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“You can’t fault the council”.
That is a considerable endorsement from a leading member and supporter of and financial donor to Her Majesty’s Opposition.
We have had some welcome high-profile announcements. The Nissan decision was great news for the constituency. It was announced that Nissan would build its new model at the plant, resulting in hundreds of new jobs not just at the plant but in the supply chain, which is often based around the area. I would also like to place on record my thanks to the Government for their financial contribution to research and development and for ensuring that Nissan had all the support it could possibly ask for from the UK Government. That is a tremendous endorsement and this week the plant announced that it will have to change its shift system because of the unprecedented demand for the models that it makes. That is great news.
There are many other good news stories. Over the past few years, some 60 international inward projects have come into the city. The projects have recently included Nike, the sports manufacturer, which has announced that its headquarters will be based in the city, accounting for about 15 per cent. of all jobs there. Although we have had setbacks, such as Northern Rock and other closures, in many instances they have been balanced by the additional growth and the announcements of new jobs in the city.
Manufacturing remains hugely important. It accounts for 26.3 per cent. of all jobs, which should be seen against the backdrop of a national statistic of about 10.9 per cent. We also recognise—perhaps learning from the past when there was a huge dependence on specific industries—that in order to cope in a global environment we need resilience, a wide jobs base and a wide economic base, which will mean that we do not face some of the problems that we have seen in the past. As part of that strategy, Sunderland is internationally recognised as one of the top cities in the world for technology investment.
A heavy commitment has gone into launching software city, an industry-led initiative supported by city council finance. Some £7 million went into building the new Evolve centre in my constituency, where companies such as the home-grown international Leighton Group, under the leadership of Paul Callaghan, are based and produce innovative software. I visited the company a few weeks ago and was very impressed by what it was doing and by its work force, many of whom lived locally or had gone to local colleges and the university. They were employed in a dynamic and growing company. We were also successful in the UK Government’s digital challenge bid, where we got £3.5 million towards community-based projects that deal with technology.
That has all helped to give us a competitive advantage. It is coupled with the partnership that we enjoy with the private sector. Many people talk about partnership and it is a very popular word, but in our case the partnership is real because it is based on trust. It has not happened in just the past few years, but has been ongoing in the city. We have also provided high-quality premises not just for large employers but for small and medium-sized enterprises, too. The latest of those developments is based at Rainton Bridge in my constituency. The 54-acre site will provide about 850,000 sq ft in space, with a potential for 4,000 jobs and about £100 million in investment. Northern Rock was due to relocate staff there and we await Ron Sandler’s restructuring plans, but we remain optimistic that the development will do well.
I spoke earlier about infrastructure projects, and the city council has submitted a revised business case for improving the highway infrastructure on the central route into the development. The companies on the site supply companies such as Nissan and therefore need good infrastructure. I urge the Minister to speak to colleagues in the Department for Transport to ensure that the council’s revised bid gets early consideration and a quick answer.
Planning permission has just been awarded to Barnston Holdings, part of Nissan Land Holdings, for another 600,000 sq ft site offering 4,000 jobs. Development land is important in many urban areas and I urge the Government to ensure that public bodies such as city councils can identify and purchase sites for development well in advance.
I also want to mention the effect that the full business rate on unused sites has on development. I understand the reasons, but the matter needs to be reviewed. We should not have detrimental fiscal policies that might act as disincentives to developers prepared to invest heavily, as part of a speculative venture, in new building in the hope of attracting jobs.
I shall conclude by saying that our record in these matters is a proud one. The achievements speak for themselves, but I pay tribute to the many companies that have come to my constituency and the city of Sunderland. They have put their faith in the area and the people who work for them. Ultimately, it is those companies that provide the jobs, whereas our job is to ensure that there is an excellent business environment for doing business. That is all about working in partnership and ensuring that companies know that we are continually improving our education facilities and skills base.
One lesson that we have learned is that foresight is very important, as we need to be able to predict, as far as possible, how things will turn out. In the past, economic changes that took 20 or 30 years now happen in five or 10, as many of the rules of the old economic order have gone out of the window.
I have told the House before that I attended last year’s “State of the City” debate in Sunderland, when a young man just leaving school asked me what sort of job he would have in 30 years’ time. That made me think, as I left a school in my constituency just over 30 years ago. If someone had told me then that, today, there would be no shipbuilding, that mining would be gone for ever and that the city would produce 400,000 cars a year, 78 per cent. of which would be exported to Europe, I would have been amazed. Indeed, some of the
cars even go to Japan: all that, given the state of the British car industry in the 1970s, made me wonder how to answer that young man.
We live in a fast-moving economy, and we need to develop a public policy that is adaptable and flexible enough to enable us to meet the demands of business. If we do that, we will generate the wealth that our constituents expect will be spent on the services that they need so much.
10.8 pm
The Minister for Employment Relations and Postal Affairs (Mr. Pat McFadden): I begin by congratulating my hon. Friend the Member for Houghton and Washington, East (Mr. Kemp) on securing this debate about the economic development in the area that he represents, and on his thoughtful and thought-provoking speech. I know that he cares passionately about this subject, and since becoming the MP for the area he has been not just a very active but a highly effective MP for his constituency, particularly in securing the jobs, investment and development that are so important to the local economy. Given that strengthening regional economies is a key strand of the Government’s policy, I very much welcome the opportunity to reflect on economic development in Sunderland.
As my hon. Friend said, his constituency and the surrounding city have been through hard times in the past, but he showed that a great deal of progress has been made and that the city has come a great distance in recent years. I was delighted to hear the good examples that he set out of progress towards future growth. In the first five years of this decade, average year-on-year growth per head was 3.2 per cent—higher than the north-east as a whole, at 2.4 per cent., and the UK average. That has contributed to a significant increase in jobs in that period, to the tune of about 15,000.
It is most encouraging to see that developments in recent years have meant that Sunderland has moved into new and exciting areas, functioning in a global context and competing internationally, as my hon. Friend said. At a time when being connected is more important than ever for individuals, cities and countries, people in Sunderland are leading the rest of the country in embracing digital technology as part of their everyday lives. Some 66 per cent. have broadband connections, compared with a national average of 57 per cent. He mentioned the digital challenge competition, in which the city was recently successful, and Doxford International is the first business park in the UK, outside London, to be awarded world teleport status. That demonstrates the development of broadband telecommunications and the information and communications technology skills of the local work force.
The Government are investing in both the infrastructure and the people of Sunderland through a wide range of projects supported by European regional development fund and European social fund money, including community economic development, business support, capital investment and training. Many of those projects have been under the umbrella of regional support provided by the regional development agency One NorthEast, the Learning and Skills Council and others. I also echo the tribute that my hon. Friend paid to the positive and outward-looking city council that Sunderland has had
in recent years. As he said, much of the progress in the area has resulted from the partnership between the city council and those other bodies. That has led to a strong local area agreement for the city and a wider multi-area agreement for Tyne and Wear.
Along with investment in buildings, the Government are investing in infrastructure. My hon. Friend has played a positive and important role in supporting the Sunderland strategic transport corridor, discussions on which are ongoing between my colleagues at the Department for Transport and Sunderland city council, and I will bear in mind what he said this evening. The region’s interim regional transport board has recently confirmed its support for the scheme.
The Government have also recently invested some £20 million in the Sunderland aquatics centre, which is intended to be a training centre for the 2012 Olympics. I know that the development is warmly welcomed by my hon. Friend and other local MPs. The Sunderland urban regeneration company has delivered a number of physical regeneration projects in the city, such as the Sunniside project, for which a brownfield site containing many historic buildings is being developed into new residential, retail, food and drink and leisure opportunities.
As my hon. Friend said, there is ongoing private sector investment, and he outlined the benefits at Rainton Bridge. The presence of its own back-up generators, uninterruptable power supply and fire suppression systems has created an ideal location for disaster recovery facilities.
The story of Sunderland in recent decades would be incomplete without mention of the role of Nissan, which has been critical to the local economy for more than two decades. Recent announcements by Nissan have provided encouraging signs of continued growth. The first of these, of course, is the new model that is to be produced. The Government were delighted to provide £6.2 million in grant aid towards an overall investment for the car of more than £55 million, split between the Sunderland site and suppliers’ plants. My right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform described the new car as “a great British achievement”. The second achievement is the success of the Qashqai, which has led to the recent recruitment of 800 employees, bringing the Sunderland total to 5,000. As my hon. Friend said, the plant is on target to make a record 450,000 cars this year, and has introduced round-the-clock production to the site. That record means that one in every five cars built in the UK is a Sunderland-made Nissan.
Quarterly economic reports that we receive from businesses in the region remain broadly optimistic, even in these more uncertain times. Of course, times are more uncertain, not just here but right across the globe. We have seen, for example, the impact of the international credit crunch on Northern Rock. Here, apart from the wider economic importance of the Government’s actions, the region also required support in the form of decisive action from the Government. Managing the reduction in jobs and the related issues is, I know, an issue that Sunderland is currently addressing with the support of the regional development agency and other regional partners.
So, for our part, continuing to invest in infrastructure, in projects to develop the skills of the people and to attract new businesses are the areas that we must focus on and I am pleased to see that these are being addressed.
Apart from economic issues, health issues have long been a challenge for the north-east, and it is heartening to see that as well as its impressive economic achievements, Sunderland council has been shortlisted in this category, as well as in reducing re-offending, for the annual Beacon awards. I am sure that this will only spur the council on to invest further in health improvements across the city. Sunderland has also had some success in testing new ways to help long-term incapacity benefit claimants off benefit and into sustained employment. That is critical to expanding opportunity for those who need it most. The city is 80 per cent. towards a three-year target of 500 benefit claimants into work by 2009. This is impressive, but as my hon. Friend said, it is also an ongoing challenge, with some 20,000 people in the area in receipt of the benefit as of last summer. So we have set ourselves and the north-east challenging targets to drive forward the social and economic regeneration agenda. It is encouraging to see the regional development agency playing a key role in progress in Sunderland. But
it is not just funding that will enable us to continue to make the progress that is necessary into the future. We also have to streamline the bureaucracy and increase delegation, and that is what we are doing through the sub-national review. The successes in the north-east give us confidence to delegate more to the region.
I am delighted that the area that my hon. Friend represents has done so well to increase the growth rate in recent years. I know that he and the local council have played an important part in this. The leadership that they have shown will be all the more important as the city navigates its way through what will perhaps be more uncertain economic times. I am sure that my hon. Friend will continue to play his part in the ongoing economic development, the outward-looking, positive success story and the development of the area that he has so ably represented over the years.
Adjourned accordingly at eighteen minutes past Ten o’clock.
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