I beg to move,
That this House notes the need for a clear deficit reduction plan, and that such a plan must have at its heart measures to foster growth and create the conditions for a strong business-led recovery; believes Government has a crucial role to play in fostering economic growth and in creating a better-balanced economy; supports strategic decisions to back key sectors such as digital, life sciences, low carbon manufacturing and civil nuclear power; congratulates the previous Government for supporting businesses through the downturn and laying the foundations for the UK to be globally competitive as the country makes the transition to a low carbon economy; expresses serious concern that the Government’s decisions risk removing key support for business and industry at a critical moment in the economic cycle; further believes that cutting investment allowances will pull away vital support for manufacturers seeking to invest and grow; further notes that the Government’s scaling back of the regional development agencies at a time when recovery is fragile will impact on investment vital for regional economies; and regrets the coalition Government’s decision to place a question mark over a number of vital industrial support decisions taken by the previous Government.
Let me make it clear at the beginning of the debate what I said during our initial exchanges at oral questions a couple of weeks ago—deficit reduction is important and I do not say that every decision to reduce expenditure is wrong. The Secretary of State and I both fought the recent election on policies to reduce the deficit. But the Opposition believe that this must be done in a way that supports economic growth, and not in a way that undermines it. It is critical to our future that fiscal consolidation is done in a way that supports rather than undermines growth.
On the timing of deficit reduction, I am still saying what the Secretary of State and I were both saying back at the time of the election, but he is now saying something very different. Just a week before polling day he said that
“it would be foolish to rush into significant cuts now which take the economy down even further, which lead to an even bigger deficit problem”.
Yet just days later, the Secretary of State was signing up to his part of £6 billion of cuts in this financial year—cuts that mean 10,000 fewer students going to university than under the published plans, and £300 million being taken out of the regional development agencies this year.
Such cuts will hit my constituency and those of my hon. Friends the Members for Stoke-on-Trent North (Joan Walley) and for Stoke-on-Trent Central (Tristram Hunt). The cuts will hit places such as Stoke-on-Trent particularly hard—areas that have struggled to come forward from the 1980s. The impact will be devastating.
My hon. Friend makes an important point. Before the election we were told that £6 billion could be taken out in efficiencies, but the announcement proved that that was not the case, and that the cuts will have a real effect on constituencies such as his, mine and many others around the country.
What could be the reason for the volte-face on the timing of deficit reduction? There may be cynics on the Opposition Benches who might think it had something to do with the election result or with the fact that the Liberal Democrats were in coalition talks with the Conservatives, but the Secretary of State leads us to believe that that was not the case at all. He said it was all about events in euroland, but to paraphrase Frankie Valli, “Greece” was the word, although I have a feeling that in the present coalition the Secretary of State does not go into work in the morning singing, “We can be who we are”.
Does my right hon. Friend agree that the uncertainty about the future of Advantage West Midlands, for example, is creating problems for small businesses locally? Does he also agree that if the Government set up a green investment bank—the sooner, the better—that could go a long way to helping industry in the west midlands?
That policy was in our manifesto, and we believe it would make an important contribution to economic growth.
Our argument today is that if we want a successful economy in the future and if we want to rebalance our economy and support strong manufacturing and powerful regions, a focus on deficit reduction alone is not enough. It is not enough just to have a plan for the deficit. The Government also need a plan for growth; and for that to work, we have to understand that they have an important role to play in supporting industry and creating the right environment for success.
Does my right hon. Friend agree that a potential blight is being put on companies such as Airbus and Vauxhall near my constituency, where grants signed by the previous Government to help to support the growth of manufacturing industry are now being reviewed by this Government? That is damaging the long-term potential for growth, and decisions should be reached urgently so that we end that blight and get a move on in creating jobs.
The review of industrial support decisions has indeed created damaging uncertainty that should be brought to an end in a positive way as soon as possible.
The Labour Government knew that we had to play our part if rhetoric about rebalancing the economy and making the most of the shift to low carbon was to lead to new industries and new jobs. That was not, as some Government Members have sought to portray it, some kind of irresponsible bail-out plan concentrated on failing companies. It was a strategy about supporting key national capabilities in the industries and jobs of the future, ensuring that we had strong regional economies, and having the right tax measures in place to foster investment in new plant and machinery and to support research and development here in the UK.
I am sure that my right hon. Friend is aware of how crucial the computer games industry is in my constituency, not only for the number of people the industry employs but for the students who study at the university of Abertay. The previous Government made a commitment to tax breaks for the computer games industry; does he agree that that commitment should be honoured?
The creative industries, including those that my hon. Friend mentions, are absolutely critical for our future economy. As with other areas, I believe that Government have a role in play in ensuring that the creativity of those industries flourishes here in the UK.
Of course, our future economy will be market-driven, and success depends on motivated individuals, great ideas, and enterprising and thriving companies. Our point, however, is that there is a critical role for Government when market gaps occur—a job to do in supporting investment that can pay dividends many times over in future. Let us remember that this is something that many Governments around the world are doing. Do we really believe that if the new Government elected here turn their back on this approach, other Governments who are also trying to attract new industries and new jobs will do the same? I do not think so.
This week, One NorthEast, the regional development agency in the north-east of England, confirmed a grant of £7.3 million to INEOS Bio to construct Europe’s first advanced bioethanol—ethanol from waste—plant in my constituency. That will create 350 construction jobs and 40 permanent skilled jobs, and I am sure that my right hon. Friend agrees that that is another fine example of why One NorthEast should continue its good work with the level of funding that has given it the power to help the north-east’s economy to diversify so successfully.
I absolutely agree. That sounds like exactly the kind of project where Government, through the RDA, and business can come together for the benefit of the local area.
Our concern is that the new Government do not understand the role of Government in fostering new industries or may even be ideologically opposed to it, believing, as the Secretary of State has said, that
“one of the most important jobs of Government...is actually to get out of the way”.
Getting out of the way would have done us little good when we were trying to get Nissan to build its battery plant and LEAF electric car in the north-east. It would not have helped us when were extending a loan guarantee to Ford to make the next generation of low-carbon diesel engines here in the UK. It would not have helped us when we were trying to support world-class aerospace at Airbus and Rolls-Royce. It would not have assisted in our ambition for the UK to move into the world premier league in the nuclear supply chain through the loan for Sheffield Forgemasters. Nor would it have done any good when we were trying to attract manufacturers of the next generation of off-shore wind turbines to make their products here in Britain.
Is not Airbus a perfect example not only of how hundreds of millions of pounds have secured and created thousands of jobs, but of the fact that that money is repayable, and has been repaid, and that royalties are paid on every aircraft sold, which means that this is also a very sound investment for the Government?
My hon. Friend makes a good point. A lot of industrial support is in the form of loans or loan guarantees. The depiction that the new Government have attempted to create of the indiscriminate giving of grants that were not in the public interest is absolutely not true.
Is the right hon. Gentleman aware of last week’s Centre for Cities report, which highlighted the growth, or lack of growth, in the private and public sectors over the past 10 years? Some 69% of the 1.2 million jobs added to city economies over the past 10 years were public sector positions. In my constituency, the growth rate in the private sector fell by 10% over that period, which meant the loss of 4,600 jobs from the private sector while the public sector grew by 7,600 jobs. My city was the fourth worst in the country; the city of Stoke, represented by the hon. Member for Stoke-on-Trent South (Robert Flello), was the worst. May I put it to the right hon. Gentleman that if that is the result of 10 years of massive spending in the public sector, it is simply unsustainable to carry on losing that number of private sector jobs, and that our job is to re-stimulate the economy and the framework for growth in the business sector?
The answer will be shorter than the question. I am aware of that report. However, my point is that if we want to stimulate private sector investment through some of the companies that I have mentioned, Government have a role to play. Simply walking away will lead to fewer, not more, private sector jobs.
Returning to the subject of RDAs, a firm in my constituency wishes to bring the manufacture of ceramic products back into Stoke-on-Trent from abroad, but it is unlikely to be able to pursue that ambition because Advantage West Midlands is now unable to confirm its support. The ceramics industry is trying to bring jobs back into Stoke-on-Trent, and it is quite capable of doing so, but not without a little extra support.
My hon. Friend makes a good point. Sometimes a bit of investment from the public sector can lever in significant extra investment from the private sector.
I want to turn to the criticisms of the approach that I have set out that have been made by the Secretary of State and the Prime Minister in recent weeks. They have made specific accusations, saying that the projects were agreed in a hurry and were politically motivated. Indeed, the Prime Minister repeated that allegation a short time ago at Prime Minister’s questions, when he spoke of fiddled grants for political reasons. Last week, he alleged that we had spent tens of billions of pounds on industrial support. I have to say that it is no wonder that he is sharpening his public spending axe if that is his grasp of the amount of money that we were spending on industrial support.
Let me deal head-on with the accusation about rushed and politically motivated largesse. These projects were not agreed in a hurry. We negotiated for months with the car companies, with the wind turbine suppliers and with Sheffield Forgemasters. All those projects were subject to careful scrutiny by officials and to the usual value-for-money criteria used in decisions of this kind. In the last Parliament, time after time, I stood at the Dispatch Box opposite and was criticised by some of those who are now Ministers sitting in front of me—not for going too quickly on industrial aid or for being rash about it, but for dragging my feet.
In a report published as long ago as July 2009, the Business, Innovation and Skills Committee, which was chaired at the time by the hon. Member for Mid Worcestershire (Peter Luff), who is now an Under-Secretary of State for Defence and a ministerial colleague of the Business Secretary, said that it was
“profoundly disappointed that to date not one single penny has been advanced through the scheme”—
the automotive assistance scheme—and added:
“We hope that this will change rapidly.”
That is the same scheme that has funded Ford and General Motors, so let us have fewer accusations that there was a huge rush in the run-up to the election to spend money profligately.
My right hon. Friend quoted what I intended to say. I was a member of the Committee that produced that report, and when I represented it in a debate on local radio, I repeated the accusations that appeared in our report.
May I welcome the former Minister’s conversion to a balanced economy? In that past 13 years, the previous Government virtually destroyed manufacturing industry and hung their coats on the financial industry, so this country went down. My constituency has lost hundreds of jobs in manufacturing industry because of the economic policies of the previous Government.
Order. So that I do not interrupt the flow of the right hon. Gentleman, I should say now that there have been a number of interventions whose eloquence—this is the fairest that can be said of them—has been matched only by their length. Interventions do need to be a bit shorter.
I am going to make some progress but I will give way later.
I was speaking about the timing of the previous Government’s decisions, but I also want to address the accusation that the political representation of this or that area was a motivation for our decisions. Not only is that complete and utter nonsense, but the fact that the new Government see it that way speaks volumes about how they see the Government’s role in supporting industry. Our country was faced with a choice of Rolls-Royce manufacturing here or in Singapore, Nissan could have gone to Portugal, and nuclear components could have been made in Japan or Korea. Are the Government really saying that when faced with those alternatives, their first reaction would be not to ask how to secure the investment and the jobs for Britain, but to reach for the electoral map to see who the local MP is? What a dismal view of the Government’s role in supporting UK industry.
I am grateful for my right hon. Friend’s robust point. The Prime Minister said that all that money was sent to Labour marginals, but that did not work, did it? If we want a strong manufacturing sector, will the three and a half pro-Europeans in the DBIS ministerial team—the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Wantage (Mr Vaizey) is the half—keep British manufacturing ahead of that of France? That is their responsibility.
My right hon. Friend makes a strong point, but I want to make progress.
The previous Government’s decisions were neither rushed nor politically motivated, and our manufacturing industries deserve a better future. The Government say that they are reviewing the projects to which I referred. We have already had a welcome confirmation of the Nissan decision, and I pay tribute to my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) for pressing the Government so effectively on that, but damaging uncertainty still exists, so let me ask the Secretary of State some specific questions.
What is the position on the loan guarantees to GM and Ford? What is the position on the loan to Sheffield Forgemasters? The director general of the CBI visited that plant the other day and said:
“It is hugely exciting to see such impressive technology and innovation being developed on this scale, here in the UK. The size and quality of the products being developed at Forgemasters is outstanding and this expansion programme builds on that by making a real investment for the future.”
That was the verdict of the CBI. The previous Government decided to back the expansion of Sheffield Forgemasters not because we wanted to give aid to one company, but because we wanted a greater national capability in the nuclear supply chain, which is critical for Britain when many countries are building more nuclear power stations.
The Secretary of State must confirm the Government’s position on that, because I must tell him that there are a lot of rumours going around about their attitude and response, and that if the loan does not go ahead, it will mean he is behaving exactly like the banks that he criticises for not supporting industry. We said that we would support industry, and it is time that the Government’s position on that loan is cleared up.
The proposals we made on the tax to which the hon. Gentleman refers would have kicked in next year. If I were him, I would not be so cocky about tax just a week before his Chancellor comes to the Dispatch Box to tell us his tax proposals.
To return to my specific questions, will the new Government go ahead with the port development competition that was so pivotal in attracting offshore wind suppliers to the United Kingdom? Will the new Government stand by the support to Airbus and Rolls-Royce, which was mentioned by my hon. Friends? The Government have already caused damaging uncertainty by placing a question mark over those projects. If they abandon them, all their words about manufacturing and rebalancing the economy will rightly be seen as worthless.
No—I have already given way to my hon. Friend and I want to make progress.
Support for industry is not just about specific interventions, but about having the right measures in place to foster investment and innovation, and I want to ask the Secretary of State where we stand on some of the key measures in that area, such as capital allowances, which the Government provide to encourage investment in new plant and machinery. The allowances are vital to manufacturing companies, particularly when we want them to be moving to lower carbon production. For those reasons, we doubled investment allowances in our last Budget, which meant that the new allowance—of £100,000—covers some 99% of capital investments made by companies every year.
The new Government, however, are pledged to cut those allowances to pay for their planned cut in corporation tax, a move described by the Engineering Employers Federation as “a disaster”. It has said that if those plans went ahead:
“Any business would have to think twice about investing in the UK.”
Before the election, the Chancellor said that that plan would involve the removal of allowances amounting to £3.5 billion, which would otherwise support manufacturing. Can the Secretary of State confirm that it remains the Government’s policy to cut investment allowances for manufacturing industry?
Another issue is supporting research and development. We are all agreed that we want research and development, and the manufacturing associated with it, to take place here in the UK. For that reason, the previous Government introduced the idea of a patent box—a corporation tax rate of just 10% on future profits made from patents. When we announced that policy, Andrew Witty, chief executive of GlaxoSmithKline said:
“The patent box is exactly the sort of active, long-term and creative support that we need from the government to ensure that the UK remains an attractive place for highly skilled sectors such as pharmaceuticals.”
When the Secretary of State was asked about that a couple of weeks ago, he did not answer, but I want to give him another chance to do so today. If the new Government believe so much in a lower rate of corporation tax, will he now tell the House whether they support that proposal for an extra-low corporation tax rate for that part of the economy engaged in research and development here in the UK?
On innovation, can the Secretary of State tell us where we stand on the Hauser report and Labour’s plans for innovation centres to help the crossover of ideas between academia and industry?
Let me say a word about the regional development agencies. These were introduced by the Labour Government a decade ago because we had seen the success of the Scottish and Welsh development agencies. They have, for the most part, performed well, with independent evaluation showing that for every £1 spent, regional economies benefited on average by £4.50. I know that the Secretary of State agrees that every part of the country should share in future economic growth. Before the election, he said that
“efficiency has become the new politically correct word for sacking people and cutting services”.
But one of his first acts, together with other Departments, was to take £300 million out of the RDAs, so I know that he will not claim that that was about efficiency. Will he admit that that will have a real impact, with business support cut, projects cancelled and delayed, and—as my hon. Friend the Member for Stoke-on-Trent South (Robert Flello) said, less private investment levered in to those projects?
The previous Government set out many proposals, including some £900 million over the next few years in the expenditure of the Department in which I was a Minister. We also said that we would save billions more than that on public sector pay and pensions, and we set out many other proposals. I do not stand here as someone who says that there should never be cuts. My point today is that cuts must be made in a way that supports a strategy for growth, not in a way that militates against it. That is why I raised the issue of industrial support and regional development.
Apart from the Budget, what about the future of the RDAs themselves? Government policy on this is in a total mess. We have had statements that they will be abolished, that they will be replaced, and that their replacements will both be different and look the same. Can the Secretary of State tell the House today exactly what the position is and how he is going to make a judgment on this? He talks of business and local authorities deciding in particular regions. How will that be done? Will it be one vote per council or one vote per business? Will it need a 55% majority? If it will be up to the region, how will he make the judgment on this important issue?
RDAs are important, but does the right hon. Gentleman concede that the performance of some RDAs has been patchy—to put it kindly? Does he agree that we can still deliver support for business in a cost-effective way, but more flexibly using local enterprise partnerships? One size does not fit all in all areas of the UK.
I know that the hon. Lady cares about these issues, but I have to disagree with that point. Until the situation is clarified, businesses in various regions do not know with whom they will be working, and a damaging lack of confidence is emerging about how projects that cross local authority boundaries are to be managed in the future.
The right hon. Gentleman has mentioned research and development, but one of the pressing issues in industry today is apprenticeships. We have been promised 50,000 new apprenticeships, but does he agree that they must lead to relevant qualifications at the end of them, so that apprentices are not just going through the process for the sake of it? They need to be relevant to the industry and to the companies involved.
When we were in government we brought apprenticeships back from the near-death state that they were in and made them once more a mainstream part of the labour market. They are valuable, and we increased the number available many times in our time in government. I agree that they are very important in providing opportunities for young people.
We sought this debate because we believe that while it is right to cut the deficit, it is not possible to go forward, as we come out of the recession, on the basis of tax and spending plans alone. Since the election, the Government have been determined to paint a picture of unremitting doom and gloom about the next few years in an effort to manage public expectations about the cuts that they are planning. Of course the situation we face is challenging—I do not deny that—but we do not believe that Britain is broken. We believe that we can have a strong industrial future if we have a clear plan for growth alongside the plan for deficit reduction.
Austerity alone will not shape our economic future. The Government should see their role as being ambitious for Britain, as well as one of managing public expectation about the cuts with which they have seemed to be obsessed in recent weeks. The Government should be ambitious to make the most of the transition to low carbon; to make the most of our excellence in creative industries and the information economy; and to build on what we have done in education and science and ensure that our economy benefits from it. As an MP who represents a manufacturing constituency, I also think that we should be ambitious to ensure that Britain makes things as well as provides excellent services. The Government are fond of talking about manufacturing in terms of decline. The truth is that the output and value of manufacturing have remained constant over the last decade up to the period of the recession, which is a tremendous achievement for our manufacturers as it was achieved in the face of the greatest wave of globalisation that the world economy has ever seen. We are in a stronger position than the Government make out.
The new Government have shown much about how they see things by making inaccurate statements about the amount of money that we spent on support for business, the speed at which the decisions were taken and the political motivation behind them—as I say, it had nothing to do with who represents the constituencies in which our manufacturing is located. The country and the economy deserve better than that. We are clear about the Government’s role in shaping the economy of the future. We have an opportunity before us, because we stand on the brink of a second industrial revolution as we move from a high-carbon economy to a low-carbon economy. We should be ambitious about seizing the opportunities that that represents, and that requires an active role for Government and a proper plan for growth. That is why we have tabled this motion today and that is why we raise these issues today. I commend this motion to the House.
I beg to move an amendment, to leave out from “power” to the end of the Question and add:
“welcomes the Government’s £150 million investment in a further 50,000 apprenticeships and their £50 million to support the college building programme that was in chaos under the last Government; further welcomes the extra 10,000 university places on offer for 2010-11; notes with concern the wasteful, ineffective policies pursued by the last Government regarding industrial support, and commends the Government’s plans for local enterprise partnerships that will deliver better value for money and support long-term growth objectives; recognises the need for a review of all projects approved since 1 January 2010 to evaluate their worth to the economy and taxpayer; welcomes Government support for entrepreneurs by reducing bureaucracy and increasing flexibility for both employees and employers; and believes the Government has made a strong early start in providing the conditions for long-term low-carbon economic growth and rebalancing the economy.”.
I have introduced many Opposition day debates and it is a pleasure to be able to respond to one. I know that hon. Members attend such debates for different reasons. Some come to make party points, and that is quite right—it is an Opposition day. Some come for constituency reasons, and I will have something to say later about some of the very specific projects that have been mentioned. I want to put those in context, so hon. Members need not feel that they have to intervene at any moment—
Let me finish my introduction; I will come to specific projects later.
In relation to taxation, the right hon. Member for Wolverhampton South East (Mr McFadden) knows that I am not in a position to pre-empt the Budget, but if he reads the Chancellor’s speech to the CBI a few weeks ago, he will see that it fully acknowledges that not only do we wish to see lower rates of business tax overall, but we understand the importance of capital allowances in manufacturing.
In my days in opposition, I tried to engage constructively and find common ground, and we have approached today’s motion in that spirit. It includes some excellent statements, to which we are happy to subscribe. I shall start by working through some of those areas that appear to be common ground. The motion states that the
“Government has a crucial role to play in fostering economic growth and in creating a better-balanced economy”.
That is absolutely right, and we totally sign up to it—it is exactly what the Government are about—but it pre-empts the obvious question: why is the economy so unbalanced to start with, and who was running the Government who led it to be so unbalanced? By unbalanced, most of us mean that one sector, and one part of the financial services industry—the City and big banks—became too dominant, while the rest of the economy, including trade in goods and services, and in particular manufacturing, was allowed to decline relatively. That is the imbalance we are talking about.
It is worth putting that in context, however. My hon. Friend the Member for Burnley (Gordon Birtwistle) made this point from a local context a few moments ago. The share of manufacturing in the British economy shrank from just over 20% in 1997 to just under 12% in 2009. Of course, that is a historical trend, but I remember in the 1980s when people were concerned about deindustrialisation. It is worth noting that the rate of decline in manufacturing over the past decade was three times as fast as it was in the 1980s. Manufacturing employment during the period of the Labour Government, when this imbalance grew, fell by 1.7 million—that is the population of Leeds, Sheffield and Glasgow combined. That demonstrates the decline in manufacturing. Furthermore, the number of manufacturing companies fell by 12% over that period. That was the imbalance created when the right hon. Member for Wolverhampton South East and his colleagues were in government.
I welcome the Secretary of State to his job, and he will recall that I reviewed his memoirs very positively, which added considerably to sales. He is right about the decline, but the same decline is reflected in America, Spain, France and Italy. However, one part of manufacturing as important as the rest is steel, which is an industry that I represent in Rotherham. May I bring steel industry employers and workers to talk with him? Steel requires a complex matrix to do with energy, electricity prices and trade. We had a very good relationship with the right hon. Gentleman’s predecessors, and I ask him whether, at his own convenience—there is no great hurry—I and some steel people could meet him to talk about these issues.
That was a very constructive intervention, and I would be delighted to meet the right hon. Gentleman’s constituents. I met steelworkers before the election—indeed, I went to Redcar, which is now represented by a Liberal Democrat, and met the Corus workers there—and I would be very happy to meet any steelworkers whom the right hon. Gentleman wishes to bring.
I congratulate the right hon. Gentleman on his new post. My intervention, along with that of my hon. Friend the Member for Stoke-on-Trent South (Robert Flello), is made in the spirit of trying to find a constructive way forward. In his speech, will the Secretary of State take account of the existence of heartland areas that have been over-reliant on manufacturing? One such area is Stoke-on-Trent, where we have large inequalities and where we need to do all that we can for manufacturing. Someone in his Department needs to be answerable purely for the ceramics area. We are desperate to meet with him to ensure that we can go forward with the regional development funding, irrespective of who administers it, in partnership with the Government in order to get what Stoke-on-Trent needs.
Indeed. It is part of a conglomeration, but he spoke up for Stoke-on-Trent in particular. I met the chamber of commerce from that area; it came up with some excellent ideas, and I would be happy to meet it and the hon. Lady again. Clearly, this part of the country is deprived and needs special attention, and I am happy to give it.
I return to the question of how the imbalances arose. Of course, there is a trend, but it was aggravated by bad policy. I shall remind Labour Members, not all of whom were here during the period, of some of the big developments that occurred and which produced this excessive decline in manufacturing and the excessive dependence on the banking sector. Five or six years ago, I and other colleagues were warning from the Opposition Benches about the bubble that was developing in the property market, the reckless bank lending that was fuelling it and the instability that it was going to create. We were dismissed at the time as scaremongers, but of course the bubble did burst, with the disastrous consequences that we are now paying for.
Going further back in time—probably to before the right hon. Member for Wolverhampton South East was a Member of the House—a very important report was commissioned by the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). The Cruickshank report set out graphically how the British banking industry simultaneously was pursuing short-term profits while being dependent on a Government guarantee, and was also severely damaging British small-scale business because of the lending practices being adopted. At the time, we urged the Government to act on that report, but nothing was ever done.
The right hon. Gentleman talks about the past, but does he agree with the chief executive of the Cumbria chamber of commerce who said it would take the region back to the economic dark ages if we were to scrap the Northwest Regional Development Agency?
I am happy to come to RDAs shortly. We have a view on them, and I have been asked specific questions by the right hon. Member for Wolverhampton South East about them. The hon. Gentleman will also have heard me speak specifically about the north-west at Business, Innovation and Skills questions a couple of weeks ago—but I shall return to that.
The right hon. Gentleman said that, when on the Opposition Benches, he urged the Government to take action against the banks. What were his friends in the Conservative party asking for back then?
The Chancellor of the Exchequer made a very good statement earlier, setting up the commission that will look at the structure of banking. Indeed, we are working together on improving the very poor performance of the banking sector in terms of credit to small and medium-sized lending. The record of the Labour party is terrible in that respect, and we will improve on it.
It is clear that the last Government had an industrial policy. I cede that point. We have to go back to the seminal moment when the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath, made one of his famous factory visits—to the headquarters of Lehman Brothers in London—and announced:
“I would like to pay tribute to the contribution you and your company make to the prosperity of Britain”.
The consequences of that policy are with us today, in the costs of the collapse, the recession that followed and the enormous problems that we have inherited. That was the industrial policy; that was the imbalance of which hon. Members complain.
I welcome the activist approach towards banks that the Secretary of State is outlining. He will be aware that the House has debated the situation of former workers at Longbridge who are still waiting for money from a trust fund promised to them in 2005. At the moment, that seems to be being held up by an argument between Lloyds Banking Group and the Phoenix Four. Will he get involved to try to ensure that they finally receive the money that they deserve and which they were promised so long ago?
I was in Birmingham last week, and people affected by that problem have approached me—indeed, the city council also raised the matter with me—and I have asked for it to be investigated. It is a complex legal problem, but clearly it needs looking at.
I shall proceed to the second statement in the motion with which we agree. The Labour spokesman was explicit, forthcoming and realistic about cuts. The motion reads:
“That this House notes the need for a clear deficit reduction plan”.
It is now going to get one, because on Monday we launched the Office for Budget Responsibility. We now have believable and independent growth numbers on which to construct a budget strategy, and next week the Budget will spell that out in more detail.
The Secretary of State will know that he is viewed, in his own party at least, as an economic Nostradamus. Does he seriously expect us to believe that the Office for Budget Responsibility report told him something of which, even with that huge brain of his, he was previously unaware? Most serious financial journalists are saying that the report showed that the previous Government’s forecasts were accurate, so is he seriously telling the House that it led him to a policy so totally different from the one he had been campaigning on for all those months?
That was starting to morph from an intervention into a speech. It did not require a great genius to see the fallacies in the bubble economy that was being created, and I was one of many people who saw the problem. However, the hon. Gentleman is getting to the issue of my position, which was also raised from the Opposition Front Bench, so let me deal with the question of cuts, the timing and what the sensible response is. The motion refers to a
“critical moment in the…cycle,”
and talks about recovery being fragile, and it is fragile. There are risks in both directions. If there are rapid cuts in public spending, they of course run the risk of having an impact on growth; we all understand that, but there is the risk on the other side that if we did nothing or delayed taking action, there would be a serious crisis of confidence in the economy because of the sovereign risk crisis that is rolling around Europe.
I was specifically challenged to say why I had changed my mind on the subject, and I will tell the hon. Gentleman when I changed my mind. Before I entered this Government, I spoke at some length to some of the key decision makers in the UK, including the head of the Treasury, and we also had advice from the Governor of the Bank of England. Their advice was unequivocal: in the circumstances that we entered, we had absolutely no alternative but to act decisively and quickly. I always made it clear in opposition that we had to act rationally. We had to take account of growth on the one hand and sovereign risk on the other. Those factors had to be balanced. We have balanced them, and we came to the decision that early action was essential in the light of the circumstances that exist. That was objectively based on the evidence in the economy.
The right hon. Gentleman also met the permanent secretary at the Treasury and the Governor of the Bank of England before the election, so I am still not clear how his mind was changed between the election campaign and when he became the Secretary of State. Can he clarify what it was between those dates that made him change his mind?
I do not know whether the hon. Lady was reading the newspapers when she was campaigning for election to this House, but there was a major sovereign debt crisis emerging in Europe. [Hon. Members: “Oh, come on!”] Well, I am sorry, but the gasps from Opposition Members suggest how utterly and completely out of touch they are with the realities of financial markets. We are talking about a very serious crisis, and the Government had to respond to it, as other Governments are doing now.
I congratulate the Opposition spokesman on being honest enough to acknowledge, in a rare departure from tradition, that he had been forward in accepting the need for cuts. Those on the Benches behind him who are so anxious about early cuts need to be aware—the Institute for Fiscal Studies pointed this out—that the previous Government were already engaged in a fiscal tightening of £23 billion for this financial year. We are now being accused of making cuts in the current circumstances, but the previous Government were planning that too.
That was on the record, and it was not just a theoretical abstraction; rather, many of us saw it happening. It happened in the Department for Business, Innovation and Skills, which the right hon. Member for Wolverhampton South East was responsible for. Lord Mandelson was the first Minister to put his Department forward for early cuts, which was why, in the run-up to the election, I attended a meeting of further education college lecturers in my constituency, 70 of whom were going to be made redundant. The reason for that was that those early cuts, introduced by the right hon. Gentleman, were working their way through to the front line of teaching. I then went to one of the leading science laboratories in my constituency, where 40 members of staff were being made redundant because of cuts made by the right hon. Gentleman and Lord Mandelson this financial year, so please let us not have any more of this pious nonsense about early cuts.
Whatever may or may not be the case with regard to early cuts, one decision that the previous Government did make was on contracts signed between 1 January and the election involving Vauxhall at Ellesmere Port, Airbus, Sheffield Forgemasters and many others. Will the right hon. Gentleman tell the House when he is going to decide whether those grants can proceed, in order to end the blight on those industries?
I am grateful to my right hon. Friend. I appreciate that he is concerned about interventions, but given that he is saying that his response has been rational, as I believe it has been, he will be aware that my part of the world—Cornwall—is the poorest region in the UK. By the Government’s own admission, it receives less than the Government say it deserves in health funding and for many other public services. The Government rightly propose to abolish the RDAs, but what impact will that have on the poorest regions in the UK, if match money is not available for the convergence programme, for example, and those regions—the most impoverished and the most in need of investment—carry a disproportionate burden of the cuts?
I am heartily relieved that my hon. Friend did not ask me an awkward question about the retail ombudsman, but he is right about Cornwall: it has special problems. As it happens, it has not been well served by the RDA. The South West of England Regional Development Agency covered areas such as Bristol and more prosperous parts of the country, which received an undue share of its attention. In the new structure, which I shall describe shortly, his county, and its county council and businesses, will be in a much better position to advance their cause.
I have taken a lot of interventions. I am always generous, but may I come back to the hon. Gentleman?
I want to pursue the issue of cuts. I have dealt with the issue of immediate cuts; however, the question is where they were going to lead. I know that we have gone quite far in the modernisation of the House, but we have not got as far as PowerPoint projections, so I am a bit limited in what I can show. However, the right hon. Member for Wolverhampton South East will be familiar with the work that the IFS did before the election showing where cuts were going to appear in different Departments, had the Labour party been returned to power. I have here one of its charts, which shows what would have happened to the Department that I now lead. It shows a projection of cuts in the order of £4.4 billion, or 20%. That is what the right hon. Gentleman and his colleagues were planning.
Indeed they were, although I do not think that the right hon. Gentleman can quite make up his mind whether to apologise or deny.
The IFS is an independent body—it has nothing to do with the Government—and I am talking about what it anticipated. It would be useful to contrast the scale of the cuts that the right hon. Gentleman and Lord Mandelson and his friends were planning to make in their area of government with what we have already done. In the first week of office we had to find cuts, and we found £830 million—we got £200 million back in recycled money and we have made a cut of £630 million. That is a large sum of money, but it is about an eighth of what we know a Labour Government would have taken out of my Department’s spending. [Interruption.] We can quibble about the number, but very large cuts were being planned by the Labour Government, had they been returned to office. Let us be clear about that.
It would be useful to know what Labour was planning to do. The right hon. Gentleman objects to cuts in RDAs and cuts in industrial support, and he objects to the fact that student numbers are not rising by as much as he wanted, but where are the cuts going to come from? All from the science budget? All from FE colleges? I do not know. Perhaps he is too embarrassed to stand up and tell his colleagues on the Benches behind him what he was planning to do, but I would like to know, because we are in the middle of a very difficult spending exercise. I would like his advice, so perhaps I can set up a private meeting with him and Lord Mandelson, so that they can tell me what they were going to do. I would find that instructive.
Many of us have admired the right hon. Gentleman’s pragmatism and judgment over the years, yet we remember what he said during the election campaign about the danger of clearing the structural deficit within the lifetime of this Parliament, which is a policy of his coalition partners. The Office for Budget Responsibility has now indicated that the structural deficit is much worse, yet the Chancellor is sticking to the same timetable. If the Secretary of State worried about that approach during the election, will he share with the House his worries about the deeper and worse situation that we now face, and the effect that it will have in pushing us back into another recession and increasing unemployment steeply?
Of course there are dangers, and I spelled out earlier the twin dangers that we have to balance very carefully. Lest the hon. Gentleman imagine that I have suddenly developed an enthusiasm for strict public sector discipline, I suggest that he read the pamphlet that I wrote the best part of a year ago, in which I made the case for dealing with the structural deficit rapidly and in a radical way. That is entirely compatible with the strategy that we are now adopting.
May I just finish this point?
It is clear that the Opposition’s response in the motion to the budget cuts and to the issue of imbalance is really not very serious. Let us examine a couple of other fragments from it. It talks about the “business-led recovery” that they seem to want. I wonder how many people are aware that 21,000 new regulations affecting British companies were introduced in the past 10 years—that is six per working day. How on earth were the previous Government hoping to achieve a business-led recovery when businesses were being prevented from growing? A survey published today by Infotec shows that one in 10 British entrepreneurs were contemplating leaving the country for tax and regulatory reasons. That is the legacy that we now have to address.
The motion also states that the previous Government were
“laying the foundations for the UK to be globally competitive”.
During their period in office, the competitiveness league tables—which are generally accepted—showed that this country fell from seventh to 13th. So that is what they meant by laying the foundations for us to be competitive.
Let me now turn to the vital industrial decisions about which several Labour Members are quite rightly exercised. A significant number of projects were signed up to before the election. Some were good; some were questionable. Many of them raised issues regarding value for money, affordability and other factors. Quite rightly and prudently, we are carrying out due diligence on those projects; we are working our way through them.
I can make one announcement today, however. It is right and proper that we should examine the decisions taken by the previous Government since 1 January, to ensure that they offer good value for money and are in line with the Government’s priorities. That is entirely legitimate. This need for re-examination is something that the automotive industry, in particular, understands and accepts. Equally, however, it has urged us to reach our decisions quickly, given the time that has already elapsed in considering the loan guarantee projects.
The Prime Minister confirmed this week that the Government’s support for the Nissan electric vehicle and associated battery plants would go ahead, and I am today able to announce that the Government have confirmed that a loan guarantee of £360 million will be offered to Ford, and one of £270 million to General Motors Vauxhall. This confirmation is, of course, subject to appropriate pre-conditions for our support being met, and to final decisions by the companies. We understand that GM is considering its next steps in the light of progress in obtaining funding from Germany, and I believe that it might not wish to proceed with our offer. However, the offer has been made and it is now confirmed. That is all I can say today. Decisions will be announced shortly on other specific projects.
The Secretary of State mentioned the due diligence being conducted on particular projects. The Prime Minister has referred to Lord Mandelson going round the country with a massive cheque book, handing out hundreds of millions of pounds, two thirds of which he said went into Labour marginal constituencies. Will the due diligence also involve taking a close look at where that money is being spent, particularly where those Labour marginal seats are now held by members of the coalition parties?
The Government are obviously fond of reviews. We are about to have a defence review, which will involve the 400M military transport aircraft project. That will have an important effect on all wing production in the UK. How long does the right hon. Gentleman’s Department think that review will take? Clearly, those companies could make the choice to site the work elsewhere, which would have a dramatic impact on the work force in this country.
I, too, have received the news from General Motors that it might choose not to proceed, because of the current situation. However, if GM is to succeed as a business—as the Prime Minister said he wanted it to—it is important that we should have confirmation from the Government here and now that they will be ready to come back to the table and talk to the company, especially in relation to the next-generation vehicles such as the Ampera.
The hon. Gentleman is showing some indignation. I am so used to hon. Members asking for more money, and I am sorry if I have underestimated him—[Interruption.] Okay, if it is simply a question of encouraging a valuable new project, I would be delighted to do that, and I hope that he will arrange an appointment.
I cannot negotiate across the debating Chamber on the basis of announcements that are being made outside this place. It would be ridiculous to ask me to do so. I am, however, happy to keep in close contact with that project and with the people involved. It is clearly an important one, and we have confirmed today that we were willing to support the continuation of the loan. That is all I can say, but I am happy to talk to the hon. Gentleman and others about how we can take this forward constructively.
I have taken an enormous number of interventions; I will take one from the hon. Gentleman later.
Before I leave the car industry, I must point out that these projects were part of an assistance scheme for the industry, and I think that the Opposition Front-Bench spokesman would acknowledge that they were time limited. Other projects have already made applications, which are being properly considered, but we cannot have a situation in which the car industry, or any other, assumes that it can come to the Government for money, just because it has an interesting project.
It is worth underlining the point that, in large parts of the British car industry, brilliant companies have got through the recession without Government support. My first visit as a Minister was to the Bentley factory in Crewe—[Laughter.] Hon. Members might laugh, but that factory provides thousands of highly skilled jobs and a high-quality product. It is a subsidiary of BMW. It was very badly hit by the recession—it lost half its output—but it kept going. The management took a big pay cut, and the workers joined them, accepting that they had joint responsibility for the company. The company survived; it is now flourishing—it has some of the most sophisticated technology in Britain—and it did all that without a Government guarantee.
Land Rover, in my constituency, is another brilliant example of a company that has weathered the economic storm. It is now surging forward, and it is investing in research and development. I welcome the decision on GM and Ford, and we should all be concerned about having a level playing field in relation to the UK economy and those in other parts of the world. Can we use R and D investment and capital investment in advanced manufacturing plants such as these to provide at least a level playing field in relation to other countries, and to secure investment for the United Kingdom?
I know that my colleague takes a close interest in these matters. She has represented the interests of Solihull and the factory extremely well over the past few years. I am very happy to talk about her proposal, but I want to emphasise the fact that the automotive assistance scheme does not have a permanently open door. Applications have been made, and they will be dealt with on their merits.
I was giving examples of car companies that have flourished and coped with the recession without coming for Government support. Before I went to visit Bentley, I went to another factory, Cosworth—one of several Formula 1 manufacturers in this country, using very high technology. It was flourishing, providing highly skilled manufacturing employment and was not dependent on Government support, like many others. It is not just the specialist producers either, as mass producers—Honda, for example—are also relevant. Honda took a big hit during the recession and the work force accepted part-time working and cuts in pay in order to keep the company together. They did so, and the company did not come forward asking for specific Government assistance. That will now be the pattern.
We have made it very clear—I made it clear in a speech—that we are willing to do what we can to support growth in the British economy, and we will do it by helping build up competences, skills, research and development and so forth, but we are not in the business of handing out money to individual companies. Quite apart from the merits of the proposal, there is an issue of affordability in the financial climate in which we now operate.
Let me start to conclude by clarifying some things that we want to do. We believe, like the right hon. Member for Wolverhampton South East, that the Government have a role. I do not believe in laissez-faire. The Government have a role; there are many market failures; there is, of course, an important role for Government in this field. It has to be cost-effective, however, and it has to be affordable. Let me summarise some of the things we are starting to do, having been in office for only a month.
The first element is skills. One of the first decisions made by the Government when they came into power was to fund 50,000 apprenticeships. That compares with the 200,000 built up under the last Government over 10 years.
The money has been made available; that is the key point. We know from the National Apprenticeship Service that there is a great deal of interest in this programme and those places will be taken. It is a big advance on the level we inherited. Let me emphasise that, unlike the previous Government, we do not believe that we can fund these things out of thin air. We have funded it by changing our priorities. We have made a decision to cut back on the Train to Gain programme in order to fund these additional apprenticeships. That was based on priorities and on a critical review by the National Audit Office of how the Train to Gain programme operated under the last Government. We discovered that a quarter of all training places would have been funded by the companies anyway, that the programme was paying for the accreditation of skills where those skills already existed and that it was paying for expensive middlemen rather than establishing direct links between businesses and colleges. We now have not just more apprenticeships, but a better mechanism.
Secondly, we want to support further education colleges, which are the basis for post-16 education and training among those who do not go to university. One of the Government’s initial steps was to create a £50 million capital fund, more details of which will be announced tomorrow by the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes). It is worth remembering the Labour Government’s record in respect of FE capital—
The hon. Gentleman says huge investment. I do not know what Department he served in, but the responsible Minister had to make a profound apology to the House for the complete catastrophe created by the Learning and Skills Council when it invited colleges to come forward with capital works projects. Bids were put in and then approvals followed for 10 times the value of the money available, so that many of those projects had to be cancelled. Colleges across the country are now living with the legacy costs of that. We are now putting in place a firm programme, properly costed, which will deliver serious capital investment to the FE sector.
I was asked what would happen to the regional development agencies. It is very clear from the coalition agreement that RDAs will be replaced by local enterprise partnerships. The right hon. Member for Wolverhampton South East asked perfectly valid questions about how that transition will be managed and how the enterprises and local councils will work together. My colleague, the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), will come forward in due course with proposals explaining how that will happen.
Lest we fall into the idea of believing that all RDAs made a remarkable contribution to the British economy, it is worth reflecting on some of the comments made by the Public Accounts Committee and then the National Audit Office. What we learned from that analysis is that the RDAs absorbed something like £10.6 billion in their lifetime. They did create some employment, that is for sure—at £60,000 per job. That was the cost—much more than twice the average wage, and at a time when there was a labour shortage in the economy and people were coming in from overseas. I repeat that £60,000 was being paid through the RDAs into creating employment. I do not deny that many of their activities were useful, but equally many were not. At Prime Minister’s Questions, the Prime Minister detailed some of the more absurd excesses, and I could have added a few more—the £50,000 party for the South West of England RDA in Center Parcs, champagne receptions in Cannes and many others. Some serious work was done, but it was very costly, raising very serious questions of cost-effectiveness. We now want to create a structure that reflects the real interest of enterprise and local councils.
Well, it will certainly change. We are leaving it to local people to decide. This is a very original concept for Labour Members, who are used to everything being centrally driven. We believe that very often the best initiatives come from the bottom rather than the top—I know the hon. Gentleman may distrust that, but we do not know what is going to come out of the north-east consultation. It may be—
Let me finish my point. The north-east councils and local businesses might prefer a structure like the one they already have—it is for them to decide—and there will be a process by which any proposals can be evaluated. In other parts of the country, a different route will be chosen. As I have said, the Minister of State will set out in due course how that transition will be managed.
I genuinely seek clarification because I am confused by what the Secretary of State is saying. A few minutes ago, he said that the RDAs would be replaced, yet in response to my hon. Friend the Member for Sedgefield (Phil Wilson), he seemed to say that it was a kind of maybe rather than a certainty. This is a really important issue to get clear. Is it true that all RDAs will be replaced, or could that be affected by the consultation that the right hon. Gentleman talks about? To take the example of One NorthEast, if it were the view of business and local authorities—I would like to hear how that will be determined—to retain that RDA, would the Government accept that? It is important to clarify this matter.
For the avoidance of all doubt, they will be replaced, but the structures that emerge could have a regional scope if that is what local people want. That is the answer. The process will be set out in due course. All that needs to be said for the moment in clarifying our position is that the RDAs will be replaced. They did not give consistently good value for money. We need another approach, another structure, and partnerships of local business and councils. That is what this Government will now put in place.
I will move on. [Interruption.] The hon. Gentleman appears to be grumbling from a sedentary position. If he feels passionately about the particular structure that operates in his area, there will be plenty of opportunity for him to talk to his local councils and his local businesses. This has to be enterprise-led, not bureaucrat-led or politician-led; it is an enterprise-led initiative. He has to get together with those people and come up with constructive initiatives for his own area.
As someone who represents a constituency in Yorkshire and Humber, may I welcome the moves to abolish the RDAs, which in my area have been driven by the interests of West Yorkshire at the expense of East Yorkshire and north Lincolnshire? As we move towards whatever replaces them, will the Secretary of State confirm that local, sub-regional identities and economies will be respected, and that local people will have a real input?
The right hon. Gentleman misunderstands completely. [Hon. Members: “Oh.”] He is confusing two different things: one is function, and the other is geography. They are different things. The RDAs will not continue, under any definition of our policy as it emerges through consultation—they will not perform the same range of functions as they do currently. If local people wish it, they might have a regional form, and that will emerge in due course. I think that enough has been said about the matter. I know that the right hon. Gentleman has struggled to take it in, but I think that where we are heading is abundantly clear.
To explain the point to the Opposition, geography varies around the country. The west midlands has a number of city regions, and it would be positive development if each had a local enterprise partnership. We do not know whether Coventry is in or out of greater Birmingham, but we want a city regional basis. The north-east, however, might like a regional approach. My right hon. Friend will agree that the Opposition do not understand the concept of geography and boundaries, and believe in enforcing the same rules across the country, rather than leaving such matters to local people.
That is absolutely right. The basic problem—and the reason that it is taking some time to explain the matter to the Opposition—is that the Opposition believe that the status quo must be protected because they invented it. There will, however, be fundamental changes.
Will the Secretary of State give way?
I have taken enough interventions.
To conclude as I started, we need private sector-led growth to offset the very difficult cuts that will have to be made in the public sector to restore financial sanity. Some initiatives will require direct Government intervention, but many will not. For example, we are committed to removing the burden of regulation, which mushroomed to alarming proportions. One key step that must happen, and that failed miserably under the previous Government, is to ensure an adequate supply of credit for small and medium-sized businesses. We must have a tax system that is friendly to business, that encourages companies to come here and that is simple. Most fundamentally, however, business wants the Government to clear up the mess in the public finances, as all the business associations make absolutely clear. I do not know how many of the business associations the right hon. Member for Tottenham has talked to, but, with regard to his comments about a business recovery, the business associations make it absolutely clear that they cannot develop business in Britain unless the mess in the public finances is sorted out. They need confidence, certainty and an assurance that the cost of capital will not escalate because of the crisis in finance. That is the priority, that is what we are working on, and that is how the recovery will take place.
Order. I remind hon. Members that Mr Speaker has put an eight-minute limit on contributions to this afternoon’s debate. A very large number of Members want to take part in the debate, so it would help them all to get in if hon. Members were able to make their contributions in less than eight minutes.
I welcome the right hon. Gentleman to his new post. I know that he is committed to industry and manufacturing, even if that did not come out fully in his presentation today. I also thank him for his kind note on my election as Chair of the Business, Innovation and Skills Committee, and I look forward to his coming to our Committee and to talking to him about his future plans for industry and manufacturing.
As a long-standing member of the Business, Innovation and Skills Committee, and as a Member of Parliament representing a constituency with an economy that is heavily manufacturing-based, and which is adjacent to the constituency of the now shadow spokesperson, my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), I had many discussions with local manufacturers in the depths of the recession. Yes, they wanted our public finances cleared up, but the Secretary of State did not mention two other things that came through loud and clear: first, they wanted the level of demand in the economy to be sustained, as they depended on that to sell their products; and secondly, they wanted a range of individual schemes designed and tailored to support weaknesses within the industry, to preserve their future.
I agree completely. Many companies made the point vigorously that if they went down now, future tax revenues would be lost, and the prospect of us going into a deeper and further recession would be much greater. The previous Government’s short-term measures to sustain local manufacturing were therefore essential.
I looked at what the coalition document says about the coalition Government’s commitment to manufacturing. I was disappointed to find that the only reference to manufacturing was in the section on business:
“Our aim is to create the most competitive corporate tax regime in the G20, while protecting manufacturing industries.”
Although that is laudable and welcome, it is hardly the most robust commitment to sustaining our manufacturing industries. The previous Government’s measures to sustain demand and provide selective support, such as the car scrappage scheme, contributed to the current deficit, which, we are told, it is essential to eliminate if our manufacturing industry is to survive. However, the fact is that without incurring that debt our manufacturing industry would not have survived and would be in a far weaker position.
The title of the debate on the Order Paper is “Government Support for Industry”. The first thing the Secretary of State could do to support industry would be to say to the Chancellor of the Exchequer and the Prime Minister, “Stop making apocalyptic utterances about the state of our public finances.” I am happy to say that the report of the Office for Budget Responsibility on Monday demonstrated that our public finances were very much as reported by the former Chancellor of the Exchequer, and in no way conform to the current Chancellor of the Exchequer’s scaremongering portrayals. That is a serious matter, as it not only has implications for investment in industry and the public services, but for the public climate, which might be very damaging to our industries. Literally millions of public sector workers feel that they could be affected by decisions about investment in our public services. As a result, they are likely to decide to save rather than spend, which will reduce demand and potentially precipitate that double-dip recession.
I understand the passion felt by the hon. Gentleman on behalf of public sector workers in particular, and I think that it is shared across the House. Does he not recognise, however, that the debt interest payments that we shall soon be making will affect every worker, and every non-worker, in the country?
I am committed to public sector workers, but I am equally committed to those in the private sector. My point is that unless we sustain our private sector in manufacturing industry, it will be far more difficult to pay off our debt in the long term. We need to sustain our base. That, I think, is a better strategic position, and it is the position taken by the last Government.
On Monday I visited a firm in my constituency which employs 25 people and has a turnover of about £1 million. It largely contracts its work from the public sector. Does the hon. Gentleman agree that the cuts agenda will affect not only the public sector, but the private sector as well?
Yes. The days when the economy could be divided between the public and the private sector are long gone. Engagement between them is subtle, sophisticated and often mutually supportive. The livelihoods of millions of workers in the private sector could be affected by decisions about public investment, but public utterances fail to take that into account.
Let me say something about individual schemes. Although it would obviously be unreasonable to expect the Secretary of State to present a comprehensive plan for support for manufacturing industry, I should have liked to hear a greater indication of the priorities that he would identify in his new role. The fact that the Government have begun by calling into question a range of initiatives taken by the last Government to support strategic industries does not augur well for the future. The argument that some of the grant and loan guarantees provided through either the automotive assistance programme or the strategy investment fund were in some way politically motivated prior to the election is a canard.
Before the election I was a member of the Business, Innovation and Skills Committee, which was chaired by a Conservative and which operated on an entirely cross-party and consensual basis. It criticised the then Minister, my right hon. Friend the Member for Wolverhampton South East, for taking too long to implement some of the loans and grants under that scheme. I debated publicly with the Minister at the time and was vigorous in my criticism of him, and I shall be vigorous in my criticism of the current Secretary of State for trying to imply that there was anything political in that process. In my view, the delays were due to an exaggerated consideration of due diligence and other complicating factors.
There are two helpful things that the Secretary of State could do. First, he could ensure that his colleagues do not damage demand, public confidence and industry by their public utterances. Secondly, he could resolve not to call loans and grants into question and create doubt and uncertainty in areas where they have been allocated by implying that they are there for a political purpose, because that would inevitably lead local people to believe that they are likely to be withdrawn following the change of Government. It would be playing political football not only with the livelihoods of individuals but with the strategic significance of the companies involved, particularly Sheffield Forgemasters.
I am running out of time, but let me make one more point. There was considerable debate about the regional development agencies. Yes, it is fair to say that there were some patchy performances, and yes, in the new climate there will be reductions. However, I hope that when the Minister winds up the debate, he will give a commitment that if RDA functions are to go to local deliverers, the funds that they are currently scheduled to receive will go with them.
Thank you, Madam Deputy Speaker, for allowing me to catch your eye so that I can make my maiden speech. I am grateful for the courtesies that the Chamber shows to new Members when they make their maiden speeches, but, being a doctor, I am reminded of the occasion on which I stood outside the human dissection room. I feel like that now: rather anxious, rather excited, and perhaps too eager to get stuck in.
It is customary for new Members to pay tribute to their predecessors. My predecessor, Andrew Mackay, served in the House for 29 years, representing Birmingham, Stechford for two years between 1977 and 1979, Berkshire, East from 1983, and Bracknell from 1997. It is fair to say that his reputation for constituency work was outstanding. His will be a tough act to follow, and emulating it presents a challenge that I hope to meet.
The name “Bracknell” comes from the Anglo-Saxon word Braccen-Heale, which means “bracken-covered secret place”. It was first mentioned in a boundary charter in 949 AD. A thousand years later Bracknell was designated a new town, and ceased to be a secret place. Its has grown significantly since then, and has managed to attract many companies: Honeywell, General Electric, Cable & Wireless and 3M, to name but a few. But Bracknell is not just good at business; it is also a regional centre for culture, and South Hill Park is within its confines.
The theatre at South Hill Park is named after Oscar Wilde. He is reputed to have stayed locally, and may have named his most famous stage character, Lady Bracknell, during his stay. Like, I fear, many present and former Members, I have a past in amateur dramatics. I can assure the House that I did not take the role of Lady Bracknell, but I did take the role of Jack Worthing in the same play. Members may recall that that character had two names, Ernest in town and Jack in the country. I can assure the House that I will be Philip in all places, but that I will always remember, when speaking,
“the vital Importance of Being Earnest”.
My constituency includes two other towns, Crowthorne and Sandhurst, and the delightful village of Finchampstead. Crowthorne is perhaps best known for being the site of Broadmoor hospital and Wellington college. Sandhurst, of course, has the Royal Military Academy, but in addition it has a remarkable series of events and community activities under the banner of Sandhurst Pride. Finchampstead is a delightful part of the world. It is famous for its association with Tudor royalty, who hunted there, and is also the site of a remarkable community centre, the Finchampstead Baptist Centre. It provides wonderful views of the Hampshire countryside from Fleet Hill.
Let me now talk about a topic that is allied to this debate. Next week we shall all be in the Chamber to listen to the Budget statement, and to hear about the dreadful finances of the country. Of course we need to make some decisions very quickly to deal with not just the deficit but with the debt, but I believe that we also need to make decisions about the future balance and direction of the economy so that we can secure greater stability, sustainability and strength, an emphasis on a creation of wealth that is real rather than transitory, and more energy-related and knowledge-related independence from friend and foe alike. That is why I want to mention the space industry, which I think merits Government support. As I look around the Chamber, I suspect that there are quite a few BlackBerrys in operation. I look at the cameras and delude myself into thinking that millions have tuned in to watch my maiden speech. Both forms of communication need satellites. Someone had to make the decision to put the satellites up there, and we are really good at making them.
The space industry is a growing area. That is why it is vital for UK prosperity. There is a multitude of economic opportunities. The industry has grown four times the average since 2000. It adds £6.5 billion to the UK economy annually. My own company, Tektronix, in Bracknell makes sophisticated measurement gear for satellites. The key point is that the industry is growing. Why is it growing? It is because we are the best at it. We have to be the best in this global economy. We also need to anticipate the direction of technological demand in the world.
It is not just about the economy. The industry also benefits education. It inspires innovation. It inspires generations of scientists and engineers. In one poll of engineers, almost 40% cited it as the reason that they went into their chosen career. It also helps us with the environment, an issue that I am very interested in. It allows us to assess man’s impact on the natural world. It also offers solutions, one example being the transfer of data into space, getting rid of terrestrial-based masts that are so energy dependent.
The industry is also strategic. It underpins critical parts of infrastructure. It allows Government to have intelligent ways of formulating transportation plans. It is hugely important in defence, of course, and it aids our ability to wield soft power in the world.
Space is indispensable; that is basically what I am saying. It is an open goal for us. We should be shooting at it repeatedly. The sky is not the limit when it comes to the space industry. It offers a new economy, a green economy that offers real returns, and a niche market that depends more on knowledge than on labour, which is relevant when competing with China, India and Brazil.
I am often asked why I stood for election to this Chamber and moved away from being a doctor to being a Member of Parliament. To my mind, people who come in here should want to make this country a better place. I want to put Britain first. I do not want to be part of a Government who manage decline. One way of doing that is by having a strong high-tech sector. Government’s role is to reduce tax and regulation and thereby stimulate an increase in scientific knowledge.
I have no idea how long I have in this House. That is up to the people of Bracknell constituency to decide, but when I leave I hope that I will have contributed to putting the “Great” back into Great Britain.
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.
I congratulate my hon. Friend the Member for Bracknell (Dr Lee) on a truly outstanding maiden speech.
This Parliament will be overshadowed and dominated by the budget deficit and the consequent need to make cuts in public spending, but we should never forget that it is a Labour deficit and that these will be Labour cuts. The speeches made today by Labour Members have displayed a total inability to recognise that we have a serious budget deficit and that action needs to be taken as a result. The only comments made by those on the Labour Benches—I suspect that this will be the same throughout this debate—have been in support of more public spending. They do not appear to have recognised that that is not sustainable any longer.
We need to examine what businesses in our constituencies want. I think that we are all agreed that, as the motion says, we need
“a clear deficit reduction plan, and that such a plan must have at its heart measures to foster growth and create the conditions for a strong business-led recovery”.
What do businesses want? First, they want access to bank lending. The coalition agreement clearly states:
“We will develop effective proposals to ensure the flow of credit to viable SMEs. This will include consideration of both a major loan guarantee scheme and the use of net lending targets for the nationalised banks.”
So the Government are going to address the issue of ensuring access to bank lending for businesses.
The vast majority of businesses in my constituency want to see red tape cut and the burden of regulation lifted from businesses. The coalition agreement clearly states:
“We will cut red tape by introducing a ‘one-in, one-out’ rule whereby no new regulation is brought in without other regulation being cut by a greater amount”.
We will end the culture of ‘tick-box’ regulation…We will end the so-called ‘gold-plating’ of EU rules, so that British businesses are not disadvantaged relative to their European competitors…We will give the public the opportunity to challenge the worst regulations.”
Small and medium-sized businesses in my constituency have been crying out for all those things for many years.
Businesses want a simplified tax system. The coalition agreement clearly states:
“We will find a practical way to make small business rate relief automatic.”
“We will reform the corporate tax system by simplifying reliefs and allowances, and tackling avoidance, in order to reduce headline rates. Our aim is to create the most competitive corporate tax regime in the G20, while protecting manufacturing industries.”
Again, that is very much welcomed by the business community.
What will also be welcomed in a business-led growth approach is the following coalition Government intention:
“We will make it easier for people to set up new enterprises by cutting the time it takes to start a new business. Our ambition is to make the UK one of the fastest countries in the world to start up a new business.”
That is excellent.
I shall now discuss the regional development agencies. I must say, as the Member for Banbury, which is on the edge of three geographical regions—the west midlands, the east midlands and the south-east—that RDAs have been of almost no use to my constituency. They have been inflexible, rigid and expensive. The creation of local enterprise partnerships—joint local authority-business bodies introduced by local authorities to promote local economic development—will ensure much more flexibility. My local district council is currently in negotiations with another district council, which lies in another geographical area but is contiguous to us, and the new arrangement will give us a lot more flexibility. It also goes with the grain of what local people want.
It is also excellent news that this Government will try to encourage more green industry and green-collar jobs and the creation of a green investment bank in my constituency. We hope that we will see the start of a new eco-town at Bicester, because things can be built upon green-collar jobs.
We are therefore going to see access to money, a reduction in the regulatory burden and the other thing that most businesses in my constituency want: improved and enhanced skills. An excellent start has been made with funding for 50,000 apprenticeships having already been made available. In addition, the Government are going to seek ways to support the creation of apprenticeships, work pairing, and college and working training places, as part of our wider programme to get Britain working. I am going to ensure that my constituency gets as many of those apprenticeships as possible, because it is incredibly important to enhance the skills base.
We will not be able to spend or tax our way out of the current situation. What we must do is have a business-led recovery, which also means having an export-led recovery. I very much welcome what my hon. Friend the Member for Bracknell said about the space industry, but this country can take the lead in exports in all sorts of other areas. Only a very small amount of what we produce goes to China. We need to tackle the huge markets that exist in the world, and China is just one example. Since the election, I have started to establish a north Oxfordshire export club in my constituency, so that everyone in the constituency can share advice and collaborate to see how we can collectively help to promote exports and to try to ensure that a far larger part of our output goes overseas. It is those exports—the hard cash earnings that we get from exporting goods overseas—that will help to pay for the recovery here.
This Government have a positive agenda that is going to help a business-led recovery. They are doing and proposing to do the sorts of things for which businesses in my constituency have been crying out for a very long time, and I wish the Government well in their endeavours.
I cannot begin to explain what an honour and privilege it is to be making my maiden speech as the new MP for Bolton West. Of course, I follow in some august footsteps. William Tyson Wilson was elected as the Member of Parliament for Westhoughton in 1906, as one of the first 29 Labour MPs. Do not worry, Madam Deputy Speaker, I am not going to talk about every one of my predecessors, although it would be good just to mention Baroness Ann Taylor, who came from Johnson Fold, one of the big estates in my constituency and was the Member of Parliament for Bolton West for nine years from 1974.
Anyway, back to William, who, like me, came from the trade union movement and was particularly passionate about education. One of his greatest achievements was the introduction of school meals, because he recognised that children could not learn and flourish if they were hungry or undernourished. My immediate predecessor, Ruth Kelly, also made a real difference to education. She was involved in schools throughout the constituency, but it was as Secretary of State for Education that she made real changes. She oversaw the healthy eating agenda and introduced the extended schools programme, now often known as “Kelly hours”.
Ruth represented Bolton West at the highest level of Government for much of her career, including a long stint in the Treasury, and as Communities Secretary and, latterly, Transport Secretary. She was the youngest woman ever to sit in Cabinet and somehow found time to become mother to four children. Ruth championed the cause of hard-working families and I wish her well in her new career.
The constituency of Bolton West has had many boundary changes over the years, but I am delighted with the last one, which has brought the town of Atherton, which has been my home for the past 24 years, into Bolton West. The constituency also has the town of Westhoughton, where the residents are called “keawyeds”—I had better translate that; it means “cow heads”. Legend has it that a cow got its head stuck in a five-bar gate and because the farmer could not get the cow out, he sawed its head off. People thought that that was just because he was stupid, but it was not at all—it was because the gate was worth more than the cow. The cow now has pride of place on the badge of Westhoughton high school. The town has also just been named as one of the best shopping centres in the county.
Atherton and Westhoughton share a piece of tragic history. In December 1910, 343 men and boys perished in the Pretoria pit, which was situated between the two towns. The centenary of this disaster will be commemorated this year with the installation of a monument.
We also have the village of Blackrod in Bolton West. I hoped to find out that that was the ancestral home of Parliament’s Black Rod, but no such luck. Wikipedia does not have too much to say about the village of Blackrod, except that it has a dialect
“very far removed from Standard English.”
We have the town of Horwich, which was once a major centre of train building at the loco works—sadly gone—but is now the home of the Reebok stadium and Bolton Wanderers. We also have several parts of Bolton itself: Smithills, the home of the haunted coaching house; and Heaton and Lostock, probably the most affluent part of the borough and home to many footballers.
The whole of Bolton West has a proud industrial heritage, particularly in coal mining and textiles: the pits and the mills, which were largely destroyed during the last Tory regime. However, we have companies that have managed to change and develop and to be part of a diverse local economy, including companies such as the Richard Threlfall Group, a family firm which has been trading for 175 years. The firm started making machinery for the textile industry and continues to supply valves—although now to the oil industry—and manufactures silicon products. Companies such as Web Dynamics, which manufactures technical textiles, are able to succeed and thrive due to the support from the regional development agency and Government grants. It has become a world leader in the development of insulation.
We have Watson Steel Structures, which is providing the steelwork for the Olympic stadium and has also given birth to Wenlock and Mandeville, the two mascots for the Olympic games. Two of our local companies recently won regional apprenticeship awards—the Green Team and MBDA. MBDA is a shining example of a company dedicated to work force development. All employees are encouraged to undertake training to fulfil their potential and it has the most amazing apprenticeship programme. The company really concentrates on the personal development of its apprentices as well as their industrial skills. This means that it has young people who are a real credit not only to themselves but to MBDA—they are confident and capable. Half the apprentices are female and as part of their programme they go into schools to encourage other girls to make a career in engineering. MBDA has received widespread recognition, not least from the previous Labour Government, for its outstanding record and I only wish that every company could follow its example.
Companies like those and others in my constituency have developed and thrived because of the support they have received from the Labour Government, the Labour council and the regional development agency. Work-based learning through apprenticeships, the union learning fund and graduate training programmes have made a real difference to their ability to compete in these challenging economic times. I am disappointed that the Government are cutting the future jobs fund but I hope that they will continue to support the union learning fund, a fund that enables trade unions and employers to work in partnership to increase the skills of the work force and that is particularly effective at getting to hard-to-reach groups. Cuts to the future jobs fund, cuts to the regional development agency and cuts to Government support for industries in Bolton West will not help the budget deficit. They will simply mean that there are more people out of work and more businesses closing.
I was a youth worker during the last Tory Government. I worked with unemployed young people in the ’80s and ’90s when we had generations of them with no jobs, no hope and no future—young people whose lives were so damaged that some of them never recovered. I hope that the Government have learned from the past and that they do not let this situation happen again.
I am ambitious for my constituency. I believe it is a tragedy that young people who live on my estate of Hag Fold do not believe they can become brain surgeons, solicitors or teachers. If only we could overcome the poverty of aspiration, it would make a huge difference to the lives of many people in Bolton West.
I have spent the majority of my working life as a youth and community worker and as a trade union activist. Six years ago I went to work for the trade union movement. My last job was for TSSA—the Transport Salaried Staffs Association—the union for people in travel and transport. So hon. Members can see that I have spent all of my adult life fighting for people with disadvantage or in difficulty. I shall continue that fight and hope I can be a real champion for the people of Bolton West. I hope that I can do justice to the faith placed in me by them.
I must congratulate my hon. Friend the Member for Bracknell (Dr Lee) on his excellent maiden speech, with which I agreed in every respect. I also congratulate the hon. Member for Bolton West (Julie Hilling) on her excellent maiden speech, which was entertaining as well as informative.
I am grateful for the opportunity to contribute to this important debate on support for industry, but we cannot debate support for industry in a vacuum. I do not want to dwell on the past, but none the less we want to learn from it. A lot of the Opposition’s schemes for supporting business when they were in office had a rather half-hearted effect, at best. Many of the schemes, such as the capital enterprise fund, were only subscribed to by 50%. The trade credit insurance fund, which had an original budget of £5 billion, only had a take-up of less than £20 million. Apprenticeships have been hard to fill. A lot of the problems with these schemes are caused by low awareness among industry, eligibility criteria that are far too complex and rule out far too many worthy applicants, and a bureaucracy that small enterprises simply cannot cut through.
I thank the hon. Lady for giving way. I am surprised by what she says about apprenticeships, because in my constituency of Leeds West, the number of apprenticeships has gone up from 70 to 210 in the last decade. At Leeds college of building, 400 people started on apprenticeship programmes supported by businesses this year—more than they have ever had before. I am very surprised that she says that people are not taking up places.
There is a big problem with apprenticeships for a lot of people in my constituency. The college funds NVQ level 2 and 3 training programmes and more and more students are trying to stay in college because they simply cannot get the apprenticeships outside as the employers are too hard up to provide them.
I am a former schoolteacher, and I am sure my hon. Friend will agree with me that what has happened in education over the last few years is that the gap between the best-performing and the worst-performing schools has widened, the number of children from poorer backgrounds going on to decent and good universities has fallen and more people are leaving school with poorer qualification levels and poorer standards in basic literacy and numeracy than did before the previous Government came to power.
I thank my hon. Friend for that excellent intervention. I was going to go on to make that point myself, but I shall leave it to Sir Terry Leahy, the chief executive of Tesco, to make the point for me. He employs 41,000 people under the age of 20 in a total work force of 280,000. He said at the end of last year:
“Sadly, despite all the money that has been spent”
“standards are still woefully low in too many schools. Employers like us…are often left to pick up the pieces.”
That is one of the many problems that industry faces.
Let me go back to the points that I was making that follow on from the apprenticeship schemes. Stourbridge has a great many small to medium-sized enterprises. Indeed, in the metropolitan borough of Dudley, of which we are part, 90% of companies employ fewer than 50 people. It is all very well for business leaders to support regional development agencies, as some of them have in the past, but smaller companies cannot cut through the thicket of bureaucracy and have not benefited from them in any large number. In my constituency, where so much industry is classified as SME, that is a real problem.
Support for industry cannot exist in a vacuum. I must contest the Opposition’s claim, in their motion, about
“supporting businesses through the downturn”.
I have already made the point that a lot of the measures that the last Government took under the umbrella of support for industry had a very limited effect at best when set against the disastrous macro-economic policies that they pursued. The macro-economic environment is really what affects business, not this scheme and that scheme.
Stealth taxes were a cardinal sin of the last Chancellor but one, and in my constituency they had a disastrous effect on industry. Empty property relief was abolished and that had a very negative effect. That, the rise in business rates and the spiralling cost of energy and fuel are the things that really make a difference to business. Business was really let down and was not supported by the last Government, so I strongly contest the wording of the motion. The point on education has already been well made thanks to my hon. Friend the Member for Brigg and Goole (Andrew Percy).
What business needs, first and foremost, is for sanity to be restored to the public finances. My right hon. Friend the Secretary of State made that very clear in his response. A robust deficit reduction plan that will enable us to keep interest rates low is one thing that will support industry far more than this support programme and that support programme. I congratulate the Government on promising us—presumably we will hear more detail next Tuesday—a simpler and lower corporate tax regime, as that is crucial. Tax and regulation are two sides of the same coin, and I also applaud the regulation proposals of the new Business, Innovation and Skills team. My hon. Friend the Member for Banbury (Tony Baldry) mentioned the one in, one out regulation rule that is going to come in. I am hopeful that it might even develop into a one in, two out rule over the next couple of years, and I set that as an aspiration for the new BIS team. I was also delighted to hear the Prime Minister announce this week a review of health and safety regulations, which have got out of hand. They are a burden not just on the private sector but on the public sector.
I make a plea for the protection of our science base and our research and development base, so I am delighted that my right hon. Friend the Minister for Universities and Science is present. I will pay tribute to the last Government in one respect regarding the science base. The shadow Secretary of State, the right hon. Member for Wolverhampton South East (Mr McFadden), mentioned the new patent box tax incentive for drugs and biotechnology products that are researched in the UK. That tax break of 10% in corporation tax is a very useful and proper incentive that might help to stem the tide of research and development that is, tragically, going overseas, despite our having one of the best science and research bases in the world. The last Government belatedly came up with a solution and I very much hope that our Government will continue with that support.
I support the amendment to the motion, particularly in relation to the skills agenda. I am delighted that we will be giving additional funding for apprenticeships to drive business more in the direction of taking them up, as that is badly needed. I am also pleased to see at least some rescue of capital funding for the further education college sector. Stourbridge college in my constituency made a fantastic bid, and was encouraged so to do by the old Learning and Skills Council. It spent a lot of money pursuing that bid in quite a proper manner only to find at the death that all its plans had to be put on hold because the old LSC had over-committed its budget by at least four times. Stourbridge college is pursuing some of those plans, and I wish it all the best. I hope that I can find the right corner of the BIS Department to lobby for our college to get some of the additional £50 million in capital funding that is being made available.
The new skills agenda, the diversion of money from Train to Gain into apprenticeships and the diversion of money from RDAs into local enterprise partnerships will enable small firms and students in my constituency to access that funding directly, to operate under a lighter inspection regime and to get on with the job of training our young people so that they are fit for business. That is what I really applaud about the skills agenda, and I support 100% the amendment to the motion.
First, I congratulate the hon. Member for Bracknell (Dr Lee) and my hon. Friend the Member for Bolton West (Julie Hilling) on their excellent contributions, and I thank you, Madam Deputy Speaker, for giving me the opportunity to make my maiden speech today, particularly during the debate on industry.
I worked in a traditionally heavy industry—the coal industry—which, although it is now struggling for its very survival, is very strategic in terms of security of indigenous energy supplies for electricity generation in the UK. Coal still produces, on average, 33% of the electricity generated in the UK and at peak times it is not unusual for the coal that we burn to produce up to 50% of the nation’s electricity requirement. Sadly, as a nation we are now a net importer of energy, importing up to 40 million tonnes of coal and burning approximately 60 million tonnes per annum. Clean-coal technologies, particularly carbon capture and storage techniques, need to be implemented without further delay if we are serious about saving the planet from its own demise.
The Houses of Parliament have many traditional and historic protocols, one of which allows me to pay tribute to my predecessor, Mr Denis Murphy, who represented the people of Wansbeck for more than 13 years. He was a hard-working Member of the House, who at all times worked with passion, diligence and dedication for the constituents of Wansbeck. On behalf of those constituents, I should like to place on the record my heartfelt thanks to Denis and take the opportunity to wish him and his family the very best for the future. I am proud to follow in the footsteps of Denis Murphy, Jack Thompson and other Wansbeck MPs such as the much-revered Northumberland Miners Association leader Thomas Burt, who became the first ever coal mining MP in 1874. When he retired in 1918 he was the Father of the House, following a long and distinguished career that lasted for more than 44 years.
I have worked in the coal mining industry, having been a coalface worker from an early age before graduating to that fine old school of moderacy, the National Union of Mineworkers, of which I was the elected national president up until the general election in May. I can think of no finer people to represent than those in my constituency and the miners of the UK, and I can think of no finer privilege than representing them in this House—a challenge that I greatly relish.
Wansbeck has been heavily dependent on the coal mining industry, with more than 70,000 miners being employed at one time. It was once the epicentre of the great northern coalfield, which proudly contributed to the industrial revolution from the 18th century onwards. Many people paid the ultimate sacrifice as a result. Many women were widowed and too many children were orphaned. However, as safety and health regulation was strengthened, with the implementation of the Mines and Quarries Act 1954 and the Health and Safety at Work, etc. Act 1974, employee safety in the industry became the envy of the entire world.
At this juncture I must stress that if recent reports are correct and the Government are looking to repeal and dilute hard-fought-for workplace safety and health legislation, which will accurately be portrayed by the general public as an attack on hard-working, decent people, I and my colleagues will campaign vigorously and oppose any such draconian measures. My experience shows clearly that the weakening of any such legislation results in the amplification of the strength of the employer at the expense of protection for the employee, increasing the current imbalance in fairness at work that many people experience. Health and Safety Executive statistics do not lie. In 2008-09, 180 people were killed at work and 132,000 had injuries reported under RIDDOR––the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995—and there were a further 246,000 reportable injuries.
There are many challenges ahead for the people in my constituency. The heady days of the coal industry have passed, but the benefits and experience that shaped our area are still evident—the dignity, the honesty, the sincerity, the good grit and determination of both young and old shine through, even in what might be described as the dark and difficult times of the not-too-distant past.
We shall make the best of our opportunities. Like other areas, we demand high standards in public services. We want schools that we are proud of and hospitals that we can rely on. We want safe streets, free from crime, and employment for all ages, with acceptable wages, terms and conditions. Above all, we want a community built on a spirit of social justice that is both equitable and fair.
Only this week, a report published by the National Cancer Intelligence Network stated that lives could be saved if people from poorer backgrounds were as healthy as the rich. People in my area are not only more likely to suffer from late diagnosis of cancer but also from inequalities in the treatment offered. That is not acceptable. This is 2010, not the early 1800s. We will not tolerate such behaviour from those in power, and nor should we be expected to do so.
There are many wonderful areas in Wansbeck, ranging from Bedlington to Ashington, Cambois and Morpeth, but there are also many problems. Sadly, Morpeth and its residents were victims of horrendous flooding in September 2008, when there was a month’s rainfall in 12 hours and more than 1,000 properties were affected. I am working with the Environment Agency to ensure that the proposed flood alleviation scheme is delivered in full and at the earliest possible date.
There are many fine projects in Wansbeck. The centre of the constituency is Ashington, followed by Bedlington and Newbiggin. For our area to progress and to emerge successfully from the days of heavy dependence on the coal industry we must attract new business and maintain our existing major employers, such as Rio Tinto Alcan. Our area is also heavily dependent on public sector jobs, and the Government must recognise that any attack on the public sector will have a catastrophic affect on constituencies such as mine. Opportunities for young people in employment and education must remain a top priority, while we allay the fears of the elderly and infirm and reassure them that their future is to be cherished, free from fear.
Finally, I thank Members again for their forbearance over the last few minutes. I look forward to many lively but constructive debates in this historic Chamber and hope to emulate the many great speakers from both sides in the mother of all Parliaments.
I congratulate Members who have made their maiden speech today—my hon. Friend the Member for Bracknell (Dr Lee) and the hon. Members for Bolton West (Julie Hilling) and for Wansbeck (Ian Lavery). I am glad I made my maiden speech last week, because they have raised the bar even higher. I wish them all the very best in their future careers in the House.
I am glad to be speaking in this debate on the best way for the Government to support industry. There is one thing on which I think all Members will agree, and it is the most important factor—that the recovery of our industrial sector is linked to the recovery of every other part of our economy. That will repair the broken economy bequeathed to us by the former Administration.
To help industry, before considering anything else, we have to fix the fundamentals of the economy. Britain’s prosperity has traditionally been built on the foundations of sound public finances, low and simple taxation and light, flexible regulation. Over the past 13 years, Labour progressively shredded each of those principles. The previous Government saddled our country with a budget deficit of more than 12% of gross domestic product—the largest in Europe—and a national debt approaching £900 billion, a staggering increase of more than 160% in 13 years.
As a result, we have no choice but to make cuts in both public borrowing and public spending. If we do not, we shall no longer be able to sell enough Government bonds to fund the deficit, resulting in a catastrophic economic crisis. It really is that simple. At this point, we cannot even plan to reduce our total debt stock; at best, we can only hope to add to it less fast.
Let us be clear: these are Labour’s cuts. As we make them, we must of course make sure that we protect the most vulnerable in society.
A few weeks ago, the OECD, the G7 and the International Monetary Fund said that we had no choice but to make the cuts, so I think they would agree with what I have just said.
We cannot rely on a benign global economic outlook as we approach the cuts. I believe that the international financial markets are at their most fragile since the collapse of Lehman Brothers in 2008; the euro’s troubles are only just beginning; the largest emerging economies in the world are about to raise interest rates, so demand will fall, which will affect global demand; and investor appetite for sovereign debt, including our own, is rapidly diminishing.
If we are to get our economy moving again we have no time to lose, so I look forward to the emergency Budget statement that my right hon. Friend the Chancellor will make next week.
To help industry, we need to get the banks lending again. I have met many people in Bromsgrove who tell me that it has never been so difficult to get a loan. Drawing on my 19 years’ experience of working in the City, I believe that bank lending will not recover until the banks are forced to admit the true state of their balance sheets. Right now, the markets just do not believe that our banks are being truthful about the problems that they face. In turn, the banks are not getting the capital that they need, so they are instead squeezing existing customers, as well as not lending.
As well as a thorough review of financial regulation and regulators, we need an independent audit or a stress test of each British bank, eventually leading to a private sector recapitalisation of weaker institutions that are identified. In that regard, the report that was recently issued by the Future of Banking Commission—of which, I believe, my right hon. Friend the Secretary of State for Business, Innovation and Skills was a member—has made some worthy suggestions.
Also to help industry, we need a dramatically different approach to business regulation, as many of my hon. Friends have said today—an approach that is radically different from that of the previous Government. Many business men and women say that the sheer cumulative volume of regulation makes their lives so difficult. People who need to be dealing with customers and products are instead too busy complying with regulators, and many regulations are simply not necessary to keep businesses honest and safe.
The word “regulation” is often bandied around. Although many people hear it, they do not appreciate its full impact. Does my hon. Friend agree that, in the small business sector alone, nearly one full-time employee a year is needed to deal with the growth in regulation, particularly over the past decade—equivalent to a cost of about £11 billion a year—and that there is no greater signal for turning back the clock? I agree with my hon. Friend the Member for Stourbridge (Margot James) that it is perhaps time for a one-in, two-out policy on regulation.
Absolutely, and I think that my right hon. Friend the Secretary of State for Business, Innovation and Skills said earlier that 21,000 new business regulations have been introduced over the past 13 years—six every working day of the last Government—but such talk of regulation also applies as much to EU regulations as to domestic regulations. Much of what comes from Brussels is often unnecessary, badly thought through or just ignored by other member states when it suits them. So we need a new approach to EU regulations that helps British industry and business and not one that undermines them.
My constituency of Bromsgrove was once a very proud manufacturing hub, supplying much of the west midlands industrial complex. Much of that industry has now, sadly, disappeared. Some hon. Members may remember one of my predecessors, Sir Hal Miller, who was a passionate advocate of industry in the west midlands, especially the motor car industry.
In recent years, a large “closed for business” sign has been hanging over our country. Whether down to punitive taxation, excessive regulation or inadequate incentives, the effect was always the same: to repel new businesses and discourage existing ones. Having run a private equity business, I cannot stress highly enough how destructive those misguided policies have been. Consequently, I support the amendment, and it is hugely reassuring once again to have a Government who recognise the urgent need to re-open Britain for business.
First, I congratulate you, Madam Deputy Speaker, on your election and the hon. Member for Bracknell (Dr Lee) and my hon. Friends the Members for Bolton West (Julie Hilling) and for Wansbeck (Ian Lavery) on their witty and wise maiden speeches.
In 1981, I was one of the organisers of the people’s march for jobs—500 unemployed men and women from the ages of 16 to 60 who marched with dignity to London, such as the mother and her son from Whaley Bridge and the 150 people who joined the march from Birmingham and the midlands. They were the victims of a Conservative Government who stood back and said that unemployment was a price worth paying. That was an error of historic proportions, which severely weakened our manufacturing base, with catastrophic consequences still being felt to this day, including in the poorest parts of my constituency—Birmingham, Erdington.
All that stands in stark contrast to the wise decisions that were taken by a Labour Government in the depths of an unprecedented global economic crisis to embrace industrial activism. Short-term measures were taken such as the scrappage scheme on the one hand and strategic investments in Sheffield Forgemasters, Nissan, Airbus, General Motors and others on the other hand. As a consequence, the scrappage scheme alone created 400,000 jobs, with tremendous benefits for the supply chain in the automotive industry. Those strategic investments have built firm foundations in areas of growth: the nuclear industry and renewables, aviation and the car industry. Nissan is a classic example, with £20 million of public investment levering in £420 million of investment by the company, 50,000 new cars and 60,000 batteries—a good deal for Britain.
We now have the right hon. Member for Tatton (Mr Osborne). He is the Private Frazer of Downing street. “We’re doomed. Doomed,” is his daily refrain. “Labour mismanaged the economy,” is the moan that we constantly hear from Ministers. It could not be further from the truth. By 2007 we had reduced borrowing and debt to beneath the levels that we inherited from a Conservative Government. Then, in a global economic crisis, we borrowed to invest, to boost the economy and the order books of the companies in my constituency, such as those in the machine tool industry—companies such as Dana, Guhring and Micro. All those benefited from the wise and brave leadership given by our Government.
Will the hon. Gentleman explain why, when Labour came to office, Northampton was 440th in the long list of areas of low unemployment. We rose to 132nd in that list under Labour. What do the people of Northampton have to thank a Labour Government for, in that respect?
A Labour Government in the most difficult times did not do what a Conservative Government did in the 1980s—abandon people to their fate. The Labour Government stood on the side of ordinary people and took the necessary strategic long-term decisions to rebuild our manufacturing economy.
I am obliged to the hon. Gentleman. We are both Members of Parliament in the west midlands, and he waxes eloquent about public investment being the only panacea for the problems that we have in the west midlands. There is an organisation that he will know about called Advantage West Midlands. I am sure the shadow Secretary of State also knows about it, because he appointed the board when he was a Minister. I have business men in Tamworth queuing up to tell me how inefficient and how ineffective that organisation is. One of them is a former Labour councillor who went to AWM, asked for investment, did not get it and lost his business—
I will come to the truth about Advantage West Midlands in a moment. The truth is the opposite of what has just been said.
What we are hearing is the politics of the alibi, camouflaging an ideological objection on the part of the Con-Dem alliance to what its members call big government. It fails to understand the critical role of Government in boosting manufacturing in Britain. Of course it is true that good companies are those that help themselves. I have been involved in negotiating ground-breaking deals in the nuclear industry, the food industry, dockyards and the defence sector—ground-breaking deals that have transformed what were failing companies, working with the employers by way of a change and investment agenda.
I know from my experience in the real world of work, not the world of the trading floors, that time and again, with good employers, we have had to go to central Government, local government and the regional development agencies. Only last year I was involved in an exercise together with Scottish Enterprise and the Scottish Government with a leading food manufacturer. Had it not been for partnership, we would not have got the investment, which in turn levered in further investment from the company, securing the future of 500 jobs in an area of high unemployment.
First, the reference was to 400,000 cars. Secondly, the companies are British-based world class manufacturers of machine tools who, when I was at their exhibition last Friday and met many of them, said with one voice, “For us to succeed, we look to support from and partnership with Government.” Those are precisely the companies that were rescued from the brink by the car scrappage scheme.
The lesson from experience in the real world of work is that industry best flourishes in partnership with Government, with a framework provided by good government, and sustained and strategic investment underpinned by a determined national will. One need only look at Germany’s enduring strengths in manufacturing, which exist precisely because there is that national will. I am proud of the fact that a Labour Government embraced industrial activism. Now is absolutely not the time to pull back from that, because it would be an error of historic proportions. The decisions we make now will decide whether we grow or decline in the future—whether we condemn another generation to no hope. It is therefore essential that we invest to grow and act to rebalance our economy, which had become too heavily dependent on the finance sector.
That is why, for manufacturing, capital allowances matter because they incentivise investment in machinery and plant. That is why, for manufacturing, the patent box matters, with its 10% reduction in corporation tax to encourage innovatory companies to locate intellectual property and manufacturing here in Britain. That is why, for manufacturing, it matters that there is support for research and development. I hope that in refocusing current support, it is not so severely circumscribed as to avoid support for world-beating companies such as Jaguar Land Rover. The Jaguar plant in my constituency is at the heart of a hub of 150,000 people in the midlands who depend on the motor industry for their livelihoods. I will look to the Government to work with me, as the Member for Erdington, in respect of the Jaguar plant, and the hon. Member for Solihull (Lorely Burt), in respect of the Land Rover plant, to secure the future of those two beacons of manufacturing excellence.
That is also why regional development agencies matter. What we have heard today is ill-informed prejudice that flies in the face of the history of, in particular, the successful RDA that is Advantage West Midlands. I have seen that at first hand. After the crisis at Rover in 2000, the supply chain became less dependent on Rover, thanks to the work of Advantage West Midlands. As a consequence, when Rover collapsed in 2005, the supply chain did not collapse, as might otherwise have been the case. The manufacturing technology centre and the manufacturing advisory service are prized by manufacturing employers in the midlands, and that is because of what Advantage West Midlands has done.
Let me issue a challenge to the Secretary of State: necessary as it is to move beyond myths, will the Government now publish the independent evaluation of regional development agencies ordered by the Labour Government before the election? Will he confirm that that demonstrates that Advantage West Midlands is one of the best two RDAs; that for every pound of public money invested, £8.14 of wealth is created in the regional economy; and that it has scored the maximum possible score and has been deemed to be performing strongly? In this new era of openness, will that report now be published?
Birmingham is historically the laboratory of manufacturing and of the genius and enterprise of the British people; too often, now, it is British genius but made in China. Our single biggest task is the renaissance of manufacturing in our country. That will not happen if Government once again abandon British manufacturing.
I thank those who made their maiden speeches today. It is so good to hear them participate in a debate on industry. For me, this is one of the most important debates that we can have, given that we are in the middle of a recession and trying to take our country out of it. Truly focusing on industry, business, skills and innovation will take us through the recession and get us back to the strong economy that we need again for this country.
I also feel personally that this is important. I still remember the day when I was in school and was first taught about the industrial revolution, and how that motivated and inspired me to go and do something in business. I spent the 20 years after I graduated in different sectors of business. The industrial revolution is a part of our history that made us great—one hon. Member mentioned that in his maiden speech today—and we want to make our country great again, and creating a strong economy is one way to do that.
The Government can do several things in that respect. Reducing bureaucracy has already been mentioned by several hon. Members, but I want to emphasise what businesses with which I have worked and spoken—in Brentford and Isleworth and elsewhere—have told me. We must do something about the bureaucracy and red tape that both small and large businesses must manage, because they saw it increase under the previous Government. Instead of that red tape and bureaucracy, we need to ensure that we create the atmosphere and environment in which enterprise can flourish, and create an enterprise-led economy. That means encouraging new businesses and getting them to innovate and create new ideas. Time and again, as a country and as individuals, we have proved that we can do that so well in Great Britain. Let us get rid of the regulation, support new enterprise, and ensure that we build this country again into what it can be.
On creating a better-balanced economy, we have perhaps limited ourselves and focused on too few sectors. I worked in financial services, which in the past has helped us to create a strong economy, and I believe it will again. However, we need to look beyond what we have done before and ask, “What is needed for the future?” I want to ensure that we are supporting the manufacturing sector, research and development, and science and technology, which need our input and support if they are to grow.
On education and skills support for business, I welcome our proposal—it was mentioned today, in the coalition agreement and previously in the general election—for investment in apprenticeships and university places. Businesses have told me that they have spent crucial training time in their organisations teaching people how to read and write, rather than getting on and developing the skills that they need. We must begin to address that at schools, by ensuring that our children get the best possible education, so that we create the skills necessary for the country.
The previous Government pursued wasteful policies in the past 13 years. They introduced a number of schemes that were designed to help businesses through the recession, but those have failed. We now have a duty to this country to review those projects and ensure that we are getting value for money for them. Policy is really all about the outcome; it is not about having another new idea or drafting another piece of legislation every day. It is about asking, “What will this policy actually deliver on the ground in terms of jobs and support for industry?” I encourage the Government to look again at those policies. We need to ensure that we are supporting people in skills-based training and apprenticeships. I thank my right hon. Friend the Minister for Universities and Science for visiting West Thames college in Isleworth with me. That college is a great example of a good scheme. We need to build on such schemes to ensure that we gain the skills that are required in future.
I also encourage the Government to do everything that they can to support British industry and create that competitive environment for business investment. Given the state of the public finances, we must find ways to do that and increase opportunities for business, cut excessive expenditure and red tape, and simplify our processes. I therefore support the Government’s amendment, because we should do all that we can to rebuild our country and allow businesses and people across this land to aspire to do what they can to make this country great once again.
I am grateful for the opportunity to make my maiden speech today in this debate on Government support for industry. I congratulate the hon. Member for Bracknell (Dr Lee) and my hon. Friends the Members for Bolton West (Julie Hilling) and for Wansbeck (Ian Lavery) on their contributions. Over the last few weeks, I have listened to many maiden speeches and been very entertained—although probably not as much as I was today by the story of the cow—and taken on a descriptive geographical journey around many parts of this great nation.
It is a great privilege to stand here today in this wonderful place, having recently been elected by the people of North West Durham, the community that I was born into and grew up in. There is something very special in being elected to represent the people I grew up with, went to school with and still live among. I follow in the footsteps of Hilary Armstrong, who served North West Durham for 23 years and, before her, of Ernie Armstrong, her father. I have followed in Ernie’s footsteps in more ways than one as he was a head teacher in Durham County and went on to be the assistant director of education in Sunderland, a job I followed him into many years later, before following him and his daughter as Member of Parliament for North West Durham. Both were first-class Members of Parliament, hard working and passionate about the north-east region and the North West Durham constituency.
Hilary is certainly going to be a very difficult act to follow. She was a social worker who brought practical skills and experience to this House. She was a strong, determined and persuasive female MP, at a time when there were even fewer female Members than there are today. She was immensely proud of her northern roots and a staunch defender of the north-east region. She had a long and distinguished career, holding several posts in government—not least Chief Whip—but it was her role as social inclusion Minister where she was truly in her element. Hilary was passionate about improving the lives of the most vulnerable and the disadvantaged in our society, and in that we share a common purpose.
For those who have never visited North West Durham, I can tell them that it is a hauntingly beautiful place and that they should plan to visit it soon. The towns of Consett, Crook and Willington are surrounded by small villages. The Durham dales and countryside surrounding that are categorised as an area of outstanding natural beauty. That contrasts sharply with the countryside as I remember it as a child, when it was black and covered with coal dust, but all that has now gone. I do not know why I should be surprised at that—given that it is sandwiched between north Yorkshire and Northumberland, it was always going to be beautiful under all that coal dust.
Durham has a long and proud industrial history. It was heavily dependent on coal mining, steel production and heavy engineering. Every village had a pit and Consett was a steel-making town. North West Durham, our industries and our people suffered terribly during the Thatcher years. The closure of Consett steelworks resulted in unemployment among the male population reaching almost 100%. We lost jobs and we lost industries, but there were some things that even the Thatcher Government could not take from us—our communities; our resilience; our fortitude in the face of unemployment, poverty and deprivation; the warmth of our people; and the way in which they care and work for one another. That may be linked to what the Prime Minister now refers to as the “big society”, but we in the north-east think of it fondly as socialism.
North West Durham, like most of the post-industrial north, has undergone an economic and social revolution in the past 13 years, with the support of the last Government. Educational outcomes, which are very close to my heart, have been transformed. We now have some of the best schools in the country, with the best performances. Sure Start centres are ensuring that our children have the best beginning to their academic lives, and our young people now go on to further and higher education in much great numbers than was possible before. There are more good, sustainable jobs; people are better off; health and housing services are much improved; our local economy has been given the time and support needed to adapt and diversify; and the food and renewable energy industries and tourism now thrive. The biggest employers in North West Durham, outside the public sector, are International Cuisine and Derwent Valley Foods—a sign of the diversification of our industries and jobs. Renewable energy and green industries were being established in the north-east region with the help of the last Government, and I sincerely hope that they will continue to be supported by the new Government.
Like Ernie and Hilary Armstrong, I have spent much of my career working with, and supporting, vulnerable young people—in my case, specialising in special educational needs. I will be campaigning on behalf of these young people in the House and will speak on SEN and disability matters whenever I have the opportunity. I will be looking to Members from both sides of the House to support me in advancing the interests of this group of disadvantaged, and very often marginalised, young people. I will also be championing the cause of children living in poverty, because I have seen first hand too many times the links between poverty and educational under-achievement. It is simply unacceptable that children in receipt of free school meals—a clear indicator of poverty—on average do progressively worse at school than their peers, that young people with parents in manual occupations are far less likely than others to go to university and that only one in six students at top universities come from lower socio-economic backgrounds.
With the recession and the return to power of a Conservative Government, backed by their Liberal Democrat friends, my people fear a return to the desperate situations of the 1980s and early 1990s. They fear for their jobs, their homes and their children’s future. The public sector in my constituency employs 6,100 people, and I am especially worried about them, particularly given the Prime Minister’s warnings about what he has in mind for the north-east. In order to grow, the north-east needs a work force who are highly skilled and possess diverse, adaptable and technological knowledge. There are real opportunities for us to seize, in tourism and the renewable energy industry, that have the potential to bring jobs and growth to the north-east, but to do this the Government need to show that they have faith and confidence in the region—the kind of faith and confidence that employers such as Nissan have shown and which the previous Government had in my region.
I will work ceaselessly as the MP for North West Durham—the constituency I was born into—and for the people I grew up with and whom I am proud to represent in the House.
I congratulate the hon. Member for North West Durham (Pat Glass) on her passionate speech about her constituency, and I am pleased to hear how attracted she is to the big society—she is always welcome on the Conservative Benches.
We all know that we are in times of deep economic hardship, but we are now heading in the right direction. A key reason is that we have already begun to fix the wrongs, and our first focus has been on balancing the books. For anyone in any doubt about whether this is the right strategy, I need only point to the commendations that my right hon. Friend the Chancellor received at the G20 summit in South Korea for his efforts in this area. However, although we have made an important start, there are of course many things that we need to do, and for me the importance of business cannot be underestimated. From my experience at YouGov, and from talking to businesses in Stratford, small or large, I know that there are three main areas that people want us to focus on: getting rid of bureaucracy and red tape, simplifying the tax system and giving small and medium-sized businesses tax incentives and easier access to funding. All those areas must be addressed, and I shall endeavour to discuss them today.
It is no coincidence that after 13 years of a Labour Government, business in this country feels bogged down by bureaucracy. I am delighted that one of the first things that we have done is introduce a one-in, one-out policy on regulation. That will change the culture of Whitehall and help those stuck in red tape to free themselves and get on with their business. Next, we need to focus our efforts on the need for a simpler and fairer tax system for business. It is not in our country’s interest for businesses to waste time and resources on decoding the hugely complicated tax system. Someone running a small business is the chief executive officer, the salesperson, the receptionist and the accountant, so the more time they spend on bureaucracy, the less they spend on building up their business.
The abolition of the employer’s contribution to national insurance must be commended. It is an excellent policy, and there are already businesses in my constituency, such as GreenMech, DCS Europe and the brilliant Purity Brewing, applauding this initiative. Even Lord Digby Jones, the previous Government’s adviser, warned against that anti-jobs policy in the other place.
One of the most difficult areas to address is the funding available to SMEs. The previous Government made steps in the right direction, but they did not work. The RDAs have clearly not worked, and they have wasted an enormous amount of taxpayers’ money on bureaucracy. Banks want to lend only when the sun is shining. The previous Administration failed to fix the roof during those times, and it was SMEs that paid a heavy price. However, I am pleased that we have already pledged to ensure that a flow of credit is available to viable SMEs, both by considering a national loans guarantee scheme and by the use of net lending targets for banks. In the future, we must continue to do more to help in that area.
I want to address another matter that is key to strengthening our business sector in this country. We must ensure that our employees of the future are equipped with the skills that can help them and their employers succeed. I for one always looked at the skill and expertise of a potential candidate, rather than just their university education. That is why I am such a strong believer in apprenticeships and the skills that they offer. In a previous life, I did a lot of work with a fantastic charity called Edge, and I applaud the Government’s focus on apprenticeships.
Making things and selling things to the world are going to be vital for our future. That is why we need to support engineering, whether it be mechanical, civil or software engineering. Engineering needs to be seen as an aspirational qualification again. We need only look at Germany, a nation proud of its engineers, to see what can be achieved. For me, we must focus on specific areas of business, in order to create a niche for ourselves as a nation.
I am grateful to the hon. Gentleman for giving way—I believe that this might be his first run at active combat in the Chamber, so he is welcome. He talked about software engineering, and his party made a commitment in the election to a tax relief system for the games industry, which is important in the sub-region that he represents. Does he still support that?
I am going to answer the hon. Gentleman. At the same time, we have to remember that we are currently borrowing £500 million, and we have to cut our cloth accordingly.
We must focus on specific areas of business to create our niche. If we look at Britain in relation to our Chinese and Indian counterparts, we see that we can never hope to compete with them on production cost or quantity. That is why we must focus on intellectual property and innovations. We need only look at Formula 1 to see what talent we already have in innovation here in the United Kingdom. As politicians, we need to focus our energy on the recommendations of inventors such as Sir James Dyson. Sadly, however, we are tending to lose our best people to other nations where innovation is better funded. For example, Jonathan Ive, the designer of the iPod—such an iconic brand of our era—is British, but he works for a great American company. We must learn from the USA. Silicon valley is the home of US tech start-ups precisely because of the environment created there by the US Government and because of the support that start-ups receive. We should learn from that and create our own opportunity zones here in the United Kingdom.
I applaud the approach taken so far by the coalition Government, and it is important that we continue to do all we can to encourage growth in the private sector, so that we can continue to create jobs that are sustainable. That will be an important move away from the previous Government, whose policies led to an unsustainable and unrealistic bloating of the public sector. Our future lies in business and, for me, specifically in innovation. What we do now will affect the course of our business future, and I am confident that, with the coalition Government in place, we will succeed.
Let me end by saying that I support the amendment tabled in the name of the Prime Minister and colleagues.
Thank you, Mr Deputy Speaker, for this opportunity to make my maiden speech. I warmly congratulate the hon. Member for Bracknell (Dr Lee) and my hon. Friends the Members for Bolton West (Julie Hilling), for Wansbeck (Ian Lavery) and for North West Durham (Pat Glass) on their excellent contributions to the debate today.
Barnsley East is a new constituency, albeit one with an old name. It is made up of wards in the old constituency of Barnsley East and Mexborough and in the old Barnsley West and Penistone seat, so it is my privilege today to pay tribute to not one but two predecessors. Jeff Ennis served the people of Barnsley for three decades, first as a local councillor, rising to become leader of Barnsley council, then as the Member of Parliament for Barnsley East and Mexborough. Born and bred in Grimethorpe, he still regards himself as a “Grimey” lad. He was not merely from that community; he was always part of it.
Jeff Ennis was well known in this House, not least as an animal lover, particularly those animals of the four-legged variety that can be seen at events such as the 2.15 at Newmarket, the 3 o’clock at Cheltenham and the 3.30 at Sandown—votes permitting, of course. Hon. Members might know that Grimethorpe is the home of the world-famous Grimethorpe colliery band. The band featured in the film “Brassed Off”, which was set in my constituency. Indeed, Jeff Ennis helped to set up the all-party group on brass bands. He understood as much as anyone that the elites who run the world of culture do not always properly reflect and support the culture and entertainment of working-class communities, and in a small but important way, this highlights the insight that Jeff Ennis was able to bring to the House. He was always a powerful and authentic voice for working-class people.
I mentioned that I also had the privilege of representing wards that were part of the Barnsley West and Penistone seat, which was represented with great distinction for the better part of 20 years by Michael Clapham—better known to us all as Mick Clapham. It is fair to say that, in the brief time that I worked in the Labour Whips Office, Mick’s name would occasionally appear on the lists of hon. Members who might require extra assistance in finding their way through the appropriate voting Lobby. I know that he opposed ID cards, tuition fees and the Iraq war, which puts him on broadly the same platform as all the candidates for the Labour leadership. I am sure that that will amuse him, and slightly surprise him.
I was privileged to be present at the unveiling of a memorial by the steps of the town hall in Barnsley to mark all the men and boys who were killed or injured while working in the pits in and around Barnsley. Mick Clapham spoke movingly, and without notes. In this place, he was able to use his tremendous experience to considerable effect, especially in helping to secure much-needed compensation for former miners. I know that he will continue to use his experience in his capacity as chair of the Government’s important review committee on the regeneration of the coalfield communities.
Mick embodied one of the finest traditions of this House in being one of the large number of former miners who have served here. My hon. Friend the Member for Bolsover (Mr Skinner) represents this tradition extremely well, as do others, including my fellow new Member, my hon. Friend the Member for Wansbeck (Ian Lavery). The number of former miners in the House is, sadly, reducing and it is my view that the House of Commons is the poorer for it.
The area I represent remains a community built on coal. I myself grew up in Edlington, the site of the main Yorkshire colliery, and the house I grew up in overlooked the pit. My brother and his family still live in the same house. In not-too-distant history, coal mining in Barnsley accounted for more than 30,000 jobs, with many more dependent on that employment. My constituency has had more than a dozen pits at one time or another. Today, the number is zero, and we are still dealing today with the consequence of the closure of those pits.
My constituents are proud—very proud—of their industrial heritage. They remember the jobs of the past, but they want the jobs of the future. The question today, then, is how we continue to give people the opportunities they need and how we can continue to transform lives and life chances. The context was set out very well by the leader of Barnsley council, Stephen Houghton, in the “Tackling Worklessness Review” of March last year. How we use the power of Government, working with the private sector and with local government to promote employment in areas like my own is extremely important.
I have to say that the policies of the new coalition Government are not encouraging. There seems to be complete hostility towards the public sector, and complete hostility towards the role of Government: it is always the Government who are the problem, and they can never be a force for good. That was certainly the Prime Minister’s and the Chancellor’s rhetoric. We heard, I thought, a slightly different tone from the Secretary of State in his rather baffling performance today, but I am sure that we will get to the bottom of where he is coming from.
The abolition of the future jobs fund, which was pioneered in Barnsley, was a major blow and a matter of profound regret for me and my constituents. We are also seeing the beginning of the hidden cuts in education that are affecting schools across Barnsley right now. This is not new politics, but old economics. The mistakes of the 1920s are being repeated today—the sort of deflationary policies that we are now seeing repeated nearly a century later. By itself, the private sector cannot possibly deliver all the decent jobs in areas like mine that have fundamental structural problems.
To finish, George Orwell spent some time in Barnsley when he was researching “The Road to Wigan Pier”. He once said, in a rather critical way:
“A Yorkshireman in the South will always take care to let you know that he regards you as an inferior. If you ask him why, he will explain… The Northerner has ‘grit’, he is… ‘dour’, plucky, warm-hearted, and democratic; the Southerner is snobbish, effeminate, and lazy”.
That might be slightly uncharitable towards southerners—[Interruption.] I emphasise the word “slightly”. Despite the serious threats we in Barnsley face from the new Government and despite the challenges that lie ahead, I am convinced that the greatest asset we have in Barnsley are the people of Barnsley. It is their talent, their skills, their hard work, their ingenuity, and their pride in themselves and their compassion for others that make me so very proud to represent them here today.
I begin by congratulating the hon. Member for Barnsley East (Michael Dugher) on his confident and well-spoken maiden speech. I noticed that he mentioned in the early part of his speech that he had worked in the Labour Whips Office, so I suspect he will be extremely useful to his new colleagues in helping to explain to them exactly how this place works. He also mentioned the need for jobs for the future; I entirely endorse what he said and agree with him on that.
I think it was the Secretary of State for Business, Innovation and Skills who set out earlier the basic difference of opinion between the Government and the Opposition regarding the spending of money, and that is reflected in the Government’s amendment to the Opposition motion. The previous Government tested to destruction the theory that if we throw money at a problem, we will resolve it. We all know now that that is not the case.
All Members should welcome discussion in the Chamber of the importance of manufacturing, and of the need for a balanced economy. I might have misheard the shadow Secretary of State earlier, but he seemed to imply that only Labour Members of Parliament understood the needs of manufacturing because it was based in their constituencies. Perhaps Labour Members have missed this, but there has been an election, and some seats have changed hands. I for one represent a seat with a significant amount of manufacturing, although there will be less when AstraZeneca closes its site at the end of 2011. However, my constituency has a large amount of high-tech manufacturing, including a wonderful engineering department at Loughborough university.
Does my hon. Friend share my bafflement that all the speeches that we have heard from Labour Members seem to ignore the fact that over the past 13 years the share of manufacturing in our economy has halved? It is entirely contrary to the facts for them to talk about the brilliance of the Labour Government as regards manufacturing.
I entirely agree with my hon. Friend. Manufacturing has fallen at a faster rate over the past 13 years than in the 1980s. The hon. Member for Birmingham, Erdington (Jack Dromey) spoke about the need for a balanced economy, but the previous Government had 13 years to achieve that. I welcome the fact that the Conservative-Lib Dem Government’s coalition agreement says that there is a need for a balanced economy.
My hon. Friend makes a powerful case. Was not the entire strategy of the former Labour Government predicated on three things: the housing market, the growth in financial services and public sector expenditure increases? All were found wanting, and manufacturing and other sectors were neglected.
I entirely agree with my hon. Friend. I noticed a certain amount of eye rolling when an earlier speaker mentioned that she had worked in the financial services industry. As my hon. Friend has pointed out, however, the financial services industry’s growth over the past 13 years was huge. We will not take lessons from Labour Members in that regard.
In referring to industry, I think that Labour Members have been talking about larger companies—perhaps I will be corrected—but most people in this country work for smaller businesses, and in some cases very small businesses. They are the backbone of our economy, and their growth will drive the economy out of the current situation.
I want to talk about three aspects of support for business, some of which have been referred to already. First, more bank lending to businesses is necessary. As chamber of commerce research shows, small businesses are being penalised with higher rates of interest. In my constituency, two gentlemen running a small industrial company who rightly took out a mortgage to buy premises in 2007—when lenders were falling over themselves to lend their company money, as it was a very sound bet and had never failed to make repayments—have suddenly been told by the building society in question that the property has fallen in value and that the ratios are therefore wrong, so they will have to renegotiate the mortgage and pay higher interest rates that are clearly beyond them. That is exactly what banks should not be doing at this critical time in the economic cycle when businesses need support.
Obviously I am not running the Treasury, and I am not the Chancellor of the Exchequer. [Hon. Members: “Not yet.”] That is too kind.
I contacted the chief executive of the building society I mentioned and asked for an explanation, but I sometimes wonder whether decisions are made at a lower level of management and without any real thought or understanding. We heard a statement earlier about the directors of banks. I should like to know whether all directors are fully informed of the way in which their bank is running its business, and whether they realise that they are putting the squeeze on businesses which, although sound, cannot afford to make higher repayments at this stage of the economic cycle while they are also trying to stay afloat and keep people employed.
Much has already been said about the increase in regulation. According to the Federation of Small Businesses, small firms spend seven hours a week dealing with red tape. I welcome the Government’s decision to introduce a “one in, one out” system. I do not know whether other Members have been receiving surveys, but I received one recently asking what law I would like to introduce. Actually, I do not want to introduce any more laws. I should like to see fewer laws. I should like laws and regulations to be simplified, both for businesses and for individuals.
Members have mentioned the gold-plating of European Union legislation, which goes on all the time. I sincerely hope that following the change of Government, we shall see an instruction that regulations are no longer to be gold-plated.
May I commend to the hon. Lady the most recent report of the Regulatory Reform Committee, published in the last Session? Evidence was taken from a wide range of sources, including the London Business School, which said that it was not true that Britain was in the habit of gold-plating EU regulations.
I am grateful to the hon. Gentleman, and I shall certainly look at the report, but I know from my business experience that that is not the case. Some regulations may not have been gold-plated, but I understand that in one instance that has been brought to my attention—the agency workers directive—the Government have gone further than was intended in the EU’s original drafting.
I visited a local business recently, a recruitment company. I was told that it employed one individual to help it to deal with its accounts. In one month, he has to fill in four different forms for a business register and employment survey, an annual business survey, an annual survey of hours and earnings, and a monthly wages and salaries survey. The annual business survey asked how long it took him to fill in the form. It had taken him one hour and 25 minutes—one hour and 25 minutes that could have been spent earning money for the business. Who is using all this information, and what is it being used for? Is it just going into some big black hole somewhere? We are making our businesses spend far too long on red tape and form-filling.
Before I return to the subject of regional development agencies, I want to say something about skills and apprenticeships. I was delighted when, earlier today, the Prime Minister said that there would be support for them in the Budget, and I welcome the 50,000 additional places that are mentioned in the amendment to the motion. We have a terrific college in Loughborough, which I visited again recently. My right hon. Friend the Minister for Universities and Science has visited it with me, and his colleague the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), has visited it as well.
The college provides a variety of courses, but its building plans—like those of the college in the constituency of my hon. Friend the Member for Stourbridge (Margot James)—have been hit by the chaos in the Learning and Skills Council. Having committed £30,000 to the planning process for its new buildings, Loughborough college found that the LSC had massively overspent, and that it would receive none of the money. It now tells me that, although it does a tremendous job and its courses are well over-subscribed, its buildings will not be fit for purpose for much longer, and it does not know how it will find the money to fund the new ones.
Adult learning is very important. The hon. Member for Bolton West (Julie Hilling) spoke of aspiration. I think that we should encourage better careers advice, emphasising the importance of manufacturing to school pupils and informing them of the opportunities that are available in the engineering sector and, indeed, all areas of manufacturing. One practical suggestion from a manufacturer is to help employers to run in-house training courses.
I want to comment on RDAs because I did not get a chance to intervene on the hon. Member for Birmingham, Erdington (Jack Dromey). Some RDAs may have achieved their purpose, but I recently spoke at a conference organised by the Leicestershire Asian Business Association. There were 50 people in the room. Not one of them—I specifically asked the question—had a good word to say about their RDA, the East Midlands Development Agency. I am happy to listen but it is up to the regions to decide the best way to offer business support. The best way may be through local enterprise partnerships. It may be through keeping some form of regional structure, but I support the amendment to the motion.
I congratulate you, Mr Deputy Speaker, on your new position. I also congratulate the new Members—the hon. Member for Bracknell (Dr Lee), and my hon. Friends the Members for Bolton West (Julie Hilling), for Wansbeck (Ian Lavery), for North West Durham (Pat Glass) and for Barnsley East (Michael Dugher)—on their excellent speeches.
I am grateful for the opportunity to address the House for the first time as the Member of Parliament for Middlesbrough South and East Cleveland, particularly during a debate on industry. I follow in the footsteps of my former employer, mentor and friend Dr Ashok Kumar, who tragically died on 15 March this year. He was a polite, courteous and conscientious local community leader with an exemplary knowledge of manufacturing, processes and industry in general. More than that, he was loved in our area not just for his tenacity and work ethic, but for the warmth that emanated from his every pore. The people living in the hills, valleys and suburbs of Middlesbrough South and East Cleveland, whom he served with a selfless and determined devotion, will miss him terribly. He will be a hard act to follow.
It is a great honour and a privilege to represent the constituency where I was raised, and that I call home. Middlesbrough South and East Cleveland is a microcosm of British society. It includes former mining villages such Loftus, Carlin How, Skinningrove, Brotton and Skelton, large estates such as Hemlington and Park End, market towns such as Guisborough, leafy suburbs such as Nunthorpe, Marton and Coulby Newham, and seaside resorts such as Saltburn, where I live today. Those are all areas where I have personal memories of growing up.
Middlesbrough South and East Cleveland encapsulates some of the diverse and interesting communities that make our country great, and those communities are a reflection of their industrial setting. My area bore men and women who assisted a son of my seat, Captain James Cook, to build the Endeavour from local timber to sail and discover Australia. Centuries later, the descendents of those same people helped to build the Sydney Harbour bridge from East Cleveland iron ore and Tees river steel. Today, my constituency still provides and proudly manufactures steel components at Corus Skinningrove and at TC Industries—places I know very well—where, alongside fellow workers at TCP Redcar, whom I represented as their union official, and with our two local papers, the Evening Gazette and The Northern Echo, we have fought to keep our proud steel-making heritage. That campaign still continues.
Many of my constituents work in and around the Wilton and Billingham chemical sites. A proud tradition of mining still continues at the Boulby potash mine; it is still going strong. Important institutions such as TTE bring on and train apprentices to be our next generation of skilled workers.
My seat also has a rich and varied agriculture. It has begun to diversify into a bourgeoning tourist industry, and a rapidly emerging digital economy, supported by our local Teesside university. That rich diversity was represented excellently by Ashok, an Asian MP in a predominantly white seat, who in his own maiden speech reflected upon following in the footsteps of local Labour heroes who overcame prejudice to build a better and fairer country for the minorities of the future. He talked about Billy Mansfield, an East Cleveland ironstone miner who left school at 13, and from the pit face to Parliament, as Ashok said, fought for his class and his people. There was also Ellen Wilkinson, who represented the old Middlesbrough East constituency throughout the early 1920s. She proved, against the conventional wisdom of the day, that a woman could successfully promote the needs, aspirations and dreams of a heavy industrial region.
As Ashok always reminded me, without the Labour party none of these huge cultural shifts could have been achieved. I am proud and humbled to be following in the historic tradition set out by my predecessors. The voices of the people of my area are ringing in my ears when I enter this House every single day. I am thinking of voices such as June Goodchild, a local community activist, who has strived for her estate in Easterside for years and achieved great things for her community by working in partnership with her local Labour authority in Middlesbrough; and Robbie Middlemas, a Skinningrove steelworker and community trade union site official, who for the past 24 months has led his members through some of the most difficult days that they have ever witnessed at Skinningrove. There has been a similar situation down the road at TCP Teesside. I am thinking of voices such as that of Ian, a local entrepreneur who lives next door to my parents, runs a small chemical fabrication business and has been helped by One NorthEast. Their lives will not be improved by over-simplified ideological positions and a reliance on the invisible hand of market forces. Sometimes the reason why that hand seems invisible in areas such as mine is because it is not, in fact, there at all.
The new coalition Government seem intent on a withdrawal of public funding, and a rolling back of the state and of the work of regional development agencies such as One NorthEast. The coalition blame red tape and not the real culprit: a lack of long-term secure capital specifically set aside for a manufacturing base—it is a base that has historically provided revenues to keep leafy idylls in the south leafy. This ideology condemns my area and my people—the people of Teesside—to a bleak future. This ideological short-termism fails to seize the opportunities that the level of sterling currently offers in building on our manufacturing export markets; money could be reinvested in vital research and development projects. This bleak future undermines market certainty for any prospective private long-term investor in my area.
It has always been necessary for the public sector—or, rather, the Government—to take the initial risk in investment, so that private investment would follow with assured certainty. The new coalition Government see this public spending, on my home town area, as a huge waste. They apply a perfectly rational, liberal, laissez-faire logic—they say that if the market does not invest in the area, it should be left—but where does that leave the people I live alongside, who need jobs and opportunities to feed their families? This monetarist logic is not new; neither is the grim condemnation of my area’s people.
Another predecessor of mine waxed lyrical in his maiden speech about the fact that the world-class British TCP site produced 1.5 million tonnes of steel with 25,000 employees and within the period of terminal Tory rule could then produce 2.5 million tonnes of steel with only 5,000 employees. This is a grim logic of no industrial support and a grim Government who defer to an inflated natural level of unemployment. But in this era, the deliberate attack upon jobs in my area is now targeted at the public services, public servants and the voluntary sector. These are all jobs that provide a market for the private sector. Public sector jobs make up the lion’s share of employment in my constituency. Prior to the election, both the Lib Dems and the Tories promised to protect front-line services, but we have seen jobs for the young cut, incentives for employers to employ cut, training for the unemployed cut, grants to build housing for people with learning disabilities cut, funding to offer college places to all 16 and 17-year-olds not in employment or education cut, funding for the police cut and free school meals cut. Those are all the real coalition anti-job policies. In addition, if this coalition raises VAT on 22 June, it will hurt the poorest people and the smallest businesses the most. The only VAT rates that should be raised are the current 0% rates on private health care and private education, which only the rich can afford.
So, I come to this House with great regret for my area that Labour is not in power and with great anxiety and fear over what the future under a Tory-led coalition Government will bring. However, as a newly elected representative, I pledge here and now to be vigilant in the face of every threat to the livelihoods of the people of my constituency and never to give up fighting for those who elected me.
This is the first time that I have spoken in a debate when you have been in the Chair, Mr Deputy Speaker, and I welcome you to it. I warmly congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop). He has a truly charming constituency—it is perhaps not quite as charming as my own—with a distinctive pioneering heritage. Given the eloquence of his speech, I believe that he will be doughty champion for people in his constituency.
My speech follows a long line of maiden speeches made today. The hon. Member for Barnsley East (Michael Dugher) referred to miners and former miners. He may be aware that the Government Chief Whip was also a miner, so he may add him to his little club. The hon. Member for North West Durham (Pat Glass) also spoke eloquently, as did the hon. Members for Wansbeck (Ian Lavery) and for Bolton West (Julie Hilling), and our friendly doctor, my hon. Friend the Member for Bracknell (Dr Lee), even though his joke was the worst that I have heard in a maiden speech. [Laughter.] I am sure he will thank me for that later.
I was terribly surprised that the first debate called by the Opposition was on Government support for industry, because these are the same people who have just been in government while we witnessed the loss of 1 million jobs in the manufacturing sector. I shall bring my personal experience to this debate, because I worked in manufacturing for 13 years for a company—not as a trade union official, but right in the thick of it. I should have said that I also worked for the BBC for six months and I saw where they filmed—I can assure hon. Members that they were the flashiest offices.
I worked in industry only under a Labour Government, and I am sorry to say that I learned the Labour litany “Regulation, regulation, regulation”, “Tax, tax, tax”, and “Reporting, reporting, reporting”. To sum up, I encountered a lot of bureaucracy and complexity wrapped up in red tape. There has been talk today about capital allowances, refunds and rebates, but for me, as a finance director of one of the subsidiaries of the company that I worked for, all I can say is that it got more and more complex. The only people who truly benefited were the tax accountants from PricewaterhouseCoopers and other firms. They were the people who had to take on the job, if we wanted to do it, of reclaiming the money. Better still, I think, is the attitude that we should stop telling industry how to invest and that we should reduce corporation tax instead. I praise the former Government, because they undertook that during their term of office. That was the right thing to do and I hope we will go further.
I want to share two small examples. I am sure that people will have sampled the excellent produce of Adnams, a company in Southwold in my constituency, which built a special new building that required no equipment to keep the beer cool. Because Adnams did not buy old-fashioned technology, it could not get capital allowances for it. It even pressed the former Prime Minister on this point, but people still cannot get capital allowances for a new building. Adnams has suffered as a consequence.
Let me use another example from my personal business experience: car tax. There are a lot of unintended consequences. The health and safety aspects, which I thought were important, meant that we insisted on estate cars for all our field-based employees. We tried to encourage them to buy or lease British-made cars, but the sad reality was that the extra costs of preparing for £600 or £700 of car duty meant that we had to think through the options of recommending that they no longer buy cars from manufacturers that made cars in Britain or to remove two or three jobs to pay for that. That is the unintended consequence of some of the legislation, which might sound good at the time, but in the real world means that jobs go.
Both sides of the House are united in believing that the private sector will lead the recovery—or, at least, most of us are. Of course, we disagree on how to do it. I see the hon. Member for Wrexham (Ian Lucas) on the Opposition Front Bench; he is a great advocate for businesses in his constituency. I know his constituency quite well, not just because he soundly beat me five years ago when I stood for election there, but because I have cousins who live and work there in Kellogg’s and other businesses. For me, it is an example of a one-business town—mining was a big part of it—that has diversified. It needs to broaden its base and I welcome that, but we need to see that more across every region—every county, I should say—in our great country.
The RDAs were one of the flagship policies of the last Government and I am delighted that they are having their sails trimmed—indeed, that they are being scuttled. The hon. Member for Birmingham, Erdington (Jack Dromey), who is not with us at the moment, referred to a report. I am not sure which one he was talking about, but the National Audit Office published its report just three months ago and it was not rosy reading when it came to the effectiveness of the RDAs in helping business. The net cost was £60,000 per job created, which is a hefty introduction fee for trying to get jobs into our economy. The NAO was unable to say that there was value for money and could not conclude that the return for money was optimal. It blamed aspects of poor project analysis, pervasive optimism bias—that is, very rose-tinted spectacles were worn in considering how particular projects would generate benefits—and weak evaluation. Indeed, it made the point that most RDAs were unaware until 2009 of the types of projects that yielded the best and most enduring benefits.
The fact that in a number of cases RDAs struggled to identify market failure and, where an intervention was made, they could not justify why they had done the project, speaks volumes to me. It gives a feel of money being thrown at projects, as my hon. Friend the Member for Loughborough (Nicky Morgan) mentioned, and throwing money does not solve a problem. That might be backed up by the statistic given by the NAO—30% of RDA funds were spent in one month, the last month of the financial year, when RDAs were desperate to get rid of their budget, no matter where.
I shall not cry to see the RDAs go. I am not saying that everything they have done was bad, but for me they are not necessarily the best way to deliver the support that businesses need. The key point that the National Audit Office uncovered was that targeted business support generated the best return. I hope that the new local enterprise partnerships will focus on that and will learn that lesson.
I welcome the amendment to the motion, because it mentions the college places and apprenticeships that are necessary to rebuild the skills needed to get Britain back on its feet. Local businesses of mine, including EDF at Sizewell and BT at Martlesham, already run apprenticeship schemes that are oversubscribed, and I hope we can encourage more to do so. Companies such as Brafe Engineering in Woodbridge want more technically skilled people coming through—not just people with degrees in any subject, no matter what. We have to do this and it is absolutely imperative to have appropriate Government support and not just the blank, scattergun approach that is the legacy of the previous Government. I support the amendment.
First, I thank hon. Members on both sides of the House who have made their maiden speech today, especially my hon. Friends and neighbours the Members for North West Durham (Pat Glass) and for Middlesbrough South and East Cleveland (Tom Blenkinsop). They reminded me that the north-east of England is probably the most beautiful part of the country and that we discovered Australia as well, so we have a lot going for us.
Today’s debate is mainly about how we reduce the deficit and how to grow ourselves out of the problems that we have at the moment. My big worry about all the doom and gloom that we are getting from the Government, who are basically talking down the economy and talking down the country, is that we will end up in a spiralling, self-fulfilling prophecy where it is all doom and gloom. It is not just me who says that. On Sunday, a recent business survey by the Centre for Economics and Business Research was on the BBC’s online news website. It stated:
“Business confidence among UK firms has seen its biggest drop since 1995 due to the government’s rhetoric on spending cuts, a survey suggests…there is a significant risk that the rhetoric has begun to impact on business confidence, and fears of the economic impact of spending cuts may be causing businesses to rein back on growth plans.”
So, it is not just the Labour party and the Opposition saying that; it is business itself, which will be fundamentally affected by the Government’s current programme.
Let me say something about employment. Previous Government intervention has meant that even though we are going through what is apparently the worst recession for 60 years, unemployment is nowhere near what it was in the 1980s and 1990s. Today’s statistics put the figure for people claiming benefits at about 1.4 million or 1.5 million. In my constituency, the number of people who are out of work has fallen by 600 in the past year and by 140 in the past month. In the 1980s, that figure was 5,500, and 40% of those people had been out of work for 12 months or more.
We all know the quote that has been mentioned twice today about the Tory Government of those days saying that unemployment was a price worth paying, but we do not need to go back to those days. We can look at last Thursday’s Department for Communities and Local Government questions to find the Government’s default position on their programme for cuts. When my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) asked,
“is it not inevitable that those in greatest need will take the biggest cuts?”,
the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), without hesitation, stood up and said:
“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]
That proves to me where the cuts are going to hit the most—local communities not just in the north-east of England but throughout the country. We have to be prepared for that, and one thing that prepares us for it is the regional development agencies.
I must say that I am more confused now than I was at the beginning of the debate about what the Government’s position is on RDAs. “The Coalition: our programme for government” document says on page 10:
“We will support the creation of Local Enterprise Partnerships—joint local authority-business bodies brought forward by local authorities themselves to promote local economic development—to replace Regional Development Agencies (RDAs). These may take the form of the existing RDAs in areas where they are popular.”
After the Secretary of State spoke earlier, I kept asking myself, “When is an RDA not an RDA?” It seems, from what the Government are saying, that the answer is—when it is an RDA.
Let us get some facts right about RDAs. First of all, they have trained more than 400,000 people and created more than 850,000 jobs over the last 10 years. They have helped nearly 60,000 businesses to start up and more than 110,000 businesses have benefited from a free business health check. RDAs brought forward funding of £100 million for regeneration projects, and they have launched transition loans to help businesses access finance. We are talking about a strategy for growth, but RDAs helped to deliver it.
In my constituency, the RDA helped businesses such as Rock Farm Dairy to set up a new bottling facility. The RDA is creating jobs in the north of the constituency. The Printable Electronics Technology Centre—PETEC—is in Sedgefield village, at NETPark, the North East Technology Park. The hon. Member for Bracknell (Dr Lee) was on about space and science. From what I see at NETPark, I know that today’s science fiction is tomorrow’s reality. That work was being done with the help of the RDA and a Government who invested £12 million to promote it. The research and development facilities at PETEC have helped to protect more than 600 jobs at Thorn Lighting, just over the border in the constituency of my hon. Friend the Member for Bishop Auckland (Helen Goodman). That is creating high-value jobs, making sure that manufacturing jobs stay in this country and do not migrate to the far east or to eastern Europe.
One NorthEast put investment of £10 million into NETPark to help set up headquarters for global science and technology companies, such as Kromek—global headquarters in the north-east of England. We should be proud of the fact that such companies are basing themselves in an area that in the past was used to deprivation and high unemployment. That investment was under a Government who were thinking ahead for the future well-being of local people.
Newton Press is a small company in Newton Aycliffe that has just invested in £100,000-worth of new equipment. It is a family firm, going back over many years, employing 11 or 12 people; I know the owner, Syd Howarth. He had a phone call from One NorthEast to tell him that he could not have the £20,000 grant they were working on to fund a further two jobs, because the Government said that One NorthEast can no longer award grants. That may be only two jobs, but it would be two people off the unemployment total in my constituency. If those grants are being withdrawn all over the region, how many other people who could be in work will not be in work?
The cuts are undermining growth in areas such as the north-east of England, which has suffered in the past. We should be thinking about the future, and ensuring that there is a future for people in places such as Sedgefield. One person’s cut is another person’s front line, especially in business where the front line could be the bottom line, too.
What we have learned from the debate is that there is total confusion in the Government. What is their strategy for growth? The Government started the debate by saying that RDAs were safe, then they said that RDAs could be safe, then that they were not and now they are again. We need consistency and clarity from the Government, because the people I represent want certainty.
This is the first time I have had the privilege of speaking while you are in the Chair, Mr Deputy Speaker, so I congratulate you on your appointment.
We are in a bit of a déjà vu situation. Labour Members cry about Tory cuts, yet they forget why the cuts have to take place. They are suffering from collective amnesia and forgetting that for the last 13 years they ran this country and the Government on the proposition that they had abolished boom and bust. The former Prime Minister, when he was Chancellor, openly boasted about that. There was a feeling that money would pour in—that there was an inexhaustible pot of gold to be drawn from. It reminded me of Aladdin, who rubbed the lamp and the genie appeared. Labour seemed to think that the genie would appear, they would ask for money and, magically, it would arrive.
I remember that very well, but I would point out that, in the five years before the crisis that the hon. Lady speaks of, we were running completely needless deficits. We did not have to run those deficits; we did so because of the concerted attempt by the then Chancellor to expand the state and to keep spending money.
During the 2005 election, we were—[Interruption]. If I may continue.
The general Aladdin’s lamp approach was shown to be absurd. As the then Government kept rubbing the lamp and the genie came out, they asked for money, but the genie suddenly became rather less giving. At one point, the genie—in form of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne)—wrote a letter and said, “There is no money. We have run out of money.” The reason why we have done so is simply that we were spending too much.
I have a Methodist background. My mother is a Methodist lay preacher, and she would tell the Sunday school, which I attended, about the seven fat years and the seven lean years. Those hon. Members who know the Old Testament will remember that Joseph had a dream in which he dreamt of seven fat cows and then the seven lean cows. [Interruption.] This is not very complicated; it is quite simple actually, so please bear with me. I know that Labour Members have concentration problems sometimes. I am sorry—it was a long time ago. The pharaoh had the dream and he spoke to Joseph. [Interruption.] This is very important and interesting. He asked, “What does this mean?” and Joseph said very simply, “You will have seven fat years and seven lean years.” The whole point is that we are meant to save money in the fat years, so that we can spend it in the lean years. The Labour Government comprehensively failed to do that. They thought that the fat years would run indefinitely. They thought that they had abolished boom and bust.
The point of telling that simple story is to show comprehensively the reason for the cuts mentioned by the hon. Gentleman—I forget his constituency. [Hon. Members: “Sedgefield.”] I apologise; I was perhaps confusing him with another Member for Sedgefield. The hon. Member for Sedgefield (Phil Wilson) referred to them as Tory cuts, but the simple story of Labour’s failure to rein in Government spending in the boom is why we must make these cuts. They are not coming out of the blue or from savageness.
I was pointing out that, because of Government intervention, we were creating jobs, especially in the north-east of England, through the regional development agencies. We were not creating poverty; we were creating growth and prosperity. We took action when we were in government before the last election, and 500,000 fewer people are out of work than if we had not done so.
Is my hon. Friend aware that Great Britain went into the recession with the largest budget deficit in the developed world and that that was nothing to do with the banking crisis but was solely due to the management of the economy by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)?
I am fully aware of those facts. The figures show that the ratio of our debt to GDP is 12%. That is higher than any other country in the west. [Interruption.] I am sorry; I stand corrected. The deficit-to-GDP ratio is the highest of any other country in western Europe and, indeed, in the western developed world.
I am sorry to correct the hon. Gentleman again. He is right to correct himself—the deficit, not the debt, ratio is 12%—but is he aware that the deficit figure in Greece stands at 14%? Greece is, I believe, in the western world. Is he also aware that we went into the crisis with the second lowest debt-to-GDP ratio in the G7?
The hon. Lady is being quite clever and fixing the measuring rod.
Gordon Brown, the former Prime Minister, openly boasted of abolishing boom and bust. That was the central claim that he made. He predicated his entire policy on that premise. The premise was wrong. As we all know, and as hon. Members have commented, we went into a recession and we were faced with a huge deficit. That was a huge bust, which the former Prime Minister, in his wisdom, failed to see. That is why we were saddled with the deficit, and why we have had to make some of the tough adjustments to which Opposition Members have alluded.
That context is important. I know that there will be difficult times. I know that up and down the country Opposition Members will bemoan and complain about Tory cuts, but the context demonstrates why the adjustments have had to be made. They were forced upon us by the international environment. My hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) mentioned that investors would not buy British Government debt. As a consequence, we have to rein in our spending. That is common sense. It is wrong for Opposition Members to say that we are trying to strangle the baby in its cot and that we are savage and uncaring. It is a matter of practical policy. Without that, we have a bleak future.
I am not talking about the 18 years from 1979 to 1997. I am talking about the 13 years in which we lived under Labour.
To finish my contribution, I want to talk about the private sector and the public sector. Someone described trying to grow an economy by focusing on the public sector as a man sitting in a bucket trying to lift himself up by pulling the handle. It does not work. The only way we can have a viable public sector is if we can have revenues coming in from a buoyant private sector. As my hon. Friends have reiterated time and again, it is only by having a prosperous private sector that we can grow our way out of the recession. The message about a strong private sector is clear. It wants less regulation, less red tape and bureaucracy and a clear tax system, and it generally supports the coalition Government and the Government programme. For these clear and simple reasons, I support the Government amendment.
I welcome you to your new post, Mr Deputy Speaker.
I am not sure about the Aladdin analogy. I am, however, convinced that with the Prime Minister and the Deputy Prime Minister, we are now in the age of the brothers Grimm.
Before I get to that, however, may I congratulate everyone who made their maiden speech today? They spoke with passion, commitment and humour, and all bring something special to this very special place. I want to mention in particular the contribution of my new hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), who spoke superbly about his predecessor, Ashok Kumar, who was both a colleague and a friend to those of us who were elected before 2010.
I congratulate the Government and, in particular, the Prime Minister. They got the decision on the £21 million for Nissan absolutely right, confirming the investment made by the Labour Government. It offers welcome reassurance to the highly skilled work force, some of whom live in my constituency, to the companies in the supply chain, and to the region as a whole. If the Government insist on revisiting all the spending commitments that were made in the preceding months before the election, I hope that when they do so, they will follow the model that they have developed in looking at the Nissan grant. It is important that they get on with it, because if they do not, they risk sapping the confidence of business in the region.
I want to make it absolutely clear, as did the shadow Secretary of State, my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), that we accept the need for deficit reduction, but we also accept that there needs to be a strategy for growth alongside it.
One at a time!
As my right hon. Friend made clear, the Department for Business, Innovation and Skills identified £900 million-worth of cuts before the election. Before the election, I was in the Home Office, where we had identified £500 million-worth of savings. It is simply wrong to say that the previous Government did not identify savings, but if the hon. Member for Spelthorne (Kwasi Kwarteng) wants to go beyond that programme, it is up to his party and his Government to bring forward those proposals.
The hon. Gentleman talks about cuts that were identified by Labour. We all know that the Labour figures implied £50 billion of spending cuts; for all that we have heard about demanding more money, that is the fact of the matter. He mentions £500 million as an aggregate figure, but can he give us, say, five specific examples of cuts at the Home Office, where he was a Minister, that would have happened under a Labour Government had they been re-elected?
I would first mention the battle for savings that every police force has to deliver while protecting front-line services. However, I do not necessarily want to talk about that—I want to talk about the money that was in the budgets under the previous Government for a very good reason.
This debate is not only about BIS but about the whole of Government. I hope that the Minister will have a word with colleagues in other Departments, for the sake of construction workers in my constituency. I hope that we can have a decision on Building Schools for the Future in north Tyneside. Our children deserve the best learning environment, but our construction workers deserve jobs, too. When the last new school in my constituency—Monkseaton high school—was built, more than half the construction jobs went to local people. When the then Leader of the Opposition, now the Prime Minister, went to the school, he praised the building. So let us have some commitment from the Government that gives certainty and ensures that Monkseaton high school was not literally the last new school to be built in my constituency.
There was also money in the regional transport budget, but that budget has been frozen. That has caused me concern, but, more importantly, it has caused concern for local businesses and their representatives. There was £30 million in the budget to improve the A19-A1058 Silverlink roundabout. A driver who turns left at that roundabout goes to the new green technology park on the north bank of the Tyne. If they go straight over, they go to the Cobalt business park—the biggest private business park in the country, which is there because of co-operation between the public and the private sectors in bringing those jobs to the area. If we do not get those improvements, then people who go through the new Tyne tunnel—delivered by the previous Labour Government—will end up in gridlock. A whole host of then shadow Ministers came to look at those roads and made promises to my constituents about what they would do. Well, they are in government now, so they had better start delivering on those promises. If the road network in the north-east is not upgraded, if we are excluded from the rapid rail link, and if the new runway at Heathrow does not take place, squeezing out the regional air links, why would an investor who comes to Great Britain think about putting their money into the north-east given that we do not have a transport network for the future to create future jobs?
I want to concentrate on the regional development agency, which has been mentioned. Before the recession, the north-east had the fastest-growing economy of any region outside London. That did not happen despite Government action, it happened with it, and One NorthEast was part of that story.