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Economic Development (Sunderland)

12.30 pm

Mr. Fraser Kemp (Houghton and Washington, East): I am grateful for the opportunity to debate economic development in Sunderland, the city that I am proud to represent. Economic development spearheaded by local authorities is the cornerstone of the strategies that the United Kingdom needs to develop. Without an effective strategy for economic development, we are disadvantaged and unable to do the things that are necessary to build sustainable futures for our communities.

The demise of our shipbuilding and mining industries means that the economic base of the area I represent has undergone a more dramatic transformation than has been seen anywhere else in the United Kingdom. Those industries provided employment for the vast majority of people in the area, not just for the past few decades, but for centuries. If people 20 or 30 years ago had been asked what future they envisaged for the city of Sunderland without mining or shipbuilding, the response would have been bleak.

It is a tribute to people's talent and ingenuity that Sunderland has not become an economic wasteland. In the 20 or 30 years in which we have lost our core, primary industries, not only have we have attracted new industries to the area, but we have developed our indigenous manufacturing industries. With much work and effort, we have not only responded to the change, but managed and embraced it. We have been ahead of the game, looking to the future of new industries that are developing in the United Kingdom. In recent years, Sunderland city council and its economic development team have been consistent winners of various awards for the area, including the best economic development area in the United Kingdom, top location in the United Kingdom for sites and premises, and the United Kingdom's most successful regeneration city. Those awards, which have been achieved in difficult circumstances, serve as a tribute to the local authority and the people who work with it.

A report issued a few weeks ago by Business Strategies described Sunderland as one of the few cities that are genuinely bucking the trend with respect to manufacturing industries. That message is hammered home by the fact that my constituency contains the most successful car plant in Europe: the Nissan car plant is the most efficient in Europe in terms of production per worker per car. Regrettably, the task of getting that message across was not helped by a press release that I saw yesterday. Under the heading, "Conservative News", the right hon. Member for Wokingham (Mr. Redwood) announced:

Any right hon. or hon. Member who issues a press statement about another hon. Member's constituency should check with that Member, or at least with the company concerned. That press release has caused great anxiety to tens of thousands of people and their families.

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Yesterday, I spoke to the managing director of Nissan, who confirmed that no final decision had been made. It is regrettable that people are willing to jump on any bandwagon to promote bad news, even when it does not really exist. The issue of such a press release throughout the region caused much pain and anxiety to those who work at the car plant. The right hon. Member for Wokingham would be better employed working with the rest of us to try to secure jobs at Nissan in the production of the new Micra, and supporting the Department of Trade and Industry's award of £40 million to Nissan, which is currently being examined by the European Commissioner for Competition. We expect an announcement from him at the end of the year. The right hon. Gentleman should support the retention of jobs in the north-east, not condemn job losses that have not even happened.

Although much has been achieved in recent years, I am not complacent. I realise that we cannot ease off. We live in a global environment and in a changing world, so it is important to maintain the pace of change. We must respond not only to the situation as it stands, but be ahead of the game and identify the new industries that areas such as the north-east can attract. My constituency is predominantly made up of former coal mining areas and we must recognise the deprivation and lack of opportunity that persists within such areas.

Many schemes have been undertaken. A few weeks ago, we were successful in respect of a multimillion-pound bid called Urban II, which is designed to increase opportunities for people who live in former coal mining areas in respect of training, literacy and child care. That offers the chance to take a big step forward. We must not forget those communities. The Department of the Environment, Transport and the Regions has carried out much work and the Government have given help through coalfield regeneration programmes, such as the Coalfields Trust, but we must keep up the momentum. One of the big moral judgments that the Government will face at the end of their current term of office and the next will be whether they have made a material difference to people who live in former coalmining areas.

I ask the Minister to use her good offices to chase up one or two matters, the first of which is the reclamation of the Lambton cokeworks, which date from the beginning of the 18th century. The area the works occupy has been heavily contaminated by the process of making coke, one product of which is cyanide. The land is badly polluted and it is important that we look for ways in which it can be reclaimed. Reclamation would allow a new road to be built across the land, which would open up both existing industrial estates and others that are planned. It would provide a link between the A1M and the A19 and open up a whole range of opportunities, not only in my constituency, but in neighbouring former coal mining constituencies. There would be a considerable effect on the whole area.

One NorthEast, through the English Partnerships coalfield programme, currently has consultants looking at that issue, but we would like a decision to be reached as soon as possible and funds to be made available. The site was purchased by the local authority some time ago, with a view to reclaiming the cokeworks. Incidentally, during work on the site, Britain's oldest wooden

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wagonway, dating from 1730, was unearthed. It would be of great advantage to receive news of any action that is to be taken.

My right hon. Friend the Secretary of State for Trade and Industry is considering proposals relating to the Sunderland area regeneration compact, commonly known as the ARC, which the local authority is keen to see expedited. The project covers the constituencies of my hon. Friends the Members for Sunderland, North (Mr. Etherington) and for Sunderland, South (Mr. Mullin), the Under-Secretary of State for the Environment, Transport and the Regions. It is one of the largest projects of its kind in Europe--a joint public-private partnership initiative that would develop the corridor surrounding the River Wear. The project has the full support of One NorthEast, English Partnerships, the local authority and everybody in Wearside. Anything we can do to get a decision on the proposals would be helpful, because the project would provide opportunities and jobs, not only in Sunderland, North and South, but in Houghton and Washington, East.

I would like the Minister to bear the points I have made in mind. My area has suffered blows in the past, but it is fighting back effectively, and I have said how successful local manufacturing has been. There are many important initiatives taking place: for example, a couple of Fridays ago, I visited a project called G-Tel, which gives young people opportunities through the new deal; of the 70 trainees in the Washington Galleries--part of the G-Tel project--30 are now in full-time employment. That project was put together and developed by the Department for Education and Employment, the Galleries training centre and the Prudential, and has been very successful.

A lot of effort has been put into giving people the necessary training, but we have to provide the infrastructure for jobs, so the city council's work to develop sites and build factories is crucial. If we can develop in that way--and we can--we need never witness the waste of human talent that we saw in the reign of the previous Government, during the 1980s and early 1990s, when the people in our constituencies had little hope and few opportunities. The situation is beginning to improve and my message today is that we must keep the momentum going.

12.42 pm

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes) : I congratulate my hon. Friend the Member for Houghton and Washington, East (Mr. Kemp) on securing the debate. He knows the north-east region and the city of Sunderland well, and has clearly outlined for us the issues that that area of the country has faced over the past two decades and still faces to some extent.

Since 1997, we have tried to provide new opportunities for a regionally focused approach to tackling some of those problems. The organisations, communities, individuals and authorities in the north-east have already responded positively to the challenge of taking an increased part in the approach to the economic and social progress of the region, and of

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Sunderland in particular. Business people, local authorities and voluntary sector groups are all involved to various extents in plans and activities and the Government's regionalisation programme.

My hon. Friend the Member for Houghton and Washington, East and other hon. Friends, some of whom are in the Chamber today, have played an important role in supporting and taking forward all those efforts. However, he is also right to celebrate the strength of the city of Sunderland and the north-east. I understand the feelings that he expressed clearly about the behaviour of some Members, who are apparently prepared to sacrifice the concerns and expectations for the future of local people by pursuing a soundbite with no substance in the context of what Nissan has said. He has outlined the work that the Government are doing to secure, through the Commission, a satisfactory outcome to the decision by Nissan. We are confident that the Commission is dealing with that in a timely way and we look forward to its results.

Before I come to the issues that my hon. Friend wants me to address, I shall refer to several initiatives that we have introduced and in which the partners in the region, particularly in Sunderland, have been involved. My right hon. Friend the Minister for Local Government and the Regions, who has had to leave the Chamber, took part in the launch of the regional economic strategy developed on behalf of the region by One NorthEast. My right hon. Friend is working closely with One NorthEast and its partners. That strategy outlines the issues, and the opportunities, faced by the north-east. The long-term strategy of One NorthEast is ambitious but achievable.

The region has a new assisted area map, providing various forms of grants, which covers about 97 per cent. of the region's population. The Government have made a bid for a new programme of European objective 2 structural funds up to 2006, which will be worth more than £460 million to the area and will support spending of around £1 billion. Several sub-regional partnerships will bring together local authorities, businesses, learning and skills councils, small business services and so on, all trying to work together to make sure--the point raised by my hon. Friend the Member for Houghton and Washington, East--that those opportunities and resources are translated in ways that make a real difference for people. My hon. Friend is right that the final test is not the money that goes in but what we make that money, and other resources and efforts, achieve; that depends largely on local partners.

My hon. Friend will know that the neighbourhood renewal fund was launched with a consultation paper earlier in October. The city of Sunderland is one of 14 authorities in the north-east that will be eligible for assistance and, provided that it complies with the conditions for that funding, it stands to receive an extra £14.3 million over the next three financial years. I know that my hon. Friend will be pleased with that. The neighbourhood renewal fund in particular will assist local authorities and others working together to bridge the gap between the poorest communities and those that have had higher standards of services and economic well-being.

The single regeneration budget has also played a crucial role in Sunderland and the region. In its work to develop economic activity and regeneration in

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Sunderland, One NorthEast is funding five single regeneration partnerships from the first five rounds. My hon. Friend will be pleased to know that after the announcement of round six in August this year, a new partnership to regenerate Thorney Close will receive more than £10 million over the next six years. Again, those are important strands that need to be brought together to assist the various forms of regeneration, not just economic but social and environmental.

My hon. Friend mentioned two issues on which I would like to comment. The first was the area regeneration compact, or the ARC as it is known locally. As he said, that initiative was launched in June last year in response to job losses and closures in Sunderland at Grove's Cranes and the brewery. My right hon. Friend the Secretary of State for Trade and Industry recently considered the development strategy for ARC and earlier this week responded to Dr. John Bridge, the chairperson of One NorthEast, welcoming the strategy and encouraging ARC to press ahead with its economic and financial appraisal work. I say clearly to my hon. Friend that the Government believe that the proposals in the compact document are in line with the regional strategy of One NorthEast and with the forthcoming urban White Paper.

The Secretary of State has asked the task group to press ahead with the important necessary economic and financial appraisal work. It is important that the compact should provide the basis for the kind of public-private partnership that we know to be the most effective way to achieve sustainable regeneration, and, as my hon. Friend said, that would place Sunderland ahead of the game. That is the critical task. He will be reassured to know that my right hon. Friend the Minister for Local Government and Housing--I do not want to compromise her--is now leading on the development of ARC, in agreement with my right hon. Friend the Secretary of State for Trade and Industry.

I know that my hon. Friend has worked extremely hard liasing with One NorthEast and others to try to ensure funding for reclamation of the Lambton cokeworks. It is an important scheme that he knows will cost £12 million or more, and it will see productive re-use of brownfield land. Clearly, that would hit one of the Government's priorities. Studies have to be undertaken to validate the proposals and there must be separate economic assessments to justify what is, as he would agree, significant expenditure. One NorthEast wants those to proceed as rapidly as possible. It is committed to try to finish them in the next four to six months, after which time it should be possible to confirm the source of funding and a programme for reclamation of the site. I cannot give my hon. Friend an absolute guarantee today, but I hope that I have been as reassuring as possible and that he will take some encouragement from that.

I should also like to comment on the city of Sunderland partnership. Of all the issues that my hon. Friend raised, partnership is the most crucial to getting the maximum from the resources available and ensuring that they are translated into changes that make a difference to local people. The Government can do only so much. Since I have been a Minister it has been clear that, although the Government's job is to make resources, structures and mechanisms available, local people have to translate money and opportunities into economic and social progress, with our support.

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I congratulate the council on its forward thinking and approach to partnership working, which are critical. The city of Sunderland partnership, which has brought together key players in the city, was established in 1994 and has operated a strategic planning process that includes a city strategy. The partnership clearly provides a solid base for the Government's modernisation agenda, and is placed to become the local strategic partnership that will finalise the preparation of the city's community strategy and the priorities for utilising, for example, the neighbourhood renewal fund. It will also drive forward economic regeneration for the city.

Mr. Kemp : On the question of former coal-mining areas, I want to make one plea. We often hear about such areas, and there is rightly talk of Yorkshire and Durham, but it is not often remembered that there is a substantial coal-mining area, formerly the north Durham field, in the city of Sunderland.

I want to mention a collegiate approach, using joined-up government, to the issues facing former coal-mining areas. Does my hon. Friend the Minister agree that in some sense we have to look broadly in terms of social provision, education, transport facilities and equipping people with basic skills? Is that not one of the great benefits of the Urban II project, for which we have funding in mining areas? For example, it will provide child care, which will help women to find work again. We must see matters in terms of not only the factory unit, but providing a social infrastructure around people to give them chances and opportunities.

Ms Hughes : I agree that that is critical. Change is unsustainable unless we pay attention to the development of that infrastructure and to other issues such as how to raise the skills and capacities of local people. That is the distinctive contribution that the Government have made, which local partners such as Sunderland have understood and are taking forward. If we do not pay attention to all the issues mentioned by my hon. Friend the Member for Houghton and Washington, East, including training, child care, housing and transport, change may die away when the initiative ends. We will not have created a change that lasts and makes a difference to people--the difference will last only as long as the initiative.

My hon. Friend referred to transport. The Government recognise, as does the city of Sunderland, that local economists depend on good strategic links to markets in the United Kingdom and Europe. Transport infrastructure is especially important in the north-east. Construction of the Metro extension is under way and will offer improved transport links within Sunderland and with the rest of the Tyne and Wear conurbation. The £100 million extension will help to provide employment opportunities and access to those opportunities as well as to social, leisure and educational facilities. In addition to the Metro, a local transport plan is being developed that will use a proportion of the £50 billion that we are making available nationally to support some local priorities in partnership.

The Government have applied a range of tools and opportunities to enable people at the regional and local levels to begin to tackle some of the problems in the north-east and Sunderland. Some of those schemes are

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active and producing results, while others are in the process of development. The aim must be to tackle some of the long-term and deep-seated economic and social issues that exist largely as a consequence of the fact that little attention was paid to them in previous decades when, as my hon. Friend rightly says, a changing economic situation faced the north-east. Those issues cannot be addressed with quick fixes.

It is important that local players can see that the resources and opportunities that we are providing will be continued long enough to make real change possible. I have been encouraged by the response of regional and local players; I have commented on the ARC and on the positive approach of the city of Sunderland partnership, which provides a basis for making the most of those opportunities. However, my hon. Friend the Member for Houghton and Washington, East was right to say that the critical test lies in ensuring that as much value as possible comes from the money and opportunities provided and that a real difference is made over the next few years for the people of Sunderland and the north-east. I am sure that he will play his part in that. The extent to which regional and local players have grasped those opportunities and are trying to make that difference is encouraging.

Mrs. Ray Michie (in the Chair) : Thank you. We may now go on to the next debate.

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