HC Deb 15 December 1999 vol 341 cc47-68WH

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Clelland.]

9.30 am
Mr. Jim Cousins (Newcastle upon Tyne, Central)

We are here this morning to discuss the Cabinet Office report "Sharing the Nation's Prosperity". The report is a landmark in the discussion of regional needs and problems, and the Government programmes and spending that attempt to deal with them. We all know that society is extremely divided. We are now in a city where people are jamming switchboards to buy internet stocks, yet it is also a city where there is a low rate of investment in new technology. We are now in a city with sharp divisions between neighbourhoods. For instance, Hackney has some of the worst deprivation in Britain, yet it is only a short bus ride away from some of the greatest explosions of wealth on the continent.

I am conscious that many of my hon. Friends are here today to discuss the north-east of England, because the situation there is different. Not one family in the northeast is untouched by the brutal facts set out in the report. That is not the result of a temporary swing in economic activity. It is not the result of the closure of a single factory or of an industry. It cannot be addressed by a task force or a sprinkle of worthy Government initiatives.

The problems for the north-east that are highlighted in the report have very deep roots. They affect the way of life and the thinking of the people of the north-east. Nobody in the north-east ever feels confident of job or income, and it will be so for years to come. That affects planning for the future; it affects the start-up of businesses; and it affects people's thinking about their own and their families' future.

People in the north-east have made huge efforts to adapt and to come to terms with the facts that are set out in the document. There are many disappointments, despite the efforts that ordinary people have made. Some of the problems are well known to us. My hon. Friend the Member for Tynemouth (Mr. Campbell) has had to grapple with the problems caused by the closure of Siemens. Others are grappling with the difficulties of the offshore oil industry, which the report claims to be a growing industry. The pattern of problems feeds on itself, and it will require years of calculated, determined and systematic action to deal with it.

I do not intend to spend much time speaking about statistics, but, for those who represent the north-east, the indicators in the report are part of the ordinary week-by-week experience for us and our constituents. Among English regions, the north-east of England has the lowest economic activity, the lowest gross domestic product per head, the lowest earnings, the lowest household incomes and the lowest rate of registration for VAT for new businesses. It has the second lowest number of income support claimants and the second lowest rating for educational achievement and attainment—a crucial indicator. It is the region in the United Kingdom with the lowest take-up of vocational qualifications, the lowest business-base formation, the greatest unemployment and the lowest employment rates. The difference between the north-east and the south-east, means that one in six people of working age are not in the labour market. That capacity and potential are not available to serve our community and our people.

With that goes the ridiculous social stress of London and the south-east—the overcrowding, the poor quality of life and the other difficult and intractable problems that require so much Government action. Only yesterday, I was present at a parliamentary Committee, and heard the Chancellor say that it would cost between £14 billion and £16 billion to solve the problems of the London Underground. The cost of relieving stress in London and the south-east is paid twice over by the north-east. First, we help to pay for it. Secondly, if that economic activity were taking place in our region, not only would we benefit directly, but the cost to the south-east would be so much lower. Sharing the nation's prosperity is fundamental to maintaining the broader welfare of life, not only in the north-east but in London and the south-east. That will require sustained longterm action. We cannot leave it to market forces. Nor can we leave it to the tweaking of market forces. That simply will not work.

I ask the Government to bear in mind the following points. First, we need to set regional spending and performance targets, so that we can measure regional progress towards a benchmark to which all regions can aspire. Secondly, a needs assessment should be made of the English regions, and of the other nations that form the United Kingdom, that puts consideration of regional problems, needs and spending on a common base. We could thus ensure that the regions and nations of Britain achieved the common objectives set out in the report.

The north-east obviously needs a substantial increase in health spending. It has the worst health experience in the United Kingdom, except for Scotland. We need a substantial increase in health spending, and I look to the Cabinet Office to work with the Department of Health to ensure that those needs are met on a regional basis. However, we must bear in mind the fact that the health regions are not the same as the regional areas used in the report.

The north-east has the lowest educational achievement anywhere in Britain, but there is no regional element in the work of the Department for Education and Employment; it has no regionally based programmes or assessments. If we are to have joined-up government, and if we are to tackle the deep-rooted patterns of low educational achievement of which our communities are the victims, we need a regional element in the work of the Department for Education and Employment.

Mr. A. J. Beith (Berwick-upon-Tweed)

On that point, surely if there were some proper regional assessment within the Department for Education and Employment, action would have to be taken to deal with low educational funding in the counties of

Northumerland and Durham. Both counties have a very low level of educational take-up compared to the nation as a whole.

Mr. Cousins

I suspect that every part of the northeast would benefit from such an assessment. I would not care to single out the counties of Durham or Northumberland, although I am well aware of some of the difficulties that Northumberland faces because of the low density of its population and the large geographical area that has to be covered.

We must consider another point. The Government, in the White Paper on regional development, describe our region as "peripheral". I look to the Government to ensure that we have at least one motorway connection to the south, which we do not have now, and one dual carriageway connection to the north, which we do not have now. We would then be rather less peripheral.

Above all, the regional development agency needs a substantial amount of money to regenerate the communities of the north-east and to take advantage of the Government's programme for setting up new enterprise. To have one law for the lion and for the ox is oppressive. To treat every region equally in the promotion of new enterprise will be to the advantage of those regions that already have a stronger business base than we have in the north-east. Strong and special measures must be taken if the north-east is to achieve equality in the creation of new businesses.

The Government have created a huge agenda for themselves. It is set out in the White Paper "Building Partnerships for Prosperity", in which the Deputy Prime Minister said:

Throughout my political career I have argued that the English regions are crucial to this inclusive approach. That approach is intended to tackle the environment and our quality of life, and to modernise and achieve sustainable development. He continued:

Our vision is for the English regions to grow and prosper, alongside Scotland, Wales and Northern Ireland, within the United Kingdom and within the European Union. We need the right information so that we can measure whether that agenda is being achieved.

In the preface to that White Paper, the Prime Minister, who represents a constituency in the northeast, said:

I want the people of each of England's regions to have better opportunities to contribute to the prosperity of their own communities". That is absolutely right. We in the north-east of England do not want permanent welfare dependency. We want a platform and programme of Government action that will permanently lift us out of structural welfare dependence and enable our people to play a full part in British society, as they want and need to do. That will contribute to the well-being of national society.

Our people must believe that they can prosper and shape the destiny of their region without constantly depending on decisions, including those on Government budgets down to fine-grain detail, taken in Westminster and Whitehall. It is time to support regions such as the north-east more strongly and to enable our people to be free to take part in British society, which they want to do. That will relieve many of the difficulties in other regions, which suffer the opposite end of the problems that our people suffer. That is a great agenda, and we ask the Government to take steps to put it into practice.

9.43 am
Mr. Ronnie Campbell (Blyth Valley)

I shall not take too much time, because I made a speech on the north-south divide in the debate on the Queen's Speech not so long ago and I do not want to repeat myself.

The report, entitled "Sharing the Nation's Prosperity" was produced in five days. I was sceptical about that because I thought that it would be a whitewash—just a push-off that had been dreamt up and put on paper. We thought that the report was intended to soften us up, but we have now read it and its findngs are worse than we thought; they reinforce our case.

As my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) has said, we are dealing with the north-south divide, and we have seen the problem before. I shall not knock the Scots today, Mr. Deputy Speaker, because you are in the Chair. I shall take it easy. The Barnett formula was devised many years ago to help Wales and especially Scotland, which was going through a bad patch. It helped Scotland and got it going, especially in terms of education, health, jobs and prosperity.

There are big differences between the regions. People have said that the gap is closing, but not according to the figures that I have seen, which show enormous regional differences. In The Journal, the local Newcastle paper, the right hon. Member for Berwick-upon-Tweed (Mr. Beith) compared education in Berwick with that in a little town just over the border in Scotland. The Scottish school received much more money than the one in the right hon. Gentleman's constituency did. Any Government who allow such unfair differences to continue are not doing their job.

I do not want to take money from the Scots. Geordies never want to take money from anyone. I am sure that you have a lot of money, Mr. Deputy Speaker, but I do not want to take it from you. All that we in the northeast are saying is that the formula was good enough for Scotland when it was on its knees, so we should receive similar help. We never said that we wanted what the Scots were getting. We were all right in those days; we had pits and shipyards, and the north-east was not a bad place to be. As my hon. Friend the Member for Newcastle upon Tyne, Central said, at least we knew that we had a job. We thought that jobs in the pits were for life, until Margaret Thatcher decided otherwise.

What does the report mean for us? What will it do for the north-east? When will the proposals be implemented? The report is very good; it goes a long way to help our case, but how will the Government help us? I hear rumours that the Government will look at the north-east and say, "Well, there are some good pockets in the north-east and some bad ones." I have the funniest feeling that they will throw a little money here and there and say, "Get on with it. That's all you are going to get", yet the Barnett formula will not be touched. The formula will stay in place because the Prime Minister does not have the bottle to change it given the Scottish situation. The Scottish nationalists are breathing down the Government's neck.

Unfortunately for us, there is no fourth party in the north-east; we have only the Liberals. Only one Tory Member is here in the Chamber. The Liberals are on our backs. If people in the north-east become disillusioned with the Government, they will go to the Liberals. Fine; the Prime Minister might love to see a Liberal in my seat rather than me. He works with them now, so he might work with one better than with me.

The problem is that we need extra cash in the northeast. The Barnett formula must be changed. I am not knocking people in Scotland, but we should get the same as them. We are on our knees. Our shipbuilding, mining and other industries have gone. Elleton pit is on the brink and may close in the new year. We want something to replace those industries. We need help not only in industry but in education, and the Government's five-day wonder report proves our point.

9.48 am
Mr. Peter Atkinson (Hexham)

The longer I spend in the House, the more I begin to agree with the hon. Member for Blyth Valley (Mr. Campbell). I agree with him that the Prime Minister would not have the bottle to revise the Barnett formula. In recent weeks, people have concentrated on the Barnett formula, but doing so is a waste of time. The Government's response at yesterday's Scottish questions shows that they are more concerned with keeping the Scottish National party at bay than with anything else. That is why the Barnett formula will not be reformed.

Ms Dari Taylor (Stockton, South)

Did the previous Administration ever consider changing the Barnett formula?

Mr. Atkinson

I shall answer that point later, and I hope that the hon. Lady will be patient.

The only way to increase funding for the north-east is to take money away from the south. However, the Government will not do that, given Labour's marginal seats in the south. I am afraid that the five-day wonder report, "Sharing the Nation's Prosperity", is more Downing street spin that anything else. As has been said, the report took five days to produce and it is only a mishmash of old statistics pulled together in a binder.

The statistics on the north-east given in the report are out of date. It talks about unemployment going down—in fact, it is going up. The Prime Minister's press secretary, whose name we cannot mention, talked about hysteria in the local media over the north-south divide. The north-south divide is as old as the hills, but has been made worse in recent years with the decline of the heavy manufacturing industries, while the south has boomed under the growth of high-tech and financial services. We are continually seen to be knocking the north, which is a great pity. One of our problems is convincing people who live south of Watford that we have some good things going for us in the north. As long as we appear a begging-bowl economy, it is harder to attract inward investment and people into the region.

The north has a great deal going for it. It has spectacular landscapes and coastline, in many respects a high quality of life, relatively traffic-free roads, an industrious, hard-working and innovative population, some splendid cities—such as Newcastle upon Tyne, which is one of the most spectacular cities in the country—and wonderful growth in its higher education sector: more than 70,000 students go to the north-east to learn, and that would be a wonderful resource for the region if only it were properly capitalised on. The fastest-growing industry is tourism and there is much to do to build that up.

The blame, if I may put it that way, for the growing north-south divide can be put on the policies introduced by the Government since the last election. It is worth considering what they have done. The hon. Member for Shipley (Mr. Leslie) laughs, but one has to remember—he probably does not know the north-east—that it is a big, rural, peripheral area, as it has been described. So what do the Government do? They hike petrol tax up to one of the highest levels ever—the highest level in Europe. How does that help an area that depends on cars and on tourism?

Mr. Derek Foster (Bishop Auckland)

Does the hon. Gentleman not recall that the only time in recent years that the north-south divide reduced was during the disastrous recession of 1990–92 when the south, for almost the first time in the past 100 years, suffered as much as, or perhaps even more than, the north? That was under the hon. Gentleman's Government, and they did not want it to happen.

Mr. Atkinson

There was a recession at that time and the south suffered, but I do not understand what bearing that has on what I am saying. Government policies, such as the increase in petrol duty in an area that depends on the motor car, are strangling local enterprise. The hotel and tourism industry is already having to deal with a strong pound; why be handicapped by making our petrol the most expensive fuel in Europe?

The countryside depends on agriculture—look what the Government have done to it. Agricultural incomes are the lowest that they have ever been. The beauty and prosperity of rural Britain depend on the prosperity of farming. More smoke and mirrors emerged from the Select Committee on Agriculture only yesterday, when it was announced that the Government's aid package to farmers would amount not to £500 million, as was trailed, but to £1 million.

We also have some of the highest council taxes in the country. Is it not idiocy that a person living in an average, three-bedroomed semi-detached house in Newcastle upon Tyne pays more council tax than someone who owns a £35 million house in Kensington? That situation has arisen because we have inefficient local authorities, which have been responsible for so much of the trouble in towns in the north-east. Local councillors in the north-east prefer to spend their time squabbling with one another and stabbing one another in the back, rather than getting on with cleaning up the cities and dealing with the sink schools and low educational expectation that we have in Newcastle.

Dr. David Clark (South Shields)

The hon. Gentleman is not being fair to the councillors in the north-east. Does he not concede that for two years running the best unitary authority anywhere in England has been in the north-east, in South Tyneside? In spite of the highest unemployment in the UK and worse than average deprivation, the north-east has some well-run local authorities, of which South Tyneside is a good example.

Mr. Atkinson

One has only to look at the evidence of one's own eyes and of the reports to see the low

educational achievements—the local authority is responsible for the schools—and one has only to walk around Newcastle, which is one of the most spectacular cities in England, to see the litter blowing around and the dereliction in part of the west end, which was once one of the finest residential areas in the city. Local authorities have considerable responsibility for some of the conditions in the north-east.

I also wish to mention the health tax that has now been imposed on us. As we see in the report, the northeast has some of the worst health problems in the country. Health action zones have recently been set up, which we hope will improve that situation. However, with sleight of hand, the Treasury has changed the way that health authorities are funded; they now have to carry all the burden of their drug costs. That will cost my local authority perhaps £2 million a year from its budget and that will be reproduced throughout the north-east, which will mean that we will not be able to develop the health action zones, which have already been set up, unless they receive extra funding.

Mr. Cousins

It is a pity that you are using this occasion to make a lot of rather unfortunate local party political points. Would you not accept that the 20 years of Conservative government, which underpins so much of the information in the report, so much of the dereliction of Newcastle's west end, for example, and so much of the social stress that constitutes the poor health experience of the region, might also have something to do with the problems that we are discussing?

Mr. Deputy Speaker

May I just say before we proceed that the hon. Gentleman's use of "you" implies that he is speaking to the Chair? Even his hon. Friend the Member for Blyth Valley (Mr. Campbell) did not involve the Chair in his arguments about the Scots.

Mr. Cousins

I apologise, Mr. Deputy Speaker. The atmosphere is so much like an urban district council that I am reverting to type.

Mr. Atkinson

I agree. It has been called the Westminster parish council; I do not know whether that is a little unfair.

I agree in part with what the hon. Gentleman says, but many of the conditions of the city have been made substantially worse by the housing policies operated over the years by Newcastle city council. I think that that is self-evident. The north-east has also not been helped by the planning system and by ministerial delays on planning. One of the things that developers and entrepreneurs in the region complain about is how hard it is to get planning applications through. The classic example is the one in my constituency with the plan to build a virtual reality centre at Stannington in Northumberland, which was lost because of the Minister's refusal to make a decision on the planning application. By the time that the Minister had decided to go against the decision of the inspector who had recommended approval for the plan, the funding for the project, which could ultimately have created 2,000 jobs, had gone and the scheme was dropped.

How do the Government's abolition of the Northumberland and Tyneside training and enterprise councils and their creation of something called skills and learning councils help the region? The Northumberland TEC has been at the forefront of introducing new skills in its area, but it has been abolished and replaced with a body on a sub-regional basis. How does that help? The creation of the regional development agencies was also damaging for the region. Before them, we had the development councils, which were specialist bodies in areas such as the north-east that needed special treatment and special development. The whole country now has regional development agencies and it is obvious that the chairman of the regional development agency in the south-east is saying, "We have problems down here and we want to keep more of our money at home and not spread it around the country." The regional development agency will ultimately do more to harm than to help the region. I imply by that no criticism of Dr. John Bridge, for whom I have the highest admiration, who is the chairman of the regional development agency in the north-east, but I would have preferred him to stay at the Northern Development Company, which did a first-class job for the north-east.

The north-east also has poor road infrastructure. We have had no news about taking the MI up to Newcastle, and we still have the threat in the countryside of a pesticides tax and an aggregates tax, which will damage quarrying, opencast mining and farming.

I urge on the Minister some solutions to the problems. First, I urge him not to increase the price of petrol, because that would be extremely damaging in a region such as the north-east of England. Secondly, I ask him to introduce a scheme to provide some relief for hauliers on the duty that they pay. In rural areas, transport is everything, and increasing diesel costs increases all costs. He should also follow the advice of the Leader of the Opposition to abolish RDAs and replace them with a new development company, returning to the idea of the Tyne and Wear and the Teesside development corporations. Hon. Members have interrupted me to refer to the Government's record. The creation and funding of those two development corporations—I realise that local councillors did not approve of them—by the Conservative Government, by short-circuiting local government in the north-east, did more than any other measure to improve the environment of the north-east.

Proper funding should be provided to deal with sparsity. Time and again—I accept that when we were in government it was the same—we have not succeeded in making the case that sparsity, especially in education, roads and social services, should be properly funded. That would help. We should also have more enterprise zones—another successful Conservative innovation which continues to prove extremely successful—and less regulation which strangles the farming industry and new enterprise. We do not have enough local businesses. The north-east of England needs more service industries. Every time that the Government introduce a measure such as the working time directive, the national minimum wage or the social chapter, they increase the burden on business and make it increasingly hard to develop the necessary new industries.

We need some commitment from the Government, who have produced six Cabinet Ministers who represent the north-east—the three Bs: Brown, Blair and Byers; and the three Ms: Mandelson, Mowlam and Milburn. When the Conservatives were in power, we did not have even one, but the Conservative Government were more committed to the north-east than are the current Labour Government with their six Cabinet Ministers.

10.2 am

Dr. Ashok Kumar (Middlesbrough, South and Cleveland East)

I congratulate my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) on securing the debate. Debate on the north-south divide has been going on for as long as I can remember.

I shall say a few words about the definition of poverty and the appropriate political instrument for tackling poverty, which have a bearing on the broader issue of regional disparities. I shall also outline the structural nature of some of those disparities and how they affect my constituents.

The Cabinet Office report released last week was timely, foreshadowing a detailed study conducted by the Joseph Rowntree Foundation on patterns of poverty in this country that are linked to social and geographical circumstances. I hope that we shall have an opportunity some time in future, perhaps in this new innovative debating Chamber, to discuss the Rowntree report and its implications for tackling social exclusion and powerlessness.

My right hon. Friend the Prime Minister was correct in adducing that pockets of poverty exist in the southeast and that problems are experienced in parts of London. As my hon. Friend the Member for Newcastle upon Tyne, Central said, estates and communities just a few miles from this place have levels of unemployment equivalent to some of the worst in the areas that we represent in the north-east.

Unemployment and poverty must be tackled and eradicated wherever they occur, and I support any initiative to breathe new life into such communities in areas such as north Kent or the estates of Southwark, Newham and Hackney which suffer from joblessness. However, the problem is that we are not comparing like with like. I accept that there is high unemployment in the Medway towns, for example, but Kent has benefited as a centre for logistics following the opening of the Channel tunnel. Similarly, there is high unemployment in some of east and south London's inner-city estates, but they are located a short bus or tube journey from two of the greatest generators of jobs and investment in the United Kingdom—the cities of London and Westminster. Government programmes for those areas should therefore be geared to job connect schemes and employability projects—to fitting the unemployed to jobs that match their aspirations, to heightening people's competence to fit those jobs and to creating intensive, intermediate labour-market projects, schemes that will flower and help people achieve employed status, and schemes that contract with private companies based in the heart of the city.

For our region it is different. Although pockets of prosperity exist, they are small pockets in a very large overcoat. Quite simply, for our unemployed people, jobs remain unavailable in any real quantity. Indeed, the jobs that are available are, as often as not, poorly paid, and too often of low quality.

Over the years, job-hunting agencies have achieved much. New plants in the region, such as those created by firms such as Samsung, Nissan and LG, are welcome, but must be set against an employment topography that has been affected by the death of the coal mining industry, as my hon. Friend the Member for Blyth Valley (Mr. Campbell) mentioned, and vast job losses in the steel, shipbuilding and heavy engineering industries. Indeed, some of the newer industries in our region have yet to achieve critical mass. Although Nissan is probably the UK's leading-edge car manufacturer, firms such as Samsung have yet to achieve the full employment potential that was promised.

On the Tyne and the Tees, many former shipyard workers found work with the arrival of new orders for the offshore industry, which needed their skills and talents. However, that industry, too, is no longer in good shape. Years of low oil prices and the gradual depletion of the North sea oil fields have left many yards without orders. Many yards have been mothballed, and the men have been laid off.

Throughout the north-east, and especially in my region of Teesside, we still bear the scars of our past. Those scars are deep, and were formed under a previous Government. They affect entire communities. In many—indeed, most—communities we may have lower unemployment figures than two or three years ago. However, the figures for people deemed "economically inactive"—people who are unemployed, ill or drawing incapacity benefit—show that, in many communities, such people constitute the largest minority. Such communities co-exist with other communities in which joblessness is lower and other social factors are better, but even those communities fare far worse than many of their southern equivalents. Areas such as the north-east need a regional strategy to create jobs and train people for those jobs. The south needs a regional strategy to overcome unsustainable overheating and help jobless people adapt to a vigorous labour market. Those are two different approaches for two distinct areas. They are not in competition, but complementary.

There is a lot of loose talk about the north-south divide. It does exist, and anyone who tries to pretend otherwise is flying in the face of bitter reality. I refer to two recently published sets of indicators. First, the Government map of areas for which industries can benefit from assisted area status shows a swathe of red across the entire country except the vast majority of the south-east. Secondly, the new map of areas that benefit from European structural funds mirrors almost exactly the assisted areas map.

Overheating in the south helps no one: indeed, it does the economy of the south a disservice. It distorts the national labour market and leads to public spending to relieve congestion and the other effects of growth that is urgently needed elsewhere. Again, that problem highlights the need for balanced regional policy throughout the UK.

We must congratulate the Government on having done more for the English regions in a little more than two years than the previous Administration did in 18. I take immense pride in the fact that fully fledged regional development agencies have been created for all the regions. However, to be effective, they need to be properly resourced. Their funding formula needs to be reassessed after their first year of operation to enable

them to operate according to the scale of the problems that they face. The Government have already made a start by granting a more generous allocation than anticipated, and for that they must be congratulated.

Mr. Peter Atkinson

I am grateful for the hon. Gentleman's words on regional development agency funding, but is it not the case that the RDA, for what it plans, will have a smaller sum than it would have once had, even with the extra money?

Dr. Kumar

The Government have corrected that. We made representations to the Government, and they listened, unlike the Government whom the hon. Gentleman supported. That is the difference between this Government and the previous Government.

Mr. Atkinson

Time will tell.

Dr. Kumar

Okay. It must be recognised that our RDA in the north-east should receive additional assistance. Given the historically low land values and a large land bank inherited from English Partnerships which involves remediation problems, we cannot assume that capital receipts will be easily obtained in the early years.

RDA resources need to be partnered by other regional boosts. Unlike the south, we do not have our fair share of innovative sunrise industries. Indeed, a correspondent in The Sunday Times noted that 66 per cent. of the companies featured in its list of the 100 top innovators came from below the historic line from the Wash to the Exe.

In my own area of Teesside, we are anxious that that technological imbalance be corrected. An example is ICI's long retreat from bulk chemicals, which means that its large manufacturing site at Wilton is now home to a range of spun-out or disposed former ICI concerns. Wilton is the site of some of the biggest names in the world chemical industry, yet without research and development there is a danger that the complex could become what we in the north-east call a screwdriver plant. That means a place where manufacturing processes occur without the added value of research and development or technological advance. For that reason, we are backing a project to transform the Wilton research and development centre into a new form of innovation park where applied research and development can be carried out for site operators by a trust working in collaboration with prestige universities.

Regional policy for the north-east simply must recognise the strengths of our region and grasp the opportunities that are present. However, it must be honest enough to recognise the structural weaknesses of the region and flexible enough to allow the RDA and other agencies to apply innovative new progammes to correct those weaknesses. That is the mirror image of the policies that have to be designed for the south-east. The problems that we face must be recognised. If we are serious about devolution, the Government must be adult enough to accept that we must have programmes devised and carried by the region for the region.

Thank you for allowing me the privilege of speaking in this new, innovative Chamber, Mr. Deputy Speaker. I hope to exercise that privilege again.

10.13 am
Mr. Alan Campbell (Tynemouth)

I commend my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) not only for securing the debate, but for the measured way in which he made his case. That stands in some contrast to the hon. Member for Hexham (Mr. Atkinson). I am sure that he did not want to give the impression, but he nevertheless did, that he was not in the House when his Government presided over the BSE crisis or when they introduced the automatic fuel escalator that our Government have abolished.

I welcome the report and the opportunity to debate it. In many ways, the report and the debate grew out of what is happening in the north-east. I want to refer to those concerns and to the impact of Government policy on my region.

The report describes in graphic detail the differences between regions, and goes a long way to confirm what many of us already believe. The differences did not begin on 1 May 1997; indeed, some of the statistics in the report describe what happened in the later stages of the previous Government. I hope that the report does not add to any stereotype about the north-east or to any sense of fatalism, because both would be entirely misplaced. The north-east has enormous potential that we can achieve, provided we tackle the fundamental issues faced by the region.

Solutions will not be found by encouraging or promoting inequality between or within regions. The future of the north-east does not lie in a low-pay, low-skill, low-investment economy, nor is it entirely within the grasp of central Government.

I almost find myself agreeing with some of the points made by the hon. Member for Hexham, although I shall try to steer clear of doing so if possible. The north-east, like many other parts of the north, has suffered over the past two decades by being opened up to a global economy that exposed the weaknesses of the traditional industries on which it so heavily depended. That global economy continues to set the pace and is defining new regions. It is redefining the nature of national economies and is casting new doubt on the effectiveness of national economic policy.

The global economy cruelly exposed the weaknesses that we suffer in education and skills not only in the north-east, but across the regions. I am one of the last people whom anyone would find being critical of the excellent teachers in the north-east. However, we have a long way to go if we are attain the standards needed. As has already been said and is confirmed by the report, the north-east has the lowest level of attainment at GCSE and the highest proportion of the work force without qualifications outside Northern Ireland.

We have not created or sustained sufficient small businesses in the past because, like the rest of the UK, we have been too slow to invest and to see the potential of markets. As a Government, we inherited a generation of people in the north-east, too many of whom never knew about work. Some families have been out of work not only in one generation, but in two. Alongside that is a level of poverty in the north-east that helps to explain why we have such unacceptable levels of ill health and crime.

The report is therefore welcome because it is a stark reminder of how far we have to go, but I have one regret about the way in which it was put together and published. It is not to do with the speed with which the exercise was carried out, but to do with the fact that we have its results now. I wish that the study in the report had been carried out two years ago. If we had audited the region then, we would have had a clear view of what was going on in the north-east and we could have given a more measured response as to the success of the Government's policies in the regions.

Mr. Ronnie Campbell

LG is an example of what you are talking about. It came to the north east for a site in my constituency.

Mr. Deputy Speaker (Mr. Frank Cook)

Order. The practice is for remarks to be addressed to the Deputy Speaker, not to those in the Chamber.

Mr. Ronnie Campbell

I am sorry, Mr. Deputy Speaker.

There were 1,000 jobs in the factory at £2,000 a job. However. LG went to Scotland, which offered £27,000 a job. That is the sort of competition that we had in those days, simply because of the Barnett formula.

Mr. Alan Campbell

My recollection is that LG went to Wales, but my hon. Friend is right to say that the region has not been able to compete at that level, and obviously that important issue needs to be addressed. He is right to draw attention to inward investment as well, as I want to do in a moment.

Central to achieving the needed prosperity, before we can share it out, is the concept of getting people into work. We must face facts. Unemployment in the northeast is too high. It is too high as long as anyone in any family who wants work is deprived the opportunity of it. To put that into context, it is sometimes overlooked that in the two years since the election we have created more jobs than have been lost. There has been a net gain in jobs in the north-east. The new deal has been crucial in tackling long-term unemployment. In my constituency, 130 young people are now in work as a result of it. Longterm youth unemployment has halved.

Between 1981 and 1997, 110,000 jobs were lost, most of them in primary industries or in manufacturing. The economy of the north-east continues to change. Inward investment has had an important part to play in that. In the past three years, 128 projects have created or safeguarded 50,000 jobs. We now have micro-electronic and automotive sectors. We also have a growing service sector in business services, call centres and retail services. If we are to move towards a high-technology economy in the north-east, we must continue to attract inward investment. If inward investors are to come to the UK and, hopefully, to the north-east, they must have a stable economic framework in which to invest, which means having the lowest possible interest rates that can be achieved, and low inflation.

I am pleased that the north-east has attracted a higher than average amount of regional selective assistance. We need more small businesses. There are signs that the situation is improving. Figures suggest that more new small businesses are being created and that they are surviving longer. Unlike new small businesses in many regions, they are putting more resources into research and development.

I said earlier that the north-east had the lowest attainment rate at GCSE. However, there are signs of improvement. Education is probably one of those areas in which it is hard to see quick improvement. However, the north-east has more under-fives in education than any other region; we also have the fewest under-eights in classes of more than 30. That is a direct result of the Government's policy. But we need to go further. As well as promoting a knowledge-based enconomy and entrepreneurship, we must ensure that that prosperity is shared.

It is important that 1,600 people in my constituency of Tynemouth benefit from the minimum wage. I am pleased in one way, but not surprised, that the hon. Member for Hexham has again confirmed that his party would abolish it. It is important to my constituency that 2,000 families now find that work pays because of the working families tax credit. It is important that 3,000 pensioners benefit from the minimum income guarantee. Such policies are based on need and, as a result, they not only redistribute within a region, but redistribute between regions.

Mr. Peter Atkinson

rose—

Mr. Campbell

I think that the hon. Member for Hexham is about to confirm his remarks. I will give way to him in a moment.

All the beneficiaries will find it incredible at the next general election that a sensible Opposition would remove each of those policies.

Mr. Atkinson

It is kind of the hon. Gentleman to give way. He referred to 1,600 families in his constituency. What would he say to my constituents who lost their jobs in the catering and hotel industry because of the national minimum wage?

Mr. Campbell

I hope that the hon. Gentleman can provide evidence of that—or is it simply one of the scare stories that were put about by the Opposition when the minimum wage was debated? They talked about the devastating effect that it would have on the economy, but they have produced no evidence of that. If the hon. Gentleman is willing to provide me with some, I shall be happy to receive it. My constituency has a tourism, hotel and catering industry and I have not received one letter, phone call or complaint about the effect on it of the national minimum wage. In fact, the good employers in my constituency welcome it.

Although unemployment may be falling in the region, I am not complacent, because it is still too high. I shall finish my speech by referring to three courses of action that fall within the Government's remit. First, they can be a purchaser and bring extra spending to a region over and above the normal public expenditure that is allocated to areas. Shipyards on the River Tyne are facing a lack of orders, yet some companies are showing extraordinary faith in the region, because they are investing in new resources and taking on apprentices. I hope that the Ministry of Defence will show such faith, too. I want it to put work into the shipyards of the

north-east. Shipbuilding is not a sunset industry. We shall continue to need warships, and the best ones are built on Tyneside. There is also a growing market for ferries, and Tyneside could become a world centre of excellence for that.

The second course of action that I want the Government to consider is the dualling of the Al. It would open up a huge area for investment and create jobs. I cannot understand the reluctance of successive Governments in tackling that issue. Whoever wrote the report and said that the north-east has "relatively limited traffic congestion" has not travelled north of Newcastle on the Al.

My final point concerns the regional development agency. I welcome the commitment of additional resources and the continued commitment of more than our fair share of single regeneration budget money. The RDA has a specific role to play in regeneration. We have to complete the schemes that are under way. As a Member of Parliament who represents a declining seaside town, I shall be knocking on the RDA's door because we need regeneration, too. The Opposition will come to rue the day when they proposed to get rid of the regional development agency.

The report demonstrates that we have a long way to go. The north-east may well have further to go than other regions. It illustrates the stark differences between the regions. It also demonstrates differences within regions. Tackling poverty and exclusion wherever they occur is central to the Government's actions, and I have every confidence that they will continue along that path.

10.27 am
Ms Dari Taylor (Stockton, South)

I also congratulate my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) on the very measured manner in which he introduced the debate. The document "Sharing the Nation's Prosperity" has produced a focused response to the problems in our regions. It has sharpened our knowledge and it clearly ensures that we must define a direction for Government spending.

The document stated that there are disparities within regions. However, the disparity within my constituency in the north-east is as great as that between regions, north and south. Within my constituency are leafy suburbs and people who benefit significantly from being involved in the new technology industries, whether it be communications or whether they are part of the university of Durham, the biochemical industries or the pre-medicine industries, all of which have developed since the Labour Government came to power. The small engineering companies—the Samsungs—are features of my constituency and of Stockton, North, your constituency, Mr. Deputy Speaker. They offer many of our suburbs tremendous opportunities.

There is serious disparity within my constituency, such as in the Thornaby area, where the shipbuilding and ship repair industry used to be. It was a fine heavy engineering concern, which, I remind the hon. Member for Hexham (Mr. Atkinson), was flattened by his Government. Mrs. Thatcher proudly stood on Teesdale, waved her handbag and said, "Look at what I have achieved." I can tell her what she achieved: the closure of some fine engineering companies and high unemployment, which has translated into unemployability.

I shall be concentrating on those aspects in my comments today because I want the Government to concentrate their thinking. Areas such as the Thornabys and the Parkfields in the north-east are in desperate need of support—significantly more than many of the leafy suburbs.

In conclusion, there are disparities within regions, and there is a serious problem in the north. I hope that people will concentrate their minds and acknowledge that the disparities within constituencies are seriously problematic. That should be the focus of future Government spending.

10.31 am
Mr. Don Foster (Bath)

It may be of interest to know that although I represent a south-west constituency, I was born in the north and still care passionately about it. Anyone who has read the report will have been flabbergasted by the spin that the Prime Minister put on it. There is no doubt that the Prime Minister accepts that there is a north-south divide, but in all of his utterances when he launched the report in Manchester, he went out of his way to obscure that. I suspect that he did that to try to placate many of the Labour Members in the north-east who are rightly worried about what is happening. I congratulate the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) on his excellent speech. It is clear from that and from the speeches of the hon. Members for Blyth Valley (Mr. Campbell) and for Tynemouth (Mr. Campbell) that the Prime Minister has not pulled the wool over their eyes. There is undoubtedly a north-south divide.

My right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith)—who, sadly, has had to go off to Committee—would no doubt have pointed out more eloquently than I can that the figures make the north-south divide very clear indeed. We know that unemployment in the north-east is almost three times higher than in the south-east. Disposable income per head is almost a third lower in the north-east than in the south-east. The Office for National Statistics makes it clear that the south-east is 7 per cent. wealthier than the European Union average while, by constrast, the northeast is 15 per cent. below the European average. By contrast, the north-east has the highest proportion of low-income families in the country. I could go on, but hon. Members know those statistics only too well.

It is a pity that the Prime Minister, who was quoted earlier by the hon. Member for Newcastle upon Tyne, Central, made no reference in all his remarks to the buffeting that the north-east suffered as a result of the decline of steel, shipbuilding and coal. The Prime Minister was right to point out that there are variations within regions, but those variations are huge and we ignore them at our peril. Surely our knowledge of those regional variations should influence the many different aspects of policy. The new Labour Government fight shy of the word redistribution, but surely that is the Government's role if we want to ensure that we share the nation's prosperity, as the title of the report says. Regional redistribution must be one way of targeting help on those who are most in need.

Reference has been made to the Barnett formula. It is perfectly possible to have that type of arrangement to identify the needs of regions and to ensure that we have a target formula against which we can make judgments on whether we are sharing the nation's prosperity fairly.

Mr. Derek Foster

I am grateful to my honourable namesake for giving way. He mentioned the Barnett formula. I know that the Government do not want us to mention it; they would prefer us to keep silent about it. However, by pointing out the complexities of the economics and geography of poverty, the report makes an incontrovertible case for reviewing the Barnett formula. People from every English region are clamouring for such a review. Does the hon. Gentleman agree with me?

Mr. Don Foster

Of course. I have made that clear, but I am grateful to the right hon. Gentleman for giving me the opportunity to repeat it. I am sure that all hon. Members will be interested in a written answer that was given by the Secretary of State for Scotland, who seems to be perfectly happy with the Barnett formula with regard to Scotland. He states:

I have had no discussions with the Treasury about the Barnett formula."—[Official Report. Westminster Hall, 14 December 1999; Vol. 341, c. 130W1-1] Time is brief and I know that other hon. Members wish to speak. I have just one dimension to add to a debate that has not taken place. The report shows other interesting statistics. In many respects, under the Labour Government, Britain "isn't getting fairer". During the first years of the Labour Government, the number of people on very low incomes—less than 40 per cent. of average earnings—rose by more than 1 million to a record 8.4 million. Information from other sources, such as the growing concern about the problem of coronary heart disease among unskilled workers compared with professionals, or the evidence showing that educational standards of children from middle-income groups are improving faster than those of children from the worst-off homes, tells a similar story.

I do not believe that Government action is helping in those issues. If we want to help children who are doing least well—those from the less well-off families—it is bizarre that the Government have set targets for the most able 80 per cent. of pupils, but have set no targets for the bottom 20 per cent. If we want to target financial aid on those who are less well-off, I cannot understand the Government's bidding formula of funds for education. For example, Cornwall, where 15 per cent. of pupils are eligible for free school meals, receives £308 per head from the bidding process, whereas Rutland, which is considerably wealthier, with only 6 per cent. being eligible for free school meals, receives £1,006 per head. That will hardly help to tackle the problems of the disadvantaged.

There are many other areas in which the Government have not got it right. A client of the Plymouth citizens advice bureau has recently been disentitled to benefit for not taking a job with a weekly wage of only £101 because it would have cost £40 a week to take it.

I welcome the fact that we now have the social exclusion unit and that we have joined-up thinking on the work of different Government Departments to tackle some of the problems of poverty. It is a pity that the work of that unit is reported only to the Prime Minister and that there is no opportunity for parliamentary involvement in its activities. I worry about the fact that the staff has increased threefold without any discussions in Parliament. We have no idea whether it will increase still further. However, at least it is the beginning of joined-up thinking.

The debate has clearly illustrated that the Government must look seriously at the real divide that exists between the north and the south, and the variations between regions. There is an urgent need for a new approach to regional funding and support to the regions. The Government are very fond of their phrase "the new deal". The time has now come for a new deal for the regions.

10.39 am
Mr. Andrew Lansley (South Cambridgeshire)

I congratulate the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) on securing the debate, which has proved interesting. I want to add a perspective that goes to the heart of the north-east's problems and also focus on wider problems in the country as a whole. The title of the report is "Sharing the Nation's Prosperity", which means not just sharing out, but sharing in that prosperity. Realising the potential in regions will help to solve regional differences and inequalities; it is not just a matter of dealing with areas of deprivation. There are sound arguments for focusing on creating prosperity, rather than addressing inequalities, but I also accept the view of the Joseph Rowntree Foundation report that economic growth and rises in employment do not necessarily resolve poverty and inequality. We need economic growth, but we also need separate and different measures to deal with poverty and inequality.

I shall not delay the House by discussing the context of the report, but it would not be unduly cynical to say that the exercise was more about presentation than substance. The analysis is limited, as I will show. Anyone examining the structure of relative disadvantage reflected in the report's figures would see immediately that it is about peripherality, rurality, sparsity, distance from markets and access to markets.

It was argued earlier that market forces were not so important, but market forces are crucial in the long run. It is also a question of whether market forces are given an opportunity to exploit the potential in regions. There is great potential in many regions that are relatively economically disadvantaged at present and it is important for market actors to gain access to regions in order to exploit their potential. That is as true in parts of the south-east and the south as it is in the north.

Referring to differences within regions is partly valid. In the south-east, unemployment is highest in Thanet, and in the eastern region it is highest in Great Yarmouth. Those places are peripheral to their regions. Of course, it remains the case that the generalities of regions involve inequalities, but there is an important theme running through the argument—a theme, as I said, of peripherality, infrastructure, and accessing markets and services.

When one looks at the structure, one sees a pattern, which I would not dispute. There is a north and south

pattern. However, if one examines local authority districts with more than one third of non-agricultural employment in manufacturing, 12 are in the north-west, 10 in the east midlands, six in Wales and four in the north-east. There are none in London, the east, the south-east or even in Scotland. The Government have neglected manufacturing, and 190,000 jobs have been lost. There is also a pattern of relative disadvantage in regions that are more dependent on manufacturing. That will be exacerbated as a result of the climate change levy, for example. My hon. Friend the Member for Hexham (Mr. Atkinson) provided another example when he referred to the costs to hauliers of taking manufactured goods to markets in more peripheral manufacturing locations.

My key point and contribution to the debate is to stress the importance of dealing with the infrastructure consequences of peripherality. The document "Sharing the Nation's Prosperity" suggests that the picture is highly complex, as differences within regions obscure a more general pattern. In fact, the general pattern is clear, but the statistics in the document are not well compiled to illustrate it. Page 5 of the document states:

In the North West, GDP per head in 1995 ranged from 119 in Halton and Warrington to 61 in Sefton…where the UK average is 100". But a more careful study would show that the residence of corporations is the key factor. Warrington is more industrialised, but not much industry is resident in Sefton, which is more of a commuter area. Similarly, in the south-east, the fact that per capita GDP is high in Berkshire but relatively low in East Sussex has much to do with the residence of pensioner populations. The figures do not tell the whole story, even of the extent of genuine relative economic disadvantage in those regions.

It might be said that the flaw in my argument about peripherality is London. Nine local authorities have an unemployment rate of more than 10 per cent.—five are in London and four in the north-east. I do not want to embarrass the hon. Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) too much by agreeing with him. We need to examine the particular circumstances of London. The general point is that local authority districts with high unemployment rates in London are none the less subsisting within a travel-towork area with relatively low unemployment rates. Areas such as Hartlepool and Middlesbrough in the north-east have high unemployment rates with respect to both local authority residents and the travel-to-work area. We need to take jobs to those areas.

London's relative deprivation is sometimes the result of ethnicity, discrimination or educational disadvantage, which produces a lack of jobs for people often living in an otherwise strong job market. In the north-east, joblessness leads over time to relative economic disadvantage. The solution in London is to help the people; in the north-east, it is to help the regions—a very big difference. The same economic policy cannot deliver solutions to both areas. I look forward to hearing the Minister's reply.

If the Prime Minister wants to deal with these problems, I would advise him to consider several issues. It is clear from his response to the report that he has not done so. First, it is crucial to focus on infrastructure. It has been mentioned several times—not least by my hon. Friend the Member for Hexham—with respect to access to the north-east. Infrastructure is critical for access to markets. Secondly, we must recognise such factors as sparsity, rurality, decline in farm incomes and relative dependence on manufacturing with respect to local government distribution of spending, for example. I know how relatively underfunded Northumberland and Cambridgeshire are in that regard.

I recommend a change in the Government's attitude to manufacturing. They should drop any proposals further to increase fuel duty levels in real terms and they should drop the climate change levy. The spatial impact of policies across the board must be recognised. Reorganising expenditure into a regional development agency will not be the answer, when £330 million has been taken out of the Highways Agency budget in two years. That will not deliver the infrastructure that is required for regions that need to be brought closer to their markets in order to realise their economic potential.

10.48 am
The Parliamentary Secretary, Cabinet Office (Mr. Graham Stringer)

May I first congratulate my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) on securing the debate? He and other hon. Members made valuable contributions and made a telling case on behalf of their constituents in the north east. It is rather like being invited to a meeting of the North East Labour group—not a pleasure that I have enjoyed before.

I want to make it clear that the Government fully accept that there are regional disparities within this country. One of those disparities is between the north of England and the south-east of England. Some comments in the press have suggested that the Government do not recognise regional disparities, but that is not the case. The report's statistics on the nation's prosperity make that quite clear. I accept some of the points made by the hon. Member for South Cambridgeshire (Mr. Lansley) about the incompleteness of working only on the basis of GDP per head. London is much richer than elsewhere; the figures on disposable income also show that London is more prosperous than the north-east.

One of the interesting points in the report is that regional disparities in this country are less substantial than in some other European countries. I did not realise that before reading the report and wonder whether other hon. Members were aware of it. That means that it is not easy to solve the problem on its own, and we must bear that in mind when we discuss it.

There is also the issue of complexity, to which several of my hon. Friends and other hon. Members referred. We are talking not simply about a north-south divide, but about rich and poor and about poverty existing side by side with wealth. That is a complicated issue. Some of the highest unemployment in England is on the south coast, and the hon. Member for South Cambridgeshire mentioned Great Yarmouth. Towns such as Dover and Southend also have extremely high levels of unemployment. It probably surprises many people that Plymouth has a higher unemployment rate than Greater Manchester.

Peripheriality is one factor in regional disparities, but it is not the only one. Depending on which measures one uses, Cheshire is between the second and fifth most affluent county in the country. Cornwall is, by most measures, the poorest. The issue is complicated, and the average regional figures often hide more than they reveal. If we concentrate on average figures, we often miss the differences between regions and the pockets of poverty.

To explain that, I want to go back to a debate in which I was fortunate enough to take part with my hon. Friend the Member for Newcastle upon Tyne, Central about 12 months ago. We both represent northern, urban constituencies that are some considerable distance from London. We talked about the decay in housing and the problems of crime and drugs that are associated with it.

I want to ask my hon. Friend a question to get to grips with the difficulty of the problem that we are discussing. Let us imagine that he could, by magic, increase the prosperity of Newcastle, Manchester or Leeds to the level of that in London. Does he really think that that would deal with the problem that he so graphically described in that earlier debate? What effect would it have on some of the people who live in terraced houses? They are socially excluded and are sometimes associated with crime and sometimes victims of it. Often, they are associated with the drugs culture. Would they be affected by an increase in the general level of prosperity if the Government did not take several of the initiatives that they are currently taking to deal specifically with the problems that I mentioned? I suspect that my hon. Friend would agree that we must recognise that regional disparities exist as well as dealing with problems within, and sometimes without, urban areas.

The contribution by the hon. Member for Hexham (Mr. Atkinson) was extraordinary—he has obviously been injected with the same drug that has given the rest of the Conservative party amnesia. His contribution was extraordinary, given that we are considering problems in Newcastle and other parts of the country. The Conservative party was in office for 18 years and tripled child poverty, doubled the number of people who were living in poverty, decimated the steel industry, the coal industry and shipbuilding and introduced the fuel duty escalator for good measure. It left us with those problems, but now opposes many of the solutions, such as the creation of regional development agencies or measures to do something directly about poverty by introducing welfare tax benefits and the minimum wage or increasing child allowances.

The hon. Gentleman's contribution was also extraordinary given that several Opposition speakers mentioned what could be done through local initiatives. From my own experience, I know that the Conservative Government largely centralised control and took power away from local democracy in the regions while they were decimating the industries that I mentioned. They took power to the centre and stopped local initiatives.

An important comparison can be made with Europe where it has been possible to take initiatives in regional government and in the government of cities. Barcelona and Catalonia are the most obvious examples of that. They were poorer than many cities and regions in northeast England in the early 1970s, but now form one of the most affluent parts of Europe. That happened because of local initiative, which the previous Government stifled. That is precisely why this Government have introduced regional development agencies, which are now setting out their plans to help develop the regions. That is why the new Local Government Bill, which is before Parliament, contains a provision to enable local government to take the lead in the local community. It also gives local government powers to take a direct interest in the economic benefit of an area. That is in stark contrast to what happened previously.

To put it quite simply, the Government's purpose and objective is not only to recognise regional disparities and the north-south divide, but to approach the problems of social exclusion and poverty wherever they exist.

Mr. Cousins

I thank my hon. Friend for giving way. Earlier, he asked me whether I could solve the problems that I had described by magicking away the difference in GDP per head between London and Newcastle. My answer is that I would rather not rely on magic for anything. The Cabinet Office produced the report, but will it produce others to enable us to measure regional needs and problems and examine regional spending, or is the present report just a one-off?

Mr. Stringer

None of us must rely on magic, but my hon. Friend's question is an interesting analytical tool for getting at the heart of the problem. The Cabinet Office's responsibility and purpose is to produce reports that will help the Government and Parliament to tackle the problems of poverty and social exclusion. That is why we have a social exclusion unit. I look forward to many more debates on this issue and to being supported by many more facts, which will set out the statistics and the causes of problems.

We are coming to the end of an interesting debate. We aim to create an environment in which business can thrive. We want business to thrive and regions to survive. To answer one of the first questions that my hon. Friend the Member for Newcastle upon Tyne, Central asked, doing something about regional disparities is bound to help the prosperity of the whole country. We are wasting resources while regional disparities exist. Tackling that problem is the Government's policy.

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