Nick Brown MP

WHEN WE MET A YEAR A GO IN THE LEGEND’S ROOM AT MIDDLESBROUGH FOOTBALL CLUB, I USED THE OPPORTUNITY OF THE CONFERENCE TO SET OUT MY AIMS AND AMBITIONS AS THE NEW MINISTER FOR THE NORTH EAST AND TO SAY WHAT I HAD ALREADY DONE.

WHAT I WANT TO DO TODAY IS TO REPORT BACK ON WHAT WE HAVE ACHEIVED TOGETHER AND TO SET OUT THE WORK WE HAVE IN HAND TO GET OUR REGION THROUGH THE CREDIT CRUNCH AND BEYOND THE RECESSIONARY FORCES THAT ARE AT WORK IN THE ECONOMY.

LAST YEAR I SAID THAT I WANTED TO DO THE REGIONAL MINISTER’S JOB ONE STEP BACK FROM PARTY POLITICS, IN AS MUCH AS THAT IS POSSIBLE, IT’S AN APPROACH THAT HAS BEEN BROADLY WELCOMED IN OUR REGION, ALTHOUGH HARDER TO SUSTAIN NATIONALLY.

LAST YEAR I SAID THAT MY AMBITION WAS TO DRIVE UP THE PROSPERITY OF OUR REGION. I SAID THAT I WANTED TO WORK WITH EVERY IMPORTANT SECTOR IN OUR REGION, BILATERALLY WHERE I COULD. I SAID THAT I PLACED PARTICULAR EMPHASIS ON ENGAGEMENT WITH THE PRIVATE SECTOR. SMALL AND MEDIUM SIZED ENTERPRISES, AS WELL AS THE BIG PRIVATE EMPLOYERS.

SO THAT’S WHAT I’VE SET OUT TO DO AND I’VE INVESTED A FAIR BIT OF TIME IN DOING IT. I THINK BILATERAL MEETINGS, FOCUSED ON SPECIFIC TOPICS ARE OF MORE VALUE; BUT IT REQUIRES, OF COURSE, A GREATER INVESTMENT OF TIME FROM ME AS THE MINISTER AND FROM THE CIVIL SERVANT’S WHO SUPPORT ME.

I HAVE MET WITH REPRESENTATIVES FROM ACROSS ALL SECTORS. THERE HAVE BEEN 7 BILATERALS WITH THE NOTHERN BUSINESS FORUM AND FURTHER MEETINGS WITH THE FSB AND THE NORTH EAST CHAMBER OF COMMERCE AS WELL AS MEETINGS WITH REPRESENTATIVES OF SPECIFIC PRIVATE SECTOR PROJECtS SONHOE, EASINGTON FILM STUDIO, EASTGATE RENEWABLE ENERGY VILLAGE AND THE EXPANSION OF TEES PORT AND OF COURSE THE EXCITING PLANS FOR BRINGING THE MANUFACTURE OF OFFSHORE WIND FARM STRUCTURES TO THE NORTH BANK OF THE TYNE.

WE’ve HAD BILATERALS WITH REPRESENTATIVES OF THE TOURISM INDUSTRY AND THE VICE CHANCELLORS OF THE REGION’S UNIVERSITIES AS WELL AS THE STRATEGIC HEALTH AUTHORITY, REGIONAL TUC, ANEC, LSC, TEES VALLEY REGENRATION AND THE LEADERS AND CHIEF EXECUTIVES OF THE 12 STRATEGIC LOCAL AUTHORITIES.

I HELD 9 EVENTS ON THE DRAFT LEGISLATIVE PROGRAMME. THESE INCLUDED BILATERALS WITH THE SHA, VICE CHANCELLORS, REPRESENTATIVES OF CIVIC SOCIETY (THIRD SECTOR/VOLUNTRAY GROUPS), THE NORTHERN BUSINESS FORUM, THE REGIONAL TUC AND THE 12 LOCAL AUTHORITY LEADERS AND CHIEF EXECUTIVES.

MY PRINCIPLE JOB IS TO BE AN ADVOCATE, A CHAMPION FOR THE REGION AT THE HEART OF GOVERNMENT. OVER THE LAST YEAR I HAVE TAKEN UP INDIVIDUAL PRIVATE SECTOR SPECIFIC ISSUES WITH THE APPROPRIATE DEPARTMENT WITHIN GOVERNMENT. WE’VE HAD OUR SUCCESSES.

I WANT TO THANK BOTH THE EVENING CHRONICLE AND THE MIDDLESBROUGH GAZZETTE FOR HOSTING TWO LIVELY CONSULTATION EVENTS. A GREAT DEAL WAS SAID ON BEHALF OF VICTIMS OF CRIME AT THE NEWCASTLE EVENT. I TOOK THE ISSUE UP WITHIN GOVERNMENT AS I PROMISED AND THE VICTIM’S COMMISSIONER IS NOW ANNOUNCED AS GOVERNMENT POLICY.

IT’S WORTH REMINDING OURSELVES THAT THERE ARE SOME SIGNIFICANT PROJECTS UNDERWAY IN OUR REGION. THE TEESPORT EXPANSION, THE PROPOSED DEVELOPMENTS ON THE NORTH BANK OF THE TYNE AND THE CONSTRUCTION ON THE SECOND TYNE TUNNEL.

BUT I WANT TO FOCUS MY REMARKS ON HOW WE WILL GET THROUGH THE ECONOMIC DOWNTURN.

IN ORDER TO DEAL WITH THE PROBLEM THAT CONFRONTS US, IT IS NECESSARY TO ACCURATELY ANALYSE HOW IT CAME ABOUT AND WHAT ITS KEY FEATURES ARE. AN INABILITY TO EXPLAIN THE PROBLEM WILL LEAD TO AN INABILITY TO SOLVE IT. EQUALLY HOPELESS IS TO SAY: “LOOK HOW TERRIBLE EVERYTHING IS,” AS IF SAYING THING’S “aRE TERRIBLE” WAS A SOLUTION ITSELF. OF COURSE IT IS NOT.

The root of today’s problems are failings in the global financial system. The crisis began in the US housing market. The problems in that sub-prime housing market rapidly spread to the entire global financial system, causing a disastrous tightening in credit and undermining confidence (the fall in the value of Global shares by 50 per cent since May DEMONSTRATES THE DROP IN CONFIDENCE.)

All this happened, too, at a time when the global economy was already suffering from unprecedented increases in energy, food and commodity prices. Those increases pushed up inflation everywhere, and added to the pressure on businesses and households. In the UK, inflation, although now falling, is still at AROUND 4.5 per cent. The result has been a sharp reduction in growth across the world.

the impact is felt right across our economy and by every one of us, so restoring and maintaining financial stability is absolutely crucial.

THE CHOICE IS EITHER FOR THE GOVERNMENT TO INTERVENE AND USE PUBLIC MONEY WHERE PRIVATE MONEY CAN NO LONGER BE RAISED OR, LET THE RECESSIONARY FORCES UNLEASHED BY A RAPID CURTAILING OF CREDIT TAKE THEIR COURSE.

THERE ARE TWO FURTHER POINTS THAT I BELIEVE NEED TO BE MADE HERE BEFORE I GO ON TO ADDRESS THE REGIONAL DIMENSION: WHAT IT MEANS FOR US AND HOW WE ARE GOING TO GET THROUGH.

THE FIRST POINT IS THE WIDESPREAD PUBLIC ANGER THAT WE ARE IN THIS POSITION IN THE FIRST PLACE. THE BEHAVIOUR OF THOSE WHO HAD CHARGE OF GREAT PRIVATE SECTOR LENDING INSTITUTIONS AND THOSE WHO HAD THE RESPONSIBILITY FOR REGULATING THEM IS COMING IN FOR A GREAT DEAL OF CRITICISM. AS WELL IT MIGHT.

ANGER AND CRITICISM, HOWEVER JUSTIFIED, WILL NOT OF THEMSELVES GET US THROUGH THE PRESENT DIFFICULTIES. THERE ARE LESSONS IN ALL OF THIS FOR THE FUTURE, BUT THE SITUATION IS SO SERIOUS THAT THE GOVERNMENT HAS TO TAKE DECISIVE ACTION NOW. WE HAVE DONE; AND OUR APPROACH HAS BEEN ECHOED WORLDWIDE.

THE SECOND POINT THAT NEEDS MAKING IS THAT THE GOVERNMENT HASN’T ‘GIVEN’ LENDING INSTITUTIONS LARGE SUMS OF TAX PAYERS MONEY. THE GOVERNMENT’S INVESTMENTS ARE SECURED AGAINST THE ASSETS OF THE BANKS. THE GOVERNMENT IS EARNING INTEREST ON THE MONEY COMMITTED.  IN RETURN THE special liquidity scheme that gIVES money to the banks is on condition that THOSE BANKS THE GOVERNMENT own, put the same amount of lending into small businesses as they did in 2007.

I DON’T NEED TO REMIND A NORTH EAST AUDIENCE AS TO WHAT THE ALTERNATIVE LOOKS LIKE, MASS UNEMPLOYMENT IS A RECENT MEMORY FOR OUR REGION. I CAN REMEMBER THE PRIDE WE ALL FELT ON TYNESIDE AS HMS RICHMOND LEFT THE TYNE FROM SWAN HUNTER’S SHIPYARD. THE GOVERNMENT WAS IN THE HANDS OF THE TORIES AND THE YARD WAS IN THE HANDS OF THE RECEIVERS.

TOGETHER WITH THE MUNICIPAL LEADERS OF NORTH TYNESIDE AND NEWCASTLE, OTHER MP’S AND TRADE UNION LEADERS, I WALKED UP THE BANK AT THE HEAD OF THREE THOUSAND SHIPYARD WORKERS WHO HAD DONE THEIR VERY BEST AND WERE NOW REDUNDANT. RENDUNDANT AT A TIME WHEN UNEMPLOYMENT WAS HIGH. INTEREST RATES WERE HIGH BECAUSE INFLATION WAS HIGH.

LIKE EVERYONE ELSE I WAS ANGRY AT WHAT WAS BEING DONE TO US AND ANGRY THAT I COULDN’T DO ANYTHING ABOUT IT, EXCEPT STAND UP FOR THE COMMUNITY THAT HAD ELECTED ME TO REPRESENT THEM.

NOW, WE ARE NOT POWERLESS. WE ARE THE GOVERNMENT AND WILL DO EVERYTHING WE CAN TO GET THIS REGION THROUGH THE ECONOMIC DOWNTURN. THERE MUST BE NO RETURN TO THE MASS UNEMPLOYMENT AND ACCOMPANYING MISERY OF THE PAST. AND HERE’S HOW WE ARE GOING TO GO ABOUT IT.

AS PART OF THE GOVERNMENT RESPONSE THE PRIME MINISTER HAS ASKED EACH REGIONAL MINISTER TO ENGAGE WITH REPRESENTATIVES OF THE PRIVATE SECTOR IN THEIR RESPECTIVE REGION AND FEED BACK CONCERNS AND IDEAS TO GOVERNMENT.

BECAUSE OF THE CLOSE WORKING RELATIONSHIPS IN THE NORTH EAST AND ALREADY ESTABLISHED BILATERAL WAY OF WORKING, I WAS ABLE TO GET ON THE FRONT FOOT. 

SINCE SEPTEMBER I HAVE MET WITH REPRESENTATIVES OF THE NORTHERN BUSINESS FORUM 4 TIMES AND MOST RECENTLY HELD A MEETING WITH REPRESENTATIVES OF BANKING AND FINANCE AND ACCOUNTING. FURTHER MEETINGS WITH SPECIFIC SECTORS SUCH AS THE MANUFACTURING AND ENGINEERING SECTOR ARE PLANNED.  

I ENSURE THE VIEWS EXPRESSED AT THESE MEETINGS ARE REPORTED BACK TO APPROPRIATE COLLEAGUES IN GOVERNMENT TO TAKE ACTION.

TO NAME BUT A FEW EXAMPLES:

1)    CONCERNS WERE EXPRESSED OVER PROMPT PAYMENT OF BILLS: The Government has responded with Central Government and RDAs committing to pay suppliers within 10 days. 

gOVERNMENT is now working with the NHS, THE LGA and others to extend the 10-day payment aim TO OTHER PARTS OF THE PUBLIC SECTOR. WE ARE REVIEWING LEAD CONTRACTOR ARRANGEMENTS, TO ENSURE PROMPT PAYMENT TO SUPPLIERS FURTHER DOWN THE SUPPLY CHAIN.

2)     Response to concerns over reforms to Empty Property Rate Relief:

I HAVE TAKEN UP THE REGION’S CONCERNS OVER EMPTY PROPERTY RATE RELIEF TO THE TREASURY INCLUDING 2 written representations and MEETINGS WITH THE EXCHEQUER SECRETARY.

MY EFFORTS HERE GOT SOME NATIONAL ATTENTION WHEN TORIES IN LONDON TRIED TO MAKE IT INTO A SPLIT IN THE LABOUR PARTY STORY SAYING THAT I WAS ORGANISING A REBELLION AS CHIEF WHIP AGAINST THE PRIME MINISTER. FOR THOSE WHO KNOW THEIR POLITICS, THIS IS TOO LUDICROUS, EVEN FOR THE DAILY MAIL AND SO THE STORY CHANGED INTO A NORTH VERSUS SOUTH VERSION WITH MORE EXTREME WRITE UP’S SUGGESTING THAT I WANTED A SPECIAL TAX RELIEF ONLY FOR NEWCASTLE EAST AND WALLSEND.

IN FACT THE TREASURY HAS RESPONDED announcing in the PBR a temporary increase in the threshold at which an empty property becomes liable for business rates. For the financial year 2009/10 empty properties with a rateable value of less than £15,000 will be exempt from business rates.

This is estimated to cover 77% of empty properties in the North East and seven Out of ten properties nationally.

3)    CONCERNS OVER ACCESS TO FINANCE AND CASH FLOW PARTICUALRY SMEs:

THIS IS ONE OF THE MOST COMMON CONCERNS RAISED WITH ME WHICH I HAVE PUT TO COLLEAGUES IN GOVERNMENT.

THE GOVERNMENT HAS RESPONDED, TAKING DIRECT ACTION TO HELP BUSINESSES ACCESS THE CAPITAL AND MANAGE THE CASH FLOW THEY REQUIRE. MEASURES IN THE PBR DEMONSTRATE THIS:   

• More generous tax relief for businesses now experiencing losses, by allowing temporary additional carry-back of up to £50,000 of losses to be set against taxable profits from the last three years;

• A new HMRC Business Payment Support Service to allow businesses in temporary financial difficulty to spread payment of their HMRC tax bills over a timetable they can afford, with no additional surcharges or penalties

• A new Small Business Finance Scheme to support up to £1 billion of bank lending; a separate £1 billion guarantee facility to support bank lending to small exporters; a £50 million fund to convert businesses’ debt into equity; and a £25 million regional loan transition fund.
• TO HELP SMALL BUSINESS THE PRIME MINISTER ANNOUNCED ON WEDNESDAY THE GOVERNMENT’S INTENTION TO PUT THE BANK codes on a statutory footing.

THESE MEASURES WILL BENEFIT OUR REGION WITH THE DISPROPRTINATLY HIGH NUMBER OF SMES. 133,620 SME’s Will BENEFIT in the north east.

The RDA has PLAYED AN IMPORTANT ROLE TOO:

iT ANNOUNCED A £10 MILLION Support package In September and ANNOUNCED the JEREMIE fund of £125 million (Joint European Resources for Micro to Medium Enterprises Initiative) in November which IT is estimated will help 850 SMEs to access finance over a five year period.

oNE NORTH EAST HAS AGREED TO CONTRIBUTE TO THE £110 MILLION TO SUPPORT REGIONAL BUSINESSES THROUGH THE GOVERNMENT’S NEW SMALL BUSINESS FINANCE SCHEME, CAPITAL LOAN SCHEME AND TRANSITION LOAN FUND. THIS IS ON TOP OF THE £10 MILLION IT COMMITTED TO A BUSINESS SUPPORT PACKAGE LAUNCHED IN SEPTEMBER.

SIMILARLY Business Enterprise North East which operates the Business Link Service in the North East has carried out important work in working with over 17,000 businesses and people starting business in the first six months of this year alone providing health checks and advice and support. 

OF ALL THE ISSUES RAISED WITH ME. THE REGION’S TRANSPORT INFRASTRUCTURE COMES UP MORE OFTEN THAN ANY OTHER SINGLE TOPIC. I KNOW THAT MY COLLEAGUE GEOFF HOON ADDRESSED THESE ISSUES AT YOUR DINNER LAST NIGHT AND SO I WON’T DO AGAIN, EXCEPT TO MAKE TWO POINTS.

FIRSTLY, I WANT TO WELCOME SUE GOLDSMITH’S OFFER MADE ON BEHALF OF NATIONAL EXPRESS  TO HELP IN EXAMINING THE BUSINESS CASE FOR HIGH SPEED RAIL CONNECTIVITY ON THE EAST COAST LINE, BY WHICH OF COURSE I MEAN ALL OF ITAND NOT MAKING THE FALSE ASSUMPTION THAT THE NORTH ENDS AT LEEDS, AS THE CONSERVATIVES DO.

ALL THE ADVICE TO ME IS THAT THE IMMEDIATE ISSUE IS CAPACITY RATHER THAN SPEED, BUT THIS MIGHT NOT ALWAYS BE THE CASE, IT IS ALSO NECCESSARY TO MAKE SURE THAT WE ARE RUNNING AHEAD OF THE CLIMATE CHANGE AGENDA AND NOT BEHIND IT. TO MAKE ABSOLUTELY CERTAIN THAT WE ARE KEEPING ALL OF THIS ADEQUATELY REVIEWED I WANT TO GIVE NATIONAL EXPRESS THE FASTEST RESPONSE THAT THEY’VE EVER HAD FROM GOVERNMENT AND TO OFFER AN EARLY MEETING TO DISCUSS WHAT A DETAILED WORK PROGRAMME WOULD LOOK LIKE.

SECONDLY, I WANT TO REPORT THAT TOGETHER WITH MEMBER’S OF PARLIAMENT FROM TEESSIDE I HAVE BEEN TO SEE LORD ADONIS, THE NEW TRANSPORT MINISTER TO DISCUSS HOW WE TAKE FORWARD THE CASE FOR THE TEES METRO. AGAIN I WANT US TO REACH CONCLUSIONS AND GET ON WITH THINGS IF WE CAN.

LET ME SAY SOMETHING ABOUT THE HOUSING MARKET IN THE REGION AND LIQUIDITY MORE GENERALLY.  ON WEDNESDAY IN THE QUEEN’S SPEECH, THE GOVERNMENT ANOUNCED:

1. Northern Rock and Bradford & Bingley have joined the Royal Bank of Scotland in agreeing that it will not repossess homes for a full six months. OTHERS HAVE FOLLOWED their example.

2. THE GOVERNMENT HAS MADE IT CLEAR IN ITS new pre-action PROTOCOL THAT repossession should be a last resort. Judges now expect lenders to consider what steps and what flexibilities might help to keep families in their homes. We are backing that up with free debt advice in every court, and we will work to ensure that the protocol is minimising the number of repossessions ever brought to court.

3. THE GOVERNMENT IS OFFERING FAMILIES WORRIED ABOUT THEIR MORTGAGES A THIRD PROTECTION. Hard-working households that experience a redundancy or significant loss of income as a result of the downturn will be able to defer a proportion of their interest payments for up to two years while they get their family finances back on track.

This measure is in addition to THE protection for the unemployed, who, after 13 weeks, can claim help with their mortgage. It will extend protection for those in work as well as those out of work. We will make this possible by guaranteeing lenders against the risk of loss from those deferred interest payments.

THE PRIME MINISTER ANNOUNCED ON WEDNESDAY THAT THE country’s eight largest lenders have already agreed to sign up FOR THIS schemE. these lenders include HBOS, Nationwide, Abbey, Lloyds TSB, Northern Rock, Barclays and HSBC—already 70 per cent of the mortgages that are held in this country.

THE GOVERNMENT WILL CONTINUE TO TAKE action to improve social housing, with new investment brought forward—an extra £100 million this year and £450 million the year after. THIS HELPS 3,600 HOUSEHOLDS IN THE NORTH EAST.

AND THERE IS MORE THAT WE ARE TRYING TO ACHIEVE:

1) THERE HAVE BEEN NUMEROUS REQUESTS TO DO MORE TO RAISE AWARENESS OF ENTITLEMENTS TO SMALL BUSINESS RATE RELIEF. ANEC ARE EXPLORING THE POSSIBILITY FOR RUNNING AN AWARENESS CAMPAIGN IN OUR REGION AND I HAVE ASKED FOR ADVICE ON HOW BEST TO RUN A TAKE UP CAMPAIGN.

2)  THE GOVERNMENT HAS REALLOCATED £350million under ‘train to gain’ programme for SMEs to ensure employees have the skills and business knowledge they need.  I WANT TO DO MORE. I KNOW THAT THE NBF plans to write TO ME WITH AN OVERVIEW OF CONCERNS ON THE SKILLS AGENDA AND AM MORE THAN willing to DO WHAT I CAN.

I AM CLEAR THAT THE OPEN, INCLUSIVE AND ACCESSIBLE APPROACH THAT I’VE TRIED TO CHAMPION WITHIN THE REGION IS THE RIGHT WAY TO DEAL WITH OUR PROBLEMS.

THIS WOULD BE TRUE IN GOOD TIMES, IT IS EVEN MORE TRUE AS WE FACE UP TO THE CHALLENGES, NOT OF OUR OWN MAKING, BUT CREATED FOR US BY AMERICA’S BAD DEBT CATASTROPHE AND THE INSUING LIQUIDITY CRISIS IN THE WHOLE OF THE DEVELOPED WORLD.

WHEN THE COUNTRY IS IN TROUBLE IT’S ELECTED REPRESENTATIVES OUGHT TO BE ABLE TO WORK TOGETHER TO GET THE COUNTRY THROUGH.  AS YOU ALL KNOW THIS IS NOT WHAT’S HAPPENING AND SO THE GOVERNMENT HAS TO GET ON WITH IT ANYWAY.

THE GOVERNMENT HAS MADE ITS CHOICE; a cohesive approach that will get the north east through. action to get liquidity back into the economy, action to support business and ACTION to put money in the pockets of ordinary people.

I BELIEVE THAT THIS IS THE BOLD – RIGHT CHOICE FOR OUR COUNTRY – BUT SO MUCH MORe SO for our region.