Unemployment (North-east)

Phil Wilson Excerpts

Wednesday 20th June 2012 Westminster Hall

[Mr Wright]

My hon. Friend is right. I know that he remembers Galbraith in the ’60s.

Some 84,000 jobs have been lost in the construction industry, in part due to stopping the schools building programme, road schemes and social housing, which were all socially and economically necessary, because they boost productivity, efficiency and economic capability in the long term and, in the short term, in the worst and most severe global financial crisis ever, help to provide skills and capacity in the construction sector.

The Government fail to accept the basic economic point that, for every £1 of public money spent on construction activities, almost £3 of private sector money is generated back into the local economy, in terms of jobs, the supply chain and construction.

[Phil Wilson (Sedgefield) (Lab)]

My hon. Friend has made a compelling argument for a Labour Government. I congratulate him on securing the debate. Does he agree that there is one task that the Government ignore all the time? The only way that we can secure real growth is by the public and private sectors working together in partnership.

[Mr Wright]

I pay tribute to my hon. Friend, who does not get enough recognition for the enormous amount of work that he has done on two fronts: securing the work for Hitachi trains in our area and ensuring that Durham Tees Valley airport can be a catalyst for economic growth and connectivity—a word that I cannot stand—so that we can compete and sell our goods and services and get them to the rest of the world.

--- Later in debate ---

[Phil Wilson (Sedgefield) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Brooke. I congratulate my hon. Friend the Member for Hartlepool (Mr Wright) on securing an important debate. I welcome the Liberal Democrat Members for north-east constituencies. It is a disgrace that the Conservative Members are not here to speak up for the north-east on the issue.

I want to be quick, and make some general points. In Sedgefield, unemployment has gone up by nearly 25% in the past 12 months. The number of people who have been out of work for six months or more has gone up 100% over the same period. There is something I would like the Government to do; I do not know whether the Whip is also the Whip at the Department for Transport, but areas such as County Durham and Darlington have a big issue with buses. People might wonder what that has to do with unemployment, but it is about getting to work. The cutting of subsidies from public bus services means that I have constituents who cannot get to work, and who must consider packing in their jobs. Secondly, Jobcentre Plus says it has funds set aside to buy bicycles for people, so that they can get to work. A bit of joined-up thinking is required between Departments.

The question of demand in the economy, to grow the private sector, has been touched on in the debate. The average wage in County Durham is £418, whereas the national average is £503. Cuts in benefits—and we know that welfare benefits are going to be reformed—will affect 120,000 households in County Durham. That is half the households in the county. About £150 million will be taken out of the local economy. That is something to bear in mind if we want the private sector to grow.

I want to refer to the same speech that the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) quoted, by John Mowbray. I congratulate John, as well, on being made an OBE in the honours list. In the same speech he went on to say that the public sector has been hit incredibly hard by the Government’s austerity purge. We must say that is true.

The way to get the private sector to grow is through the private and public sectors working together. I want to draw hon. Members’ attention to two initiatives in my constituency. One is the Hitachi factory, which will create 500 jobs, with thousands in the supply chain, the vast majority of which will be in the private sector, obviously. However, that would not have come about if it were not for public sector procurement.

The other initiative involves Durham Tees Valley airport. As Tees valley Members of Parliament will know, things have been difficult for the airport in recent years. The number of passengers using it has gone down from just under 1 million to about 200,000. Peel Airports has gone to the regional growth fund in the new round for a grant of some £60 million. It wants to invest over time some £60 million in developing the airport. It wants to develop the freight and logistics side of it, to the south of the airport. That requires the input of some £60 million of taxpayers’ money. That is the public and private sectors working together.

I want to quote from the assessment that Durham Tees Valley airport has pulled together of the impact that the development could have. The impact assessment states:

“Once fully developed and occupied, alongside the current operation of the airport, the whole DTVA site has the potential to support around 3,650 gross FTE jobs, supporting approximately £220m of gross direct GVA for Tees Valley each year…2,420 of these are net FTE jobs and these could be taken by Tees Valley residents.”

That is very good news for the Tees valley. All MPs in the north-east should get together to ensure that the project works.

The final thing that I want to mention is regional pay. As I said, the average wage in County Durham is £418. I ask the Whip this: how low does he think that pay should be in County Durham? I keep asking that question, but I never get an answer. Regional pay will suppress the economy in areas such as the north-east of England. The hon. Member for Redcar (Ian Swales) and I agree on regional pay; we have both signed early-day motion 55.

[Annette Brooke (in the Chair)]

Order. I call Mr Kevan Jones, with a time limit of four minutes.

--- Later in debate ---

[Stephen Crabb]

I am grateful to the hon. Gentleman for that intervention.

[Phil Wilson]

The hon. Gentleman is right to say that the number of apprenticeships has gone up. The biggest increase is for those over the age of 25. However, the massive increases are not in engineering, where the number has gone up by 29%, but in education and training, which has gone up by 373%, in arts, media and publishing, which has gone up by 134%, and in health, public services and care, which has gone up by 104%. Where we need the growth in high-value jobs, the apprenticeships are not coming through as quickly as they are in other sectors.

[Stephen Crabb]

The hon. Gentleman seemed to downplay a 29% increase in engineering apprenticeships. More than a third more apprenticeships in engineering have been created, which is quite a success story, and I am grateful to him for highlighting it this afternoon.

We have heard useful contributions from my hon. Friend the Member for Redcar (Ian Swales) who recognised the importance of a sensible regional strategy. He talked about the benefits of the local enterprise partnerships in the north-east and in the Tees valley. He also drew attention to the fact that the north-east has recently achieved record exports. We believe in rebalancing the economy, and we want to see a more balanced export-led recovery. With its record exports, the north-east is well placed to take advantage of that.

Several hon. Members have referred to the excellent John Mowbray, who is the president of the north-east chamber of commerce. Last week, he talked about the importance of the north-east as a potential driver for an export-led recovery. I am really disappointed that Labour Members have not recognised that and are not sharing the ambitious approach of the north-east chambers of commerce. John Mowbray said that what the north-east really needs is a united front. Labour Members have turned up in force this afternoon not to show an ambitious united front or a positive approach—[Interruption.]