Below 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.

Over the next few months the Government will be deciding whether it will sanction the manufacturing of high-speed trains as part of the Intercity Express Programme. Japanese manufacturer Hitachi is now looking to put its faith in the North East for the future and has identified Newton Aycliffe as a preferred site to build rolling stock. 

It is predicted that 800 jobs will be created at the factory, and a further 7,000 positions across the supply chains throughout the region of which 70% will be in manufacturing.

Nick said: “This is an important strategic investment in our region. The project has great potential to be a secure and enduring part of the region’s employment base and I strongly support it.”

VAT is a tax which hits the poorest hardest. The more of your income you spend, the worse you’ll be affected by this rise. The Lib Dems know this – that’s why they campaigned against it in the General Election. But in their first Budget, the Lib Dem Tory Coalition have announced plans to raise VAT to 20%.

Ms Harman, who will be launching a new campaign against the VAT rise tonight, told the Evening Standard that Labour Party Chief Whip Nick Brown was “an immovable object” in negotiations over the vote.

Ms Harman said: “We were amazed that the Government wanted to keep this in committee and not on the floor of the House. Fortunately they ran into a brick wall in the shape of Nick Brown. I hope this vote is the High Noon for the VAT rise.”

Since its creation, One NorthEast has created and safe guarded over 160,000 jobs in the North East. But Lib Dem Business Secretary Vince Cable has now confirmed it is to be scrapped. Newcastle East MP Nick Brown has branded the move “the single worst thing the Liberal Democrats could have done to hurt the North East economy”.

As Regional Minister, Nick worked together with the One NorthEast as it played a key role in getting the region through the economic downturn, helping to bring in large-scale green technology projects like the electric car plant at Nissan, and the new wind-farm factory in Walker.

Nick with Chancellor Alistair Darling at this year’s Regional Cabinet in Durham

Today’s Budget is good news for the East Newcastle, putting economic growth first, to ensure that people have the skills and jobs they need to succeed in the world and their children have the opportunities to get on and get ahead.

The Labour Government has laid out a clear plan to cut the deficit within four years once the recovery is guaranteed, while protecting vital frontline services – in health, education and police numbers.

Nick Brown said: “This is a budget for economic recovery. The strategy is the right one. It is particularly right for our region. The measures aimed at small and medium sized businesses have a disproportionately beneficial impact on the economy of the North East. The extension of the time to pay initiative and the extension of help for business liquidity are both proposals that the business community have made to me.”

Nick with Prime Minister Gordon Brown at the site of the new Clipper factory

Nick joined the Prime Minister in Walker yesterday as global energy giants Clipper Windpower confirmed their plans to bring a windfarm factory to the banks of the Tyne. As Minister for the North East Nick has worked hard to promote the Region as a centre for green industries. That work is now getting results, with this announcement expected to provide more than 500 local jobs on the site of the old Neptune Yard.

Nick said: “This is the start of a whole new industry for east Newcastle. It will provide secure employment for generations to come and put our community at the forefront of new green technologies. This is a great example of the public and private sector working together.”

Aided by the Labour Government’s recent announcements of increased wind energy grants and further off-shore sites for windfarms, these developments are not just good news for employment in our area, they are good news for the planet as a whole.

Up to £350m will be spent on modernising stations, installing new escalators, renewing track and refurbishing rolling stock. The remainder will pay for maintenance and running costs until 2019.

Nick said: “Today’s announcement safeguards the future of the Tyne and Wear Metro for a generation. The Metro is the envy of other cities and the Government’s commitment reflects the importance of the Metro to our region.

“The Government’s package of over £300m of capital investment will be focussed on what passengers want, transforming the Metro and renewing its world class status resulting in a better service, securing hundreds of jobs and delivering value for money to the tax payer.”

Nick with the Prime Minister at the Nissan plant last year

With the scheme closing soon, Minister for the North East and Newcastle East MP Nick Brown encourages the North East’s motorists to take advantage of the car scrappage scheme if they wish to do so, or risk missing out.

Figures released show that more than three quarters of the budget for the Labour Government’s hugely successful scrappage scheme has been used up by individuals and families, boosting UK car sales and helping the car industry through the downturn. Funding for less than 82,000 new vehicles orders is left for consumers to take advantage of under the scheme, as it nears its end.

Nick said: “Labour’s car scrappage scheme has kept our car industry going during these tough times. These figures show that time is running out for people in the North East to get a great deal on a new car by trading in their old one. If people have been thinking about taking advantage of the scrappage scheme then now is the time. 

“Unlike the Tories who left the motor industry to sink or swim during the 1990’s, the Labour Government is investing through difficult times to give real help to people and protect jobs and businesses. Nowhere is this clearer than in the North East, where Labour Government investment in Nissan will see the birth of the electric car and the underpinning of a new industry for decades to come.”

Nick in Downing Street with Chancellor Alistair Darling

Nick today welcomed the entry of the newly strengthened Northern Rock to the savings and mortgage market after the restructuring of the company came into effect on 1 January 2010.

Nick said: “This is an important milestone for Northern Rock and its staff.  It signals a fresh start for the new, strengthened bank and is a major step towards an independent future. 

“The Government has protected the deposits of hundreds of thousands of British families. From today a healthy new Northern Rock will offer savings and mortgage products, increasing competition in the sector and providing consumers with more choice.”

The Government has made clear that it wants to see a well functioning mortgage market with responsible lending and access to a wide range of affordable mortgages. The successful launch of the new Northern Rock is a significant step towards meeting these aims.

Nick at a One NorthEast event earlier this year to promote the region's green economy

Nick Brown has criticised threats to cut the North East’s development and training funding. The Lib Dems have suggested they would cut money used to support One NorthEast and other regeneration groups, while at the same time slashing the budget for the export guarantee credit department.

Minister for the North East Nick Brown said the cuts “could not be more damaging” to the Region.

Nick said: “From both the Tories and the Lib Dems we would see the development agency closed down. The Lib Dems would cut by at least half the Train to Gain budget and cut the export guarantee scheme. It is almost impossible to imagine a bigger blow to the region’s economy.

“Everything we have heard from the business sector has told us how useful these schemes, especially the export guarantee, have been. A move like this would wipe out any hope of an economic recovery in the region.”