Oral Answers to Questions

Debate between Tom Blenkinsop and Lord Wharton of Yarm

Wednesday 22nd February 2017 Commons Chamber

[James Wharton]

As always, DFID Ministers would be delighted to meet parliamentary colleagues. I am sure we would be happy to arrange an appropriate meeting, and I can assure the hon. Lady that we are looking to invest in long-term economic prospects in Montserrat, as elsewhere.

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

7. What recent assessment she has made of the humanitarian situation in the Donbass region of Ukraine.

Tees Valley Inward Investment Initiative

Debate between Tom Blenkinsop and Lord Wharton of Yarm

Wednesday 15th June 2016 Commons Chamber

[James Wharton]

The hon. Gentleman makes an important point. Teesside is of course internationally respected for the chemical processing industry; not just NEPIC but CPI and the work done in that sector provide good jobs, long-term investment and real opportunity to attract more. We always want to continue to support that. As part of the process of looking for international investors, we are looking to support those organisations to see where more investment can be brought in. The chemicals and processing industry will form part of the story going forward of the sites that the MDC will become responsible for and the work it is doing.

[Tom Blenkinsop]

The Minister mentions CPI and its importance to the local and national economy. Can he comment on my question about MPI and the steel catapult: do the Government intend to go forward with that? In our area we have the capability of R and D closely associated with the former blast furnace. That could provide the inward investment necessary to get that industry going again in our locality.

[James Wharton]

I will come on to talk about that. I just want to address the second part of the question from the hon. Member for Hartlepool (Mr Wright). He asked about offshore wind, and significant approvals have been given for offshore wind not far off the coast of Teesside. This will present a real opportunity to bring investment to our area. I know that live discussions are taking place with companies in the Tees valley about how they can be part of that supply chain and bring jobs and investment to our area through being part of the processes of delivering that potential driver of our economy. I have had discussions with some of those local companies, and I am supporting them as far as I can. Some of the discussions are of course commercially sensitive, but I also want to extend a direct offer, particularly to the hon. Gentleman, given his constituency’s interest in the matter. If there is something specific that a company in his constituency would like to see done, if there is a meeting that it would like the Government to attend, or if there is any assistance that I can give, he need only call on me to arrange it. If the Government can support or help, I will join him and do everything I reasonably can to persuade people to take the right decisions.

The hon. Member for Middlesbrough South and East Cleveland asked about the Materials Processing Institute. There is a bid from that organisation for a catapult similar to the one we have already mentioned, but my understanding is that that bid is not sufficiently strong at this time. However, despite that having been the initial decision and recommendation by officials, it is my intention to ask the Secretary of State for Business, Innovation and Skills to look personally at that and to ask officials whether improvements or changes could be made that would enable that to be delivered.

The Government have to take these decisions on a sound basis, and they have to assess things fairly, wherever in the country they might be, but if there is potential and opportunity, it is important that we ensure that that has been explored to the fullest degree. If there is something that can deliver benefits and improvements to our area and bring investment and jobs to our communities, I want to see it explored and every avenue considered—certainly before any negative decision is made—in the hope that a positive decision might be forthcoming. I am happy to give a commitment to ask for that work to be undertaken, and I will do so following the debate this evening. I do not know what the outcome will be, but whatever happens with the individual projects of which we have spoken and with the individual recommendations in Lord Heseltine’s report on the economy of the Tees valley, we have great potential and I am confident that we have a great future.

The Evening Gazette newspaper is running an Invest in Teesside campaign, recognising that the more we talk up our area and highlight the opportunities that exist there, the more we can jointly achieve and drive forward for the benefit of its economy. I look forward to working with hon. Members across the House—indeed, I have little choice other than to make that offer in relation to the Tees valley. I look forward to working with the Evening Gazette, with local businesses, with the local enterprise partnership, with the new combined authority and with the mayor—when they are elected next year with the exciting range of powers that they will have, whoever they might be—to drive forward investment in Teesside.

Our area is very well placed to profit from many of the exciting things that are happening in the world and from the great skills of the people who live in our communities. We have a duty to work together to deliver on that, but that does not mean that the Government will acquiesce in every request, or that we will do everything that is asked of us immediately. It means that we will properly assess and consider the situation, and think long and hard about the right approach to take. We will build a broad consensus on what can be done for the good of the economy of our area. That work is well under way, as we can see in the mayoral development corporation and in the devolution deal that has been agreed. I hope we can also see that in the tone of this evening’s debate.

[Tom Blenkinsop]

I repeat a question I asked in my speech about an investigation into the remaining assets on site at SSI, including the continuous casting and basic oxygen steelmaking equipment. I also asked whether there would be an investigation into the blast furnace itself. This is important because it would enable us to establish the degree to which the assets might be redeemable or saleable. It would also give the official receiver an instruction about how those assets could be used in future.

[James Wharton]

Given the specific nature of the hon. Gentleman’s question, I will seek to address it. The site is in the hands of the official receiver, and the Government are talking to them. We are working to ensure that the site is handed over in the best possible circumstances that can be achieved, given its sad recent history, and when that happens we will of course seek to maximise the use of all the site’s assets and the land, including any assets that remain on it. That will primarily be channelled through the development corporation, which will drive that process. It is in all our interests that that proper work is done in the appropriate way and at the appropriate time.

I am absolutely confident that the Tees valley has a bright future ahead of it. We have the most incredible people, businesses and opportunities. Given the things those people and businesses are doing and the way in which the leadership in the private and public sectors is pulling together in the interests of the broader local economy, these could be exciting times. We have faced a difficult year, but I hope that by working together we can ensure a brighter future for all our constituents.

Question put and agreed to.

Scotland and North-east England Post-2014

Debate between Tom Blenkinsop and Lord Wharton of Yarm

Tuesday 4th March 2014 Westminster Hall

[James Wharton]

I will not give way to the hon. Gentleman again, because we are short of time.

After Scotland votes to remain part of the United Kingdom, as I am sure it will, my concern is that the north of England will face a challenge. While we do everything we can to support the country, the economy and its growth as a whole, we must ensure that we do not allow an unfair competitive advantage that would damage the economies of the people and constituencies that we represent.

[Tom Blenkinsop]

The hon. Gentleman and I know that the growth of Teesport in our region is massively dependent on exports to the Scottish market. For example, last January, Bunn Fertiliser announced that it would use Teesport to export not only to its English sites, but to the Scottish market. Can he give any other examples in our area of the Scottish market being so crucial to Teesside?

[James Wharton]

The examples are legion. The entire chemical processing industry and our engineering expertise on Teesside are in competition for jobs and investment with similar industry in many parts of Scotland. That goes not only for Teesside, but for Tyneside, Wearside, County Durham and the north of England as a whole. It is important for us to work together, and to improve the economies of all such areas where we can. We must not allow unfair competition that would unjustifiably and unfairly penalise the people we represent in the north of England.

Where would that take us? If Scotland voted to remain in the United Kingdom, the greater debate would be the one that took place in the north of England. The push would be for further regionalisation. We had a vote some years ago on whether we wanted a regional assembly, and the proposal was rejected in an outstandingly clear result. My concern is that that movement and impetus would arise again, out of a feeling of unfairness about Scotland being able to compete in a way that disadvantaged the north of England. The push towards regionalisation in England would start again—it would start in the north—and it is not something that I want to see.

Scotland voting no, if handled in the wrong way, could lead to further regionalisation, damage and break-up in the United Kingdom. I have no objection to powers being given to regions, but I do not want wholesale transfers away from our existing united model, which I support. We resoundingly rejected a regional assembly, but this could open the door to that debate starting again. The people of the north-east do not want a regional assembly, and the people of England do not want an English Parliament—that is not a route that the United Kingdom should go down—but I fear that a no vote, if handled in an improper way, might allow the creation of unfair competition and disadvantage for areas such as the north-east and the north-west, and for constituencies similar to mine, leading us down a path that would do irreparable damage in the long term to the United Kingdom.

I welcome the debate, and we will hear much more on the subject in future. I congratulate the hon. Member for Sedgefield on raising such an important issue. I hope that, whoever is in government and whatever the situation at the time, people in London and in Westminster will appreciate the significance of further devolution to Scotland if it unfairly disadvantages the north-east.

NHS Funding (North-East and Teesside)

Debate between Tom Blenkinsop and Lord Wharton of Yarm

Tuesday 5th November 2013 Westminster Hall

[Tom Blenkinsop]

My hon. Friend has mentioned that in Health questions and in the Select Committee on Health, of which he is a doughty member who provides a lot of input. Someone from a poorer socio-economic background has a lower likelihood of reaching the age at which they would receive more funds under the allocation—it would probably never happen. This becomes a self-defeating, vicious circle of a lack of investment in people who might need it the most.

As I was saying, the proposals in a recent working paper issued by NHS England on the allocation and the indicative target allocation would have led to a per capita reduction in funding for CCGs throughout the north-east, and my constituents would have lost out. Meanwhile, CCGs in the south would have had a per capita increase; for example, those covered by Coastal West Sussex CCG would each gain £115, those in Hailsham £136, and those covered by South Eastern Hampshire CCG £164. That is clearly not a one-nation NHS. I received ministerial assurances that that formula was not ultimately used for 2013-14, but a response to a parliamentary question that I asked confirmed that

“No proposals or decisions regarding allocations for 2014-15 have yet been made.”—[Official Report, 22 October 2013; Vol. 569, c. 76W.]

The hon. Member for Stockton South (James Wharton), who is in the Chamber, told the Evening Gazette on 23 October that it was indeed “right” that NHS England was considering reducing health funding for his constituents and the north-east, but—

[James Wharton (Stockton South) (Con)]

The hon. Gentleman has either misread or misremembered, or perhaps the Evening Gazette did not give a full account of my comments. What I said was right was having an independent funding body that makes decisions based on a formula that is consulted on, and it is right that age should be a factor. That does not mean that deprivation should not be a factor. I recognise and welcome the debate, and the effort that hon. Members in all parties are making to put the case that deprivation has an impact on health outcomes and should be considered as part of the funding formula. I recognise, however, the independence of NHS England, and I support it being an independent body. Does he recognise its independence?

[Tom Blenkinsop]

I recognise the health outcomes and needs of my local constituents; as their representative, I will voice those views and needs vociferously. I take on board, however, the hon. Gentleman’s comments and his desire to see deprivation recognised in the allocation of funds. On the future allocation for CCGs, I hope that he will advocate to the Minister on behalf of those of his constituents who share the same socio-economic background as me, in the way that we Labour Members do. I take his intervention in favour of those funds in a spirit of common north-eastern friendship.

Will the Minister assure us that he will urge NHS England to consider deprivation and regional health inequalities when determining funding formulae? Furthermore, will he guarantee that any funding formula used to determine allocations in 2014-15 will not leave the north-east comparatively worse off, and will not widen the north-south health divide? I thank the Minister for his time, and I hope that he will be able to provide the clarifications and assurances that my colleagues and I have sought this afternoon.

Cleveland Fire Authority

Debate between Tom Blenkinsop and Lord Wharton of Yarm

Monday 13th May 2013 Commons Chamber

[Tom Blenkinsop]

I think you will agree, Mr. Speaker, that it was such an important point that it had to be made a second time. I shall develop my response to it during my speech, if my hon. Friend will allow me to do so.

In Cleveland, the chief fire officer is exploring the possibility of spinning out the fire brigade. The whole range of fire and rescue services activity, including emergency response, is being examined for the purposes of being “spun out”—to coin a Government phrase. The proposal is being supported by Ministers in the Department for Communities and Local Government and by the Cabinet Office, which is spending over £100,000 on the legal advice that will be necessary for the pursuing of such a restructuring.

[James Wharton (Stockton South) (Con)]

Will the hon. Gentleman give way?

[Tom Blenkinsop]

I will, although Members normally inform the Member who has secured the debate that they wish to intervene.

[James Wharton]

I thank the hon. Gentleman for his generosity. He was at the same meeting with the fire authority and the chief fire officer that I attended with the hon. Member for Stockton North (Alex Cunningham). We discussed these matters then, and I think that the main concern among all the MPs who were present was to ensure that the employment rights of the people who work for the fire service were protected.

The hon. Gentleman has mentioned the organisations that he thinks are backing this proposal. Will he acknowledge that it is the Labour-run fire authority that is pushing it, and the Labour chairman of the authority who thinks that it is such a good idea?

[Tom Blenkinsop]

We understand that, under the recent regulations introduced under the Government’s own Health and Social Care Act 2012, the TUPE regulations are worth about 90 days in practice. As for the hon. Gentleman’s claim that the Labour authority is pushing the proposal, the Labour chair actually said “If we were properly funded, we would not even consider going down this route.” As I shall make clear, this is a devolved blame game initiated by Ministers to thrust a mutilation of the concept of mutualisation on the people in Cleveland.

Accident and Emergency Provision (North-East)

Debate between Tom Blenkinsop and Lord Wharton of Yarm

Wednesday 13th February 2013 Westminster Hall

[Tom Blenkinsop]

My hon. Friend makes an excellent point. It is a sorry state of affairs, and personal experiences, that people from our area are reporting. The warning signs are there, and I believe front-line staff when they say, as has been reported:

“Somebody is going to die somewhere down the line and it could be the most vulnerable, children. Families of sick people arrive at hospitals and expect to find them in a bed, but they are still outside in an ambulance.”

In fact, a tragedy has already taken place. Last year, an ambulance crew brought a patient to the hospital, but he was not officially handed over to A and E staff. Before he could be seen by a nurse or doctor, he went into a fatal cardiac arrest. The patient, who has not been identified, died at James Cook university hospital, having waited for emergency treatment for more than two hours.

The delays are obviously stretching resources all over the place; for example, ambulances from as far away as Lancashire are being brought in to cover other emergencies. I fear that, with changes in NHS provision elsewhere in the north-east and north Yorkshire, James Cook hospital’s resources might become even more stretched. Surgeries’ general reduction in their late opening times for out-of-hours appointments in some areas across the north-east is putting further pressure on regional A and Es. For example, in County Durham, 69 GP surgeries offered late opening appointments in 2011, but in 2012 that was down to 61 surgeries, which is a 7.6% drop. In Newcastle, 33 GP surgeries offered late appointments in 2011, which dropped to 24 surgeries in 2012. In Hartlepool, 15 GP surgeries offered late appointment times in 2011, but that dropped to 10 in 2012, which is a 31.3% decrease. As the Minister will admit, triage is essential, and that is enormously helped by walk-in centres in my constituency, across Middlesbrough and in Redcar, especially as regards less affluent transient populations who are often not on GP registers.

As the Minister knows following the meeting he kindly agreed to have with me and a representative of the trust, urgent care provision in east Cleveland is facing particular problems. The trust claims to be taking steps to resolve the problems, but if the issues are not resolved, I fear that in the interim—and possibly in the longer term—a reduction in urgent care provision in east Cleveland might further increase the demand faced by James Cook hospital’s accident and emergency department, as patients search for alternative treatment. To an extent, we have already seen that with the draw-down in services at Guisborough general hospital’s minor injury unit.

[James Wharton (Stockton South) (Con)]

I congratulate the hon. Gentleman on securing what is an important debate for many of our constituents. Many of my constituents use James Cook hospital—some by choice, because it is such a good hospital. The hon. Gentleman is talking about the reorganisation of services across the north-east and its impact. We have seen A and Es closing, or being focused in smaller areas to provide specialist care. How would a new hospital at Wynyard impact on future service provision for our constituents?

[Tom Blenkinsop]

I thank the hon. Gentleman for his input. A hospital at Wynyard would be an excellent provision for the region. It was planned by the previous Labour Government. That was as part of a different financial package and under a different scheme, but it was always in the Labour Government’s plans. It is good that the present Government also want that to happen. However, we are discussing current services, and the impact of the reduction in moneys on James Cook hospital and services in east Cleveland and north Yorkshire, which he will no doubt have read about in the local press.

Changes in provision for A and E departments in north Yorkshire might increase the pressures faced by James Cook hospital. In the neighbouring constituency of Scarborough, the trust has given assurances as to the future of overnight A and E services, but local people feel that there are uncertainties over the future of those services. In Northallerton, the Secretary of State for Foreign and Commonwealth Affairs, the right hon. Member for Richmond (Yorks) (Mr Hague), has been campaigning against cuts to services, particularly maternity services, at the Friarage hospital. In Malton, the minor injuries unit has been closed at weekends. I fear that if services at those hospitals are further reduced, additional demand might be placed on James Cook hospital, despite the fact that it already struggles to cope with demand.

When someone is taken to hospital in an ambulance, most reasonable people would expect them to receive care and treatment very quickly. Although I accept that demand is difficult to predict, I certainly do not expect my constituents to have to wait two and a half hours after been taken to hospital by paramedics. I do not hold nurses or doctors responsible for that; after all, more than 5,000 nurses have been cut across the NHS since May 2010. The situation is more likely to have been caused by the budgetary squeeze and the organisational changes that local NHS trusts find themselves dealing with due to the Government’s cuts and unnecessary NHS reorganisation.

I hope that my examples make it clear that there are serious problems on Teesside and across the region, and that they cannot be allowed to continue. I appreciate that the Minister is monitoring the situation with regard to urgent care staff in other hospitals in my constituency. I would be grateful if, alongside that process, he closely monitored A and E performance at James Cook university hospital. There is a very real danger that the situation could deteriorate. At the moment, the capacity for the hospital’s A and E department is 60,000 patients a year; that is what it was designed for. This year, it expects almost double that figure—105,000 patients. That is a time-bomb waiting to go off, which would have repercussions across the region.

Budget (North-East)

Debate between Tom Blenkinsop and Lord Wharton of Yarm

Tuesday 17th April 2012 Westminster Hall

[James Wharton (Stockton South) (Con)]

Thank you, Sir Roger. It is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Gateshead (Ian Mearns) on his passionate speech and on securing such an important debate. The issue is important to all of us who represent the north-east, in whichever party.

It is important to be clear that the north-east is not a basket case. It is not the end of the world and it is not a place where economic activity does not exist. There are many good signs of progress and economic success in our region. Unemployment in the north-east has been falling for the past two months, against the trend in much of the country, in what Members will agree is a difficult economic climate. There are many examples of significant good news stories, such as the relighting at the weekend of the SSI blast furnace on Teesside. That is very good and positive news, due in no small part to the sterling work of my hon. Friend the Member for Redcar (Ian Swales), who has fought long and hard to see steel-making return to that part of our region.

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

Will the hon. Gentleman also acknowledge that the work to get SSI to purchase the Corus steel plant began in the summer of 2009 and was largely due to the work of the trade union on the site, which led the “Save our steel” campaign, in conjunction with Labour Ministers, who regularly met plant representatives, unlike this Government’s Ministers, who refused to meet work forces at Rio Tinto Alcan and—these are not in the north-east—at steel sites in Kent, such as Thamesteel?

[James Wharton]

The hon. Gentleman’s generosity in wanting to ensure that everybody who played a part is adequately recognised is testament to his character. The unions played a significant role, as did the Government of the day, when the plant’s closure was announced, as have the Government of today, in delivering the success. It is something about which we can all be pleased in our region and I welcome the hon. Gentleman’s comments.

We have also received the good news that Hitachi will come to Newton Aycliffe to build trains. Nissan has announced that more jobs are being created and more work being done. In my constituency, Nifco has just opened a new factory in Eaglescliffe—a smaller but none the less significant manufacturing investment—and is already considering options for expansion because it is doing well.

More than 47,000 private sector jobs have been announced in the regional media since the last election. Articles in the press report what is said and announced, the levels of investment and the positive news, yet all too often all we hear are the negatives. I am sure that we all agree on a cross-party basis that it is important to take every opportunity to talk up our region and make it clear to anyone who is considering investing there that we are open for business and looking to do business, and that we welcome investment and we want to see the jobs and growth it would create.

Business Rates (North-East)

Debate between Tom Blenkinsop and Lord Wharton of Yarm

Tuesday 25th October 2011 Westminster Hall

[James Wharton (Stockton South) (Con)]

It is a pleasure to serve under your chairmanship, Mr Amess. I congratulate the hon. Member for Sunderland Central (Julie Elliott) on securing the debate.

It is not unusual, as a Conservative Member for a constituency in the north-east, to feel a little outnumbered, and today the odds are perhaps slightly on the side of the Opposition, as far as weight of contribution is concerned—although perhaps not quality; we shall find out about that.

The way we fund local authorities is very centralised and has been for some time. The OECD says that we have less funding autonomy for local government than France, Germany, Spain, the United States and Japan. That is not sustainable, and successive Governments have considered, and commissioned reports about, ways to move funding, to give local authorities more responsibility over what happens in their area, to allow them to benefit from success, and to transfer responsibility, so that local democracy can be more effective in holding to account the representatives who run an authority. More than half our local authority funding, on average, comes from central Government grant—money redistributed through the Treasury.

What the Government appear to be trying to do is to reverse that trend. We have seen in areas other than funding, such as localism legislation, that councils are going to have a general power of competence. Local authorities will be empowered to do things that are in the interest of the communities that they represent. In doing that, there is a need to reform funding and the way in which local authorities receive their funding, so that they will have autonomy, freedom and the local accountability that comes with such autonomy and freedom. I am prepared to believe—giving credit to the Government—that that is the foundation for the proposals on business rate retention.

Local authorities collect about £19 billion in business rates annually. That goes to the Treasury, which redistributes it. As the hon. Member for Hartlepool (Mr Wright) pointed out, some authorities get more back than they put in. That is quite right, because there is a discrepancy in the ability of different local authorities to raise rates from the existing infrastructure in their areas. The challenge for Government is to find a fair way of tying future growth and so incentivising councils to promote growth in their authority area without unduly disadvantaging areas that will find it more difficult to do so.

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

Does the hon. Gentleman not think that the Government’s policy at the moment is slightly counter-intuitive, given that the Tees valley local enterprise partnership has a manufacturing-led sector growth policy? If manufacturing per hectare brings in only a fifth compared with retail, does he not think that the new policy could hinder the sector growth policies of business-side LEPs?

[James Wharton]

The hon. Gentleman makes a valid point, and I will touch on that later in my brief comments. We are consulting on how the policy would work, and there is a challenge for the Government to ensure that the areas that promote a manufacturing base as the driver for economic growth are not disadvantaged. It is a valid point, but we must not jump the gun and assume that it will be a problem, because we do not yet know what the framework will be—it is a matter for consultation.

There are weaknesses with the current system, such as accountability, which I have touched on, and a weakness in the freedom of local authorities to respond, because they are so dependent on central Government grants. We have seen, over many years, the problems of the central Government grant funding system, which include its complexity and how it often plays out in ways that cannot be easily predicted and are not necessarily to local benefit. There is also a problem regarding the incentive that it gives to some local authorities and councils, which may perceive that they can get more benefit for their area by lobbying central Government for more support than by focusing on promoting growth and improving their area.

What are the Government doing? The first and most important point, which some hon. Members, to give them their due, have touched on this morning already, is that there is a consultation, which is an opportunity to feed in, talk about and outline proposals, and to ensure that the concerns of local authorities in places such as the north-east, where there is a genuine fear that they may be disproportionately disadvantaged by any move towards local retention of business rates, are properly taken into account.

Regional Development (North-East)

Debate between Tom Blenkinsop and Lord Wharton of Yarm

Tuesday 22nd March 2011 Westminster Hall

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

At the risk of making this Adjournment debate appear like the alternative Budget for the north-east—or of the hon. Member for Middlesbrough South and East Cleveland—I warn the Minister that the breadth of coverage of this speech will be large. However, I am sure, as I know my hon. Friends are, that such a diverse speech can only partially cover the wide sectoral diversity that has been achieved in 13 years of patient investment in the region by the previous Labour Government.

Let me give the Minister a brief overview of some of the issues of concern that face my region. I hope I speak for all parliamentary representatives of the north-east region when I say that a north-south divide still exists in England; it is deep, long term, continuing and persistently separates a nation on the basis of where an individual is born and raised, without due regard to the exceptional talent at hand within the boundaries of the Tees and the Tweed. Indeed, the current economic gap—which is perpetuated by the current economic climate—between the north-east and the rest of England is likely to widen, with the serious economic and social consequences that that entails.

PricewaterhouseCoopers’ analysis of the comprehensive spending review indicates that the north-east will be disproportionately hit by spending cuts and job losses. Unfortunately, the coalition Government’s hope that private sector growth alone will fully compensate for such consequences ignores broad economics and, therefore, looks highly unlikely. Indeed, with the Government doing less—or rather, intervening less—in the north-east in particular, the economic position of the region will be made far worse, not better. The coalition Government are not supporting with adequate institutional arrangements or money their declared aim of rebalancing. Rebalancing without the support of adequate resources is a recipe for failure.

Ministers have consistently disputed the need for proactive regional policy or strong Government intervention. That stands in stark contrast to what happened this time last year, when the parties in the current coalition, unaware of the then Labour Government’s actions behind closed doors, called for direct state intervention in Teesside Cast Products. They disingenuously confuse and coalesce the logic of the “crowded-out private sector” with a laissez-faire, sideline observing position, away from the crucial brokering of integral business deals necessary for a burgeoning and diverse manufacturing sector.

For my sub-region within the north-east, “primers”, or large industrial foreign and domestic investments, still dictate the pace of a regional economy outside a city. They historically work in our region, and our region, more than most in England, wants them. The new orthodoxy, rooted to agglomeration, relies on the purely local—almost parochial—delivery of economic planning. I do not decry that in its entirety, but for local partnerships with very limited resources, manpower, expertise, clout, cash and perspective, to deliver will be difficult and will only get more difficult.

Localism and equity are not the same thing. If the objective is to ensure that northern authorities have the resources both to support their local economies and to provide local public services, the greater the extent to which the business rate is devolved, the more extensive the equalisation scheme that would be needed. Such a policy approach remains spatially blind, with absolute priority given to the destruction of existing regional economic structural drivers, such as the regional development agencies, which is simultaneously delivered cap-in-hand with grossly exaggerated local government budgetary cutbacks in the north-east. It is evident that, for this Government, deficit reduction takes primacy over economic rebalancing and any notion of localism.

RDAs were emasculated before any local enterprise partnership was fully set up, allowed to root itself or to be fully financed in and around the expectations of the present Government. That is not the fault of the LEPs—in my case the Tees Valley LEP—because the structures, finance and guidance were delivered to them by the Government. A plan to allow LEPs organically to transform themselves and direct themselves—or perhaps that is the lack of a plan—has been the Government’s prevailing philosophical hobby, rather than occupation. However, that is a smokescreen. It only proves again that deficit reduction takes primacy over any economic rebalancing, and trumps any new trumpeted localism for this Government.

If we are to make LEPs work, they must be properly funded and have access to funds. They should not have to bid with raffle tickets for funds from a regional growth fund—such a fund is less than the total budget for a still non-defined mutualisation model for post offices—that is suffering under the gross weight of demands. LEPs need a proper funding apparatus, whether localised or national in source.

The rush to condemn the RDA within the crucible of the coalition’s gaze has been pursued with a vigour that borders on an almost McCarthyite zealotry. On 12 October 2010, the Minister said:

“The economic divide between the Greater South East and the rest of England is as wide today as when the RDAs began their work. That by any measure is a failed policy.”

The case against One NorthEast totally and utterly reduced it to a list of failings, without due or proportionate regard to its obvious successes, which, unfortunately, did not come to light until after it had effectively been dismantled. Many of the coalition’s policies, including the new homes bonus and impending reforms to the business rate, are likely to favour the south over the north, and the north-east in particular. Recent spending decisions in key areas such as science and technology largely favour a strong southern bias.

The bias in research and development towards the south is cumulatively increased when areas that produce traditional industrial products, such as Teesside, require further state investment, such as grants for business investment schemes, job creation programmes, and public sector relocation. If that investment is not forthcoming, the north-east will remain behind the curve in comparison with its sister regions in England.

[James Wharton (Stockton South) (Con)]

The hon. Gentleman speaks very passionately on the subject; none the less, I find it hard to agree with some of his comments. He says that the north-east is falling behind, but since mid-August there have been announced almost 26,000 new private sector jobs, investment worth some £9 billion and private sector contracts worth £1.5 billion. The north-east economy is booming in some areas, and that should be welcomed. Far from falling behind the rest of the country, we are showing all the signs of powering ahead, rebalancing our regional economy and getting the private sector up and running again.

[Tom Blenkinsop]

The hon. Gentleman is a strong advocate for Stockton South and a worthy adversary indeed. He is right: Teesside has a fantastic industrial economy and many new projects have opened up across the region, in his own patch as well as my own. However, those jobs will be created over a certain time period. Many of those were to have been announced before the general election, but for a number of reasons the announcement was halted until after the election was called. It would be false to say that One NorthEast did not have a prime role in bringing those businesses to our region. As a former union official in the steel industry, I know how much One NorthEast has worked with both Governments in trying to get Sahaviriya Steel Industries into the region. What I am trying to say is that a list of failings was produced but there was never an equitable list of positives and negatives when we were assessing RDAs.

We strongly require support for the emergence of a range of different financial sources for infrastructure development, including the green bank, and a greater localised and decentralised source of capital explicitly held for manufacturing entrepreneurship. That will allow risk-takers to take those industrial strides around the existing capital and skills inherent in the cultural demographics of our region. I hope that, unlike the Secretary of State for Energy and Climate Change, the Minister will consider a manufacturing green bank that works with the agencies to deliver the technology and product design that will give us green technologies—working and operating out of Edinburgh, the Secretary of State’s preferred location—rather than holding debates on “green” ISAs or other financial products that simply have the term “green” before them. That green finance must be aimed at manufacturing and not solely at financial high-street products if the Government’s own agglomeration policy is to be pursued for manufacturing.

However, I understand where the Government are coming from on industry. Agglomeration is fine, but industrialised clustering works even better, as we have seen in Germany and the Netherlands, when industry has its own access to funding to implement its own decisions, or when financiers are educated in industry and are located nearby, as documented in yesterday’s Financial Times. However, that connection between finance and industry is still vague and I very much doubt that Ministers at DECC and the Treasury are concerned about it at present, as both Departments appear to have a more obvious preoccupation with carbon floor pricing than with industrial finance. Carbon floor pricing, which I will discuss later, is perhaps the most important issue for Teesside.

I also challenge the Government’s huge assumptions about another topic that I will discuss later: export-led growth. It is obvious to any man and woman in the street that all Governments at any point in time want export-led growth. A healthy balance of trade is integral to a modern industrialised economy. However, we have to be vigilant about the economic mood music emanating from Asia at present.

Enterprise zones—an issue particular to my area—are the Thatcherite reprise of this Government. The enterprise zones policy is not wholly bad, but previous examples have shown that they are best used in certain sectors such as retail and finance. Our financial capitals are established overwhelmingly in London, although Leeds has developed in that regard in recent years. A previous example of enterprise zone growth in the north-east is evident at Gateshead’s Metro centre. However, what we do best on Teesside is not best suited to enterprise zones, and they ignore the broader view of industrialists in the port and chemical sectors.

I also want to look at particular areas in my constituency, such as our local high streets in Middlesbrough, Guisborough and East Cleveland.

[Tom Blenkinsop]

I thank my hon. Friend for his intervention and I have to agree with him. Obviously, there are benefits from enterprise zones. They bring a certain percentage of business in, but they also displace existing business. I will go into that issue in more detail later.

What can we do for small and medium-sized businesses and the self-employed? I have already talked to the Minister about that, and I believe my comments were received very positively. Ultimately, however, the direction of the north-east must be viewed from the perspective of the north-east. Until our region has more command of its economic destiny, it will continually have to bid against other English regions and Scotland and Wales for attention and investment.

Economic development in the north-east is a subject of deep concern to my constituents and the people of the wider region. Indeed, it should also be of concern to all the people of the UK, because without shared growth our country can never travel the road to prosperity. In the coalition agreement last year, the Prime Minister and the Deputy Prime Minister said:

“We both want to build a new economy from the rubble of the old. We will support sustainable growth and enterprise, balanced across all regions and all industries”.

That was and is an admirable pursuit, but my constituents are not seeing words being translated into action. In contrast, despite the north-east having the highest proportion of workers in the public sector of any English region, the Conservative-led Government have vague plans for growth in the north-east’s private sector, while simultaneously attacking its public sector base and the businesses—small and medium-sized, as well as self-employed—that thrive as a result of that public spending. The Prime Minister and the Deputy Prime Minister may have likened the economy under the last Government to “rubble”, but the last Government understood the regions and gave real teeth to regional development.

For example, the north-east regional development agency—One NorthEast—was one of those rarest of things: a public body with almost unanimous support that attracted praise from public and private sectors alike. However, a subtle criticism I have of the agency is that the region should have capitalised on the opportunity that it provided to take strides on its own. With a regional assembly that is democratically legitimate, our region would certainly be in a stronger position to attract business as well as to retain it, rather than witnessing what we are seeing in some areas: a partial and gradual leakage of industry from our region.

Praise for One NorthEast is well deserved. An independent report by PricewaterhouseCoopers showed that regional development agencies return £4.50 to regional gross value added for every £1 spent, if allowance is made for the expected persistence of economic benefits. Furthermore, the National Audit Office’s independent performance assessment concluded that One NorthEast was performing strongly. So why has it been abolished, especially after the Business Secretary said that the regions could decide what best suits their area? The only answer can be that the Conservative-led Government’s business policy is dictated from an informed position, but one that looks from London. It is a policy that will work, but not for all, and is ultimately submerged in an ideological fervour. It is formed not by regional or local opinion but Whitehall dogma. However, I reiterate that I do not believe that Ministers are stupid or ignorant of economics; they are simply applying a view that does not have a kernel within my region, and which does not redistribute wealth.

One NorthEast is the body that helped to set up and support the North East of England Process Industry Cluster, which made £1 billion gross value added in six years with just £3 million of public support. However, in addition to the scrapping of One NorthEast, we have now seen the abrupt end to the emergency package devised for Teesside in the wake of steel job losses. That fund targeted jobs growth in the chemicals sector, particularly in the growth area of agri-chemicals, as an alternative to lost steel jobs. Obviously, we have had the excellent news of the investment by SSI at Teesside Cast Products. However, that emergency jobs scheme has been axed, even though it is still allocating work and has £18 million in uncommitted funds that could have been used to support and enhance the objectives of NEPIC members’ companies.

Now we hear that a long-standing and successful job creation fund, which in the past decade has helped to create many hundreds of thousands of jobs in areas such as the north-east, is to be axed by stealth. That fund—the grants for business investment scheme, under the name regional selective assistance—has been responsible in the north-east for pumping £112 million into poorer parts of the region, helping to create 25,000 jobs. In various forms and under successive Governments, the scheme has been in place since the late 1960s. It survived the Heath years, the 1970s Labour Governments and even the Thatcher and Major years, as well as the following Blair and Brown Governments. Despite differences of economic policy, all those Administrations recognised the value of regional selective assistance. Throughout that whole post-second world war period, that element of consensual “Butskellism” remained and only now has it been totally dismantled.

The Chancellor has announced the creation of at least 10 enterprise zones across Britain, in a scaled-down revival of Margaret Thatcher’s flagship urban renewal programme of the 1980s. The Chancellor hopes that those zones, which will offer simpler planning rules and corporate tax breaks, will accelerate development in areas that already have high growth potential. They will not simply be created in areas of physical decline. However, sceptics believe that they could be ineffective and that the appeal of the tax breaks will be limited by the fact that only £100 million of Government subsidy will be available, spread over four years.

The Chancellor’s announcement is part of a wave of initiatives to be unveiled by Ministers before the Budget tomorrow, all of which are intended to prove that the Government have a coherent strategy for growth. He will announce at least 10 zones, which are expected to be chosen by Ministers on the basis of submissions by councils and business leaders. To address fears that this is a top-down initiative that might sideline town halls and local enterprise partnerships, the Chancellor will say that local authorities will be able to keep all of the business rates that they raise in the new zones.

However, retention of the business rates will almost certainly benefit a number of London and south-east areas. In fact, the special interest group of municipal authorities, or SIGOMA, analysis of 2009-10 settlement-based grants showed that the top 10 councils to benefit are Westminster, City of London, Surrey, Hertfordshire, Hillingdon, Hampshire, Camden, West Sussex, Kent and Essex. The London boroughs of Westminster, Hammersmith and Fulham, Kensington and Chelsea, and the City of London will gain £1.6 billion in total in local spending, whereas the north-east, north-west and Yorkshire will lose out by £760 million in total.

The Chancellor insists that the coalition’s initiative will shift growth from London and the south-east to other regions, and he says that it contrasts with what he claims was Labour’s attempt to micro-manage the economy. He told his party’s spring conference in Cardiff:

“Our approach is different: tax breaks and less bureaucracy, not quangos and more regulation.”

[James Wharton]

As I sense that the hon. Gentleman might be moving on in his speech, it is important to put very clearly on the record that, although he and I disagree about enterprise zones, there is a great deal of support right across Teesside for the campaign to get an enterprise zone in our local area. That support comes from not only me and the hon. Member for Redcar (Ian Swales) as local MPs but Ray Mallon, the mayor of Middlesbrough, and business people such as Steve Gibson, who is the chairman of Middlesbrough football club, as the hon. Gentleman knows. Moreover, the local enterprise partnership is extremely keen to secure an enterprise zone. It is important that the Minister hears those comments, which should be on the record. We really want an economic zone, although I acknowledge that the hon. Gentleman, who represents a neighbouring constituency, has a different view of the success of such zones from me.

[Tom Blenkinsop]

Yes, I know Steve Gibson—I am a season ticket holder at Middlesbrough FC. I partially agree with what the hon. Gentleman has said. Local authorities, business leaders and LEPs have to work within the frameworks and structures that they are given, and they have to make those frameworks and structures work. However, this is a broad debate about the policy, and if I did not talk about the economic implications of the policy, I would not be doing a proper service to my constituents.

Reviving enterprise zones will prove ineffective, even if that aim is achieved at less cost than that of the 1980s model and the zones are redesigned for today’s circumstances. The Work Foundation and the Centre for Cities think-tanks argue in recently published reports that zones created under the now Lady Thatcher and Sir John Major created too few jobs and were too expensive. The Work Foundation has said that such zones typically created only a three-year boost before areas lapsed into depression, and that up to four fifths of jobs were simply displaced from other areas, often within the same town.

London’s Isle of Dogs—now Canary Wharf—was among the most successful of 38 enterprise zones created between 1981 and 1996, but others in places such as Middlesbrough, Speke, Hartlepool and Swansea left a less impressive legacy. The EEF manufacturing association has said that the policy sounds like a return to the past. The rhetoric deployed by the Government indeed sounds attractive, but I signal real caution and suggest to them and to supporters of enterprise zones that they reacquaint themselves with Teesside’s history in the 1980s. Enterprise zones offer potential relief on local business rates, reductions in corporation tax or national insurance contributions, tax credits or capital gains allowances on investment in premises, and the relaxation or fast-tracking of planning processes and capital expenditure subsidies. Did that work in the ’80s throughout the north-east, and throughout all sectors and, more importantly, will it work now in 2011? I had a look at my old economics notes from Teesside university, and all the evidence from the past suggests that enterprise zones did not work, and possibly will not again.

Locally, Middlesbrough’s Riverside Park, which has since been very successful, was designated as an enterprise zone, but all that happened was a rush to get speculative office development off the ground with no tenants and no businesses to fill the new buildings. That, of course, did not worry the developers, who simply benefited from the tax perks from building in an enterprise zone and allowed the empty buildings to be used to make artificial losses, which reduced the total taxation on their developments elsewhere. Such experiences, bar perhaps the Metro centre and Black and Decker in Durham and the London Docklands, were admitted as a failure at the time by the Thatcher Government. In their official evaluation, the Government admitted that between 1981 and 1986 they poured £300 million into the scheme but created only 13,000 new jobs nationally, which equates to £45,000 of public cash per job at the mid-1980s value of sterling. The same study also stated that enterprise zones mainly encouraged job displacement rather than real new jobs, and it showed that 25% of new jobs in enterprise zones were displaced from within the same town.

Repeated today, that type of local displacement risks seriously destabilising our local economy, as it involves artificially enticing businesses into what could be seen as less competitive areas within the same town. On the face of it, it might seem obvious that lower taxes boost business, but that was not borne out by experience. It quickly became clear for the majority of small businesses that their biggest concern was about making a profit in the first place, and about the risks associated with achieving that, rather than about tax on revenue or profit. Questions of rent, skilled workers and access to markets were more significant than a temporary lifting of a tax burden in a specific area rather than across the board.

The only people who benefited in the 1980s were the developers, not wealth-creating manufacturing businesses. We should not dismiss out of hand any proposals to encourage job creation and, for the sake of my area, if the plan goes ahead I will wish it every success, but the evidence of actual gain is thin indeed. Some already established businesses and their owners might see it as a helpful tax avoidance scheme, but that only benefits the already rich by possibly multiplying their wealth and does not create any added value.