Industrial Strategy: North-East of England

Phil Wilson Excerpts

Wednesday 5th June 2019 Westminster Hall

[Phil Wilson (Sedgefield) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Betts. I thank my hon. Friend the Member for North Tyneside (Mary Glindon) for introducing this debate.

Sedgefield is home to the largest business park in the north-east. Between 10,000 and 12,000 people work there, in about 500 companies, from small sole traders up to massive manufacturers, such as Gestamp, Husqvarna, 3M and, obviously, Hitachi, which is now producing the rolling stock for the east coast main line. Trains for Darlington, Durham, Newcastle and Edinburgh will enter service in August this year. Everybody is looking forward to that—we have been waiting about 40 years for it.

Another manufacturer, Roman, produces showers and bathroom furniture and is now the biggest supplier in Europe. We have a very good story to tell. We are home to a university technical college, which opened two or three years ago. It has been graded good by Ofsted and is going from strength to strength. It has a great future. It is sponsored by Gestamp and Hitachi, who want to see a throughput of apprentices, and it is bringing young people into engineering and electronics and all the manufacturing industries that we want to see maintained in Sedgefield and the north-east.

I want to talk a little about the past, as my hon. Friend the Member for Stockton North (Alex Cunningham) did. We have a sound tradition of manufacturing and industry in Sedgefield. About 500 yards from Hitachi’s base is Heighington crossing, where George Stephenson assembled Locomotion No. 1 so that it could enter service for the Stockton to Darlington railway back in 1825. The platform has a nice plaque about that. Next to it was the Locomotion No. 1 public house, which is now closed, but was the original ticket office and waiting room —the first ticket office and waiting room. It is there for anybody to go and see. The original platform is there as well—the oldest in the world. We can trace our manufacturing and industrial heritage back at least 200 years.

[Alex Cunningham]

I am surprised that my hon. Friend would claim that the first ticket office is in his constituency, because there is a plaque on a wall in my constituency that declares the first ticket office in the world to be there. Perhaps we need to meet outside of this room to consider the matter further.

[Phil Wilson]

We do. All I can say is that that is where the train was assembled, where the ticket office is and where the train set off from.

[Mr Clive Betts (in the Chair)]

Order. I hope you will not be asking the Chair to rule on that.

[Phil Wilson]

No, no, but I know that Stockton had the first passenger railway in the world. We have a lot to be proud of in our area.

NETPark, a science park just outside Sedgefield village is leading the way in all kinds of technologies, including light-based technology. It produces masks that people with diabetes wear when they are asleep, which helps. It is also a catapult centre for the space industry. It is the home of technology for the future. The park overlooks the site of the old Fishburn coke works and pit, where my dad worked all those years ago. If he could only see the technologies that are now on the doorstep of where he was brought up. I am really proud of it all.

There are 9,000 manufacturing jobs in Sedgefield, which is second only to those in the constituency of my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), where there are 17,000 jobs and tens of thousands in the supply chain. We have a supply chain of about 16,000. Manufacturing is a key industry for the north-east of England. Make UK, the manufacturers’ organisation, is now saying that it is very worried about a no-deal scenario, as it is “economic lunacy”. On this side of the House, we can all agree. Make UK’s key findings are that domestic and export orders are continuing to weaken, the gap between output and orders has increased, export orders remain at their weakest since the referendum, there is growing evidence of European companies abandoning UK supply chains, investment intentions are paralysed, and the manufacturing forecast for growth is just 0.2% in 2018 and 0.8% in 2020. These are dire figures. We need to think about those indicators as we further consider in this House what to do about Brexit.

I have deep concerns about Brexit. The north-east is the only region that exports more than it imports, and more than 60% of our exports go to European markets. Being part of the EU, the single market and the customs union is vital to the north-east of England. If there is a no-deal Brexit, it is estimated that GDP will fall by 16%, which could mean the loss of something like 200,000 jobs. Those are dire figures, and we should be broadcasting them all the time.

Between 2014 and 2020, the European structural investment fund invested £437 million in the north-east economy. The aim of EU structural funds is to rebalance our economy through regional investment allocated according to need. Will the Minister tell us where that money will come from when it stops coming from the EU? The Government’s stronger towns fund, launched in March this year, consists of a £1 billion fund allocated to English regions and £600 million available under competitive bidding after Brexit. That is less than 10% of what UK regions would receive if the UK remained in the EU; the north-east alone was projected to receive £1 billion over seven years. The shared prosperity fund, which was designed to reduce inequalities between communities, has released no details on the level of funding, the funding model, the length of funding periods or the fund’s administration.

Another issue that I want to raise with the Minister, which he might not be responsible for, is the high street fund, which was announced by the Chancellor of the Exchequer a few months ago. We all agree that we need to see improvements to our high streets. Newton Aycliffe in my constituency has a high street that is owned by Freshwater. The environmental area has been vastly improved—something for which the town has won awards—but there is still the problem of empty units and shops closing, which affects not just Newton Aycliffe, but our high streets up and down the country. If the likes of Darlington and Durham are losing their branches of Marks & Spencer, I really worry about the future of high streets in new towns such as Newton Aycliffe. What can we do to remedy that?

I want to make one or two other points. The north-east is one region, but we do not act like one region. If we did, we would become a true powerhouse. The regional development agency, which was abolished by this Government back in 2010-11, was a key asset to the north-east of England. I think it is fair to say that investment was from the public sector to the private sector in the north; in the south-east, it might be from the private sector to the private sector. The regional development agency was therefore a key contributor to bringing investment to the north-east.

[Mrs Hodgson]

My hon. Friend is making a very good point, which I want to reinforce by putting it on record that, from my recollection, the regional development agency in the north-east was the only one that really worked as it should have. For every £1 that the Government invested in the north-east through the One North East RDA, the return was £7. I might have it wrong, but that is the figure from memory. Does he agree that we should have certainly been able to keep One North East, because it worked?

[Phil Wilson]

That is right, and to abolish One North East was an act of economic vandalism. It was a kind of ideology gone mad—“If it is public sector, we should abolish it.” We now see the impact of its loss, to the detriment of the north-east of England. We have got rid of the regional development agency, and we do not act as one region. We have two Mayors and three combined authorities competing with each other, whereas we need to be one region—the north-east of England—talking as one for the benefit of the whole region.

I will finish by discussing the issue of Brexit. I remember when the news came out a few months ago about the manufacturing loss of Nissan models such as the X-Trail. I remember people from the region saying on the television, “Well, if Nissan goes, we’ll be okay. We survived the closure of the pits. We survived the closure of the shipyards.” Well, we might have done—we might be starting to come out of that period—but it has taken years. How did we survive that? Why have we got a big upturn in car manufacturing? How have we as a region been able to attract foreign direct investment in the way that we have, with Nissan and Hitachi in my constituency, and with other manufacturers around the country? How were we able to survive the closures of the pits and the shipyards? The reason is that we were in the single market and the customs union, and we had access to the biggest trading bloc—the biggest economic bloc—in the world. My view is that it is absolutely wrong for the region, and for this country, to close the door on that.

We were able to come round from the closure of the pits. I grew up in a pit village, and I know what happened back in the 1980s. We managed to get through the catastrophe of the closure of the shipyards because we were in the single market and the customs union. If we close the door, what will it do for the future of manufacturing and the economic wellbeing of my region and the country? Should there be a no-deal Brexit, GDP will fall by 16%, which is not in the best interest of the people of the north-east of England. We need to be saying that loud and clear from this day on, until we get a resolution to the issue of Brexit. In my view, there is no deal that is better than the one we have now. I have asked the Prime Minister whether the deal she brought forward is better than the one we have now, but I have yet to receive an answer.