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Parliamentary Debate on the Future of the North East Economy

Nick BrownBelow are extracts from a debate which Nick instigated yesterday in the House of Commons about the future of the North East economy. Sixteen other Labour MPs also spoke up about the dangers of the Government’s economic strategy for our region. You can read the full debate on the Parliamentary website.

Now is an appropriate time to sound a warning about the changes that are being made to economic development structures in north-east England. The extent to which the coalition Government intend to abandon the Labour Government’s approach to these issues is now clear, as is the outline of their successor strategy, such as it is. It is my contention that the coalition approach is fundamentally wrong on both counts.

The economic development issues facing north-east England are not typical of those facing the United Kingdom as a whole. Of course our region is not sheltered from national and international economic trends. Regional economic development in the north-east is dominated not so much by our unique industrial history as by our transition from it. No region has done more to help itself, and there was a broad consensus in the region on the economic development strategy until the last election.

The policy approach that we adopted meant that our region had the fastest growth rates of any English region right up until the banking crisis. The Pricewaterhouse study of One North East found that, over a five-year period, the agency had directly created more than 24,000 jobs, helped to create over 1,000 new businesses, helped a further 1,700 companies improve their business performance, helped more than 6,000 people into employment, and assisted more than 98,000 people to gain new skills. In particular One North East’s work in the area of business competitiveness and development, which covers activities such as overseas investment and enterprise support, realised an overall return of £8 for every £1 spent.

My fear is that public sector cuts will affect the north-east disproportionately. As well as the closures of the economic development agency and the regional office, there are redundancies in each of the local authorities and other public bodies and vulnerabilities at the Department for Work and Pensions and Her Majesty’s Revenue and Customs complex at Longbenton in east Newcastle.

The great strength of our region is that we have all stood together, geographically and across party politics, public sector and private sector, including the public sector agencies that are not directly politically led. We have all stood together with the same focus, in an earnest endeavour to work together to give a coherent single voice to government for the good of the region. That is the correct approach.

It is my view that the direct involvement of a regional Minister worked well for our region. The Prime Minister has said that he wants to appoint area-based Ministers from among his team, and I urge him to get on and do that. The structure that would work best for our region would involve a regional Minister, a single private sector-led development agency, some regional presence by large UK Government Departments, strong private sector engagement and collaborative working across the agencies. This would preserve what we had before the general election. The focus should be on private sector priorities. I urge the Government to look again at the poor use they are making of scarce resources in the north-east, and even at this late stage to consider different structures more appropriate to the particular economic development needs of the north-east of England.

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