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6.53 pm
Mr. Doug Henderson (Newcastle upon Tyne, North): I may not endear myself to my hon. Friends, but I have to confess to feeling a trifle sorry for the right hon. Member for Horsham (Mr. Maude), who, for the second time in a couple of weeks, presented the case for Conservative economic policy. He knew that he was batting on an appalling wicket and, when I looked at the expressions on the faces of the Conservative Members sitting behind him, I was not sure that they were confident that he would produce a terribly good innings even on a good wicket.
The appalling wicket that the right hon. Gentleman has inherited was laid out by the Conservative party, which seems to be remote, out of touch, lacking in economic direction and withdrawn into itself. It must be painful for the more sensitive members of the Conservative party to be told time and again by business men and women who perhaps do not like what the Government are doing that they like even less what is being said by those at the Conservatives' end of the political spectrum. I find that extremely strange. The Conservative party is more remote from business than at any other time in my political life.
My right hon. Friend the Chancellor is batting on a good wicket and he is largely responsible for its preparation. He is on a strong wicket in respect of tackling inflation and building output, and that strong wicket has allowed other Ministers to undertake essential spending on health and education, which are crucial to any sense of social justice in this country. Without social justice, we can never expect to command the full support of the people. That strong wicket has also brought down unemployment to the levels of 20 years ago.
It is not in my character to spend my allocated time eulogising my right hon. Friend, and I do not propose to do that, but I want to place on record that I think that he has been sound, innovative and prudent in running our economy. The difficulty is that economic activity is not spread evenly. That problem is not new--it has existed for perhaps 70 years and more--and there have been endless Government and independent inquiries into the regional issue over a long period. Many Government measures, initiated by both principal parties in the House and sometimes supported by the other parties, followed those inquiries, but, despite all the concern about regional policy and the measures taken on it, we have not done enough.
There is still a major regional economic problem, and I believe that we have to tackle it if we are to achieve economic efficiency and social justice--we cannot achieve them nationally without dealing with the different parts of the economy. My own Front Benchers have been innovative in looking at many of the other problems that we face in society--those of the family, young people and how to build enterprise--but I hope that they will turn their attention to the regional problem. No area has more experience of it than my own, the north-east of England. Despite all the good economic indicators, there are still indicators that I want to see reversed. We have not been getting the benefit of the changes in the economy.
I do not claim to have all the answers in respect of tackling some of those problems, but I do claim to have experience of talking to people in the north-east of England, whatever capacity they fill in life. They tell me what they think should be considered as we try to tackle the regional problem, and I think that we need new thinking and new ideas. I have never been one of those who says that the Government can solve all the problems in society because I do not believe that that is the case, but they have to do certain things if they are to lay a foundation for change.
In my view, the Government have to continue to make every effort, through their various agencies and the regional development agency One North East, to try to get a share of the mobile investment that may be available. We all recognise what has to be done to attract that investment: we must be able to say to investors that we have people with the right skills, a regulatory regime that is attractive to them and the right sites in which to invest. Probably the best site for economic development in the north-east is in my constituency. I do not say that out of any narrow interest, because Great North park is an area with enormous potential and One North East has recognised that by giving development priority to it.
The area's development priority has also been recognised by the business and trade union communities in the north-east and, coming on to joined-up government, I hope that the Government will recognise it as well when the planning application goes before the Department of the Environment, Transport and the Regions. Without an innovative approach to such development, we cannot tackle regional problems. We need more of the traditional methods of tackling regional economic disparity.
We should come up with new ideas. If we are to change our capital gains structure, the Treasury should consider a regional differential and a different shape for the taper to encourage the development of businesses that create employment in certain regions. My business friends in the north-east believe that that should be a priority.
We should review the Barnett formula on the allocation of public expenditure. It was set some time ago, and it has been reviewed from time to time. As we reach the millennium, we are moving into a new era of political and economic development. The formula should be revisited, and we should consider whether the case for each area of the country that was made 30 years ago still stands. If not, how should we respond to that?
We should consider the relocation of Government institutions. The private sector in the north-east of England strongly believes that, if only that region had a stronger public sector--as do counties such as Hampshire and Wiltshire through Ministry of Defence investment in one form or another--and had the same economic background, private businesses would thrive to a greater extent on the back of that.
It is wrong that only 1 per cent. of Ministry of Defence employment is in the northern region, despite the fact that 12 per cent. of the British Army is recruited from there. That does not help anyone. When the Treasury reviews the public partnership rules, it should consider applying regional criteria. I am not picking out the MOD for special mention, as this probably applies to all Departments where there is southernism, as they say in Newcastle. When Departments consider relocating various parts of their operation, whether to a site in Hampshire or
Wiltshire or to a third site, more attention should be given to the third site. That makes economic sense, and would spread economic activity and release sites in the southern part of the country for the essential house building that must occur if, in the next 25 years, everyone who needs a home is to be able to buy or rent one. Much Government property in the south could be released for house building, without spoiling any of the greenbelt. Colleagues often raise that matter with me when dealing with a regional issue.
As I said, the Government cannot do everything. People should do as much as they can for themselves. Communities in the regions of Britain that are suffering should try to do more for themselves. We must all do more about basic economic standards. In the northern region, fewer people attain qualifications than in any other part of the country. That problem must be addressed. It is part of the same story as the literacy and numeracy measures that Departments are taking. There should be greater liaison with regional institutions, and the regions should give a greater push to tackle this terrible problem.
An attempt must be made to build a small business community, because that is what will produce the industries of tomorrow. The small businesses of today should become the big businesses of tomorrow. The truth of the matter is that people in the north-east of England are not taking the initiative to create a cluster of small businesses in the knowledge industries of tomorrow. The Government can help us with education and training, but we must take those initiatives. That view is strongly held by large sections of the community in the north-east.
Universities and colleges have not done enough. They want to keep their traditional campuses, whether it is a greenfield campus with a wire round it or a city centre campus. Universities and colleges should integrate with business developments throughout the country, not just in the north-east. If that link is established with young people of 19, 20 or 21 with lots of energy, it will be carried forward to a later stage in their lives when they are ready to take part in the establishment of small businesses.
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