Industry (Government Support)

Sharon Hodgson Excerpts

Wednesday 16th June 2010 Commons Chamber

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

I am thrilled to be able to welcome you to the Chair, Madam Deputy Speaker. I congratulate the hon. Member for Bracknell (Dr Lee) on his very fine maiden speech. Humour is welcome in the Chamber, especially today in such a serious and important debate, and I am pleased to be able to contribute to it.

People often talk about the north-east of England as the industrial engine room of Britain, or at least they used to. The 1980s put an end to that, unfortunately. A whole generation of workers were left without jobs by a Conservative Government who did not even see fit to try to reskill them, and told them that their “unemployment was a price worth paying”. That is fine and well when you are not the one paying it.

We were not “all in it together” when I was growing up in poverty in the north-east in the 1980s, just as again we will not be all in it together if the Prime Minister and his Lib Dem hatchet men wield their axe with impunity, as the north-east and our constituents will once again suffer the most. It took time—13 years of a Labour Government in fact—to put my own region, the north-east, back on the map as the place to be if someone wants to do business, to innovate and to manufacture—so much so that, just as the north-east led the industrial revolution of the 19th century, it is also now leading the new green revolution of the 21st century.

I want to talk about the successful industries in my constituency and the wider region that are fine examples of that. It is clear that there are three reasons why we have a success story to tell. The first is the tenacity, skills and determination of the work force. The second is the co-ordinated work that has been done by the RDA, One NorthEast, and the ongoing commitment to the region by major manufacturers such as Nissan. The third is the support of the Labour Government for the steps taken to establish the region as a green economic zone.

Members do not just have to take my word for it. The North East Chamber of Commerce said only last week when talking about the north-east and exports that

“this simply emphasises the importance of continued Government support for new and existing exporters, even in the face of large scale public sector cuts.”

Therefore, I am hoping that today the Minister will be able to assure me that my constituents are not going to lose the level of strategic support from the Government and from One NorthEast, in particular, that our economy needs to stay strong and to carve out its own niche in the economy of the 21st century.

I was delighted to hear in Prime Minister’s Question Time last week that Nissan will still receive the grant—the Secretary of State for Business, Innovation and Skills confirmed it today—which will enable it to build the new LEAF car at its Washington plant in my constituency. I was also grateful to my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) for using both her opportunities two weeks running at PMQs to raise that issue not only on behalf of me and my constituents, but on behalf of all right hon. and hon. Members in the north-east. She was able to force an answer from the Prime Minister at the earliest opportunity. This issue has major implications for all north-east Members, as we all have constituents who rely upon Nissan for their jobs, businesses and livelihoods.

The motor industry creates over £1 billion a year in value for the north-east economy and the 260 companies in the sector are estimated to employ 26,000 people across the north-east. The production of the Nissan LEAF will bring investment of £420 million to the economy and will maintain about 2,250 jobs at the plant. However, Nissan is not the only low-carbon motoring success story in my constituency. When Tony Blair visited my constituency in February 2007 and opened the Smith Electric Vehicles new production facility in Washington, he said:

“This will be a company that will really make its presence felt not just in the North East, but actually throughout the world”.

I am very pleased to say that he was not wrong. The company has worked with major car manufacturers such as Ford on concept vehicles, and has repeatedly secured business from companies such as Sainsbury’s and TNT. The company has weathered the recession, and is now making further inroads into Europe, with new product launches all the time.

There can be no doubting the importance of low-carbon vehicle engineering and its central role to the economy of Washington and Sunderland West. It is estimated to contribute over £500 million to the wider regional economy. Without Nissan, we would have struggled to attract businesses in the supply chain, many of which have set up a manufacturing base in the north-east. The company is estimated to provide around 13,000 manufacturing jobs in total in the supply chain. Although I am pleased that the Government will go ahead with the grant to Nissan, I cannot help but wonder why they ever thought about taking it away in the first place. The grant for Nissan to produce the new LEAF in Sunderland was delivered thanks not only to the company’s commitment to the region, but because One NorthEast pushed for ultra low-carbon vehicle manufacture across the region.

A cursory look at the latest edition of The Sunday Telegraph makes it clear that plans are afoot to scrap all nine regional development agencies. That has been confirmed by the Government today. That is despite us being told just a few weeks ago that where RDAs work they would remain. In yesterday’s edition of The Journal—today we have had it clarified—I read that the RDAs will be scrapped but that a new body will be formed in regions where they can be justified, such as, I would imagine, the north-east. What is the point of that—dismantling one body that is doing the job perfectly well and replacing it with another, just so that it can have a different name? Talk about bureaucracy and wasting time and resources.

Whenever I speak to local politicians, business leaders and entrepreneurs in the north-east, I am told the same thing, which is that One NorthEast is working well as it is. During my time serving on the North East Regional Committee—that is another thing that the coalition Government have decided to scrap—I heard glowing reports in our evidence sessions from a diverse range of individuals and organisations about the valuable work of One NorthEast. The only reason that I can see for it to be scrapped is an ideologically driven one; this is about a commitment to making cuts, regardless of whether or not those cuts are needed.

The case I am making is not just bluster from those of us in the north-east who believe that the region needs a strong voice, because PricewaterhouseCoopers estimates that for every pound invested by regional development agencies the return for the economy is £4.50—I reckon that the differential is even greater for One NorthEast. We know, too, that One NorthEast has played its part in the creation of more than 160,000 jobs. It is also vital to note that when jobs have been lost in the north-east, One NorthEast has led the response and taken the initiative to get people back into work as soon as possible. Therefore, the Government are not only taking away a proven job-creation scheme at a time of public sector cuts, but scrapping one of the most effective means of support that newly redundant workers have.

There is no reason why we cannot continue to improve the long-term prospects of the region’s manufacturing base, but it seems clear that removing the strategic level of planning and support that One NorthEast provides would be counter-productive. I wanted to say a lot more today, but our time has been curtailed so I shall merely say that I look forward to hearing the Minister’s response.