Jobs and Work

Roberta Blackman-Woods Excerpts

Wednesday 11th June 2014 Commons Chamber

[Roberta Blackman-Woods (City of Durham) (Lab)]

My hon. Friend is making a really strong point about the need to get additional help to the regions. Does he agree that it is unacceptable that start-up businesses in Durham have reduced by 14% over the last year? It is clear that the Government’s policies are not addressing the issues facing the north-east.

[Mr Umunna]

This is an important issue. Since the recovery kicked in, we have seen around 54% of GDP growth coming in London and the south-east, and around 75% of new jobs created in the same region. It is essential that we see more of that happening in my hon. Friend’s constituency and others around the country.

Let us be honest about it, the Government’s flagship scheme that was supposed to address this problem—the regional growth fund—has become a bit of a joke. More than a third of winning bidders under that scheme’s first round have now withdrawn entirely, while others have been left waiting almost two years to receive their money. Hundreds of millions of pounds of growth fund moneys across the regions are gathering dust in Government coffers and have not yet reached the winning bidders.

Of course, having scrapped our regional development agencies, which I am sure the Business Secretary privately feels was a big mistake, the Government replaced them with local enterprise partnerships, which have simply not been given appropriate budgets or powers to do what was asked of them. In fact, the vast majority of bids made by LEPs to the regional growth fund have been rejected in some regions. Many colleagues across the House—my hon. Friend the Member for Telford (David Wright) has spoken of his area’s desire for a city deal—will tell us, as my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) has just done, that a lot more needs to be done to rebalance our economy geographically.

On sectors, the Business Secretary’s predecessor, the noble Lord Mandelson, started pursuing a course of industrial activism, which, in the main, the Business Secretary has continued in his overall approach. There is a degree of consensus on the principles—that is a good thing—and industrial strategy is part of agenda 2030, our plan for better balanced sustainable growth, which is winning support from businesses across the country. But unless we get the overall environment right—on skills and finance, as I have discussed—across the whole country, delivery on these sectoral strategies will be compromised.

Let me finish by saying a few words about our export position. The Government promised an export-led recovery in their plan for growth. That has simply not materialised, and the measures that the Business Secretary and the Chancellor have introduced to date seem to have made no impact on that. In fact, the Office for Budget Responsibility said that the Budget would have no impact on our net trade position.

The promise to increase exports to £1 trillion by 2020 is disappearing out of reach. It has been reported that civil servants have privately conceded that the Government’s promise to get 100,000 new companies exporting by the end of the decade is “not going to happen”. This is hardly surprising when the Government have not done enough to ensure that small firms are made aware of the support that is out there. Half the members of the Federation of Small Businesses do not even know that UK Trade & Investment exists. They need to be given much more information and to be made more aware of what help is available. But then the performance of some of these schemes has been totally lamentable. The £5 billion export refinancing scheme, which was launched in July 2012 as part of the Government’s UK Guarantees scheme, and the £1.5 billion direct lending scheme, launched to great fanfare several months ago, have not helped a single firm. We need to see much more competent delivery of these schemes.

It is clear that our country has huge potential, and there is a huge amount of talent waiting to be unlocked, but people need a Government to empower them to realise their dreams and aspirations. That is not happening under this Government. [Interruption.] The hon. Member for Worcester (Mr Walker) talks about the long-term economic plan. The fact is that for many people—including people in my constituency, where, on average, people are earning £2,300 a year less than they were when the Government came to office—this “long-term economic plan” is a long-term economic sham. That is why we aim to ensure that we can allow and empower people to meet their aspirations by making certain that, this time next year, we are sitting on the other side of the House.

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[Roberta Blackman-Woods (City of Durham) (Lab)]

I am pleased to have an opportunity to participate in the debate. I hope to demonstrate that many of the measures in the Gracious Speech fail to address the real issues facing my constituency.

The north-east demonstrates many aspects of a successful knowledge-based economy, with a highly skilled and motivated work force. Our manufacturing industry alone is worth £7.5 billion to the economy, and we have a strong and successful advanced engineering sector, as well as leading the way in low-carbon technology and sustainable energy solutions.

The north-east has some key competitive advantages to enable further rebalancing and job creation to happen, if only opportunities can be unlocked. Labour recognised that when in government, and our regional development agency, One North East, was working very successfully to build on this unique skills base. Regrettably, this approach was lost when the Government abolished the regional development agencies without giving thought to the consequences of losing their skills in job creation and attracting jobs to the area.

Lord Adonis’s “North East Independent Economic Review” report recently made proposals to boost exports and supply chains and co-ordinate inward investment activities. In many ways, it sought to put back together some of the functions once carried out by the regional development agency, but with a fresh purpose and momentum. Unfortunately, there is no sign whatever that the Government will act on this report. Indeed, they have no proposals at all to intervene in an economy that needs to deliver more jobs—something that Labour did very successfully. It worked very hard to attract Hitachi to the region, and it looks as though we will gain more than 5,000 jobs in the next few years. Labour also supported Nissan through the recession, so that more jobs and skills could be developed, and we also developed the supply chain. My point to the Government is that that simply could not have happened without intervention—something that we do not have from them at the moment.

There is a real contrast between all that under Labour and having a local enterprise partnership in the area that is barely functional—it does not have a chief executive or even a deputy chief executive at the moment—and a regional growth fund that operates a scattergun approach. Most of the money allocated to the region is not drawn down in any case. According to a recent report by the National Audit Office, most of the funds remain unspent, while the cost of creating jobs has increased considerably, but Ministers are taking no action to tackle this set of concerns.

This is not only about the number of jobs created; it is about the quality of jobs on offer, too. Work must pay. The northern TUC has raised the important issue of the nature of the jobs being created in the region: many are precarious and based on zero-hours contracts, and we risk losing valuable, high-quality public sector jobs in the region, with poor private sector replacements. A good example is the Government’s proposals to privatise the Land Registry. Those jobs are currently good-quality public sector jobs, but we risk their being downgraded through privatisation. Under the present Government, about eight out of 10 new private sector jobs have been created in the south of England. It is also worrying that the number of business start-ups in Durham has fallen by 14%, compared with a national fall of 1% in the first quarter of the year.

This is not only about finding work; it is about what happens to those who are receiving low pay. My constituency is among the 10 areas that are suffering the most from the bedroom tax, which is causing households to lose about £482 a year, resulting in a reduction in local spending power. Wages in the north-east are about £50 a week lower than the UK average and about £200 a week less than wages in London. Therefore, in the retail sector, people in the north-east are spending 10% less than people elsewhere in the country. The Government must do more to rebalance the economy, and take account of issues relating specifically to regions such as the north-east.