Economic Development (North-East)

Roberta Blackman-Woods Excerpts

Tuesday 15th February 2011 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

I congratulate my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) on securing this debate. I would like to concentrate on one private sector that is vital to the north-east economy, namely the tourism sector. It is worth £4 billion annually to the region and it accounts for some 5% of regional employment with 64,000 jobs.

I would like to congratulate One North East on its work on tourism, which provided a significant regional focus. I am sorry but the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) was wrong, as the delivery of tourism was devolved to local areas of Northumberland, Durham, Teesside and Tyneside, which worked very effectively. It galvanised the north-east’s ability to promote its image not just regionally, but nationally and internationally.

The Passionate People, Passionate Places campaign was pioneered by One North East. I want to record my thanks to Stacy Hall, director of tourism at One North East, and also to someone who is very much a private sector individual—Geoff Hodgson, who chaired the North East Tourism Advisory Board and who has been one of the biggest critics of what the Government are doing to tourism in the region.

Over the past few years there has been growth in the tourism sector, which has become confident and able to promote the north-east to potential visitors not just internally but externally. All that, however, has been cast aside by the simple fact that One North East can no longer spend any money on promotion and marketing. The fantastic support given by the Passionate People, Passionate Places campaign to businesses both large and small, such as the Beamish museum in my constituency and even small bed-and-breakfast establishments in the constituency of the right hon. Member for Berwick-upon-Tweed, has been removed and has not been replaced. That has placed our region at a disadvantage in comparison with other regions which can continue to promote themselves at our expense.

I do not accept the suggestion that the north-east did not promote itself well, and nor do most people in the tourism sector to whom I have spoken. I also see no hope in what has replaced it. There is no money there. The local enterprise partnership will prove to be a mere talking shop with no real money to conduct the regional marketing campaigns that we need. I am not talking merely about competing for tourism with other parts of the United Kingdom; I am talking about international opportunities. For example, when the Emirates airline launched its successful flights from Newcastle to Dubai, One North East was able to work with it and other partners throughout the world to promote the north-east. No single LEP will be able to do that, and the opportunity will not be replaced. Businesses in the north-east and the tourism sector are already suffering as a result of the short-sighted decision to stop One North East promoting the region as a whole.

The ability of local government to become involved in tourism has also been affected. In August last year, the Prime Minister made a speech in which he promoted the tourism industry and spoke of its importance to the economy of the United Kingdom. He said,

“Tourism is a local industry.”

He said that it counted on the support of local people and could not be directed from Whitehall, and I entirely agree with him. As my right hon. Friend the Member for Newcastle upon Tyne East pointed out, the north-east is a good example of a region in which elements have come together to promote it effectively.

Tourism is not a sector that we can dismiss. It provides jobs in not just large but small enterprises. The Prime Minister said that it was a “vital part” of rebalancing the economy of the north-east, but he also said something very ironic. He said that

“Local authorities must be allowed to invest”

in

“their own communities.”

Meanwhile, his Secretary of State for Communities and Local Government was changing the formula funding for local authorities so that it was based on foreign occupancy per night, which lost the north-east some £5.9 million in local authority grant—and guess who gained? London boroughs gained £60 million. Now Durham county council, which is so proud of its great attractions—such as the Beamish museum in my constituency, Durham cathedral and the beautiful countryside in the constituency of my hon. Friend the Member for Bishop Auckland (Helen Goodman), to name but a few—is being asked to accept a 40% cut over the next four years. The idea that local authorities will step in to meet the shortfall is absolute nonsense.

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

Does my hon. Friend agree that the severity of the cuts in the council’s budget are threatening even important facilities such as our tourist information centre, which, like those in other cities, is critical to increasing tourism?

[Mr Jones]

Well, it is a double whammy for those areas because not only has the money gone that was devolved to them from One North East, and which was spent very effectively in Northumberland, County Durham, Teesside and Tyne and Wear, but local authorities are now also struggling to afford to fund important things like tourist information centres. It is an absolute scandal for the tourism offer for a world heritage site such as Durham not to be well packaged.

It seems that this Government just do not get it. The Minister has never been to the north-east, for example, even though the right hon. Member for Berwick-upon-Tweed and I asked him to visit a few months ago. They just do not get it. By way of example, I cite the idea that regionalism is bad, whether it be the regional office or One North East, and that other sectors will somehow meet the funding challenge, when in fact they will not.

I ask the Minister and the Government to listen not only to politicians, but to the people in the region who know. They are not necessarily elected officials. They might be people like Geoff Hodgson, who has a highly successful business career in the publican sector, and who knows something about what the private sector in the region needs. The Minister should listen to people like him.

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

I pay tribute to my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) for securing this debate, which is very important for those of us in the north-east. I also pay tribute to him for the tremendous work he did in the region as regional Minister. It was a great pleasure to work alongside him as the deputy Minister, and I can certainly confirm that he put great effort into securing investment for the north-east and trying to improve our economy even in very straitened circumstances.

All of us know the huge impact deindustrialisation had on the region’s economy in the 1980s, resulting in very high levels of unemployment for many years. However, the situation had begun to change by 2005. During 2005-06, the north-east had one of the fastest growing regional economies in the UK. Its economy doubled in size over that decade, adding almost £13 billion to overall output. In the mid-2000s, the region was also experiencing very high rates of business registrations, bringing it somewhere near the UK average, and unemployment rates compared with the rest of the UK were narrowing. That is a very important statement to make, because it shows what can be achieved in the north-east with everyone pulling together and with investment being made in the right areas. That improvement was also built on upskilling our population and, in particular, ensuring that we invested in our young people.

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Motion made, and Question proposed, That this House do now adjourn.—(Miss Chloe Smith.)

[Roberta Blackman-Woods]

We saw very early on that there was a need to invest in the future work force and that a great many future jobs in the north-east were likely to come from the development of the green economy. The north-east was the first region in the UK to be designated a low-carbon economic area and that brought with it developments in the universities and the industrial sectors. That confirmed the region’s huge potential to be a leader in the development of green energy, including green cars.

[Mr Iain Wright]

My hon. Friend has a particular passion for education and for upskilling our region so that it fulfils its potential. What impact does she think the abolition of the education maintenance allowance will have, particularly in our region?

[Roberta Blackman-Woods]

I am grateful to my hon. Friend for that intervention, because it demonstrates how this Government simply do not understand the needs of regions such as ours and the needs of young people in regions such as ours. Some 67% of the young people who attend my local further education college rely on EMA and they are telling me that they do not know how they will be able to continue their courses.

The previous Government recognised that money had to be put into developing the green economy. Some good examples of that include: the £20 million invested in a printable electronics technology centre in the constituency of my hon. Friend the Member for Sedgefield (Phil Wilson); the £12 million invested in biotechnology at Wilton on Teesside; and Clipper’s development in Newcastle. I name but a few, and investment also came from the private sector, mostly through Nissan. So our Government were doing their bit and they were also putting money into universities to enable them to undertake further research. Narec, a centre of excellence, and the Durham Energy Institute also do really important work on coal gasification in our region.

[Pat Glass (North West Durham) (Lab)]

My hon. Friend was talking about green jobs and industry. Does she agree that when we lost One North East, we also lost £1 million of funding that was going into the eco-village in Weardale, in my constituency? That would have created many green jobs in an area where jobs are scarce.

[Roberta Blackman-Woods]

My hon. Friend makes an excellent point. We know that County Durham’s economy has suffered through the recession and we see few plans coming from this Government to correct the situation.

It is possible to argue that our region is well placed to become a centre of green energy production and green manufacturing, but for that to happen we need to continue to develop our skills base and there are worrying signs that that is faltering. I wrote to the Business Secretary asking what was going to happen to regional skills strategies, because they have been crucial for the north-east in developing the areas where we needed to reskill the population. The letter I received from the Minister for Further Education, Skills and Lifelong Learning said:

“The Government no longer…expects Regional Skills Partnerships to produce skills strategies”

or even to meet. He said that instead the work should be undertaken by local enterprise partnerships, which represent the correct “geographies”. A number of us would query whether LEPs are the right level for discussing the skills needs of the region and for being able to identify opportunities for upskilling the population. This is extremely worrying, because we need to continue to invest in basic scientific research skills and in how to apply them to manufacturing.

[Ian Swales]

Can the hon. Lady give an example of how a regional skills strategy would deliver something new? She has just expressed what the strategy needs to be, but what else do we need to know?

[Roberta Blackman-Woods]

The hon. Gentleman has to realise that within the umbrella of green energy and manufacturing, many different skills are needed. The regional skills strategy was able to bring together universities, employers and the further education sector. They could then decide between them who was best placed to deliver those skills, but the structure that enabled that to happen has simply been removed. The Government are telling us that there is no need for those strategies, but I dispute that.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

The North East Process Industry Cluster was set up by One North East and was an exact expression of devolution to industrialists and local authorities. In the past two years, NEPIC has engaged with large industries, as well as with small and medium-sized enterprises, to get them to take on board apprentices—something which, at the end of this week, is very important.

[Roberta Blackman-Woods]

My hon. Friend gives an excellent reason why we need to continue with regional skills strategies.

I want to raise a few other issues relating to the skills agenda. The Government have also got rid of the 14-to-19 commission for skills, which is absolutely devastating. That body brought together all the deliverers of vocational education and made sure that apprenticeships were promoted in the region and in the correct areas. Again, there is absolutely nothing to replace that body and it is unclear how we are to ensure that apprenticeships are delivered in the region and that enough placements are available.

Lastly, I want to discuss the abolition of RDAs. We have to recognise that even in straitened times, the RDA could have delivered funding in the key areas that have been identified, particularly green energy and manufacturing. The money that is available—£61 million in 2011-12—has to be spent on existing projects, so there will be no new investment. As my right hon. Friend the Member for Newcastle upon Tyne East has said, all 320 employees are to be made redundant, with all that skills base going to waste. We do not know whether those people are going to get jobs in the region or will be able to pass on their expertise. That is a dreadful loss to the region and we do not think that LEPs will have the money to give employment opportunities to those people. We are all asking the Government to reconsider whether the structures they are putting in place will deliver the economic regeneration we want in the region, whether the structures are at the right level and whether too much of the infrastructure that will bring about the improvement that we all want has been removed.

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[Mr Davey]

I believe that they all do, and I will explain why. They know that this coalition Government are improving the public finances, which is vital for the stability of our economy and for investment in the north -east and other regions, and are prepared to take the tough decisions which, if one were to believe what Labour Members have said, their party would have ducked.

I share the desire of the right hon. Member for Newcastle upon Tyne East to ensure that the north-east can share in sustainable, long-term economic growth. He made that case with passion, and the Government agree that we need to make such growth our overriding priority. We want to forge a new model for growth—one that is based on rebalancing the economy, both geographically and in terms of sectors, and which promotes innovation and boosts exports, not merely relying on consumption that is, in many cases, fuelled by public debt. That is why we have set up the growth review, which is a root-and-branch analysis of the barriers that impede business growth, and the structural reforms that we believe are needed to boost economic growth across the country. The initial phase is focusing on immediate priorities for business by improving the competition regime—on which I am leading—increasing exports, reforming the planning system, and cutting red tape and regulation. That will underpin this year’s Budget. A huge amount of work is going on in that context.

When my right hon. Friend the Business Secretary recently made a statement to the House about the trade and investment White Paper, the hon. Member for Bishop Auckland (Helen Goodman) said that she was worried about where inward investment would come from. I refer her to that White Paper, which talks a great deal about the importance of inward investment for all regions of our country. Many excellent firms in the north-east contribute to this country’s manufacturing exports, and I believe that they will strongly welcome the policies and framework that the White Paper sets out.

In the meantime, we are introducing a range of policies intended to support enterprise so that companies can grow and create new jobs. Let me highlight just a few of those. We are cutting the main rate of corporation tax from 28p to 24p by 2014. We are reducing the small companies rate from 21p to 20p—not increasing it as the previous Administration had intended. We are cutting the unnecessary red tape and bureaucracy that hinders, rather than helps, UK firms. We are boosting adult apprenticeships funding by up to £250 million by the end of the spending review period to create up to 75,000 more places a year. We heard nothing about the apprenticeship scheme from Labour Members. It is a huge success. I do not know whether any of them took part in national apprenticeship week, as I did in my constituency. At many of those events, we noticed the enthusiasm of employers and their potential apprentices, with large numbers of people getting really excited about this new opportunity that the Government have provided.

[Roberta Blackman-Woods]

The Minister’s attention was obviously diverted when I spoke about apprenticeships and the need not only to have apprenticeships but to be able to move people on into employment.

[Mr Davey]

I apologise to the hon. Lady if I did not listen when she was talking about apprenticeships, but I did notice her reliance on strategies for skills. What I found rather odd in several policy areas under the previous Government is that they spent a huge amount of money on forming strategies, and then, a year or two later, they were looking at another strategy. In my view, if we have a strategy, we should stick to it and implement it rather than keep changing it, as happened so often under the previous Government.

We are also striving hard to bring about a renaissance in the UK’s industrial base, which has had some serious problems in recent years. Sectors such as advanced manufacturing are critical in creating a more diverse, resilient economy in future. That sector, among several others, is very much part of the growth review that my right hon. Friend the Chancellor will talk about in the Budget.