East Midlands Economy

HC Deb 22 March 2000 vol 346 cc189-212WH

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

9.30 am

Gillian Merron (Lincoln)

I am delighted to have secured this Adjournment debate. It is about putting the east midlands on the map. I have the honour of chairing the east midlands group of Labour Members of Parliament, a group that is 30-strong and far from silent. Its voice comes from Back Benchers and Cabinet Ministers, and among its notable members are, on the Back Benches, my hon. Friend the Member for Bolsover (Mr. Skinner) and my right hon. Friend the Member for Chesterfield (Mr. Benn), and in the Cabinet, my right hon. Friends the Members for Derby, South (Mrs. Beckett) and for Ashfield (Mr. Hoon). The span of Government is well and truly covered.

I am delighted that those of my hon. Friends who represent seats in each of the five counties of the east midlands are here today. They all have a special contribution to make. The east midlands group of Labour MPs recognises the region's need for a clear, positive and memorable image. The east midlands should have a regional identity to help persuade firms to remain in the area and to promote the region to outside investors, and we believe that it is important to secure parliamentary time to help us achieve that aim.

The day after the Budget is an opportune day for such a debate. The east midlands has much to celebrate; 11,000 families can welcome the increase in the working families tax credit; 480,000 families will receive the record increase in child benefit; 580,000 pensioner households will see the winter fuel payment increased to £150; and 9,000 of the poorest pensioners in the east midlands who have worked hard and have modest savings, will now be able to claim more money to support their daily lives. The 50,000 businesses in the east midlands will welcome the tax cuts that will encourage long-term investment. Another positive announcement by my right hon. Friend the Chancellor was the £70 million of funding for early stage investment through the creation of regional capital funds.

The location and form of our diverse region remains a well-hidden secret and, as I said, this debate is part of our attempt to change that. Lest there be any doubt, the east midlands comprises Lincolnshire, Northamptonshire, Derbyshire, Leicestershire and Nottinghamshire. It is in the centre of the country, which adds spice to the debate on the north-south divide. Indeed, that debate can rage quite happily within our region, because it contains so many comparisons and contrasts. For example, the east midlands runs from High Peak to Northampton; and it stretches from the north-west at one extreme to the south-east at the other.

By and large, people who live and work in the east midlands do not have a strong regional identity. That situation is further confused by the range of television stations that serve the region. For instance, in my constituency we can watch BBC East Midlands, Look North, Central and Yorkshire television stations—in that sense, we can face in many directions at the same time.

There is no doubt that the diversity of the east midlands is not simply its character; it is also its strength. It has a diversity of landscape, population and economic activity, which offers tremendous potential and a positive future in Britain's heartland. The Labour Members in the east midlands are determined that the region should be on course to becoming one of Europe's top 20 regions by the end of the decade. It is one of the few regions in Britain with a growing working population.

The diversity of the east midlands is entrenched in not only the contrast between large-scale agricultural production in areas such as Lincolnshire and industrially based cities such as Derby, but in the nature of the economy from coalfield areas in the north to Formula 1 motor sport specialism in the south. The growth areas are information technology, finance, insurance and distribution. In addition, call centres are finding the east midlands an ever-attractive location. My constituency will welcome British Telecom when it locates its new call centre in Lincoln, bringing 900 jobs to the city.

In the past 20 years, the east midlands economy has grown faster than the United Kingdom average. Interestingly, we can look forward to an above average growth in employment which, unusually in this country, is predominantly in full-time jobs. However, there is significant deprivation within areas of prosperity. We need to be able to fine-tune the targeting of financial support and resources, whether that is single regeneration budget moneys, objective 2 status or any other means of support, to areas that need it.

The 1998 index of deprivation draws attention to some of the issues by ranking the most deprived local authority districts in England. It takes into account a number of factors—crime, housing, unemployment and health. It is important to understand that deprivation cannot be judged on just one factor. In the east midlands, Nottingham ranks 16th, Leicester is 32nd and Lincoln is 46th. The picture will be chequered in any local authority. The problem is being able to get the support to where it is needed, no matter where that may be. I hope that my hon. Friend the Minister will respond to that.

The report "Sharing the Nation's Prosperity", which was compiled for the Prime Minister at the end of last year, said: some parts of the UK continue to suffer from the economic problems of the decline in traditional employment, most notably in mining, steel and manufacturing. The east midlands can lay claim to all those industries, and that is one of our many concerns. Rural areas, which are a fundamental part of our region, form the backdrop to those industries. Almost half the population in the east midlands live in rural areas, which is well above the national average. Average earnings of those who live and work in the region's rural areas are lower than the regional and national averages. We know that poor public transport and inadequate road and rail links are major problems and a significant disadvantage.

We look forward to the east midlands receiving its share of the £280 million, pledged by my right hon. Friend in the Budget yesterday, which is earmarked to remove some of the disadvantage experienced in rural areas. My county of Lincolnshire is an interesting case in point. The disadvantaged areas are concentrated on the coast, in parts of Lincoln and in isolated rural areas. They are brought together by the need for investment in transport and other infrastructure that will support business and communities. We find that problem in all our counties.

What are the main features of the east midlands? Let me give some of the main headlines: gross domestic product is just below the national average; levels of manufacturing productivity are lower, but there are signs of improvement; relatively low earnings—

Mr. Andrew Robathan (Blaby)

On the GDP, the hon. Lady may know that the East Midlands development agency's economic strategy document stated: There is a wide diversity of GDP patterns within the region. She has plucked out the figure for the region as a whole, which is listed in Government documents, but we do not recognise that figure in Leicestershire.

Gillian Merron

I said that the region is diverse; indeed, that is the point I am trying to make.

Let me return to the headlines. I am sure that the hon. Member for Blaby (Mr. Robathan) will be interested in the immense local variation in earnings. For example, average earnings are greater in Northamptonshire, south Derbyshire and Leicestershire, while Lincolnshire and north Nottinghamshire have seen the strongest growth in earnings. You will understand, Mr. Deputy Speaker, why Labour Members acknowledge the value of the national minimum wage in regions such as the east midlands. It enables the range of earnings in our region to be brought closer together.

The east midlands region is increasingly able to create jobs. Interestingly, one third of all new jobs are in manufacturing, and half of those involve chemicals and man-made fibres. The regional picture on decreasing unemployment is very good: it is 2 per cent. better than the national average. Between 1997 and 1999, the number of unemployed people in our region decreased by 23,000. In the same two-year period, an extra 36,000 were finding work. The picture is looking good in the east midlands, but it is important to unpick those figures. For example, the January 2000 figures for our parliamentary constituencies show that, while the average unemployment rate in the region was 3.9 per cent., it ranged from 1.7 per cent. in Daventry to 10.8 per cent. in Nottingham, North.

Such variations must be attended to, but we also have regional achievements of which to be proud. Since 1997, the east midlands has seen a reduction of 65 per cent. in long-term unemployment and a reduction of 72 per cent. in the number of young unemployed people. The new deal has been a raging success and some 43,000 people have benefited from it. My constituency has seen a 9 per cent. decrease in unemployment in the past year, which is well ahead of the regional figure. Diversity and variation are key characteristics within the east midlands and we want to level up the situation.

There are many key players in the east midlands region. The east midlands group of Labour MPs has worked to develop positive relationships, as we believe that that is the best way to achieve the best for our constituencies. I shall mention a few examples. The Government office of the east midlands works tirelessly on behalf of the region. I am pleased that it is currently working closely with the engineering industry to examine the strengths and weaknesses of engineering in the region. It has identified high-growth areas such as Toyota, the aerospace industry, Rolls-Royce energy equipment, ABB Alstom in Lincoln and railway equipment as provided by Adtranz in Derby. The Government office of the east midlands is making a good attempt to find the strengths and weaknesses of one of the key industries within our region, as well as working to promote the link between engineering and education. Those are all positive ways forward.

In May last year, the East Midlands Assembly was formally recognised by the Deputy Prime Minister in a statement made in Parliament. That recognition came before it was given to most other English regions. The regional assembly is a vehicle that brings together a range of partners who believe in and are actively prepared to work to improve the quality of life in our region. They bring a fresh perspective, commitment and a willingness to think in new ways and to find innovative solutions to some deeply entrenched problems. The regional assembly is a key body for assisting in regional thinking. It provides guidance and support as well as democratic scrutiny for the regional development agency.

The regional assembly should be particularly complimented on producing the interim regional transport strategy for the east midlands. Transport is a matter of concern in the whole area. Connections to and within the eastern sub-area and to the east coast ports in particular are poor. The main north-south road routes are increasingly congested. We have some very good public transport links, but those are particularly good at peak hours in urban areas. In rural areas or when trying to cross the region, life is more difficult. East Midlands airport provides an excellent international link and recently obtained approval for a runway extension that will open it to longer-distance flights. Many people find day-to-day travel in the east midlands extremely difficult, which is also problematic for economic development.

I pay tribute to the East Midlands development agency, which has clearly set out its strategy in the document "Prosperity through people". My Labour colleagues and I welcome and support the document, but what really matters is what it produces. It correctly states that there is a need in the east midlands for people to have the right skills and knowledge, and for businesses to be equipped to compete in the increasingly competitive global marketplace. Also, the region needs to be positioned to make the most of opportunities coming from the information and communications technology revolution. We need, too, the right climate for investment as well as strong local communities. No one could disagree with any of that and I hope that there will be support to make it happen.

We should particularly welcome some of the practical steps taken by the regional development agency—notably the east midlands planning charter, which is practical and honest in acknowledging difficulties. As we know, planning permission is an important stage in any job-generating development and delays and misunderstandings from any source can cost jobs. That is a cost we cannot afford. The charter recognises that an efficient planning process is a major factor in improving the economic competitiveness of the east midlands. It states: Quick but good-quality decisions demand a two-way process. Developers need to understand what information the local authority needs and why. If developers provide that information, they are entitled to expect a prompt, efficient and transparent response. That is the basis of the charter and I hope that it will be welcomed as an example of the ways in which the regional development agency will be able to make progress.

I pay tribute also to the midlands Trades Union Congress, which is the voice of the working people in the region. People are our key resource. The TUC is very much a partner with the other relevant groups, although I wondered if it was taking partnership a little too far when I read an article that stated that Christine Wood, emda board member for cities, who is regional TUC secretary, was hoisted to the top of a former knitwear factory in Leicester as a tradition dating back to medieval times was performed by a vicar. Topping-out" ceremonies on buildings were designed to ward of evil spirits hundreds of years ago. In a throw-back to a time when people worried about ghosts, ghouls and witches, the Reverend Philip Watson blessed a jumping cat weathervane at the Benjamin Russell building, which has been turned into a student residence, shops and pub. The serious point is that a major regeneration project has brought together private and public partners to the benefit of the local community.

The Confederation of British Industry is also an important partner in the east midlands and it makes interesting points in its regional trends survey. It says that business confidence has risen, although there is a marginal decline in manufacturers' optimism about export prospects. Clearly, we must attend to that. It also talks about stability and the deterioration in plant and machinery investment. I hope that the CBI and all businesses will welcome measures announced in yesterday's Budget, such as the extension of first-year capital allowances. I hope that that will assist in putting right some of the difficulties raised by the CBI.

Credit must also go to local authorities in the east midlands and to the east midlands regional local government association—their commitment to public services is always to the fore, serving our region well. The training and enterprise councils, schools, colleges and universities provide education and training, which means that our economy can move into the future with confidence, skill and stability.

Where do we go next as a region? We have several needs that must be addressed and we can do that by working with partners and the Government. We must have improved access to investment finance. We must keep up with technical innovation. We must ensure an adequate transport and communication system, especially in a county such as Lincolnshire. We must have an adequate skills supply—there is a great need for continued training due to replacement demand in declining employment sectors, such as engineering and textiles. We must keep highly skilled individuals in our region. We must address the inadequate supply of land for new developments and further develop an inward investment strategy to attract new firms.

There is a great need to target support on sectors with potential. The region has comparative advantages, notably in advance manufacturing, high-value engineering and aerospace, distribution, technology and research and development, especially in biotechnology, computer software and services. We must recognise that, although employment in sectors such as textiles and clothing is forecast to decline, there are still high-performing firms with real growth prospects that also need support and services.

As I said in my opening comments, we must develop a positive and memorable image and regional identity to help retain existing firms and to promote the region among outside investors. We may do that only by working in partnership and by being honest about the strengths and weaknesses of our region and the diversity within it. The east midlands has much going for it. It has a positive future and a tremendous strength in its diversity. It is important that we play to those strengths.

9.53 am

Mr. Andrew Robathan (Blaby)

I took part in a debate in the Chamber last week and was much reminded of 1 Corinthians 13, which refers to a sounding brass, tinkling cymbal and talking shop. For the benefit of those not well read in the Bible, the chapter also includes the bit about "through a glass darkly" and "childish things"—the hon. Member for North-West Leicestershire (Mr. Taylor) will know that. I am afraid that debates in this Chamber are a talking shop. That is shown by the fact that Ministers occasionally fail to turn up.

Nevertheless, I congratulate the hon. Member for Lincoln (Gillian Merron) on securing the debate and on her speech. She made a good fist of defending the east midlands as an entity. I suspect that the genesis of the debate might not be a million miles from the Government Whips office—many Labour Members are here to support the debate.

Mr. Andrew Reed (Loughborough)

For information, those of us here have a genuine interest in the east midlands economy and in promoting the region to ensure future prosperity. That is why many Labour Members but, unfortunately, not many Conservative Members, who represent east midlands constituencies have attended the debate.

Mr. Robathan

I am delighted by that intervention because I notice that the hon. Member for Loughborough (Mr. Reed) did not deny that the Labour Whips might have had a hand initiating the debate.

What is the east midlands? It is an artificial creation for administrative convenience. I have no problem with that, but in travelling around my constituency—I have been a Member of Parliament for eight years, which is not as long as one or two people in the Chamber have been Members but longer than many—no one has ever said to me, "I am an east midlander and I am really looking forward to there being an east midlands regional assembly." My constituents say that they come from Blaby, Lutterworth, Croft or from Leicestershire in England—admittedly, that is in the eastern bit of the midlands, but the people of Blaby do not look to Brackley in Northamptonshire, Boston in Lincolnshire or Buxton in Derbyshire. People in Lutterworth will be delighted to hear from the hon. Member for Lincoln about job creation and investment in Lincoln, but they will not feel personally concerned because they do not see themselves as east midlanders.

As I have said, the east midlands is an artificial creation, as is the East Midlands development agency. The hon. Lady mentioned the regional assembly, but has anyone other than those who are closely involved with it ever told her that they are in favour of a regional assembly or that an assembly would have democratic legitimacy or accountability?

Gillian Merron

The hon. Gentleman seems to be somewhat confused about the means and the end. The purpose of the debate, initiated by the east midlands group of Labour MPs, is to promote the east midlands and to further employment prospects and prosperity in the area. We will achieve those ends by working with groups such as the regional assembly, the regional development agency, the Confederation of British Industry, the Trades Union Congress and others. I hope that the hon. Gentleman supports our aims.

Mr. Deputy Speaker

Order. The hon. Lady is making an intervention, not a second speech.

Mr. Robathan

I am grateful to the hon. Lady because she did not say that lots of people were flocking to her surgery to say how much they want an East Midlands development agency or an East Midlands regional assembly, because they do not. Indeed, only six or nine months ago, the Leicester Mercury carried out a survey of businesses in Leicestershire, which found that more than 50 per cent. of businesses had never heard of the East Midlands development agency—so it is obviously doing a good job.

What is the purpose of the debate? Where should the region go next? Of course, I want the whole region to flourish. I hope that Lincolnshire, Derbyshire, Northamptonshire and Nottinghamshire do well, as I hope that the rest of England does well. I hope that Birmingham, Longbridge, Leicestershire and Herefordshire also do well, but that does not detract from the fact that the east midlands, the East Midlands development agency and the East Midlands regional assembly are entirely artificial creations. The east midlands may be used for administrative convenience but for nothing more.

Mr. John Heppell (Nottingham East)

Every region is an artificial creation in some respect. People in the north-east do not say, "I come from the north-east"; they say, "I come from Newcastle" or "I come from Sunderland." People in the north-west do not say, "I come from the north-west"; they say, "I come from Liverpool" or "I come from Manchester", so the hon. Gentleman's arguments about regional identity are spurious.

Mr. Robathan

I am not the one who is arguing for undemocratically formed regional development agencies, such as the East Midlands regional assembly, a Liverpool regional assembly or a north-east regional assembly. It is the Government who are arguing that, so the hon. Gentleman has made my point for me.

There are many concerns in my constituency about the economy, but my constituents look to Birmingham and to the west midlands. Indeed, the East Midlands development agency—that great standard bearer of this regional government that we must apparently have—said, that the key regional characteristic was diversity, something that the hon. Member for Lincoln noticed. However, when the agency's representatives go abroad to attract inward investment, they find that people do not respond to the term "east midlands". The economic strategy document—

Mr. Reed

rose—

Mr. Robathan

I will let the hon. Gentleman speak in a minute.

The agency's representatives team up with the west midlands, because people understand about the west midlands but have never heard of the east midlands. They understand that there is a country with lands in the middle, and so the areas are put together and sold as "the midlands". That is eminently sensible, but torpedoes the idea of having an artificially created east midlands region.

Mr. Reed

The hon. Gentleman is making the same point as Labour Members. The east midlands does not have an identity, which is why it has been held back for years in terms of inward investment. The point of a regional development agency for the east midlands is to create an identity so that we can build a strong and prosperous future for all the people of the region. Does the hon. Gentleman agree with that?

Mr. Robathan

The hon. Gentleman again makes my point. I want to see a strong economy and prosperity for the whole of England and the United Kingdom, not for only some narrow region of the east midlands. My constituency is on the border of the east midlands, between Northamptonshire and Leicestershire. I live four or five miles from Warwickshire. People in Warwickshire should do as well as people in Leicestershire, Nottinghamshire and Northamptonshire.

Mr. Patrick McLoughlin (West Derbyshire)

Surely the hon. Member for Loughborough (Mr. Reed) misses the point. The east midlands has been successful at attracting inward investment. Under the previous Government, it attracted the largest single investment ever made in this country, which was a Toyota plant. Inward investment is not confined to what the regional development agency can do.

Mr. Robathan

My hon. Friend makes an argument to which I would have come. Governments should create frameworks and economic conditions in which investment can flourish, as I think that even new Labour now believes. Investment has flourished, which is why unemployment in Leicestershire has decreased rapidly since about 1993. I am delighted that it continued to fall until last month, when it went up slightly. I shall not blame the Chancellor of the Exchequer and the Government for that. I blame the Chancellor for economic trends and conditions that he may create, but he is not responsible for slight dips or rises in unemployment, any more than he is responsible and should take the praise for the descending unemployment figures since 1993. They have come down because the economic conditions that he inherited were put in place by his Conservative predecessor.

Unemployment in my constituency fluctuates around 2 per cent. That was the case before the general election; it might have been about 2.5 per cent. in 1997. That is excellent for my constituents. I am delighted that we have inward investment in Lincoln, Derbyshire and elsewhere, but my constituents are more concerned about the economy of the whole United Kingdom. Their area is not confined to the Leicestershire boundary a mile from where many of them live.

The economy is diverse, as the hon. Member for Lincoln said, so why is she trying to place the east midlands into the straitjacket of a regional development agency and—for heaven's sake—a regional assembly? She talked about wanting a memorable image and regional identity for the east midlands, because it is a well-hidden secret. That is not true for the people who live there, although they may not say, "We are east midlanders." I wonder how many hon. Members in the Chamber would stand up and proudly say that. They know what happens in their region, their county and their country—[Interruption.] I am afraid that I missed that sedentary intervention. Perhaps the hon. Member for Nottingham, East (Mr. Heppell) wanted to say that he was an east midlander. The east midlands exists as an administratively convenient region, and its people do not want artificial boundaries foisted on them, as a survey in the Leicester Mercury pointed out last year.

About a week ago, there was a piece in the Leicester Mercury by the chief executive of the Leicestershire chamber of commerce and industry. I notice that two of my colleagues who represent Leicestershire constituencies are present. It states that the Euro would only add to the burden on business … I believe that the business community faces too many government-imposed burdens at the present time. It goes on to discuss the single currency further.

Mr. Reed

Will the hon. Gentleman give way?

Mr. Robathan

I am always happy to give way to the hon. Gentleman.

Mr. Reed

Will the hon. Gentleman confirm that the writer of that column supports the East Midlands regional development agency?

Mr. Robathan

Well—

Mr. Reed

Yes will do.

Mr. Robathan

As it happens, I have no idea, but I doubt it, because the members—

Mr. Reed

Yes.

Mr. Robathan

I have never asked. The hon. Gentleman may say "yes", but I doubt it, because the members of the Leicestershire chamber of commerce and industry whom I meet every week in my constituency do not, and the gentleman in question is their paid representative.

Deloitte and Touche in Leicester asked companies in Leicestershire whether they though that the Government were pro-business. The company maintains a sceptical stance. It said: Last year 29 per cent. of respondents said Yes. This year the percentage is down to 26 per cent. I am sure that someone will leap up in a moment and say, "But after the Budget, my goodness, they will all say that the Government have changed." I doubt it.

I congratulate the hon. Member for Lincoln on having made a good fist of the subject, but few people in the east midlands regard themselves as east midlanders or see a connection between the economies of Derbyshire and Leicestershire. The area is an artificial creation, and we should look to enhancing the economy and prosperity of the entire United Kingdom, including England and our counties and constituencies, rather than buy the Government line of important regions with undemocratic regional assemblies.

Several hon. Members

rose—

Mr. Deputy Speaker (Mr. Frank Cook)

Order. I must advise the Chamber that I have quite a list of hon. Members who want to speak. Hon. Members will realise from the number of Members standing how many are involved. Our time is limited. The convention is to hand over to the Front-Bench speakers at 10.30 am. Thanks to the Liberal Democrat spokesman, we shall have a couple of minutes more, but I appeal to the hon. Member to make their contributions concise, clear, to the point and less repetitive than they have been until now.

10.7 am

Mr. David Taylor (North-West Leicestershire)

Following my brief contribution, I must leave to attend a Standing Committee, for which I apologise.

I draw to my hon. Friend the Minister's attention the need for considerable work to be done on the regional infrastructure in the east midlands to enable continued, sustainable economic growth. Our transport systems are inadequate and impede the movement of people and goods, and our problems have an adverse impact on the quality of life of scores of communities that lie close to the pressure points. One example is, as my hon. Friend the Member for Lincoln (Gillian Merron) said, that the main north-south routes are congested. Plans to widen the M1 and Al are, quite rightly, on hold to allow analysis of more multi-modal solutions. The economic boom that the so-called M1 corridor is experiencing is generating considerable increases in road freight movement and private car usage, despite the great potential for public transport links, which are currently starved of investment.

The east midlands lies in the centre of the country, as the hon. Member for Blaby (Mr. Robathan) reminded us with such insight. Right at the centre of the east midlands is north-west Leicestershire, straddling the main transport infrastructure—the M1, the midlands main line and East Midlands airport, to the north of the area. The area's problems are typical of the region. North-west Leicestershire has no connections to the main rail network, which is a major obstacle to the creation of the multi-modal transport system that is so urgently needed.

The return of passenger services to the Ivanhoe railway line is crucial. I was astonished by the recent decision of the Liberal Democrat and Conservative group that controls Leicestershire county council to abandon the planned route of the Ivanhoe line in favour of linking Loughborough to Leicester and to Nuneaton in the west midlands.

The original route from Leicester through north-west Leicestershire to Burton and beyond has considerable economic and tourism potential. It would serve most of the National Forest towns and give people, particularly those without cars and those in rural areas, access to employment and training opportunities. It could be the first step towards an integrated transport plan being developed for a wider section of the east midlands.

I shall move on swiftly from the need for an improved rail network to the need for an improved road network. The recently announced bypass around my home town of Ashby-de-la-Zouch is most welcome, but one key project remains outstanding. There are real problems around junction 24 of the M1 because of serious, chronic congestion. I cannot overstress the urgency of completing the Government's multi-modal strategy in that area. Until the matter is dealt with, the local area will remain in a vacuum, awaiting urgently needed road investment such as the A6 bypass around the village of Kegworth.

Mr. Phil Sawford (Kettering)

Given that my hon. Friend is referring to bypasses, it would be remiss of me not to mention the Rothwell-Desborough A6 bypass. It is scheduled for the year 2001–02, but does he agree that an early announcement about a definite start date on such projects, which we welcome, would be an advantage to the local economy?

Mr. Taylor

I certainly agree. It is on the A6 trunk road, 35 miles to the south, that similar problems are being experienced in my hon. Friend's constituency. One way in which to control the growth in transport in the interests of the environment, but without damaging the economy, is to encourage more appropriate employment to be generated in, or close to, important towns in the region, such as Ashby and Coalville in my constituency. Such towns fall through so many funding nets, even though they often have similar problems to the major cities.

I welcome the East Midlands development agency placing more emphasis on market towns and their rural hinterland. Its initial approval of the SRB6 bid for Ashby, Swadlincote in south Derbyshire and Coalville is the first step towards redressing the imbalance, but more is needed. We need encouragement of new direct economic activity and we need to ease the flow of workers into and out of the existing centres of employment.

As for other aspects of the infrastructure, more support is needed for micro businesses and business innovation. Yesterday's Budget was excellent in that respect. [Interruption.] I am pleased that the hon. Member for Blaby echoes that sentiment. The Government's new enterprise grant, for which significant parts of my constituency will be eligible, is welcomed most warmly. Greater support for and investment in the National Forest is required if the organisation is to realise its full potential as a provider of economic opportunity. There has already been substantial growth attached to the forestry and land use aspect of the forest, but more needs to be done if the tourism potential is to be fully developed. The benefits that we have reaped so far in the former Leicestershire and south Derbyshire coalfields from the restoration of land, the revival of dozens of communities and the regeneration of the economy has been most significant. I emphasise to the Minister that the main constraint in north-west Leicestershire and in the east midlands to current and future economic growth is infrastructure, infrastructure, infrastructure.

10.14 am

Liz Blackman (Erewash)

It will come as no surprise that I am about to speak about my constituency because there are lessons to be learnt in regard to the east midlands. Erewash is between Derby and Nottingham. Significantly, it does not have the critical mass of some of the major towns in the east midlands. Ilkeston and Long Eaton are two principal towns, with smaller settlements in between. Like many areas in the east midlands, Erewash was founded on traditional industries such as coal mining—of which none remains engineering and textiles, essentially lace. Employment is below the national average and has been for a very long time and there are significant pockets of high unemployment. A few years ago, the local enterprise agency, Erewash Partnerships, did a skills audit of the constituency and found that a high percentage of the work force were skilled or semiskilled. Very few fell into the managerial and professional classes. Wages were lower than in the surrounding urban areas. The audit concluded that the area needed a learning community because education and improved skills were essential for sustainable growth and prosperity.

On the education agenda—I am an ex-teacher—there has been significant progress in my constituency over the past couple of years, with class sizes being brought right down. Derbyshire had some of the largest classes when we took control in 1997. Literacy and numeracy are progressing well. Local alliances have done some superb work, targeting areas with significant deprivation and concentrating on the early years and parental learning, which they see as critical to creating the virtuous cycle. The single regeneration budget in one area concentrates on training, and the local further education college has been innovative in expanding education, particularly for adult learners. The new deal has cut youth unemployment by 65 per cent. and long-term unemployment by the same amount. The learning and skills councils should, when up and running, provide a coherent framework for the provision of skills and training.

My constituency is characterised by small and medium enterprises, many of which are incredibly enterprising. Drawing on the traditional skills that they acquired when working for the traditional firms of the area, such as Rolls-Royce, they have branched out into specialist areas to cover a niche in the market. Atlas Composites in Ilkestone is such a firm, which specialises in carbon fibre components for the aerospace industry and Formula 1. I shall give a brief potted history of the firm—we have much to learn about SMEs in the region and beyond. Two men with traditional engineering backgrounds and skills saw a niche, bought secondhand machinery, found a suitable building, invested everything that they had earned back into the business, outsourced the design element, recruited locally and linked with the local college to develop the appropriate NVQ to support the business. They designed their own course and had it verified by the college and the training board.

There are many examples of such businesses in my constituency, which have taken advantage of the capital allowances and lower corporation tax offered by the Government. We need to understand much more about what makes a successful business. What are its roots, what are its ingredients, what develops it? The RDA and the small business service have the strategic task of continuing to develop that understanding and strategies to support businesses with so much potential.

I also see a role for venture capital and for banks. I am pleased that banking services to the SMEs have been referred to the Competition Commission.

Ms Sally Keeble (Northampton, North)

My county of Northamptonshire, which is also represented by my hon. Friend the Member for Kettering (Mr. Sawford), is similar to Erewash in having many SMEs. Does my hon. Friend agree that development agencies are vital engineers of growth, precisely because of the need to foster the innovation to which she referred? Such firms are the engine room of the economy; they do not somehow float about by themselves, but need an appropriate level of government?

Liz Blackman

I could not put it any better than that. My hon. Friend sums up my point succinctly. The traditional sector that is not doing well is the textile industry, although even that industry has its exceptions. Firms that have invested, found a niche in the market and kept their skill base up to speed have done extremely well. I welcome the Government's textile strategy, which is currently out for consultation. The RDAs could have a strategic role in the industry to ensure that firms receive the support that they need in training, marketing and exporting.

I will talk briefly about transport and communication, which echo the theme taken up by my hon. Friend the Member for North-West Leicestershire (Mr. Taylor). Transport links in the area are not good. There is significant scope for improvement, especially in Ilkeston, which is land-locked and has waited many years for a final link to the Ml. The absence of such a link has caused congestion, which is constricting development. The town has no railway station, and it used to have four, although we are making progress on that. The integrated transport strategy must move ahead more quickly than it has done.

Nevertheless, the skill base, the education base and the potential for growth have all improved. I have used the debate merely to highlight further developments that could take place.

10.22 am

Mr. Vernon Coaker (Gedling)

I congratulate my hon. Friend the Member for Lincoln (Gillian Merron) on securing the debate, which is important to us all. I will make a couple of key points about problems that affect the region and my constituency.

The east midlands is sharing the boom in economic prosperity that the Government have brought about since the 1997 election. Problems in the region should not disguise the fact that unemployment has plummeted. Long-term unemployment has been halved, and youth unemployment has been cut by two thirds. A measure of the success of an economic policy is whether it can move people who are out of work back into work. If we are to tackle poverty and social exclusion, people must be in work. All over the east midlands, the Government are trying to meet problems head on; they are not ignoring them. That is especially true in parts of Nottingham where there are some of the worst unemployment black spots and the greatest difficulties in getting people back into work. The Government are giving people hope, the desire to work, and opportunities. That sets the scene for my next remarks.

Some areas have high unemployment. The Minister knows—I have written and spoken to her several times—that there are small pockets of deprivation in areas of general affluence. Could she give further thought to the problem faced by Netherfield, which has tried for years to obtain help so that it can support people who need retraining, better housing and education? It has never received that help because it does not fit in with the way in which Government statistics—or perhaps regional or European statistics—are calculated. All hon. Members who represent parts of the east midlands can pick out small pockets in their constituencies in which the general policy does not apply.

Clearly, difficult restructuring is taking place in the east midlands. The textiles industry is affected—Courtaulds recently announced the loss of many jobs in my constituency and in that of my hon. Friend the Member for Nottingham, East (Mr. Heppell). The coal industry continues to decline, and we should make no mistake about the fact that in the east midlands, and especially parts of Nottinghamshire, that industry has gone. In Nottinghamshire and Derbyshire, communities that depended on the coal industry are still trying to come to term with its collapse. We must remember that problems have been caused by the closure of coal mines not only now, but five, 10 and 15 years ago. At last, an attempt is being made to deal with those problems. The Government's retraining packages and the new deal for communities are important, because they try to support restructuring and ensure that new growth industries are located so as to be accessible to those communities.

I disagree profoundly with the hon. Member for the east midlands—[Interruption.]—I mean the hon. Member for Blaby (Mr. Robathan). I wish that I had meant that joke. I disagree with him, because those problems cannot be considered in isolation. The areas are interdependent, so the Government are right to focus on the whole region. To tackle the problems, it is no good treating a small village in Leicestershire, or even Leicester itself, in isolation. It is important to support people by retraining them and helping to restructure their industries and communities.

I have some quick points to make on transport. My hon. Friends the Members for Erewash (Liz Blackman) and for North-West Leicestershire (Mr. Taylor) raised some serious issues, and I do not want to repeat what was said about the access problems between Nottingham and the M1. However, they did not mention the fact that, although the east coast line and the west coast line are electrified, the midlands main line to St. Pancras, which serves Nottingham, is not. It should be electrified, and the track should be improved. In a couple of weeks' time, some hon. Members and I will meet representatives from Railtrack, and I will suggest those improvements. New services have been introduced, but the track needs to be improved so that the trains run faster and provide speedier connections between the region and London.

We also need to preserve existing pit lines and improve the local rail network so that it interconnects more easily with other transport systems. The greater Nottingham area rail development strategy coordinates the lines coming into Nottingham from all over Nottinghamshire and Derbyshire, and also, I believe, from Leicestershire, yet we do not relate that scheme to other transport schemes. Roads can block up, and they often have railway lines next to them. If we could have more local rail services on those lines, connected to the existing pit lines, we would make more progress.

10.29 am

Mr. Andrew Reed (Loughborough)

I will keep my remarks brief, although I have several points to make. I wish that the hon. Member for Blaby (Mr. Robathan) was still here to listen to the arguments about the need for a regional identity, and that the hon. Member for West Derbyshire (Mr. McLoughlin) was here, because he talked about inward investment. The east midlands has always attracted proportionally lower inward investment than other regions, partly because it has no regional identity.

One of the reasons for the debate, which I am grateful that my hon. Friend the Member for Lincoln (Gillian Merron) secured, is to ensure that parts of the region work together to promote the area not only in the UK, but in Europe and other parts of the world. Most inward investment comes from places such as Japan and the United States and it is difficult to sell the east midlands because it does not have an identity. We can do that only by working together.

I will deal with the Leicestershire part of the east midlands economy because I recognise that there are sub-regions within the region, which do not always naturally match county boundaries. We use travel-to-work area statistics for a good reason: not all workplaces and travel-to-work patterns match county boundaries. People travel from Leicestershire to the west midlands and vice versa. Therefore, it is important that we have a regional perspective, while recognising those sub-regions. We must also build on points made by hon. Members this morning by recognising the difficulties and differences that exist even within constituencies.

I have always been interested in economic development and I want to ensure that my constituency benefits from the great advances made since 1997. I accept that unemployment was falling before the general election. Since December 1996, unemployment in my constituency has fallen by more than 30 per cent., while youth unemployment has been reduced by 76 per cent. and long-term unemployment by 65 per cent. I have always felt passionately that getting people back to work is a key priority, so we have a good story to tell.

Over the past six months, I have been really annoyed by the so-called great north-south divide debate. We in the east midlands and in the midlands as a whole are extremely frustrated that the concentration seems to be on the debate between the north and the south. We exist and we experience many of the problems found in the north. Leicestershire also has many of the problems suffered by the south. For example, there are development problems and pressure from population movements. Leicestershire is an attractive place for people to relocate to; it is a great place to be. That is why we suffer and seem to get missed out of the debate. One reason for raising the east midlands's profile is to make sure that we have a proper voice in the debate so that it is not only the north and the south who are involved in the argument.

In some ways, Leicestershire, particularly the Loughborough constituency, is a microcosm of not only the region, but the whole country. I will skip over the history of my constituency and the rest of Leicestershire, but there are factors that make them unique.

First, there is the dependence on the manufacturing sector, of which textiles form a large part. In Leicestershire, 29 per cent. of GDP is still based on manufacturing, which, as hon. Members know, is far higher than in other parts of the region. However, there are difficulties, especially in the textiles sector. In Leicestershire alone, 26,500 jobs depend on textiles, and all the forecasts that we have seen from Leicestershire TEC and the other bodies that work in the county show that that number is likely to decline for the next 10 years at least. We need to make sure that we tackle that problem together.

Judy Mallaber (Amber Valley)

Will my hon. Friend accept that, although there are continuing problems in the textiles industry, it is important not to write it off as an industry in inevitable final decline: Will he also welcome the report recently produced by both sides of the industry with help from the Department of Trade and Industry? It considers how the textile industry can develop, based on innovation and new lines, so that it can compete in the world market.

Mr. Reed

I agree entirely with that sentiment, and I will deal with that issue when I speak about the five or six things that we need from the Government to ensure that areas in difficulty start to prosper. That will be achieved through innovation, technology and using our expertise.

Leicestershire is also unique in that it has three universities—Loughborough, Leicester and De Montfort. I declare an interest as a former student of De Montfort and a big fan of the other two. Most counties of Leicestershire's size would not have such expertise on their doorstep, and innovation and technology are crucial to the future of places such as Loughborough and Leicestershire. The Loughborough advanced technology initiative is a key example of what we can do by bringing companies together and working with the East Midlands regional development agency to create a technology cluster. Loughborough university is world famous for its links with Ford, British Aerospace and others, as well as for its sporting prowess. It is imporant to build on that. Many local companies that I have visited and to which I have spoken, such as Deltanet, I2R and Datalink, came out of Loughborough university several years ago. They are engineering companies of the highest order, which are growing in Europe, despite the high value of the pound, and creating jobs in the town. As I said, we have suffered from the decline in the traditional manufacturing sector and in textiles. Brush, which is one of our greatest manufacturers of locomotives, suffered a great decline during the early 1990s. It used to employ 6,500 people, but now appears, with only 900 staff, on lists of the biggest employers in Leicestershire. Such large numbers of job losses during that period represent a great decline, which we need to tackle.

I will skip over many of the things that I wanted to say. However, there are five key things that we need from my hon. Friend the Minister to ensure that we move forward in Leicestershire and the rest of the east midlands.

We need to consider the strength of the pound and interest rates. They have a large impact on manufacturing—I think that all hon. Members accept that. The single regeneration budget needs to be targeted at local areas, and I hope that Loughborough's bid will be successful. The local plan needs to be completed as quickly as possible to allow development of brownfield sites, particularly in the town. Innovation and technology grants need to come through as quickly as possible because future growth will come from them. Training and lifelong learning are key elements, which will ensure that we meet our skill shortages.

In conclusion, things are looking extremely rosy in Loughborough. There are still problems that we need to tackle, and I have described five elements that I think will make a big difference. I hope that the Minister will respond to what I have said.

10.35 am

Mr. Paul Keetch (Hereford)

This has been a useful and entertaining debate, and I congratulate the hon. Member for Lincoln (Gillian Merron) on securing it. She mentioned the diversity and disadvantages of the east midlands. In one way, the region is indeed disadvantaged in the House: sadly, it is the only region that does not have a Liberal Democrat Member of Parliament, but I assure the House that that will change soon. From the other side of the midlands, I say to the hon. Member for Blaby (Mr. Robathan), "Ich bin ein Midlander."

The hon. Member for Lincoln mentioned several issues, and I will contrast what she said with what the Chancellor said—or did not say—in his Budget speech yesterday. I will deal with two specific matters, and I hope that the Minister will respond. First, the hon. Lady said that rural areas were fundamental, and she is right. Rural areas in the east and west midlands and across the United Kingdom are fundamental, and the crisis in agriculture that is affecting them is deep and real. It affects not only those directly employed in the industry, but the wider rural economy. However, in his speech yesterday, the Chancellor did not mention the word "agriculture" once. He totally ignored the issue, as if it did not exist. The Chancellor and Labour Back Benchers may deny it, but the Government consistently ignore rural areas. There are pigs sitting in Parliament square, and dairy farmers have to pour their milk away, but the Government consistently ignore such issues. I hope that the Minister will tell us what the Government intend to do about those matters. Why will they not match the agriculture compensation funds from Europe and put more money into our rural areas? As the hon. Member for Lincoln rightly says, that is fundamental.

The hon. Lady also mentioned the manufacturing industry, as did the hon. Members for Gelding—[Laughter.] I apologise. I should have said the hon. Member for Gedling (Mr. Coaker), but I was still thinking about agriculture—and for Loughborough (Mr. Reed).

Mr. Deputy Speaker

Order. It is customary to address the Chair, not some nebulous audience.

Mr. Keetch

I apologise, Mr. Deputy Speaker.

Manufacturing industry is vital to the economies of the east and west midlands. What did the Chancellor say about manufacturing yesterday? He said nothing and mentioned the word only once. There was no mention of the strength of the pound or, incredibly, of Rover and the effect that that crisis will have on the economy of the entire midlands. I hope that the Minister will deal with those matters when she replies to the debate.

Agriculture and manufacturing are vital to the east and west midlands and to other rural economies across our nation. I am surprised that we do not have a Treasury Minister here today. However, we have a very capable Minister from the Department of the Environment, Transport and the Regions and I hope that she will tell us what the Government will do about the crisis in agriculture and the strength of the pound.

10.39 am

Mr. Tim Loughton (East Worthing and Shoreham)

I, too, congratulate the hon. Member for Lincoln (Gillian Merron) on securing the debate, and on the presence of so many of her colleagues, who have made interesting contributions. As the hon. Member for Hereford (Mr. Keetch) said, the most curious aspect of this debate is that a Minister from the Department of the Environment, Transport and the Regions is responding, not a Treasury Minister. In a debate on the economy, we would normally expect a response from a Treasury Minister. The fact that the Minister's colleagues from the Treasury are nowhere to be seen is perhaps due to the complete lack of support for east midlands's manufacturing industry in yesterday's Budget speech. Is it because of the view of the regions held by those at the DETR? The hon. Member for Lincoln mentioned the role of the RDAs, which featured low down on the priorities list. They certainly featured below regional assemblies and the Government office. As she said, this debate has shown the lack of cohesion within the east midlands. It is a region that, like many others, is in search of an identity.

Mr. Bob Laxton (Derby, North)

Will the hon. Gentleman give way?

Mr. Loughton

If the hon. Gentleman will forgive me, I will not give way—I have little time in which to speak.

As the hon. Member for Lincoln suggested, having a television station that covers the region is one panacea for the problem of regional identity. The hon. Member for Loughborough (Mr. Reed) made the extraordinary suggestion that inward investment is somehow dependent on a strong regional identity. He cannot possibly be suggesting that Toyota came to Derbyshire because people from that company thought, "Ah, the east midlands has strong regional cohesion, let's go there." Similarly, people at Daewoo, one of the largest employers in my constituency, certainly did not say to one another, "Let's go to the south-east because it has a strong regional identity and regional development agency, and it may have a strong regional chamber as well." It is complete nonsense to suggest that.

The hon. Member for Lincoln began by emphasising the diversity of the regions and it is the diversity within regions that makes the east midlands, in particular, a wholly artificial creation. In the five counties of the east midlands the size of the rural economy is above average, but nothing was done for that economy in yesterday's Budget. The gross domestic product per head is below average for the United Kingdom, as are the skills level and manufacturing productivity. The region features 40th out of the 77 regions of Europe, and there are big disparities in its GDP patterns. As my hon. Friend the Member for Blaby (Mr. Robathan) asked, what have Brackley, Boston and Buxton got in common? That same question was raised by Derek Mapp, the chairman of the East Midlands development agency. He was quoted last year as saying that the region had a reputation as one of the most divided in the United Kingdom.

The regional development strategy is laid out by the EMDA in the "Pathfinders to Prosperity" document. The document alludes to groups that were formed to identify solutions to business problems and which consisted of "energetic business leaders". Various sectors were mentioned in that context, including communications, construction and development, fashion and design, financial and professional services, the food chain, health care, high-growth engineering, the learning industry, retail and tourism, and cultural and creative industries. That is what the RDA, or part of it, has to say. Notable by its omission, however, is the textiles industry, which is the biggest sector in the east midlands and the one with the most problems. Is the EMDA abandoning that industry, which provides so many jobs? The Minister may like to comment on that. Is textiles manufacturing simply not new Labour enough? Similarly, the farming sector is completely ignored in the document, despite the high profile of agriculture in the region.

The EMDA trumpets its success before it has even started by saying that the integrated approach to strategic planning, based on a very close working relationship between the regional assembly and the EMDA, gives the east midlands a competitive advantage. Exactly how does that give the east midlands an advantage? Perhaps the Minister can elaborate. The strategy in the document contains 27 100—day targets which involve producing or checking eight plans, establishing six partnerships, commissioning four pieces of research, setting four targets and setting up an office in the USA. The targets include identifying a piece of land for redevelopment.

It is notable that hon. Members who have talked about the RDA—particularly the hon. Member for Lincoln—did not mention practical solutions or specific projects. The hon. Lady mentioned a document called "Prosperity through people" and a planning charter. There was an awful lot of talking, an awful lot about meetings and discussions, but no practical action.

The textiles industry in Leicester has specific problems. Figures produced in the Leicester Mercury show that unemployment rose in Leicester last month, bucking the downward national trend, with 8,226 people claiming benefit. The figure for the east midlands showed that unemployment had risen from 118,000 to 121,000, which is 5.5 per cent. of the population, again bucking the national trend. Nationally, the number of people claiming benefit fell. In the three months to January, the number of jobs in the manufacturing sector in the east midlands fell by 122,000 to just over four million, which is the lowest total since December 1994. Manufacturing employment has suffered disproportionately; the biggest falls have been in the textile and leather industries, which have lost 34,000 jobs in the past year—10 per cent. of the total. We have heard precious little about that this morning.

A survey on business in the region, which PricewaterhouseCoopers conducted last summer, makes for worrying reading, particularly for those in the manufacturing industry. The preceding six months were described as bad overall, especially for textiles. There is a general belief among business leaders that things will get worse over the next six months. Greater European integration is not seen as a factor that would make a substantial difference to business in the region. Thirty-two per cent. of businesses reported decreasing sales, and textile companies had a very bad six months, with 41 per cent. reporting a fall in sales of more than 5 per cent.

Only last week, Coats Viyella, a firm based in the constituency of my hon. Friend the Member for Rutland and Melton (Mr. Duncan), closed with the loss of 200 jobs. What was there in yesterday's Budget to help the textiles industry, and manufacturing in general? We heard an awful lot about high-tech industries, and there were an awful lot of tax incentives to help internet millionaires, but there was precious little to help traditional businesses, such as textiles and chemicals, which feature heavily in the region. There was also nothing to help agriculture.

The energy tax, another feature of yesterday's Budget, will hit the chemicals industry in particular. Even an 80 per cent. rebate, targeted on industry groups that come under the integrated pollution prevention and control directive, will not help the electricity-intensive industries in the region compete against Europe and the far east. Many jobs will suffer because of the Government's blind insistence on going ahead with an energy tax despite the fact that the Environmental Audit Committee described it as a damp squib.

The west midlands has been getting the headlines because of Rover, but there will be a big spill-over into the east midlands because jobs there depend on that company, too. The big job losses in textiles will continue, but they do not make the headlines. We have heard that a textile industry study is looming—to use a pun—and we have heard about Coats Viyella, but what in yesterday's Budget will help the industry in the region? Absolutely nothing. It is a shame that no Treasury Minister is here to respond to that question. Over the past few years, stealth taxes have affected the east midlands as much as they have affected any place. It has been calculated that stealth tax rises imposed in the three Budgets before yesterday have cost the region £2.7 billion.

It is difficult to see how regional development agencies will help. Will the Minister confirm that 85 per cent. of the RDA budget in the east midlands has already been allocated to projects that existed before RDAs were created? Will she confirm, too, that more than £1 million is spent on unelected regional politicians—RDA board members, in other words—most of whom are expected to work only two days a month? What is the added value that RDAs will supposedly bring to regions such as the east midlands? What will they do cost effectively that was not previously done by Government regional offices, or could not be done by county councils or unitary authorities? What accountability will there be on the part of the EDMA and the regional assembly, and what interaction will there be between those two bodies?

I congratulate the hon. Member for Lincoln again, because she rightly raises many of the problems in her region. There are two real problems. First, nothing that the RDAs have to offer seems to address the difficulties that I have mentioned. Secondly, even if a sense of identity united the five counties, it would have no greater impact on attracting investment from outside than what could be achieved by counties individually, or by unitary authorities working in partnership with one another or with the Government.

The hon. Member for Lincoln may want to create a regional identity—I congratulate her on her wish to do that—but is this the right way to go about it? She said that one of the strengths of the west midlands was diversity. Long live diversity, but let us not stifle it, or stifle enterprise, by imposing a costly and bureaucratic regional development agency that has produced no solutions, so far, to many of the problems of the east midlands region that have been mentioned today. Yesterday's Budget merely compounded the problems of manufacturing in the east midlands and the rest of the country.

10.50 am

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes)

I congratulate my hon. Friend the Member for Lincoln (Gillian Merron) on securing what has been an interesting and important debate. We have had the opportunity to challenge the rhetoric of Opposition Members and to make clear to the people of the east midlands, who are at the core of the debate, what their local Members—their local Labour Members, at any rate—and the Government are doing to secure their future prosperity and ensure that they share in rising national prosperity.

We have had an interesting and illuminating debate, including some very knowledgeable and analytical contributions, for which I thank my hon. Friends. I commend their efforts to put the east midlands on the map: representing their region is a legitimate and important role for Members of Parliament. Obviously, the Opposition did not consider that to be a task worth undertaking. Labour Members' contributions were in stark contrast to the sole contribution by a Conservative Member from the region, the hon. Member for Blaby (Mr. Robathan). He feels so little concern about the issue that he could not stay in the Chamber for the full debate.

Mr. Robathan

The Minister, of course, does not come from the east midlands. As she is aware, this is just a talking-shop debate, the purpose of which is to get coverage in the local newspapers. It is a load of nonsense. I care very much about my constituency, my county and my country, but not about some artificial creation such as the east midlands.

Ms Hughes

The hon. Member for Blaby quoted the Bible. As I listened to him then—and again now—it was a quotation from Shakespeare that came to my mind: … full of sound and fury, Signifying nothing. His contribution showed little concern for the east midlands economy. He referred to the narrow region of the east midlands. People in the east midlands will be very interested in that, and in the fact that the only Opposition representative of the region who spoke had nothing to say about the local economy.

Mr. Robathan

Will the hon. Lady give way?

Ms Hughes

No, I shall not give way again. I want to make progress.

I want to draw hon. Members' attention to the obvious difficulty that Opposition Members had in understanding the Government's strategy, which my hon. Friends supported, for addressing—

Mr. Robathan

Regional assemblies.

Ms Hughes

No—economic development.

We take a dual approach. As yesterday's Budget showed, we are exercised about the issue of raising general levels of prosperity throughout the United Kingdom. We also want to assist the regions to deal with inequalities between them, and diversity and inequality within them. Those two political objectives are not mutually exclusive, as the Opposition seem to think. The Opposition have difficulty understanding that broader concept, and how those important political objectives for the national and regional economies can be—indeed, must be—fused. It is the Government's job to put in place the mechanism to achieve that.

As the speeches by the two Conservative Members clearly demonstrated, the debate has been about regional economies and regional economics and regional economic development, with a focus on the east midlands. That is why I am here, speaking for the Department of the Environment, Transport and the Regions. We will not have any nonsense about needing a Treasury Minister. Hon. Members should be perfectly satisfied with me—I am very competent, and I will speak strongly on the subject.

It is important that the contributions made by my hon. Friends acknowledged that the east midlands has a great deal going for it. The region has a varied and resilient industrial base and a strong tradition in many manufacturing industries, and there is growth in many high-tech industries. There is a great deal of potential. There are centres of excellence in learning and research, and the region is an important part of the total United Kingdom economy.

As my hon. Friends said, however, there are wide disparities in prosperity between different parts of the region, with some areas suffering from deprivation and decline, including parts of the four main cities, and the former coalfields. There are signs that business confidence is increasing; high value added manufacturing is performing well, as are services and construction. However, some of the sectors that have fared less well nationally, such as textiles, clothing and footwear, are heavily represented in the region. That is having an impact on the economy, as is the fact that industries that are doing well nationally are less well represented. My hon. Friends the Members for North-West Leicestershire (Mr. Taylor) and for Loughborough (Mr. Reed) emphasised the need for infrastructure, and I accept the analysis by my hon. Friend the Member for Loughborough of the issues that should be addressed.

A core issue in the debate was our focus on the regions, in the context of economic development, and in particular the role of regional development agencies in helping regions to drive up their performance, and in targeting resources and solutions on the areas in which they are needed most. We had a clear demonstration of the corner into which the Conservative party has put itself. The Opposition have been hung by their own petard. Their knee-jerk reaction at the start of the Parliament, when they said that they would abolish the regional development agencies if they ever had the chance—which, of course, they will not means that they have to defend that position in the face of the obvious success of the agencies and the associated chambers of commerce in beginning to mobilise the regional partnerships that are so essential to the achievement of the economic development that we want to see.

Contributions were made by my hon. Friends the Members for Erewash (Liz Blackman) and for Northampton, North (Ms Keeble)—[Interruption.] I apologise for mispronouncing Erewash; it must by my north-west dialect. As the hon. Member for Blaby has said, I am not from the east midlands. My two hon. Friends made it clear how important it is to have a mechanism at regional level for delivering the means and resources to those who need them, particularly the small and medium enterprises, enabling them to drive up their performance and contribute to economic activity. That cannot be done at national level. It is surprising that the party that claimed for so many years that it had exclusive expertise in business and was the friend of business, should show itself to be completely unable to understand the important role that business-led organisations will play in developing enterprises, especially small and medium enterprises in the regions. That says much about the Conservative party's complete lack of understanding of the needs of businesses in the east midlands.

In conclusion, I draw hon. Members' attention to the subject of our debate. [Laughter.] We can all use technical terms such as economic development, gross domestic product and RDAs, but, as my hon. Friends have demonstrated, what really matters is the people of the east midlands. My hon. Friends' interests are clearly different from those of Conservative Members—

Mr. Deputy Speaker

Order. We now move on to our next debate, which is about the future of the Commonwealth. Will hon. Members who want to leave the Chamber please do so quickly and quietly?