeastern operates such Hitachi high speed trains, which have an excellent record in the current bad weather. That is a ringing endorsement of the technology and work force.

Given the combination of the weather and poor rolling stock, the journey home to the north-east for me and many others will not be a very pleasant experience over the next 48 hours. But what is more important is the economic impact of Hitachi’s desire to move to the north-east of England. The move to Newton Aycliffe would create 800 direct jobs and more than 7,000 jobs in the supply chain, many of them in the region.

Hitachi’s investment would be the biggest investment in the north-east of England since Nissan back in the 1980s. It would also tick many other boxes for the Government. It would grow the private sector. There would be a £48 return on every £1 of public investment. There is no requirement for public sector investment until after the next election, well after the scope of the present CSR. More important is the additional income to the Exchequer from the creation of so many manufacturing jobs, the average wage being between about £25,000 and £27,000. The northern TUC has published a study by the Institute for the Study of Labour in Bonn, Germany, which revealed that such jobs at such rates of pay would generate about £13,000 per employee. In the case of the 800 jobs at Hitachi, that is £10.4 million a year in saved benefits and lost sums raised through direct and indirect taxes. If we consider the supply chain too, it has been estimated the figure would rise to over £100 million a year, a sum not to be sniffed at when we all want the deficit to be cut in a careful and structured way.

In Sedgefield, unemployment stands at 1,935. According to Government figures published last week, every unemployed person costs the Exchequer £7,800 in benefits and lost taxes. Therefore, unemployment in Sedgefield is costing the country about £15 million a year. That estimate is based on someone leaving jobseeker’s allowance and earning £12,200 a year. I have two issues with that. The average wage is higher than £12,200, so the cost to the Exchequer per person unemployed will be higher. Secondly, it shows what a great paucity of ambition the Government have for those who are out of work that they believe a person will leave JSA and earn just £12,200 a year. We need real jobs with real wages and a real future. Hitachi would offer the area that, and that is why this is so important to my constituency. Hitachi coming to Newton Aycliffe would help the town fulfil its ambition. If the intercity express programme does not go ahead or the programme is ordered in from abroad, thereby exploiting British jobs, the people of the north-east will feel as if the door is being slammed on the region and on their future.

Finally, I want to thank the thousands of constituents who signed the petition supporting the Hitachi bid and the Northern TUC for its help, along with the North East chamber of commerce, Unite the Union, the Federation of Small Businesses, The Northern Echo and well over 100 companies in the region who have leant their support to the Hitachi campaign. The intercity express programme must go ahead if we are to see private sector growth in the north-east of England. The economic case has been made—more jobs, greater tax income, and the biggest investment in the region for 30-odd years. Hitachi has shown great faith in the north-east. It is time for the Government to do the same by giving the go-ahead to the intercity express programme originally proposed by the last Government and by allowing Hitachi and the north-east to get on with the job.

On that note, I wish everybody a merry Christmas.