Budget (North-East)

Roberta Blackman-Woods Excerpts

Tuesday 17th April 2012 Westminster Hall

[Chris Leslie (Nottingham East) (Lab/Co-op)]

This has been an excellent debate, thanks to my hon. Friend the Member for Gateshead (Ian Mearns), and we are left with one question, which was asked not just by my hon. Friend the Member for Jarrow (Mr Hepburn), but by most contributors. Will the Minister dare to have the audacity to utter the phrase, “We’re all in it together”? I hope that she will. I want to give her ample time to respond to the debate, because so many points have been well made, including the impact on families with children and on single individuals, and the statistic that the typical family with children will be £511 worse off annually as a result of cumulative Budget measures. When people open their pay packets at the end of this month, they will see the impact not just of VAT, but the tax credit changes that will also hit working people exceptionally hard.

People are shocked at seeing a Government hit elderly people and pensioners by freezing age-related allowances and using that money to give a tax cut to the wealthiest in society. Those earning more than £150,000 and typical millionaires—if there is such a thing as a typical millionaire—will receive a £40,000 tax benefit. That is astonishing. Is it any wonder that the Government’s fortunes are plummeting? What is even worse—as my hon. Friends the Members for Sedgefield (Phil Wilson), for Jarrow, and for Washington and Sunderland West (Mrs Hodgson) mentioned—is that there is no action of any substance in the Budget to tackle the crisis in jobs and growth. That is at the core of the issues.

The Government have taken a wrecking ball to institutions in the north-east that existed to try to help the economy, whether it was a Minister for the north, the regional development agency, or local authorities whose grants have been slashed disproportionately in the north-east compared with other parts of the country.

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

Does my hon. Friend agree that the lack of a growth strategy for the north-east is a complete travesty? Getting rid of the RDA and replacing it with LEPs and enterprise zones, fragmenting the whole support system, is not working. The Government are leaving the north-east without the support that it needs to keep regenerating itself.

[Chris Leslie]

The jobs crisis worries people, and all contributors today have talked about that, including my hon. Friends the Members for North West Durham (Pat Glass), for Hartlepool (Mr Wright) and for Wansbeck (Ian Lavery). The statistics that 22 people apply for every vacancy, and that youth unemployment in the north-east is rising by 155% are shocking. The Minister must react to that crisis.

--- Later in debate ---

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

This has been an interesting debate, and I thank hon. Members for their contributions, whether in a constricted four-minute speech or an intervention. The hon. Member for Gateshead (Ian Mearns) spoke with great passion about his constituency and the broader region, and I hope in the time available to address some of his concerns and those of other hon. Members. With a smile on my face, that gives me a chance to place on the record the apology that I have already given to the hon. Member for Bolton North East (Mr Crausby) for having mistaken his constituency on the Floor of the House last month.

[Roberta Blackman-Woods]

Will the Minister say whether she has visited the north-east to look at the impact of the dreadful Budget on that area, and to refresh her geography at the same time? Perhaps more significantly, has she asked her officials to look at the impact of the Budget on the north-east, and to come up with measures that will support growth in the region?

[Miss Smith]

If the hon. Lady had let me press on, she would have heard the answer to much of what she asks a little sooner. Let me reassure her that I have often visited the north-east, although not since the Budget, so I look forward to a chance to do that, perhaps in the next recess. As many Members have said, it is a fine region and a great place that we should all seek to support.

Let me return to the matter in hand. In the Budget, the Government made it clear that they have three priorities: first, the creation of a stable economy; secondly, a fairer, more efficient and simpler tax system; and thirdly, reforms to support growth. The 2012 Budget, together with the national infrastructure plan that we published in last year’s autumn statement, set out the Government’s latest steps towards achieving those priorities, based on a model of sustainable and balanced growth, including, of course, in the north-east.

As hon. Members have made clear, the north-east faces difficult challenges. It remains, however, a significant contributor to the national economy, and I would like to reiterate and highlight the numerous good news stories that have been mentioned and involve companies that are already investing in the north-east and creating jobs for people in the area. For example, the Japanese automotive company Vantec has created 230 new jobs and secured 800 existing posts in Sunderland. Nissan has announced the creation of 225 jobs at its Sunderland factory and 900 more with its British suppliers. Both companies have been pledged money from the regional growth fund, which illustrates the difference that that initiative makes on the ground. I join other hon. Members in celebrating the relighting of the blast furnace at the SSI Redcar steelworks, which my hon. Friend the Member for Redcar (Ian Swales) mentioned earlier in the debate.

The reforms set out in the Budget will give businesses and individuals in the region a further boost on top of those private sector initiatives. Corporation tax will be cut by an additional 1% on top of the cuts announced last year. From April this year, the rate of tax will be reduced to 24%, and it will ultimately fall to 22% by 2014—a competitive rate when we consider our competitors around the globe. Let me reiterate that the Budget increases the personal tax allowance by £1,100, which will take 34,000 people in the north-east out of tax altogether. It also increases the Growing Places fund, which will provide additional funding for the infrastructure that is needed to unlock developments that lead to jobs and growth. Local enterprise partnerships in the north-east will receive a further £11 million.

I also confirm that Newcastle has been selected to become a super-connected city. I do not sneer at that; hon. Members may fail to welcome it, but the city will receive up to £6 million of funding to deliver ultra-fast broadband to residents and businesses, which is valuable. On top of that, the Budget includes investment of almost £28 million in stalled development projects within the north-east.

Hon. Members were keen to talk about capital spending in percentage terms, but let me provide some absolute terms and mention £4.5 billion for the intercity express programme; £260 million for the new Tyne tunnel; £57 million for the Tees valley bus network; £350 million to reinvigorate the Tyne and Wear metro; and £82.5 million for a new Sunderland bridge, which perhaps hon. Members will welcome.