Building Britain's Future

The Committee consisted of the following Members:

Chairman: David Taylor

Allen, Mr. Graham (Nottingham, North) (Lab)

† Beckett, Margaret (Derby, South) (Lab)

Binley, Mr. Brian (Northampton, South) (Con)

† Blackman, Liz (Erewash) (Lab)

Bone, Mr. Peter (Wellingborough) (Con)

Boswell, Mr. Tim (Daventry) (Con)

Clarke, Mr. Kenneth (Rushcliffe) (Con)

Coaker, Mr. Vernon (Minister for Schools and Learners)

Davies, Mr. Quentin (Parliamentary Under-Secretary of State for Defence)

Dorrell, Mr. Stephen (Charnwood) (Con)

† Duncan, Alan (Rutland and Melton) (Con)

Engel, Natascha (North-East Derbyshire) (Lab)

Garnier, Mr. Edward (Harborough) (Con)

Hayes, Mr. John (South Holland and The Deepings) (Con)

† Heppell, Mr. John (Nottingham, East) (Lab)

Hewitt, Ms Patricia (Leicester, West) (Lab)

Hogg, Mr. Douglas (Sleaford and North Hykeham) (Con)

Hollobone, Mr. Philip (Kettering) (Con)

† Holmes, Paul (Chesterfield) (LD)

Hoon, Mr. Geoffrey (Ashfield) (Lab)

† Hope, Phil (Minister for the East Midlands)

Keeble, Ms Sally (Northampton, North) (Lab)

Laxton, Mr. Bob (Derby, North) (Lab)

† Leigh, Mr. Edward (Gainsborough) (Con)

† Levitt, Tom (High Peak) (Lab)

McLoughlin, Mr. Patrick (West Derbyshire) (Con)

† Mallaber, Judy (Amber Valley) (Lab)

† Mann, John (Bassetlaw) (Lab)

Meale, Mr. Alan (Mansfield) (Lab)

Mercer, Patrick (Newark) (Con)

Merron, Gillian (Minister of State, Department of Health)

† Palmer, Dr. Nick (Broxtowe) (Lab)

Reed, Mr. Andy (Loughborough) (Lab/Co-op)

Robathan, Mr. Andrew (Blaby) (Con)

† Simmonds, Mark (Boston and Skegness) (Con)

† Simpson, Alan (Nottingham, South) (Lab)

Skinner, Mr. Dennis (Bolsover) (Lab)

Soulsby, Sir Peter (Leicester, South) (Lab)

Tapsell, Sir Peter (Louth and Horncastle) (Con)

† Tipping, Paddy (Sherwood) (Lab)

† Todd, Mr. Mark (South Derbyshire) (Lab)

Tredinnick, David (Bosworth) (Con)

† Vaz, Keith (Leicester, East) (Lab)

Crispin Poyser, Chris Shaw, Committee Clerks

† attended the Committee

East Midlands Regional Grand Committee

Wednesday 9 September 2009

(Nottingham)

[David Taylor in the Chair]

Building Britain’s Future

2 pm

The Chairman: I welcome you to Nottingham this afternoon, although I am a Leicestershire MP. As in the House, it is permissible to inspect mobile phones for texts and such things—silently—but BlackBerries and PDAs must be switched off, because they conflict with the sound system used in this building. We thank Nottingham city council for the use of its very fine council chamber. The final point is that the quorum is 15 members, and there are 15 members present. If any member leaves, even temporarily, I must suspend the sitting. I am sure that you understand that. We hope that a 16th member will arrive, which will provide a bit of flexibility.

Oral Answers to QuestionsThe Minister for the East Midlands was asked—

Business Assistance

1. Alan Duncan (Rutland and Melton) (Con): How many businesses in the east midlands region have received assistance under the (a) trade credit top-up insurance scheme, (b) capital for enterprise fund and (c) automotive assistance programme to date; and if he will make a statement. [290961]

The Minister for the East Midlands (Phil Hope): I shall save my remarks about this historic occasion for when I make my statement to the Grand Committee. I shall begin by answering the first question on the Order Paper.

The Government have created a wide range of measures to support businesses during the global economic downturn, such as help with financial support, training and development opportunities. Two businesses in the east midlands have been supported through the trade credit top-up insurance scheme. One east midlands company has received £2 million of funding from the capital for enterprise fund. Nationally, more than 20 formal expressions of interest have been made to the automotive assistance programme, which includes companies from the east midlands. Such schemes are only part of the story of the real help that we are giving. I am sure that all members will join me in welcoming the Government’s announcement this morning that 29 housing schemes across the region will receive an additional £16 million of funding for affordable homes.

Alan Duncan: According to Lord Mandelson, only two firms have received assistance from the capital for enterprise scheme, and according to him neither of them is in the east midlands. The automotive assistance programme was announced in January and is still not

operating. Only 52 businesses have taken up facilities under the top-up trade credit insurance scheme, totalling a rather pathetic £7 million, but the Government refuse to say where those companies are based. Businesses everywhere, but small businesses in particular, are still being starved of credit and are being squeezed harshly by the banks. Is it not the case that such schemes are largely cosmetic, designed to get the Government a headline so that they look as though they are doing something about the recession, but in practice have delivered little succour to hard-pressed businesses? Will the Minister give us more detail about the effectiveness of the schemes in the east midlands, because many people feel that the Government, having got us into this mess, are doing very little in practice to get us out of it?

Phil Hope: I regret the tone of the hon. Gentleman’s supplementary question. He knows that the world is going through a global economic downturn, which has affected this country, this region and companies in our constituencies. The question for the Government was whether to stand back and, as in the 1980s, let the recession simply take its course with its devastating effects on individuals’ lives, businesses and communities, or whether to intervene? Unlike the hon. Gentleman’s party, we have decided to support businesses through real help now, supporting programmes such as Backing Young Britain, helping our young people into jobs through the future jobs fund, providing extra resources for businesses under the enterprise finance guarantee and ensuring opportunities for apprenticeships and job opportunities for young people, who are vulnerable during a recession.

I have met businesses up and down the region, and I can tell the hon. Gentleman that those businesses are making a great deal of use of all the Government programmes, which are making a real difference to business opportunities. Without Government intervention, the region would be much poorer, the recession would be deeper and more people would have lost their jobs. I am pleased to say that we are turning a corner and that this country is moving forward. We now need to grasp the opportunity that the Government have provided to take our country and the region forward to economic prosperity.

Keith Vaz (Leicester, East) (Lab): In answer to the robust question from the hon. Member for Rutland and Melton, the Minister mentioned the housing scheme that was announced today. I was with the Minister for Housing this morning in Leicester, at the Mandela site, where £4 million has been allocated by the Government for new council houses. Does the Minister agree that that will directly benefit not only local people, who will benefit by getting houses, but the construction industry, which will be supported by the creation of more jobs as a result of the excellent scheme that the Government announced this morning?

Phil Hope: My right hon. Friend is right. The kick-start scheme to promote housing development and the extra resources announced today for councils to build affordable homes for people to rent have two major impacts—first, meeting the need for homes in the east midlands, which

we know is there and which we must respond to right across the region, and, secondly, creating jobs in the construction industry.

Maintaining levels of public spending during a recession is crucial. It allows construction firms to bid for and win contracts to build schools, hospitals, children’s centres and infrastructure, road and transport projects. That makes a real difference not only to the economic infrastructure, which will allow the east midlands to take advantage of the economic opportunities in front of it, but by providing jobs in those industries by maintaining public spending. If we had followed the Conservative party’s formula of cutting public spending by £5 billion in this financial year, it would have devastated the economy and lost more people their jobs.

Paul Holmes (Chesterfield) (LD): Another scheme to help businesses in the current recession is the enterprise finance guarantee loan system, administered by the banks, which the Government announced before Christmas. A national survey reported earlier this summer that across the UK it was almost impossible to access the money, which has certainly been true for my constituents in Chesterfield. One constituent approached her bank, Lloyds TSB, to access such a loan last February. She was promised the loan by June, but she is still waiting and it is now September. Lloyds TSB said to her at the time that it was a bit like chasing the rainbow. Will the Minister tell the Committee how many businesses in the east midlands have accessed an EFG loan? I want to know not how many have applied for one, but how many have completed the process and got the money.

Phil Hope: The hon. Gentleman is right to emphasise the importance of the enterprise finance guarantee to local businesses in the region. As regional Minister, I recently met a group of the banks to demand that they start getting credit flowing to businesses, particularly, although not only, through the enterprise finance guarantee, given its importance in providing banks and lenders with the security to make loans to creditworthy businesses that would otherwise be unable to obtain them.

To answer the hon. Gentleman’s specific question, there are more than £41.8 million of eligible applications under the enterprise finance guarantee scheme regionally, 373 firms have been granted loans that are being processed or are being assessed and 353 businesses have been offered loans totalling £40.4 million—a considerable success, which proves the Government’s desire to ensure that businesses get the support that they need to get through the recession and into recovery.

Dr. Nick Palmer (Broxtowe) (Lab): In Broxtowe, we are delighted with the £500,000 that we have received to support the council house building programme. We are particularly delighted that the Government have shown that they are willing to support the building industry, which tends to be the hardest hit in periods such as this. Will my hon. Friend tell his colleagues in the Department that we hope that that support will not be a one-off and that we will see continuing support over the next 12 months?

Phil Hope: My hon. Friend is right, and I thank him for his congratulations. One of my jobs as regional Minister is to stand up for the region in the corridors of Whitehall and to be an advocate for it, so that it

gets inward investment and support from a variety of Departments, including the Department for Business, Innovation and Skills, the Department for Communities and Local Government and the Department for Children, Schools and Families, which can provide the investment that we need in skills, job support, housing and other infrastructure projects.

The regional economic strategy is the core document, which helps us to plan the way forward. I certainly intend to listen to businesses and local organisations, as I have been doing with colleagues on the regional economic cabinet. I intend to convey their views, to win resources and then to bear down on local deliverers, such as Jobcentre Plus and the learning and skills council, to ensure that resources are made available to the communities and individuals that need them.

Gypsy and Traveller Sites

2. John Mann (Bassetlaw) (Lab): What assessment he has made of the likely effects of the distribution of new Gypsy and Traveller sites set out in the east midlands regional spatial strategy on the adequacy of site provision in the region. [290962]

The Minister for the East Midlands (Phil Hope): The east midlands regional plan published in March 2009 sets out the distribution of pitches by local authority area in the region. The plan sets out a need for 483 additional residential pitches and 83 transit pitches by 2012. The Government have set aside £32 million nationally in 2009-10—there is £3.5 million for the east midlands—for local authorities to provide new sites. The accommodation needs of Gypsies and Travellers, like the housing needs of all citizens, are assessed and monitored and will be looked at again as part of the next full review.

John Mann: I thank the Minister for that response. No doubt he is a big supporter of local government, but local councils have decided the allocations and there are disparities. For example, Bassetlaw Conservative council, having jumped the gun in front of everyone else, has decided that it requires 47 new placements, which is more than the rest of Nottinghamshire put together. That is not surprising, because the rest of Nottinghamshire decided its allocations after Bassetlaw and in the knowledge of what Bassetlaw had done. What logic is there in an incompetent council using London-based consultants to come up with entirely mythical figures for demand, which bear no relation to what anybody locally, including the Gypsy and Traveller community, has suggested? Those figures bear no relationship to the number of Travellers passing through the district and simply skew the allocation, which will inevitably create problems in the future.

Phil Hope: My hon. Friend will recognise that it is not for me to comment on local authority decision making. He has put on record his view of the situation, and he has been an active and articulate advocate of the needs of his constituents for a number of years.

May I remind the Committee that a circular published by the then Office of the Deputy Prime Minister in January 2006 sets out the process whereby local authorities identify the needs of Gypsies and Travellers in their area by using the Gypsy and Traveller accommodation

assessment? The policy consulted on over the past three years is set out in our regional spatial strategy, which was published this year. It bases the requirement for additional pitches for Gypsies and Travellers on the figures set out in the GTAA and is the most robust and accurate picture of need in the region. I hope that that will provide the kind of guidance and support that local authorities need to make evidence-based, robust decisions with the support of their local communities.

Mr. Mark Todd (South Derbyshire) (Lab): But that is by no means a precise science. South Derbyshire has something in common with Bassetlaw in that we already have significant provision of official Traveller sites and, with Government help, there has been recent investment to extend those sites. Yet, perhaps not surprisingly, surveys suggest that we require even more sites, while other authorities nearby appear to require virtually none, which logically suggests that Travellers go to the places where they already go. There is a concentration of sites in particular parts of an area based on the appropriate provision made by sensible local authorities in the past. Such an approach fails to recognise that many areas have never provided for Travellers before and now need proper provision. Will the Minister explain how the methodology might distribute the task more evenly?

Phil Hope: The issues, dilemmas, tensions and questions raised by my hon. Friend were examined in some detail as we developed the regional spatial strategy over the past three years. Indeed, many of those points were made when the regional spatial strategy was discussed during public examination and so on.

I hope that all members in this chamber are committed to ensuring that members of the Gypsy and Traveller communities have the same rights and responsibilities as every other citizen, including the right to live in an area of their choosing. It is not for the Government to dictate where members of any group or community should live. I hear what my hon. Friend has to say about the Gypsy and Traveller accommodation assessment processes, but those processes provide the most robust and informed picture of the need for additional pitches in the region. Those figures have been used to derive the allocations set out in the regional spatial strategy and—I think that he might have been hinting at this issue—local authorities can work together and reapportion the allocation of additional pitches where joint or co-ordinated local development frameworks are being prepared. Again, that must be a matter for local authorities within the framework set out in the regional spatial strategy.

Alan Duncan (Rutland and Melton) (Con): Is the Minister satisfied with the conduct and processes of the Planning Inspectorate? He has said that Gypsies should be subject to the same rights and responsibilities as us, and he is right. However, there is the example of the proper working of the planning permission system. Those people often buy a small plot of agricultural land and inhabit it, which puts the council in a very difficult position when it comes to enforcement. Although there may have been a rejection from the local council, the planning inspectors come in from afar and suddenly decide to permit such people to remain. Is the Minister satisfied that this community is not continuously

bypassing the same planning rules that we all have to face, sometimes to the detriment of the community that lives there properly and that has followed all the planning rules?

Phil Hope: Let us be clear that the planning process, planning rules, planning guidance and planning sanctions and enforcements apply equally to whichever part of the community is subject to them. There is no question of any bias or favour towards one community or another; the planning rules apply equally to all.

The key to the problem of illegal encampments, which the hon. Gentleman has discussed, is twofold. One is to ensure that action is taken to enforce breaches of development control, where Travellers and Gypsies camp on land without permission to do so. The Government have issued comprehensive guidance to local authorities on how to make effective use of existing powers. We introduced temporary stop notices four years ago, in 2005, which have been used immediately to halt work on unauthorised developments.

As well as making the planning system work effectively, the other key is to provide more well-managed, authorised sites, so that those communities have somewhere to go and, in seeking accommodation, do not feel the need to break planning laws or any other laws. If we get both those issues right, we can successfully resolve those tensions and dilemmas that affect many people in their constituencies.

Dr. Nick Palmer (Broxtowe) (Lab): I thank the Minister for his response. Like him, I think that there is a balance to be struck.

There are two points. First, does the Minister accept that national, or regional, Government have a responsibility to ensure that there is a network? Travellers can reasonably say that they want to get from A to B with authorised stopping points along the way. A local council cannot ensure that that is the case on its own.

Secondly, we have found locally that the current powers make it slow and expensive for a landowner to get an eviction order, even when it is perfectly clear that the Travellers are there without permission. Will the Minister raise with his ministerial colleagues the question whether the police should be empowered to evict larger groups of Travellers, if those Travellers cannot show that they have permission to be on that site? Rather than the onus being on the landowner to go to court to get the eviction order, which might cost thousands of pounds, the onus would be on the people who are on the land to show that they have a right to be there.

Phil Hope: I will convey to my colleagues in whichever part of Whitehall is responsible—it may be more than one part, as my hon. Friend has mentioned the police and local government—that joining-up action at a local level makes all the difference. I will also convey my hon. Friend’s concerns about how planning powers may be used.

I re-emphasise that the regional spatial strategy identifies the need for more pitches. It has stated in which local authority areas those should be, but it is for the local authority areas to decide where the pitches should be located. There are also opportunities and encouragement for local authorities—particularly where Travellers and Gypsies move between neighbouring authorities—to work together to develop a co-ordinated approach.

In my county, Northamptonshire, there is a very good working partnership between local authorities, the police, social services, and the education departments to ensure that a Traveller unit is co-funded by a number of organisations, districts and county councils. That provides a service to ensure that when difficulties arise for either the settled community or the travelling community, they are resolved quickly with everyone’s consent. Such practical action by local authorities is the key to resolving the dilemmas that sometimes frustrate local communities.

Mr. Edward Leigh (Gainsborough) (Con): Surely we all agree on the principle that power should be devolved as much as possible and that the best authorities to deal with local opinion and issues are local authorities. The second issue on which we should all agree is that everyone should be treated exactly the same. It does not matter where someone comes from; if they apply for something they should be treated the same as everyone else. It seems to me that both those principles are being broken in this area, and I am not sure whether the Minister’s answers are entirely honest in that respect.

Travellers and Gypsies are treated differently. The Planning Inspectorate and the Government are ordering local councils to provide certain sites, although they are not laying down where they should be. That goes against the two principles that I elucidated at the beginning of my remarks, which is very dangerous. Everybody in this country should be treated the same and, as far as possible, power should be devolved to local authorities, because they know what is best for their areas.

Phil Hope: The hon. Gentleman will have to forgive me if I say that I take some offence at being described as dishonest. I do not think that that is a fair comment for this chamber, and I reject it entirely.

No preferential treatment is provided for Gypsies and Travellers in the planning system, which is borne out by the fact that the proportion of successful appeals relating to Gypsy and Traveller pitches is broadly the same as that for successful appeals relating to general housing development. There is no difference.

Alan Duncan: Not true.

Phil Hope: I have given the hon. Gentleman the facts. Simply saying, “Not true”, will not do. I am sorry, but the Opposition parties will have to accept that, although they wish to make an issue of these types of things, I am interested in finding solutions that meet the needs of everybody in our community.

Let me just respond to the two points made by the hon. Member for Gainsborough. His first point concerned devolution. Yes, these decisions are devolved to local councils. We heard earlier from other members about their unhappiness at decisions made by their local councils. Members must resolve such matters with local councillors and local communities at a local level, which I think is something that the hon. Gentleman supports.

Regionally, we need to find a solution to the demand for housing and for pitches and sites for Gypsies and Travellers. The regional spatial strategy, which has been fully consulted on in public for three years, has arrived at a solution to those problems at a regional level. The combination of regional strategy and local delivery is

the right way forward to meet the needs of everybody in our community, including the Gypsy and Traveller community. Appropriate planning policy must apply equally to those people as to any other individual or organisation in our region.

Mr. Todd: But it is a great deal easier to co-operate with other agencies in the management of illegal occupations than it is to co-operate in the allocation of sites for permanent occupation. My experience in Derbyshire is that getting agreement between local authorities to parcel out sites is similar to threading a camel through the eye of a needle. The Minister may think that that approach will solve this particular problem, but I doubt whether it will.

On a friendlier note, however, does the Minister think that the change in the law made by the previous Government in 1994 was a rather unhelpful and partial solution to elements of the problem and that a more considered approach would have served us much better as a platform for the changes that we are bringing about?

Phil Hope: I understand my hon. Friend’s concern. Indeed, having been a serving councillor myself back in the ’90s, I understand his point about the impact of legislative changes under the previous Administration.

We are not only urging co-operation at a local level and providing guidance and a framework, but putting cash on the table. There is extra money—£3.5 million for this region—to help local authorities develop the pitches and sites that are needed to provide accommodation for the Gypsy and Traveller communities. Of course, that money is in addition to the huge amounts of other money that local authorities are receiving to support other housing needs in the region. So there is both legal policy and financial incentives for local authorities to take their responsibilities seriously, to work with their local communities and to address these issues as swiftly as possible.

Alan Duncan: I am afraid that the Minister, in response to my hon. Friend the Member for Gainsborough, has rather dug a hole for himself, in claiming—indeed, in protesting—that the accusation that Travellers are often not treated the same as everybody else is somehow untrue. What my hon. Friend said is right and I can give the Minister an example to show that. In the small county of Rutland, a field was illegally occupied and the planning application was turned down by the council. However, the Planning Inspectorate granted the application on the grounds that Travellers were different and that there was no dedicated site for them nearby.

Thus, Travellers were treated differently from other categories of person in the planning process. There may be arguments in favour of that having happened, but the Minister’s assertion that Travellers are treated in exactly the same way as other people is, in practice, untrue, exactly as my hon. Friend stated a moment ago.

Phil Hope: I see that this is not going to be an opportunity to find reconciliation. All I can say to the hon. Gentleman is that I cannot comment on a particular site, or a particular decision, by a particular planning inspector, because that would be outwith my responsibilities as a regional Minister. It is incumbent on local authorities

to face their responsibilities to ensure that the accommodation needs of every part of their communities are met, including the needs of Gypsies and Travellers. The guidance is there—the regional spatial strategy spells out how that should happen—and extra funding is available. I say to the hon. Gentleman that it would be a lot better if we could get into a constructive mode of solving the problem—the issue affects local communities both in the planning and delivery of pitches and sites and in how people work together at a local level—rather than simply trying to score political points.

Industry (Government Support)

3. Mr. Mark Todd (South Derbyshire) (Lab): What discussions he has had with ministerial colleagues on Government support for industry in the east midlands in the last 12 months; and if he will make a statement. [290963]

The Minister for the East Midlands (Phil Hope): My top priority, as regional Minister for the past 12 months, has been the economy of the east midlands. Over the past year there has been a huge programme of support and intervention for people and businesses. As I said earlier, under the enterprise finance guarantee scheme 353 east midlands small businesses have been offered loans totalling more than £40 million. Her Majesty’s Revenue and Customs have reached over 13,000 agreements with businesses in the region, to spread more than £235 million of business taxes. The region stands to benefit by up to £113 million to kick-start housing development. That is in addition to the mainstream business support activities of organisations such as EMDA who, over the last year, made 20 loans to the value of £2.5 million to help viable businesses find difficult-to-access finance. It helped 17 international businesses to retain or grow their investment in the region, creating more than 1,400 new jobs and safeguarding nearly 900 more.

The Chairman: Time is running short, so could supplementary questions be rather shorter than I have allowed them to be so far?

Mr. Todd: The first thing is to welcome what the Minister said and to consolidate that by referring to the important partnerships the Government have made both with Rolls-Royce—there are many Rolls-Royce workers in my constituency—and with Toyota, which is based in South Derbyshire. Those relationships have certainly helped to consolidate the very strong brand presence in South Derbyshire, which makes it one of the leading manufacturing centres in the UK, with 30 per cent. of the work force engaged in making things. I would encourage him, however, to look further at the opportunities for railway manufacturing development in the area. The decision to award the high-speed train system to Hitachi was not initially welcomed by those in the area who have employees at Bombardier, but we faced that decision and hope that the Minister will assist in bringing the manufacturing activity that Hitachi has promised to the east midlands.

Phil Hope: I am grateful for my hon. Friend’s recognition of the work that has gone on. He would also know that the Ingleby-based company Marbran, in his constituency, received a £90,000 grant to develop a new healthy

alternative snack food from EMDA’s grant for research and development service. The £150 million package announced in July for Rolls-Royce was absolutely essential. I have met people from Bombardier to talk about their plans for the future. It has a number of bids for contracts, so it is very important that we give Bombardier support, although commercial conditions must of course apply. It is important that we provide such support for businesses and firms not only through the current recession: as we turn the corner, we need to ensure that those firms are ready to take the opportunities presented by the recovery of the global market—for jobs here in the east midlands and for overseas opportunities for some of our large international based companies in his constituency and the region. We are preparing the “New Industry, New Jobs” analysis by EMDA, which will describe how the east midlands is equipped—as a diverse, thriving and quite vibrant economy with a variety of industries—to make the most, not the least, of the low carbon and the green technologies that are going to be a feature of the global economy of the future.

Mark Simmonds (Boston and Skegness) (Con): Despite what the Minister has said, it is sadly clear that of the nine English regions, the east midlands contributes the second least to the national economy, ahead only of the north-east. Even on a per capita basis, the region is only fifth. Will the Minister expand on his previous remarks and explain exactly what the Government, himself and EMDA are doing to encourage inward investment into the east midlands where EMDA does not have a good track record? In particular, emphasis needs to be placed on the rural parts of the region to create economic diversification and sustainable employment.

Phil Hope: I probably do not have the time to do justice to such a question. If the hon. Gentleman looks at the Government’s proposals under the “Real Help Now” programme, he will see a wide range of support mechanisms being put in place in the region to deliver support to businesses not only in urban areas but in rural ones as well. As I was discussing earlier, such mechanisms will tackle the problems associated with rural unemployment and lift the barriers for some people. Businesses are looking to grow and diversify, as he said. Moreover, people in rural areas need to travel to work. Councils such as Lincolnshire have been telling me what they are doing to assist people to travel to jobs and how they are going to create job opportunities in the future. There is a comprehensive package that covers financial support for businesses—I mentioned the enterprise finance guarantee earlier—as well as training and apprentices and the Train to Gain programme. Such a package enables businesses to tap into Government funding, which is increasing year on year, to support the upskilling of the work force and to attract new workers via the apprenticeship system. Importantly, it creates a marketplace in which the new industries for the economy of the future, such as Intelligent Energy in Loughborough which is making the hydrogen fuel cells that will go into every London taxi in time for the 2012 Olympics, get the support that they need to flourish in this regime.

Alan Simpson (Nottingham, South) (Lab): Thank you for calling me for a supplementary question, Mr. Taylor. It allows me to make a reference to

Question 4, which was tabled and cleared with the Table Office, but which has mysteriously not made it on to today’s agenda. The question was about energy performance certificates and the significance that they have in relation to our approach to both housing and the construction industry. I simply ask the Minister to come back to members of the Grand Committee at some stage with information about the number of energy performance certificates that have been issued within the east midlands, and about the infrastructure of the staff who are capable of doing the inspections required for the issuing of certificates. Moreover, will he explain the interface with the construction industry that allows us to be certain that the Government’s energy conservation strategies are also part of the construction strategies for our housing future?

Phil Hope: That is an excellent point and something that was raised this morning at a seminar about all the services that are available for businesses in Lincolnshire. One company asked if we could ensure that there is a joining up between the extra money that is going into housing, the jobs fund, which allows young people to get construction jobs, and the energy efficiency industry, which ensures that houses are as energy-efficient as possible. It is that joining up that is absolutely central to the successful embedding of the economy of the future to reduce our carbon emissions and to create both jobs and homes. The regional economic cabinet that I chair considers that combination and looks at how we can do that kind of joining up between Jobcentre Plus, the Learning and Skills Council and the Government Departments that are responsible for those policy areas. I am unable to say anything about energy performance certificates because I was unaware that the question had been tabled. I will write to my hon. Friend after the Grand Committee meeting.

Liz Blackman (Erewash) (Lab): Despite having huge amounts of taxpayers’ money at the onset of the recession, the banks’ behaviour can be described as variable—and that is putting it kindly. The situation has improved in my constituency, but there is still a long way to go. Will the Minister be more specific about what data are collected on banks’ activities? Is it just new loans, restructuring or the price of money? Will he also say how frequently the data are collected and how frequently, at a regional level, he meets the banks and discusses the issues?

Phil Hope: My hon. Friend is right to focus on that key issue. The flow of credit, affordable loans and overdrafts and the ability to tap into the banks’ resources are central to businesses in the region. It is true that last year, when the banks collapsed, if we had not intervened we would have had an absolute catastrophe and the economy would not have been able to recover. We can be proud that we made those interventions. Having rescued the banks, the question is now to ensure that the money flows through. New products such as the enterprise finance guarantee scheme are starting to flow through, although there was a slow start. That was one of the reasons why I had a meeting with banks in the region earlier this year, to put to them, very forcefully, that although they were getting agreements at a national level, that was not flowing down to the regional or local level.

Data are a matter for the regional finance forum, which is convened by the East Midlands Development Agency. I will write to my hon. Friend and describe what that finance forum does, the data it collects, and how we are monitoring the banks’ performance in terms of information. My regional economic cabinet intends to maintain the pressure on the banking system to deliver the help that people need—whether that is mortgages, or loans and overdrafts—to make a success of their businesses and their lives.

The Chairman: For the five minutes that remain, three Members have managed to catch my eye. Short supplementary questions and concise answers would be appreciated.

Paddy Tipping (Sherwood) (Lab): Will the Minister have further discussions with the banks? He is right to tell us that the Government intervened—we are now major shareholders in all the banks. Is it not time to adopt a more robust approach towards the bankers, and ensure that real money comes to businesses in the east midlands?

Phil Hope: I agree with my hon. Friend. I am certainly robust in my conversations. I like to reward those who do the kind of lending that we think is important, and point out to those who are not as enthusiastic, that if others can do it, so can they.

The business of banks is banking—it is lending money. That is how they make their money. They say to me, “That’s what we’re in business to do; if there was more demand to come from businesses for our loans and overdrafts and so on, we would provide it.” I say that I have talked to businesses who say, “When we ask, we don’t get.” Let us join that up and ensure that banks provide the resources that businesses need. Let us ensure that businesses know that schemes such as the enterprise finance guarantee are there to be tapped into, and that the Government are underwriting the risk that the bank is taking. I hope that from today there will be an important message to the business and banking community that they have a shared responsibility for getting our economy back on its feet again.

Judy Mallaber (Amber Valley) (Lab): Following that response, what steps will the Minister and others take to ensure that if businesses are in difficulties, they know what business support is available at an early stage, including help with the banks? I have found it helpful in such situations to get EMDA business support and so on. However, in the report by the East Midlands Regional Committee, one of the issues raised was that although EMDA is doing what it can to get that message out, firms often come to it too late, after the stage at which they could have been given assistance to get them out of trouble.

Phil Hope: My hon. Friend is right. We are ensuring that Business Link, the doorway through which businesses can walk, is more effective at making clear what solutions it has to offer. Today, for example, we had a road show that was packed with businesses keen to find out what is on offer from the banking system, the training system, Government Departments, and Jobcentre Plus and the Learning and Skills Council through Business Link. That is to open the doorway to seven strands of business support that cover a range of issues from starting a new

business, growing a business, international trade, innovation and development. Support, grants and help are out there for businesses. We are doing what we can, and I hope that individual constituency MPs will do what they can in their areas to alert businesses and others to the new programmes that the Government have introduced, so as to see us through this global recession, weather the storm and move into economic recovery for the future.

Keith Vaz (Leicester, East) (Lab): Briefly, will the Minister ensure that as well as consulting ministerial colleagues, he will talk to business organisations? In Leicester that would be the chamber of commerce, and there are other organisations throughout the east midlands. The Government do not always know what is best; it is important to engage. I support what the hon. Member for Boston and Skegness said. I, too, have grave reservations about EMDA, and we need firm ministerial scrutiny over what it does.

Phil Hope: The scrutiny of appointed organisations such as EMDA is a critical part of why we sit here today and why we have created the Regional Grand Committee

and the Regional Select Committees. It is vital that organisations are accountable for what they do. In terms of my contact with business organisations, on the regional economic cabinet I have representatives from the Federation of Small Businesses, the Institute of Directors, the CBI and the chambers of commerce—there is a representative from the Nottinghamshire and Derbyshire chamber. Those representatives were here today. In my regional economic cabinet there are four organisations that represent the voice of large and small businesses, and the different sectors, and I therefore regularly hear at first hand the needs of businesses in the east midlands. Those representatives tell me that they welcome the Government support. We need them, as representatives of umbrella organisations, to tell their members that the help is available and to hold to account organisations such as EMDA and the banks, to ensure that they are delivering what they are supposed to deliver. I believe that EMDA is delivering a wave of investment, resources, support and training that is actively helping businesses in our region. If we did not have EMDA, our region would not be the economic success that it is.

Building Britain’s Future

2.46 pm

The Minister for the East Midlands (Phil Hope): I beg to move,

That the Committee has considered the matter of Building Britain’s Future: how the region will make the most of the upturn.

I am delighted to address this inaugural meeting of the East Midlands Regional Grand Committee. I thank my hon. Friend the Member for North-West Leicestershire for acting as our Chair. Many thanks also go to Nottingham city council for agreeing to host the event in the grand surroundings of its council house. Parliament last met here in 1357. This is therefore an historic day for the city of Nottingham.

Today is also an historic day for regional accountability in the east midlands, and as I was saying earlier, the establishment of a Regional Grand Committee, along with a Regional Select Committee, brings Parliamentary democracy closer to the people we represent, and closes the gap of democratic accountability at a regional level. It is important that appointed regional bodies such as development agencies are held to account: that they are scrutinised and their work is looked at, as demonstrated recently by our Regional Select Committee.

I am immensely proud to represent the east midlands as the regional Minister. We each know our constituencies well and are proud of them, but we can also be proud of our region, which brims with innovation and creativity. Our towns and cities boast some of the most successful businesses and universities in the country. We have a diverse rural economy—a point raised earlier, I think, in questions—which grows a fifth of the nation’s crops, and that is vital, not just to us as a region but to the country as a whole. Our expertise in staging national and international events was evident again recently when Leicester hosted the Special Olympics. That event, which I had the pleasure of attending in July, is unique.

The east midlands paints a fine picture of the strides forward that we have taken as a country over the past decade. In the past 10 years the east midlands has become a fairer, stronger and safer place to live. Overall, recorded crime in the region has fallen by more than a fifth, thanks to a more effective criminal justice system and greater investment in communities and neighbourhood policing. Lengthy hospital waiting lists have been consigned to history. Interestingly, in March 1998, more than 35,000 patients in the east midlands had waited longer than 13 weeks for an out-patient appointment, while regional figures published this month show not one patient waiting longer than 13 weeks.

School standards also continue to rise. Since 1997, there has been a 22 percentage point rise in the number of 15-year-olds achieving five or more GCSEs at grade C or above. Emerging GCSE results for this year, provided by local authorities, show a significant improvement in the attainment of the key five A to C grades across the whole region.

Poverty has been significantly reduced in our region. The number of neighbourhoods in the east midlands suffering the worst levels of deprivation has fallen by around 13 per cent. since 2001. I want to make it clear to the Committee that these achievements have not

been by chance. They were gained with decisive government, by a Government prepared to invest record amounts in public services. Today, in the midst of the global economic downturn, that strong, active style of government is as vital as ever.

Mr. Edward Leigh (Gainsborough) (Con): I hesitate to interrupt that paean of praise for what is going on, but one thing that the Minister has not mentioned is unemployment. Why is the unemployment rate in the east midlands still increasing? The seasonally adjusted number of claimants for July 2009 was 111,000, which is up 52,000 from July 2008. Perhaps the Minister could discuss unemployment and what he is doing about it.

Phil Hope: The hon. Gentleman must have been thinking about my next point about the region, namely our success in relation to jobs, skills and economic development for the future. The fact is that over the past 12 months there has been a global economic downturn, and businesses and people have had to find ways to weather that storm. Did they do that alone? No. This Government, unlike that of the 1980s, decided not to abandon a generation of young people to long-term unemployment. We are intervening decisively to ensure that the social impact of the disastrous policies of the ’80s is not repeated at the start of the 21st century.

Last June, to ensure that we have a strong future, the Prime Minister published “Building Britain’s Future”. It is a bold and radical strategy that maps out how the Government intend to help people and businesses through the recession, and to make the most of the upturn as it starts to happen. “Building Britain’s Future” spells out our plans for a new economy with a more active industrial policy to drive growth and to create the high-valued jobs of the future. We are investing to ensure that Britain can be at the forefront of the world’s new industries, and to ensure that our economy is underpinned by a first-class, modern infrastructure.

We are establishing a new £150 million innovation fund to support some of the key technology based sectors. Since becoming Minister for the East Midlands, my priorities have become the economy, jobs and skills, because of the pressure of the global economic recession. That is why I established the regional economic cabinet, to bring together leaders from the business community, the public sector and the third sector to work together to tackle the financial global crisis’ impact on this region, and to challenge each other to deliver more in our respective organisations to provide help on the ground.

The regional economic cabinet met earlier today to consider our response to “New Industry, New Jobs”, the national strategy that was launched earlier this year to invest in Britain’s economic and industrial future. Key regional bodies, notably EMDA and Business Link, are working hard to deliver stability in response to the downturn. We are now investing in excess of £26 million in the future jobs fund, targeted support fund and modernisation grants to boost the capacity of the third sector, working alone or with partners, to respond to the downturn.

The scale of the changes around us has been huge and will have long-term consequences. The changes have demanded action commensurate to that challenge from the Government. The region is building on firm foundations to develop competitive markets and a flexible

work force, and I recently saw a fantastic example of that in the east midlands. At Loughborough university, when we launched “New Industry, New Jobs”, the Prime Minister and Lord Mandelson, the Secretary of State for Business, Innovation and Skills, toured Intelligent Energy, which is a spin-off company from the university and a great example of the university’s contribution to the region’s success. The company manufactures three core technologies: clean hydrogen production and two fuel cell technologies. It has recently won a contract to build a fleet of hydrogen-fuelled London taxis for the 2012 Olympics. Such low-carbon industries are an existing strength of the east midlands economy, and the regional response led by EMDA, which I have commissioned, on “New Industry, New Jobs” will set out how we can continue to help that vital sector grow.

We are backing business from the east midlands in a broad spectrum of industries, from life sciences and advanced manufacturing to the well-established automotive, aerospace and rail-stock sectors. Activities include the sustainable construction iHub in Daventry, which will demonstrate innovative, low-carbon design in the construction sector. EMDA’s escalator of finance will address gaps in the availability of finance for our region’s small and medium-sized enterprises. We also have more plans as a cabinet to work closely with the region’s banking sector, as I described earlier. A third example is Steetley Regeneration, which aims to regenerate a former brownfield site on the Nottinghamshire-Derbyshire border to create a state-of-the-art pre-cast concrete factory—many Members here will know about that. I believe that the east midlands is well-placed for recovery and growth because we have a vibrant economy.

Meeting the business representatives from across the region in an event that I led in Grantham today emphasised the importance that businesses play in getting Government support. The representatives told me that they were still feeling the effects of the most challenging economic climate we have had for decades. But they said, I quote, that there is “cautious optimism” in the region that “the worst is over”. We are weathering the global economic downturn, and without the support that the Government have given, imagine how much more severe the impact would have been on jobs, families, home and individuals.

One indicator I want to emphasise, which I am concerned about and where my focus is more than any other indicator, is the number of young people affected by the global economic downturn, who find themselves in neither education, employment nor training. I do not think that it is right that we allow another generation of our young people to be written off, as they were in the ’80s. We are guaranteeing a sixth-form college or apprenticeship place to all school leavers. In the east midlands, that means almost 1,500 extra places this year, funded by an extra £4.8 million. From next year, every person under the age of 25 who has been out of work for 10 months will have a guaranteed offer of a place for job training or work experience. We will help adults who have been without a job for six months to set up a business, gain skills training or secure volunteer opportunities.

Dr. Nick Palmer (Broxtowe) (Lab): A number of my constituents have said that they are concerned about the sharp cut-off points for the schemes, welcome though

they are. Up to six months, there is relatively little help available. On the day of six months, suddenly more kicks in, and on the day of 10 months, some more kicks in. Would it not be better to have a more sliding scale of help, so that people would feel from day one that they have the Government behind them?

Phil Hope: My hon. Friend is right to emphasise the point of whether we can be flexible in responding to the needs of young people. I heard that message this morning at my regional economic cabinet, and I will take that point back to colleagues in Whitehall.

The important thing is that it is taxpayers’ public money that we invest, and we need to ensure that the money is targeted where it will have the most impact. All the evidence and research from previous recessions show that up to six months, people may be in and out of job opportunities and training, but that after six months, their self-esteem and self-confidence go down, their connection with services that might help them disappears and they become the lost generation.

The reason why we target resources at six months and again at 10 months is that, if we do not get people at those points, they could be lost for ever, and that must not be allowed to happen. We target the resources at people who have been out of work for more than six months because it is very important that they are not allowed to slip away. Obviously, there is support, advice and training that people can turn to before then, but that is when the real resources go in and when there is one-to-one monitoring and attention. My hon. Friend also made a point about flexibility. I have heard that elsewhere in the region today, and I will take that back to my ministerial colleagues.

The future jobs fund, a key part of the programme that is available, was announced here in the east midlands—in fact, in this very building. We will receive £15 million from the first round of the fund, potentially creating more than 2,400 jobs. It is vital that we recognise the importance of young people, and I am pleased that one of the most popular national indicator targets for local authorities in the east midlands is that of reducing the number of 16 to 18-year-olds who are not in education, employment or training; it was chosen by eight out of nine areas. I hope that we are working together with colleagues in local government and other agencies to achieve that outcome.

The importance of the housing and growth agenda in the east midlands should not be underestimated as part of economic development, and other colleagues have remarked on that in earlier parts of our discussions. We are the fastest-growing region in England. It is expected that, by 2016, there will be 500,000 more residents in our region than at present. For most people, their home is one of the most important things in their lives. We want everyone to have access to a decent home at a price that they can afford, in a place where they want to live and work. That is why I have supported the delivery of the east midlands regional plan, which sets out the number of new homes that are needed in the region; and it is why, in particular, I welcome the extra £1.5 billion of investment over the next two years as part of Building Britain’s Future, for the building of 20,000 new affordable homes and the creation of more jobs in the construction and related sectors.

Margaret Beckett (Derby, South) (Lab): Reference was made during Question Time to the new investment that the Government have just announced, some of which is also coming to my constituency. My hon. Friend the Member for Nottingham, South pointed out how it is essential that all the relevant issues should be linked together and that energy efficiency, among other things, is an important component of the investment that is being made. My understanding is that that is indeed a major criterion lying behind the investment that is forthcoming. I wonder whether my hon. Friend can confirm that.

Phil Hope: My right hon. Friend is right. We are endeavouring through the way in which the new homes are procured and through the house building regulations to ensure that new buildings conform to higher standards of energy efficiency and therefore produce reductions in carbon emissions and, indeed, savings on people’s energy bills. Crucially, we need to make sure that the people building those homes have the skills and knowledge to achieve that. There is also a need to join up, for example, the jobs fund providing job opportunities for young people in the construction industry with the necessary training in the new skills to allow those new homes to be built. I think that we get wins all round, as communities get homes and jobs and as we tackle the huge climate change challenge that we know is ahead. I shall take back to my ministerial colleagues the message about the importance of putting those things together. My right hon. Friend is right: it is built into the criteria that such homes should reach certain energy efficiency levels, to ensure that we are building homes that are sustainable in the longer term.

In the past year, I have felt worried about the group of people who are furthest from the housing and labour markets. Those people might have mental health problems or learning disabilities and find it hard at the best of times to get somewhere to live independently, to be supported to do that, or to get employment. I set up a housing sounding board to consider what more we might do to provide affordable homes.

Finally, a key element of what I am discussing is transport. We need a transport system that balances the needs of the economy, society and the environment. A good transport system would help us, as a region, to deliver greater competitiveness and growth. We have continued to show our commitment to investment in transport in the region. We accepted the region’s advice on transport within the regional funding advice priorities, with more than £2 billion to meet those priorities in the next 10 years. I shall give two examples. The work to widen the A46 and the A453 in the same time frame has been possible because of funding from the RFA package and additional funding from the Chancellor’s fiscal stimulus. We are investing in improving capacity on key national routes in the east midlands, such as the M1 widening scheme, and making considerable investment on the A14 around Kettering, to help unlock housing and economic growth.

I am delighted that we opened the Corby railway station this year—I would say that, as I am the MP for Corby; forgive me, Mr. Taylor—and the East Midlands Parkway station. That is more investment in the rail network, and both are important contributions. We are

supporting the extensions to Nottingham’s tram system, to tackle congestion in one of the nation’s premier cities.

Liz Blackman (Erewash) (Lab): This is a perfect opportunity to pitch in and flag up the fact that, for 12 years, I have been campaigning for a station for Ilkeston. There is a positive feasibility study in the Department, and good dialogue is going on between the Department and the two relevant local authorities. May I bend my hon. Friend’s ear further after the Committee?

Phil Hope: My hon. Friend is a great champion of the scheme in her constituency. I know from personal experience the benefits that railways can bring, so I wish her the best of luck. Of course, let us meet or correspond after the Committee, to make sure that I am up to speed as the Regional Minister and that every opportunity is offered to her constituents.

In the past 12 years, we have seen the laying of solid foundations for a confident and prosperous region, and that has been achieved through strong and decisive government. We have led from the front and will continue to do so to ensure that we emerge from the downturn with a clear direction forward and stronger than ever before.

3.6 pm

Alan Duncan (Rutland and Melton) (Con): I thank the Minister for what he has said this afternoon, although I remain unconvinced that the exercise of this so-called Grand Committee is really very purposeful—it is a rather ungrand Committee that is unable to take any decisions and is very much a media-based performance, rather than a practical part of the apparatus of government. For instance, the hon. Member for Erewash has just asked to bend the Minister’s ear after anything that happens in this chamber. She may well enjoy doing that—he might enjoy it, too—but I do not think that it will be very effective, because we have been briefed in advance that

“Regional Ministers do not cut across the work of the national departments responsible for specific policies and are therefore not responsible for the exercise of departmental responsibilities within that region.”

So what on earth is the Regional Minister for? There is nothing that he actually administers. He is there supposedly to gather together all the various functions of government in a way that suits the region, but he has no power whatsoever to do anything over those Departments. That illustrates the absolute failure over the last decade of the Government’s broader regional policy, which is in a state of complete collapse, and should we get into government, that policy in its current form will be replaced totally, which in my view would be for the better.

Mr. Leigh: Can I take it therefore that, when we get into power, as I hope we will next May, we will sweep away this whole farce—this Committee and the Ministers for the regions—and pass powers back down to local authorities, where the people decide how they should be governed?

Alan Duncan: It is certainly our policy to pass power back down wherever possible to county councils, or to a combination of county councils, where they choose to take them.

Judy Mallaber (Amber Valley) (Lab): Can I assume that the hon. Gentleman, in his desire to sweep away all this regional bureaucracy, would wish to sweep away the East Midlands Development Agency, and if so, would there be no business-based organisation in the region under such an Administration in future?

Alan Duncan: No, the hon. Lady cannot assume that. The problem with regional policy is that development agencies, which were originally designed to be very business-focused, have become less so over the past few years. They are commanded to affect statistics relating to general well-being, for example, or indeed to certain health objectives, all of which might be worthy in their own right but are not necessarily the proper functions of an economic-based regional agency. The agencies have therefore become funding organisations that hand out a bit of money here and there, all of which might be very useful in their individual ways, but they are not the business-focused organisations that they were originally designed to be. Our policy is therefore not to force their total abolition or anything like that, but to let them re-focus on proper business and economic objectives and for their powers to be devolved where appropriate to county councils or to a combination of county councils. We accept that there must be an economic focus, but I do not believe that that is what they do. For instance, their administration costs, including the cost of personnel, have increased by mammoth percentages over the past 10 years.

Paddy Tipping (Sherwood) (Lab): Does the hon. Gentleman accept that, in fact, EMDA’s administrative and business costs have been reduced in the past three years?

Alan Duncan: Those are certainly not the figures that I have, but I am happy to debate that with the hon. Gentleman in the proper Parliament when we get back to Westminster.

The motion is worded—presumptuously, many will think—making

“the most of the upturn.”

The cruel truth is that many businesses, people and households are still really suffering the effects of the downturn. Only to speak of the upturn during this period verges on being callous, because a lot of people are still facing massive difficulty. During questions earlier, we on both sides of this semi-circular chamber openly discussed the fact that many people simply cannot get credit for their businesses.

I was motivated to get involved in politics about 30 years ago by Britain’s economic condition. I did not like the way that Britain was looked upon as the basket case of Europe, was going down the economic plughole and was facing serious and continuing economic decline. When we got into government 30 years ago, we went through a very painful period of economic readjustment, the mythology of which continues to resonate around the debating halls of British politics, sometimes to our political disadvantage. All was designed to put this country back on an even economic keel.

The tragedy of the past decade is that this country had a massive opportunity to recalibrate the British economy to cope with growing global competition. The

Government have boasted of continuous economic growth. Some people, when measuring it, have said that it has not just been 10 years of what I would call notional economic growth, but many more than that. However, over that period we have not recalibrated the economy as we should have—the Government have spent and spent and spent.

At the end of that period, we should have been in a position in which the country had a massive pensions pot, lower taxation, a large surplus and low unemployment. Instead, as we went into the economic recession, we had a large government deficit; the pensions pot, which was massive when the Government came into office, had all but been destroyed; taxation had been creeping upwards; and unemployment was starting at 1.7 million at the end of the good years and is now predicted to pass 3 million.

Margaret Beckett: I want to make a quick point about the hon. Gentleman’s observations, not least because I have a vivid recollection—having lost my seat in the region in 1979—of the circumstances of the country then. One of the things that I remember very well is that, over the succeeding years, as a result of investment by the Labour Government in the North sea, the Government that he supported enjoyed income of something like £17 million every single day of the week for a solid 17 years. When we came back into power, we inherited a backlog of under-investment and of decay in transport, schools, hospitals and so on.

My main point, because of the thrust of the remarks that led the hon. Gentleman into his description, is that he is overlooking something in the phraseology of the motion. One of the biggest mistakes that was made in the recessions of the 1980s and 1990s was not to prepare for the upturn, to ignore what happened to people in the downturn and, in particular, to assume that as the upturn gradually began—we all accept that it is gradual—things would take care of themselves. One of the reasons why we lost a whole generation of construction is that no one prepared.

Alan Duncan: I am very open-minded about the right hon. Lady’s point about the wisdom and need to prepare for the upturn. However, as someone who has a fundamental belief in the efficacies of private enterprise and the benefits of people taking risks, I think that a lot of the energy for a successful upturn naturally comes from such people. The balance between what the Government wish to do and what emerges, in parallel, from the privately owned economy has to be married in a sense that gives the Government a picture of what the country needs to look like.

By cleverly talking about the need to prepare for the upturn, the right hon. Lady cannot escape from my accusation about the pain of the downturn, which is greater in this country than it would have been if the Government had not been so reckless in how they handled the economy. That is the fundamental point about the state of Britain at the moment: we have ended up in a worse position than any of our competitors during the downturn, and our debt burden is greater than that of almost any other country. Many generations will have to pay off the hundreds of billions of pounds of debt that have built up under the Government.

The Prime Minister—the man now at the top of the Government—was alone in charge of the moneybags for a whole decade and is the most culpable politician I can think of in my lifetime, because of what he has wrought upon the British economy and the pain that has been caused. He has been reckless and detached, and he has caused far more pain and disaster for families and businesses than would have been the case if he had been more responsible. That is the judgment people will make at the ballot box at the next election.

The Minister hit on two issues that are very important: those who have never been in work, and the plight of the young. A deep sadness of the recession is that it has hit young people very hard indeed. There has been a massive expansion of university places and many people who simply cannot get a job are now coming out of university. There have been many debates about whether that is a good or bad thing and whether the matter has been handled properly, but the fact is that, having got a degree, people are coming out of university and finding it very difficult to find a job. The recession is hitting the young disproportionately painfully in a way that is regrettable.

The other matter concerns those who are unemployed. As I said, we started the recession with 1.7 million unemployed, and it looks as if the figure will go beyond 3 million. For every person who makes up that big number, there is a painful personal story. However, the trouble is that there are really 5 to 6 million people who are either on benefit, dependent on the state or out of work. At the last count, there were 1.58 million on jobseeker’s allowance, 2.6 million on incapacity benefit and the new employment and support allowance, 736,000 on lone parent’s benefits, 400,000 on carer’s benefits, 363,000 on disability benefits, 182,000 on other income-related benefits and 95,000 on bereavement benefits. In other words, within the economy, there is a dependency on the state that is far greater than the Government often admit.

A further issue is the state of the east midlands, which was mentioned by my hon. Friend the Member for Boston and Skegness. Considering its location, the economic performance of the east midlands is weaker than we would wish it to be. The businesses that are keeping the east midlands prosperous are not getting enough praise and recognition for surviving despite the Government, rather than because of them. In our constituency casework, all of us will have been contacted by people who run businesses who have said, “The bank has just pulled the plug,” or “I applied to this Government scheme and I’ve got nowhere,” or “Those who owe me money are suddenly saying that they are going to pay it in 60 days rather than 30.” Many people who have risked their homes and their livelihoods to run their business are facing enormous difficulties. We have not heard enough about that today. There has not been enough praise for the risks taken by such people—whose earnings we take in taxation to spend on everything else—and for their position as the engine of the economy.

I have mentioned the regional agenda, which will be debated far more in Westminster over the next few months, so I shall conclude by asking the Minister a few questions about whether his role is productive or practical. What percentage of his time is spent on regional matters and to what effect is that time spent? What powers does he actually have and what top three decisions can he

point to as justifying his role? Will he explain how he has helped the east midlands area, rather than just talking about it, having lots of meetings and calling today’s sitting? Will he provide examples of real help that he has given to businesses in the region? If we are to justify this event, perhaps he can tell us whether he can see it having one positive outcome over the next month or so. Will he undertake to write to us all to explain quite what it is that we have achieved?

The Chairman: I call the Chairman of the East Midlands Regional Committee, Mr. Paddy Tipping.

3.21 pm

Paddy Tipping (Sherwood) (Lab): Thank you, Mr. Taylor. The Minister reminded us that Parliament met here in 1356. May I remind him of Nottingham’s radical history? Robin Hood, a man with whom you will identify, Mr. Taylor, took from the rich and gave to the poor—he was a real, redistributional socialist. The civil war started here, with the royal standard being raised 300 yards away at Standard hill. Nottingham was also the home of the Luddites, who were supported by another romantic hero, Lord Byron. Finally, Labour has been in control in this chamber since 1988—for 21 years—so let me say happy birthday to the Labour-controlled city council.

Part of the underlying debate today has been about the fiscal stimulus, and the debate about it will continue into the future. In a time of international financial crisis, do we need a stimulus? On what scale should it be? How far into the future will we need it? The issue will turn out to be a key dividing line, and those who advocate reducing the fiscal stimulus will do the east midlands economy no good.

I want to focus for a few moments on some of the infrastructure that the Government’s fiscal stimulus has promoted. The Minister mentioned the widening of the A46 between Newark and Widmerpool. The scheme has been brought forward and is now on the stocks, being built as we speak and creating new jobs. The Minister also mentioned lines 2 and 3 of the Nottingham Express Transit tram system, which was opposed locally by the Conservatives. The scheme will help to get rid of congestion in Greater Nottingham and provide construction jobs and new futures for people in the area.

Dr. Palmer: I am grateful to my hon. Friend, and we are all delighted to see him back in action. We should give the Conservative council credit for the fact that it saw sense in the end and made a U-turn on the issue. It is no longer trying to block the tram, although, admittedly, only after it got votes saying that it would do the opposite.

Paddy Tipping: I thank my hon. Friend for his good wishes. I am not firing on all cylinders at the moment, but I am warming up and I may get there in an hour’s time. The Conservatives are not blocking the tram, but we should be clear: they are not putting any money into it either, and they are missing a trick there.

We have talked a little about the housing package. We are seeing the biggest local authority house building programme for two decades, and I welcome the money that has come to Newark and Sherwood district council. The Minister mentioned housing in the

context of the regional plan, and I should make it clear how important it is that the present policy of brownfield before greenfield development continues. Seventy per cent. of new housing in Nottinghamshire and the east midlands is on brownfield rather than greenfield sites. Nottinghamshire local authorities face major challenges in providing new housing. We need small-scale sustainable housing close to town centres, not executive, ranch-style houses in the countryside, with five bedrooms and two cars in the drive. We must work closely with local authorities to introduce small-scale housing that meets local needs rather than the aspirations of builders who want to build in the countryside.

The Minister talked about transport. May I be blunt with him, because there is no point having regional meetings if we cannot make regional points? I am very disappointed that the train lines between Cardiff and London and between Manchester and Liverpool will be electrified. What is happening to the midlands main line? We have been given promises in the past that the midlands main line would be electrified. There has been a study of the issue, but we do not know what the result of that study is. Let me use this opportunity now to stick up for cities such as Leicester, Nottingham and Sheffield—big cities that produce a big economy—and let me make the case very strongly for early investment in the electrification of the midlands main line. Perhaps the Minister will bring us up to date with where that project has got to.

Perhaps I can also mention another local point. In his co-ordination of local authorities in the east midlands, will the Minister look closely at the bid that has been made here in Nottingham for a new World cup stadium, which will replace Nottingham Forest’s current ground? The aspiration is to move the club’s ground to Gamston. Will he talk to council leaders, including Conservative council leaders across the road at county hall, and say to them, “If we want to win this competition and if we want to be a winning team—which we need to be to bring new investment into the area—then it is no good falling out in public, as happened earlier this week, when the referees were here.” If there is division, discontent and different ideas, it is important to talk about those ideas behind closed doors, rather than prejudicing the bid that is being made for the future.

John Mann (Bassetlaw) (Lab): Does my hon. Friend agree when I note with great concern the joy that will have echoed around the other English competitor bids and around the world when they see a Conservative Nottinghamshire county council attempting to scupper one part of the proposed Nottingham bid, therefore potentially undermining England’s bid to win that World cup?

Paddy Tipping: It is important that we stick up for local people and for local clubs, to bring investment here locally. Squabbling in public on the pages of the Nottingham Evening Post does no good for us, either nationally or internationally. I hope that leading politicians in the area will see sense.

I just want to make two other points. First, the Minister mentioned crime in the east midlands. He is right that crime has gone down consistently in the past

five years. That decline is something to celebrate. However, let me remind him that the funding of all the police authorities in the east midlands—Lincolnshire, Nottinghamshire, Leicestershire and Derbyshire—is below target. I want to see us have a fair share in the east midlands. If there is a target, I want that target to be met. It is manifestly wrong that the police forces in the east midlands are, in relative terms, underfunded. Progress is being made, but we want to see more progress more quickly.

Judy Mallaber: Will my hon. Friend join me in asking the Minister to support Derbyshire police force in seeking recompense for the huge amount of money that it was forced to pay out to police an event in my constituency, when the BNP decided to hold an allegedly national fun family festival, at which golliwogs were burnt, and someone was accused of being black by the people at that event? Will he join us in seeking recompense for Derbyshire police force in its wonderful work in policing that event?

The Chairman: Order. I refer the hon. Lady to the motion, especially the words:

“how the region will make the most of the upturn”.

Paddy Tipping: Of course, having low crime and having an adequately-resourced police force brings in investment, and this issue is also about the state of the nation. Of course, where police authorities have extra costs, the Home Office ought to look very carefully at those demands.

Finally, I want to make a few points about EMDA, which has been mentioned on a number of occasions in this chamber. May I draw the Committee’s attention to the Regional Select Committee’s first report, which was published in July? The Committee chose to look at EMDA, which has a budget of £160 million a year and so deserves careful scrutiny, and Regional Select Committees, working with others, can ensure that such scrutiny takes place. May I praise and commend EMDA’s work? There is a lot of discussion about regional development associations, but my own judgment is that, in comparative terms, EMDA must be near the top of the league table. That view is supported by independent research.

Will the Minister tell us how the Government will respond to the Select Committee report? I am particularly interested in three parts of it. First—this point has been half-made during this afternoon’s debate—it is clear that the Government place extra demands upon EMDA. Is EMDA there to respond to local needs, or is it a delivery agency for the Government? Those of us who believe in devolution want a bottom-up approach where priorities are agreed in the region and where the region’s spending plans are not skewed by policy decisions taken centrally by the Government. Secondly, EMDA has been traditionally able to roll forward any underspend in its budget into the following year, which allows a great deal of flexibility. I understand that the intention is to stop that ability to roll forward, but I hope that the Minister will look at that. Finally, EMDA can be an agent for change in a very difficult financial situation. All bodies need to look closely at their spending, which EMDA has been doing by reducing its administrative

spend in proportion to the rest of the budget. However, it is clear that difficulties remain across the east midlands, and the budget reduction planned for EMDA over the next three years is not necessarily the right way forward.

I welcome this historic sitting and I am delighted—let me be controversial—that Nottingham remains queen of the east midlands. It is right, given Nottingham’s radical past, that this sitting should take place here, and it is right that Nottingham, its conurbation and the east midlands as a whole should continue to grow and compete in European and international terms.

3.34 pm

Paul Holmes (Chesterfield) (LD): I share some of the doubts expressed by the Conservative Front Bench spokesman about the value of this Committee in that it has no power to take votes and about it being a talking shop rather than an effective Committee. None the less, we are here representing Parliament in Nottingham, and I welcome the Minister’s reminder in his opening remarks that Parliament last sat here in the 14th century. This is therefore a landmark sitting in the 21st century.

One member of the Committee has already referred to the fact that Nottingham played another part in the development of Parliament when the King, having a few months earlier barged his way into Parliament with soldiers to try to arrest five MPs before then closing Parliament down, raised his standard in Nottingham to begin the seven-year civil war in order to try to impose a monarchical dictatorship on Britain’s then young, fledgling democracy. He failed of course; Parliament won that battle, and we are here today as a result.

An event that has not been touched upon, but other, more local MPs may wish to mention it later, is that Nottingham also played a part in the development of parliamentary democracy in 1832 when the Conservative Government, led by the Duke of Wellington, were desperately opposed to increasing the franchise from 2 to 5 per cent. of rich, landowning men. Nottingham castle was burned down by a rioting mob as part of the protests against what the Government were doing. Such protests led to the Reform Act 1832, which began the more rapid development of British democracy. Nottingham has therefore had quite a role in the development of British parliamentary democracy, although not always in the happiest of circumstances.

If we are here to talk about how the region will make the most of the upturn, one of the first questions to ask is whether we are yet witnessing that upturn. Some economists have been getting excited, both yesterday and today, with some early signs that perhaps we are witnessing an upturn. However, in a radio debate earlier today, two economists could not agree on that, which is not surprising, given the lamentable failure to guide the financial sector last year, which led to the massive crash of the world’s economic system. The key point quoted by both economists was that what we have seen is the first example of a halt in the fall rather than an increase in output. Therefore, if we are in an upturn, it is very early days. All the objective economic commentators from across the world and Europe agree that the UK is in a bad position and will be the last of the major western European economies to come out of the recession properly at some point next year—hopefully.

The economists are also uncertain about what sort of recession we are in. Is it a V-shaped recession, where we drop into it rapidly—as we did early this year—but come out of it rapidly? Is it a U-shaped recession, where we come out slowly? Is it a double-dip recession, where we may have a temporary false dawn, which we may be witnessing now, and then drop back into recession again in the next few months? They just do not know, economics being an incredibly inexact and rather overconfident science, as we have seen recently.

Certainly, the evidence from an area such as Chesterfield shows that we are still struggling with the recession and the credit crunch. There are major sites that were undergoing development in Chesterfield, with a mixture of council and private sector involvement, and others that were about to start development. Donkin’s site, which lines Derby road, one of the major routes into Chesterfield, was being rapidly developed by the private sector and it is about three-quarters done. However, that ground to a halt last autumn, and the last parts of it have to wait until the credit flow eases up and the final private sector development can be completed.

The Waterside development is already with a conglomeration of, I think, four different private sector companies, which have worked with the council to deal with a parcel of former industrial land alongside the railway and the canal, and put together a visionary package to redevelop that area. They were all ready to roll—they have had good help from EMDA in putting in the bases of a canal marina, which will create the core of the Waterside development—but again, that has ground to a halt because of the absolute blockage on the availability of credit for the private sector. The credit would have allowed them to get on with building the houses, shops and offices and the prestige development that the Waterside development will be. However, the site will now be developed more slowly than was anticipated a year ago.

Robinsons was one of the former major employers in Chesterfield, apart from engineering and the coal mines. It now largely no longer exists, but it holds a lot of former industrial land along Chatsworth road, another of the main entries into Chesterfield from the Peak district. Again, it was looking for much of that to be used for more prestigious housing on that side of town, but it has all ground to a halt because of the total collapse in private sector house building and the credit freeze in the recession.

Junction 29A, which is partly in Chesterfield, leads into the Markham Vale site. A great deal of work has been put into that junction by the local councils providing the land and by the Government and the taxpayer, but a year later, nothing has happened on the site. It is a fantastic industrial site in a perfect position for commerce to develop, but nothing has happened for a year due to the recession and the credit crunch. When will we see the signs of upturn? Certainly, we are not seeing them yet in Chesterfield. There are four separate developments there that have everything going for them, but have ground to a halt because of the present economic circumstances.

We have already heard this question asked: what are the banks doing about that? The banks are now mostly publicly owned—nationalised, effectively. The longest suicide note in history, the Labour manifesto for the 1983 general election, suggested nationalising the

commanding heights of the economy, such as the banks. That seemed outrageous at the time, but we have now virtually done it because the banks bankrupted themselves through their appalling financial management last year. The economies of the world and of Britain would have been in a far more dire position had the taxpayer not bailed them out in the way we did, but what are we getting in return? We have already heard various questions asked about whether the banks are playing their part, considering that they now exist by and large only because of the taxpayer adding something like 10 per cent. to the national debt to bail out their folly last autumn.

Dr. Palmer: I am grateful to the hon. Gentleman for his endorsement of Labour’s 1983 manifesto. It is unpopular to put the case for the banks here, but there is a genuine problem if politicians get too deeply involved, even in a nationalised bank, where we would start to be asked to influence individual loan decisions. Banks still need to operate on the basis of a fair assessment of the risk. Although I share the criticism that some of them are too cautious, I do not think that the hon. Gentleman is advocating that now that we own the banks we should make all the decisions on a political basis.

Paul Holmes: I partly agree with that intervention. I would certainly not endorse the longest suicide note in history of 1983. The banks should be at arm’s length, but to some extent the Government are using that simply as the excuse for the banks’ inaction. We do not want politicians or civil servants taking everyday decisions on the viability of this or that company. None the less, in the ninth month of this year, getting on for a year after that huge financial bail-out of the banks, surely they should be responding to public and Government pressure on two fronts.

Perfectly viable small businesses that had perfectly viable relationships with their banks suddenly, in the early part of this year, had their normal banking arrangements, including their overdraft facilities and credit agreements, shrunk or frozen arbitrarily, not because of their own performance but because the banks were engaged in a massive retrenchment of the risky position to which they had exposed themselves. We have heard mention of that, and many small businesses in Chesterfield have brought the issue to my attention over the past year. It was the fault not of those successful local businesses, but of the banks’ national folly in how they had operated. It would appear that the banks just pulled back from long-established relationships with successful long-standing small local companies, and I cannot see any excuse for that. If the banks will not respond to the understandable public indignation that, having been totally saved by the taxpayer, they are not responding to the needs of the economy and of local taxpayers and businesses, the Government need to start putting more pressure on them.

Alan Simpson (Nottingham, South) (Lab): Will the hon. Gentleman accept that for those who have reservations about the extent to which the Government should intervene directly in the banking system, the experience of Sweden, in the midst of its last financial crisis during which the banks were taken into public ownership, demonstrated

that it was not necessary for the Government to get involved in individual loan decisions? They simply said to the banks, “We do not care if you have lost confidence in lending to each other; your job now is simply to loan real money to real businesses”. That is the part of the banking crisis that we continue to face.

Paul Holmes: Absolutely. As I have said, where there are good business cases, the banks should do that. I could see that one or two of the businesses that approached me were in dodgy circumstances, but most of them were absolutely viable companies that had had their normal operating arrangements of three, four or five years or longer, clawed back and tightened up, which prevented them from operating properly and even endangered jobs in what would otherwise be successful businesses. There is no excuse for that. The banks must have enough pressure exerted on them to do the job they are there for, and which the taxpayer is now funding in almost all cases.

Another example, which we touched on in the question session, is the enterprise finance guarantee scheme. The Minister gave examples of how many companies across the east midlands have successfully accessed the scheme, but I am still not sure about the difference between successfully accessing the scheme and getting the money. The company in Chesterfield that I referred to is a successful one. The only reason it has a problem is that in January a company it had done some work for went into receivership, owing it £140,000. In February, it applied for an enterprise finance guarantee loan and the bank said it was like chasing a rainbow. Eventually, after I intervened a few months later, the bank said, “Okay, we will have it all done for June”. I had to intervene again at the end of August and in September, and the bank said that it would have the loan ready for October. It is eight or nine months since the scheme began and that company still has not received a penny. It is a vibrant, successful company, with full order books through to December and beyond. I can see no reason why it is not being allowed access to the loan.

Other businesses in Chesterfield have tried to access enterprise finance guarantee loans and have failed, meeting a wall of obstruction from the various banks. The regional Minister and central Government should go back to the banks to look at whether the scheme works. There was a major survey and a national report in the press at the end of July or the start of August that said that this was happening not just in Chesterfield. It had been identified across the whole country that, eight or nine months in, the enterprise finance guarantee loan system was off to a lame start. It is outrageous that there is the danger of a successful business in Chesterfield going under simply because it cannot access a Government loan scheme, even though it meets all the criteria perfectly. The banks must look to their laurels, and the Government, who are bankrolling them, must twist some arms.

What else can we do to get out of the recession and into an upturn, and then maintain it? One thing we can do is judicious capital pump-priming. I was in New York earlier this year with a cross-party group of MPs looking at how the Americans are responding to the financial crisis. We met representatives from the Federal Reserve Bank and NASDAQ, and we went up Wall street. We went to see what some of the areas on the New Jersey shoreline were doing to tackle the recession.

One of the points that struck me was that President Obama was talking about turning crisis into opportunity. He was asking all the equivalents of our local authorities across the US if they had shovel-ready projects into which the Government could direct money. He was talking about projects that could put people to work immediately in the first part of the year. That would help to bring the country out of recession and leave a lasting investment from which people could benefit. There seems to be no such initiative from this Government.

We have heard a lot of praise for the announcement today of the construction of 2,000 new council houses at the end of this year and early next year. That is 50 per cent. more than this Government have managed in the previous 12 years. Even Margaret Thatcher who hated council houses built 100,000 in her first 10 years of office, and she was running the programme then. In 12 years, this Government have managed just over 4,000 across the whole of the UK, and they are making a huge fuss over announcing 2,000 today. That is a 50 per cent. increase on a pathetically low level. Let us get real about the state of social housing in this country.

In 1997, the Government and the then Chancellor put all their eggs in one basket and said that councils were incapable of being involved in such an area—even though they had managed very successfully for the past 80 years—and that money would be directed to registered social landlords such as housing associations. Have they delivered on that? In the past 12 years, they have managed an average of 22,000 units of social housing a year. The Government’s own Barker report said that a minimum of 46,000 to 50,000 was needed simply to stand still. The national waiting list for social housing has gone up from 1 million in 1997 to 1.8 million today. The housing industry says that it will probably be 2 million by early next year because of the recession, repossessions and unemployment. Like most hon. Members, I see the human misery that that involves.

Chesterfield has about 40 council properties—flats, old folks’ bungalows and houses—that are available every week, and there are 2,500 people or families actively seeking accommodation. The council has already purged the waiting list to get rid of the inactive ones and those who have moved on and so on. There are 2,500 people every week chasing 40 properties. At my surgery every Friday I hear stories of people sofa-surfing with relatives and friends and living rough. Children are sleeping on sofas and floors, which is bad for their education and their development. It is a nightmare. One obvious answer is to let the councils build council houses like they used to. I am not talking about the pathetic 2,000 that we are hearing about today, which averages out at four per UK constituency—and four units is exactly Chesterfield borough council’s share of the 2,000. Such a number will make no difference to a waiting list of 1.8 million and growing. It is not just principled Members of the Labour party and people such as me who have been complaining about this issue over the past few years. The National Housing Federation, hardly a hotbed of left-wing socialism, has been calling all year for the building of council houses to reinvigorate the economy, to get 250,000 unemployed building workers back into work and to end the human misery of the massively increased waiting list that this Government have created.

John Mann: I thank the hon. Gentleman for giving way. Did he say four units? The reason why Chesterfield has got only four units is that its Liberal council only put in for four. That is almost as bad as Tory-led Bassetlaw, which put in for none.

Paul Holmes: There are two things to say about that; one is that it brings me on to my next point; but it is also worth noting in passing that Labour-run North-East Derbyshire and Bolsover have got a big fat zero, so the hon. Gentleman would obviously be very critical of his colleagues there.

Of course the next question is why councils—and most councils have got no housing at all out of the deal—have found it difficult to put the funding in; because it was, of course, a matter of match funding. The other aspect of the way the Government have not allowed council house building to happen in the past 12 years, and have created the terrible human misery of a waiting list of nearly 2 million, is the fact that they have taken away money that councils would at one time have had to invest in social housing, and have redirected it to other things. Seventy-five per cent. of all the money from the right to buy disappears into Government coffers. It does not stay in Chesterfield, North-East Derbyshire, Bassetlaw or anywhere else. It does not go back into social housing.

A huge percentage of council rents amounting to millions of pounds has been taken from such councils as Chesterfield, St. Albans and others throughout the country, under all types of political control. That money has been taken by the Government to be spent on other things. Much of it does not go back into social housing, whether through housing associations or councils. If all that money had been put back into the system, we would not have the dire human misery and social consequences associated with the shortage of social housing that now exists.

If the Government had, at the start of the year, taken the Obama line of shovel-ready projects and turning crisis into opportunity, how different it could be. Where does the money come from for that? I can think of one possible route. The Government announced in December a £12.5 billion forgoing of VAT receipts through a 2.5 per cent. cut in VAT, which all economic analysts have said made no difference to retail sales. If the Government boast about the £127 million that they have announced today, which with council match funding will build 2,000 houses, what could they have done with £12.5 billion receipts?

The Federation of Master Builders said explicitly that that sort of money should go to allowing councils to operate as housing associations do, to build council housing. That would have put 250,000 unemployed building workers—or a large chunk of that number—back into work; it would have provided the capital infrastructure, which would have remained for generations and would not have disappeared in a puff of smoke, like this year’s £12.5 billion in lost VAT receipts. It would be a legacy for up to a century, to provide a benefit to society. However, the Government lost that opportunity.

A reason for our slowness to come out of the recession, and for all the economic analysts saying that we will be the last in Europe to do so, is the fact that the Government frittered away £12.5 billion that could have been put to

better use, as well as the fact that they do not allow local authorities to control their finances as they would in France, Germany, Scandinavia or, indeed, the USA, and invest through prudential borrowing in local economic development.

Many other points have been raised, and, given the time, I shall quickly mention them in passing. We have heard mention of the need for skills training for young people, whether at school, college or university. The need is even greater in recession, because otherwise there will not be a skilled work force when the upturn begins. Chesterfield, like most colleges in the country, had the plug pulled on it because of the incompetence of the Learning and Skills Council in handling the capital projects. Had the college gone ahead some years ago with its original scheme for a modest refurbishment, that would be done and dusted now. Instead, the LSC, operating for the Government, said, “No, scrap that; be more ambitious. Go for a complete rebuild.” Like colleges the length and breadth of England, it received not a penny; it was told, “You will get nothing.” It will not get all the funding, contrary to the Minister’s reassurances earlier, for the increased number of places on training courses for the unemployed and on Train to Gain.

We have heard about transport needs, and the need for a high-speed rail line and electrification; but we are not going to see that.

Finally, on the council role in economic development and installing infrastructure, I shall give the Labour party some praise, because 20 years ago, when it ran Chesterfield borough council, it directed what money it could squeeze out, and that the Government allowed it, into building economic units. That is something that the council has continued to do over the past six years. At a time when the private sector was not interested in a deprived area—a former coalfield that was closed down with mass unemployment after 1992—the council started the pump-priming that made Chesterfield an attractive place.

Many private sector businesses are interested in places such as Chesterfield now, because of pump-priming by councils over the years. However, the Government, like the Government of the 1980s, do not trust local authorities to carry out such operations. It is time that those policies were reversed and that instead of just paying lip service to the idea of localism there should be a real change in councils’ power to operate.

The Chairman: Order. I have no power to impose a time limit on speeches, but brief contributions will enable me to call as many hon. Members as possible.

3.56 pm

Alan Simpson (Nottingham, South) (Lab): Is the region well placed to deal with an economic upturn? The answer is no. In that sense—and only in that sense—we are probably fortunate that there is no upturn. My right hon. Friend the Member for Derby, South said in an earlier intervention that one of the great mistakes of the last recession was the failure to have a plan for what would follow afterwards. Sadly, that is still where we are now.

I worry when I hear elected Members state that Britain is well placed to “weather the storm” of the global economic crisis. It is as though the storm will pass and we will return to a period of calm in order to carry on the economic voyage as it was. My take is that we will never return to the economic framework that existed before the current crisis. What waits for us after this crisis is a series of other crises that will be determined by events outside our control. At some stage, we will hit peak oil and peak phosphates. Some climate change experts say that we are already hitting the limits of peak soil and peak water. That may come as a difficult fact to take in the east midlands after the summer that we have had, but that is the reality of the world that we have shaped for ourselves and a result of policies over the past 50 to 100 years.

I am pleased that the regional Minister put his name to the “East Midlands regional climate change partnership”. On the lunch-time news, the Business Secretary was repeatedly asked whether he saw any signs of green shoots, and I was pleased that he declined to respond to that. The honest answer is that if there are to be shoots in a post-crisis economy, they will have to be green.

The hon. Member for Chesterfield talked about President Obama’s approach to shovel-ready projects, which is important. However, President Obama has also set out the most incredible challenge to the US—that of transforming the nature of the economy towards a sustainable economy, and opening up challenges and directions that we have yet to properly respond to.

The “East Midlands regional climate change partnership” document states that the region currently emits about 50 million tonnes of carbon a year. Under the current programme, we will have to reduce that by 80 per cent. by 2050. This morning, the Government’s Climate Change Committee said that if we continue with the folly of trying to exclude aviation and shipping from that equation, the rest of the economy will have to reduce carbon emissions by 90 per cent. by 2050. That means that by 2050, we will need an economy in our region that runs annually on 5 million tonnes of carbon emissions a year. Do we have a plan for doing that? No, we do not. We cannot masquerade as though we can build roads and rebuild industries that are heavily carbon-delivering, while at the same time living within the constraints that the climate and the planet will impose on us.

We have resources in the region. We have lots of innovative industries. Toyota has delivered the Prius car and taken vehicle manufacture into an era in which the acceptable vehicle will not deliver more than 100 grams of carbon per kilometre. However, the issue is not about stimulating the car industry as a whole; it is about developing a different notion of the car industry. We have some exciting developments in sustainable energy, but the issue is not about carrying on with energy production as we have done in the past.

In Nottingham, we are blessed with the presence of EMDA, although it is a dubious blessing. EMDA has been given national responsibility by the Government for coming up with a framework of sustainable procurement policies. I thought that EMDA was a blessing until a case when the combined hospitals trust told it about a fantastic sustainable procurement policy. There is a genius catering manager, John Hughes, who found that he could save the hospitals £1 million a year just by throwing out the culture of contractors. He wanted to

set up a network of local food suppliers to double nutritional standards, secure farm incomes and develop an infrastructure that would massively reduce food miles. He also wanted to set up a sustainable kitchen and use hospital food waste and other food waste in a biodigester to harness the biomethane to provide heating resources for the process. When the project was submitted to EMDA, EMDA could not even grasp the concept. It said, “Oh no, this is a hospital project. It is too difficult for us.”

Now, if a regional development agency does not have a clue about sustainable procurement, then someone—I do not care who—has to grab that development agency and shake it by the shoulders to make it do what it says on the packet, or what the Government try to say is on the packet. If it cannot do that, then we should dump it. We should be unafraid to say that, without lines of political accountability, the regional development agencies have no line of accreditation and just freewheel around whatever conventional strategies suit an economic view rooted in the past and not in the future.

The same applies to our shift into renewable energy. We fought long and hard in Parliament to get the Government to introduce feed-in tariffs, so that consumers could be generators of their own renewable energy. The Government have got a consultation programme out at the moment—the proposals are not very good, but they can be improved—and the rules will have to be put in place by the end of the year, so that they are in operation by April 2010. However, I wonder whether, as a region, we have the skills infrastructure to deliver. The answer is no. When I talk to communities and local authorities that are desperately keen to charge down that path, they always point out that if the Government want them to run with that, there is the question of finding or producing kids with the skills to install the plumbing, produce the technology and perform servicing and maintenance. We need a whole infrastructure rethink that will deliver that and run with it.

In many ways, we do not have a lot of time. Our own Climate Change Committee has made it clear that the UK’s carbon emissions must peak by 2015. From then, there must be a 4 to 6 per cent. annual reduction in our carbon emissions. We have to move towards post-carbon economics. That must be driven not by hopes or by individual projects, but by a coherent plan. I believe that we can do that, but I have to say to the Minister that my challenge to him, and to all members of this Regional Grand Committee, is that if we want the region to lead this, there has to be a lead from us. We have to make demands, rather than running on a series of promises and wishing for a future that we do not construct. If we have the courage to do that, the region can be in the lead. If we cannot do that, we shall be in a huge and almighty mess.

The Chairman: Order. I intend to call the Minister to wind up the debate no later than 25 minutes past 4, so if the three hon. Members seeking to catch my eye can subject themselves to a self-denying ordinance of six or seven minutes all will be called.

4.3pm

Judy Mallaber (Amber Valley) (Lab): I want to follow the remarks made by my hon. Friend the Member for Nottingham, South, because we are talking about how to prepare for the upturn going into a new world. It is

very important that we keep that emphasis. We have a proud history in our region of imaginative adaptation to new worlds. We can look at the brilliance of Arkwright and Strutt, the textiles manufacturers, and how we adapted as that industry disappeared down the Derwent valley into using its potential for our tourism industry. We adapted to those circumstances. In my area, as the pits declined, industrial parks were set up, which is why we still have a fairly substantial manufacturing base, although we have got considerable difficulties at the moment. We have a proud history of adaptation to change.

As well as looking at innovative changes, we also need to pay attention to our traditional industries. With regard to the Derwent valley I am most disappointed that, because of the way in which the Tory borough council in Amber Valley handled its finances, the council had to make a large number of cuts last year, including closing the tourist office in Ripley, where many visitors were directed towards our industrial heritage down the Derwent valley and in other local areas.

I shall highlight a couple of examples of sustainable, innovative adaptation to change that we need locally. I note that the document that we are discussing today includes a strategic approach to the Government’s role as a market shaper. I want to take this opportunity to seek support for a regulation that the Department for Environment, Food and Rural Affairs is about to put out for consultation. Yesterday, the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Wansdyke (Dan Norris), visited the BPI factory on an industrial estate in Heanor. Plastics used to be seen as modern, innovative, wonderful products, but now everyone hates them and wants them to be recycled.

BPI is the largest manufacturer of polythene film in Europe, with about 18 plants around the country. In the plant in my constituency, it has moved from being a leader in packaging and a producer of plastic bags to being a company that recycles plastics. However, one of its problems is that it cannot get hold of plastic waste to recycle, because the waste is going into landfill rather than coming back to the plant. One of its products, which it produces with another plant and which is an example of the kind of innovative approach that we need to encourage, is farm plastic. Bales of silage and hay at farms are covered by a durable plastic produced by BPI. BPI wants to take responsibility for recycling farm plastic, but only 20 per cent. of it is recycled. Most of it is just buried, or it goes to Vietnam, China or Malaysia, where it is washed in rivers. It is taken overseas to be cleaned but not recycled.

The regulation will not be a burden on business, and it will stimulate the market. It will allow a company that has invested in its equipment to use that equipment to recycle the products that it has produced, and it will also stop farmers having to pay the cost of collection. We need a regulation to implement that scheme. It is the sort of imaginative thing that we need to do to square the circle on some issues, so that a product that could be a problem can be recycled into, for example, the bags that the NHS is using to tackle the current problem with swine flu, the sacks that we get from supermarkets to put rubbish in or street furniture, which we want to be durable and made from plastic. That would be a positive result.

Other areas also need to be looked at. In the Select Committee on Energy and Climate Change, we were given the example of Rolls-Royce working with a small Bristol-based company to produce a tidal turbine, which is now in the Orkneys. Those are some of the things that we need to do locally. We need to look at using innovation in the upturn for sustainability.

We also need to make sure that we are providing opportunities for the disadvantaged in our society. We are seeking a date for my hon. Friend the Minister to visit the Holbrook Centre for Autism. We have talked about trying to provide care for people with disabilities, but we also want to provide work and opportunities for those people. The centre has a social enterprise project that produces hanging baskets of flowers in conjunction with a local company, and I was fortunate enough to be able to take that project to Downing street with my hon. Friend the Member for South Derbyshire. We want to give opportunities to people with disabilities to contribute to the economy in the future as well as just being cared for.

We need to look at opportunities for developing innovation as we prepare for the upturn in a way that meets the challenges of the new world and that does not involve going back to the past. As has been said, that will include a huge amount of investment in training and innovation. I have been most disappointed by the negative approach of the Opposition to the Train to Gain programme, which has helped firms in my constituency. We also need to ensure that such programmes address the issue of equality. I was pleased when Rolls-Royce sponsored a group from Heanor Gate science college in my constituency to go to the engineering fair at the Queen Elizabeth Centre in London. The initiative is about encouraging students to go into engineering, and there were as many girls on that programme as boys.

There is a development on the estate where my office is. I am delighted that the person building one of the new offices has been sent to St. Petersburg to engage in an international competition for roofing and tiling. We have good people and positive examples in our area. Let us prepare for the upturn in a way that fits the new world in terms of sustainability and opportunities for those with difficulties, so that we can go forward with confidence.

4.11 pm

John Mann (Bassetlaw) (Lab): In my meagre ration of time, let me first agree with the hon. Member for Rutland and Melton that we should not be here today. It is ridiculous that we are meeting in Nottingham; we should be in Parliament in September. The fact that Parliament does not meet in September shows the archaic nature of our so-called modern democracy. We should be able to hold Ministers to account in Parliament and be legislating more directly today.

Secondly, I celebrate the fact that we are in a unitary authority council room. If we want to see the public sector and Government intervening effectively in planning processes and instigating change for business, we should, as Nottingham has sensibly done, get rid of tiddly, irksome district councils, such as Bassetlaw, which are a hindrance to economic growth. Strategic unitary authorities

would benefit those of us who live in more rural areas, who are encumbered with a five-tier system of government, including the European Parliament, which is a problem for business attempting to deal with government. The Opposition are remarkably quiet about that, considering their desire to reduce the number of politicians in my area.

In Steetley, 300 were recently employed at Laing O’Rourke. MBA Polymers is building a plant with a work force of 850 as part of the upturn. EDF Energy has taken on 400 for new gas-fired power stations. There is growth already—not just green shoots but actual growth coming back into the economy. Local authorities such as the useless Bassetlaw council should help more. Apollo Leisure tells me that the banks would lend it the money to build a cinema—work could have started on 1 September—but seven years on the Tories in Bassetlaw have failed to sort out the planning conditions and hand over the money to get the cinema that young people want built. That project would create not only leisure jobs but building jobs.

I want to discuss population with the Minister, who has raised the spectre of 500,000 more people. My hon. Friend the Member for Nottingham, South missed a critical element in his analysis. Some 500,000 more people in the east midlands is not sustainable. The question that we face worldwide as politicians, which means in our own backyard in the east midlands, concerns how population can continue to rise. Why do political economists suggest that what is needed for resurgence in the economy is more people and more workers rather than better utilising those already here? It is absolutely economically unsustainable to have 500,000 more people in the east midlands and similar increases in every other region in the world. That is the biggest single challenge that faces politicians across the world, and it is one that we are shirking.

I celebrate the fact that Worksop Town football club are playing in Ilkeston in an historic first competitive match against Retford United today. This is the first time that those two local teams have met competitively. Why is the match taking place in Ilkeston? It is taking place there because Bassetlaw’s useless Tory council has failed to allow Asda to develop a 1,000-job site by delaying the planning application. That is the kind of issue on which the Minister should intervene. We should be given our ground back. We should be given the jobs that go with a new supermarket and a whole new industrial park. We should forget about piddling little local councillors who stand in the way of progress and growth, and we should do something about that development.

Finally, Nottinghamshire county council is not only Tory run but Tory owned. What was its first act as a Tory administration? It tried to close Serlby Park secondary school with the loss of 100 jobs. That school is one of the most successful in the country in terms of value added; it was one of the first three-to-18 schools; and it is the most northerly school in Nottinghamshire. The good burghers of Tory-run Nottinghamshire county council are attempting to close the school, which has nothing to do with economic regeneration and everything to do with petty politics and an inability to make coherent decisions. We can see what the Tories would be like if they were ever in power nationally.

4.16 pm

Mr. Mark Todd (South Derbyshire) (Lab): That was an admirable tour de force. In the very limited time that I have, I want to focus on just two things. First, the economy that will emerge at the other side of the recession will be very unlike what we had before. The banking sector will not be nearly as large as it was, and we certainly will not be able to rely on flogging mobile phones to each other in designer coffee shops as a major motivator for the economy. We will have to make things. As I said in an earlier question, 30 per cent. of the work force in south Derbyshire make things, with high-quality, leading-brand businesses at the leading edge of their sectors. How do we ensure that we retain and, indeed, increase that focus?

Let me pick a small number of things from a shopping list. First, we need investment in infrastructure, and I do not mean huge new roads everywhere. One major step would be to move forward with rail freight interchanges to support industry. Interchanges are wanted and have been talked about, but we have seen no concrete action.

Secondly, we must ensure that our major manufacturers have proper export support. The Government have gone through a process of supporting export credit guarantees in five different reviews, which has led to uncertainty among many of our major manufacturers. We need an export support system that is at least as competitive as those of other nations.

Thirdly, we need to ensure that our procurement policy is aligned with industrial strategy. It was disappointing to talk about the acquisition of high-speed rail vehicles only to find that the Department for Transport viewed that as a purely price-led issue with no obvious linkage to industrial strategy. I hope that the Regional Minister will ensure that industrial strategy plays a proper part in the decision making that leads to the final conclusions about any bid, and I touched on that earlier.

Finally, I join my hon. Friend the Member for Nottingham, South in saying that we need environmental policies that motivate industry to innovate and increase efficiency. There are examples of high technology being used to achieve effective environmental efficiencies—he generously acknowledged what is happening at Toyota, and we could also have picked some of the initiatives at Rolls-Royce—but we must have a regulatory framework and fiscal inducements to encourage further development, and that means support for R and D in industry.

My second point is that south Derbyshire is the fastest-growing district in the east midlands, but, so far, it has received very little infrastructure investment to secure that growth in the longer term. As we have an opportunity to take free hits at Tory councils, I should add that the situation is not helped by the fact that South Derbyshire district council inexplicably decided not to bid for the housing support funding that we discussed earlier and which it certainly requires. Such investments must be linked to the growth in housing that is planned for our area. For example, with regard to the major development at Drakelow, which is currently being discussed and would provide 2,000 houses, joining up the thinking behind that rapidly and supporting the district council’s determination to decide on that application and proceed with it would also be welcome.

4.20 pm

Mark Simmonds (Boston and Skegness) (Con): I will begin by saying, as an east midlands man who was born and educated in Bassetlaw, that Bassetlaw district council is run far better now than it was when a Labour administration was in control. Not only was I born and educated in Bassetlaw, but I was at university here in Nottingham and my constituency is in Lincolnshire—if one were to cut me through the middle, it would say, “east midlands.”

However, like my hon. Friend the Member for Rutland and Melton, I am sceptical about the value of this Committee. I do not think that the Minister is a bad man, but I was disappointed by his rather complacent introduction to the debate. He tried to steer clear of, and talk about anything but, the economic upturn. He mentioned some important issues, such as health, although the outcomes are clearly poor when compared to other EU countries. He talked clearly and importantly about issues relating to education, but there are still far too many poor schools in the east midlands letting our children down. As the hon. Member for Chesterfield quite rightly pointed out, the Government have a lamentable record on social housing.

The east midlands is a complex area because it is so diverse, containing mining and agricultural communities, commuter belts, large cities, isolated hamlets and important seaside tourist resorts such as Skegness, which is in my constituency. Despite the fact that there is innovation and entrepreneurial flare in the east midlands, which the Minister was right to mention, its social and economic indicators, sadly, too often fall behind those of other regions. That is for a range of reasons, one of which is the consistent underfunding of public sector services in the east midlands, as was mentioned by the hon. Member for Sherwood, particularly the police authorities, and Lincolnshire is the worst affected area in the region in that regard. That is certainly a message that the Minister needs to take back to Whitehall. I also felt that he was complacent about the fact that we are still in a deep recession.

Judy Mallaber: Will the hon. Gentleman give way?

Mark Simmonds: I will not because I have only a few minutes left.

The Minister should look at the latest OECD report, which clearly states that this country, of which the east midlands is obviously a part, has experienced the fastest rise in unemployment on record, which will probably hit 10 per cent. of our work force by 2010. We have the worst public finances in the G20 and the worst budget deficit, which will be 14 per cent. by 2010. The gross Government debt, as a ratio of GDP, will be 90 per cent. by 2010. These figures are staggering, as is the incompetence of the ex-Chancellor, now the Prime Minister, who has driven this country economically into the ground. All Labour Governments run out of money, as this one has done in spectacular style, and all Labour Governments ruin the economy.

In the short time that I have left, I wish to highlight the areas on which the Minister and his colleagues need to focus if they are to drag the east midlands out of its current plight. The first area relates to environmental issues, which were quite rightly highlighted by the hon.

Member for Nottingham, South. I have a particular interest: if sea levels rise, my whole constituency will be under water.

There are also significant health inequalities in the east midlands that need to be focused on and addressed. There are significant economic problems. Unemployment continues to rise and the number of benefit claimants continues to increase. Businesses are continuing to go bust and people and still losing their homes. There needs to be much more of an economic focus from EMDA than there is currently. There needs to be a significant focus on transport, infrastructure, education and skills, and there needs to be much greater penetration of the HE and FE sectors than is currently the case, particularly in the rural parts of the east midlands.

The public sector funding formula needs to represent more clearly and accurately the population that now lives in the east midlands—a point rightly highlighted by the hon. Member for Bassetlaw. We must focus not only on those moving from elsewhere in the UK, but on those moving from abroad, often to do the work that British people no longer want to do, such as working in the fields and packhouses in my constituency and elsewhere Lincolnshire.

4.25 pm

Phil Hope: With the leave of the Committee, I thank my hon. Friend the Member for North-West Leicestershire for chairing the debate and, again, Nottingham city council for playing host.

We have demonstrated today the value, contribution and centrality of Regional Grand Committees in raising issues, debating and holding me and other agencies, including Bassetlaw district council, to account for performance. We have had a rigorous and robust debate. Individual MPs have had the opportunity, in the region, to debate issues about the region and about their constituencies. We have debated jobs, skills, the environment, housing, transport, planning and crime. We have demonstrated the importance of the role that the Regional Grand Committee has played in airing, debating and discussing such views not only today, in the inaugural meeting, but over the weeks, months and years ahead.

I should like to welcome the hon. Member for Rutland and Melton to his new job in the Opposition. Unfortunately, I am not absolutely certain that he wanted that job—but he has got it. It is regrettable that in his opening remarks he chose not only to run down the idea of the East Midlands Regional Grand Committee but, in doing so, to run down the region as well, in effect. That is unfortunate, ignoring the value that the Grand Committee brings to debating jobs and skills, and people’s businesses and their livelihoods, and making cheap shots about my job as Regional Minister. All those things were unhelpful. What was helpful, however, was the opportunity that he gave us to hear what the Tory future might look like and, frankly, it is not pretty.

The hon. Gentleman talked about scrapping EMDA, and we heard of a threat to public services, as he is going to cut those. The future of Train to Gain, our skills policy, is under threat. As with the national health

service, we see two faces of the Conservatives. We have just seen how skin-deep their compassionate conservatism is. I suggest that the opportunity has been helpful, to hear what the alternative policies might be like and why it is important to return a Labour Government at a future election.

In answer to some of the questions, I am proud, with my hon. Friend the Member for High Peak, to provide regional leadership on the issues that we have been debating today and a voice in Whitehall. I shall take the issues raised back to pursue in Westminster and Whitehall, where we can focus on those who are most in need and the vulnerable—my hon. Friend the Member for Amber Valley mentioned specifically people with disabilities and learning difficulties. At a time of recession, when the Government are putting more effort into supporting people, we ought to pay particular attention to the needs of those who are furthest away from jobs and homes, to make sure that they are not the victims of recession, that we give them support and that, as we come into recovery, they, too, have opportunities for the future.

On the role of EMDA, I think that it is performing well and has consistently met its targets. Two evaluations of EMDA show that it adds between £4.50 and £9 of investment to the region for every £1 it spends. That is an excellent record for EMDA, which has provided a strong response to the economic downturn. It has quickly refocused Business Link activity. It has run some excellent survive and thrive events around the region, reaching almost 2,000 businesses—a model that others have followed.

Obviously, I do not have time to respond to all the points raised, but I shall make a couple of quick responses. First, to my hon. Friend the Member for Sherwood—it is great to see him, by the way, in such good form—I understand his concerns about the electrification of the midland main line. The service operates a number of relatively new and high-performance diesel trains, which is why there is less urgency to electrify it than the Great Western main line. However, I want to assure him that we are continuing to develop the case for future electrification schemes. We shall respond to the regional Select Committee by 29 September, so his points will be covered when we do so.

To the hon. Member for Chesterfield, we are used to the usual Liberal Democrat whinge and uncosted shopping list—we got more of that today—but I can say that we have secured, in terms of banks and support for businesses, legal commitments to ensure that, within the 12 months from March 2009, Royal Bank of Scotland and Lloyds will lend, on a commercial basis and subject to demand, an extra £27 billion to businesses over those 12 months. That is an important outcome.

My hon. Friend the Member for Nottingham, South raised important issues about the regional climate change programme. I am delighted to say that we launched that here, in the region, and we are one of the leading regions in taking forward action to secure energy efficiency.

4.30 pm

The Chairman adjourned the Committee without Question put and the motion lapsed (Standing Order No. 117A(6) and Order of the House, 15 July).