Archive for Economy

“We Need to Fight New European Commission Regional Aid Proposals Which Will Hit Teesside’s Industrial Prospects”

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, today (23rd March 2012) hit out a new possible European Commission guidelines on regional aid for industrial development which are, he said, ‘an arrow aimed at the heart of much of Teesside industrial base’.

Tom said “Teesside, like many other older industrial areas of the UK, is currently on the European Regional Aid map, which allows for local agencies and the Business Ministry to apply for EC cash to help inward investment and for business expansion which leads to jobs growth.

Now the Commission’s Competition Directorate has issued a discussion paper which suggests changes to the regulations on the targeting of this aid cash. Crucially, they are now suggesting that it be restricted to only apply to Small and Medium Sized Enterprises (SME’s) after the new round of regional aid begins in 2014.

Now in some parts of the UK, this might pass without comment. But it is an arrow aimed at Teesside economic heart. Historically Teesside’s economic base has been in chemicals, steel, port related employment and heavy engineering. That remains the case today, and of recent years much of our job creation have been in these sectors, such as with PD Ports and the associated distribution centres, the Nifco plant at Eaglescliffe which will be supplying Nissan and investment at both Wilton and Billingham and Wilton where firms like Huntsman, Sembcorp and Air Products have made major investment decisions.

What all these examples have in common is that they are all large firms, as the economic drivers and sectors of importance to Teesside are dominated by their very nature by large employers. SME’s are valuable, but they don’t build multi-million chemical plants or steelworks. We should encourage SME’s, obviously, but in this area, they depend on supply-side orders and the wealth generated by large firms for their existence.

To make matters worse, the EC has to review the Assisted Areas Map after 2014, and given the scale of problems in Southern Europe, and the unpopularity of the UK in Europe arising from our Prime Minister’s ‘little Englandism’, the UK – and Teesside – may be in the firing line is areas have to be deleted from this map.

I will be urgently be making representations to both Business Ministers and to our local Member of the European Parliament, my colleague Stephen Hughes, to build up a case to make the Competition Authorities in Brussels think again on these ideas – certainly as far as Teesside is concerned.”

“We Now More Than Ever Need a Full Investigation Into ‘Possibly Criminal Behaviour’ By Teesside Based Welfare to Work Company” – Tom Blenkinsop MP

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, today (23rd March 2012) said “a full inquiry as to whether criminal behaviour by training and employment placement group A4e was needed more than ever” after he had voiced earlier concerns after A4e was forced to withdraw from part of a £900,000 project with Redcar and Cleveland Borough Council after an A4e employee forged signatures on official forms.

He said this after a BBC investigation revealed what he called ‘a systemic pattern of duplicity at A4e across the country’. BBC Newsnight had obtained the results of a confidential 2009 internal audit of work by A4e’s top recruiters. The auditors found staff claiming for putting people into jobs which did not exist, jobs which did not qualify for payment and fabricating paperwork.

Tom said “This programme highlighted what to me seemed to be clear evidence of a systemic culture of fraud within A4e and a lack of adequate controls by the Department for Work and Pensions and other public bodies partnering A4E Both are completely unacceptable.

At the time A4E said that there was no criminal activity involved, and that the person responsible had resigned. This was also the position taken by Redcar and Cleveland Council. Now, it looks as if this kind of behaviour was par for the course at A4e, and given this, local inquiries have got to be re-opened. At the very least, Council officers should refer this matter to the Council’s own elected member Audit Committee so the matters can be looked at in an open and transparent fashion.”

A budget from millionaires for millionaires

Middlesbrough South and East Cleveland Labour MP Tom Blenkinsop, said today (21st March 2012) that George Osborne’s budget was “one devised by a millionaire to help other millionaires”.

Tom continued “The cut of the 50p top income tax band to 45p will only benefit those with great wealth. They are not found here on Teesside. Only 5,000 people are estimated to be in this band in the North East, against 195,000 in London and its leafy suburbs. This is a straight transfer of wealth from the poor to the rich. This goes hand in hand, also, with the cut to Corporation Tax.

He also outlined further attacks on the quality of life for working people and their families, with threats to keep reviewing pension age upwards, more draconian welfare changes and the driving through of cuts to public sector wages in regions like the North East from this autumn onwards.

The announcements on infrastructure spending also totally ignore Teesside. We saw announcements of big new transport spending for airport expansion in the South East and for a big expansion of the London tube system – but nothing for the North East at all.

But what was most noticeable was what was not announced. There was no commitment to even think about reversing previous hikes in VAT, a straight refusal to look at ways to cut the fuel duty burden that affects car drivers, transport firms and bus companies and no mention whatsoever of measures to tackle unemployment in areas like ours.

It was a budget drawn up by a public schoolboy and signed off by his old Etonian boss, the Prime Minister. It is a budget that reflects their class and their world view. It is, alas, a budget that will not help any of my local constituents in any real way at all.”

Teesside Young Labour: Minimum Wage freeze is “effectively a cut for already struggling young people”

Teesside Young Labour today (19th March 2012) expressed disappointment at the news that the National Minimum Wage for under-21s would be frozen, despite the increasing cost of living.

The Government today accepted the Low Pay Commission’s recommendation to freeze the National Minimum Wage for 16-17 year olds at £3.68 per hour and at £4.98 per hour for 18-20 year olds. The minimum wage for those aged 21 or above will increase by 11p to £6.19 per hour (approximately 1.8%), whilst it will increase by 5p per hour to £2.65 for apprenticeships (approximately 1.8%). The Consumer Price Index measure of inflation, however, is currently at 3.6%.

A spokesperson for Teesside Young Labour said: “Freezing the minimum wage is a kick in the teeth for young people who are struggling to afford the increased costs of transport, study and living. With inflation at around 3.6%, this freeze in fact represents a real pay cut for hundreds—if not thousands—of hard-working young people in Teesside.

Whilst the rise for apprentices and over-21s is to be partially welcomed, this nominal 1.8% rise still reflects a pay cut of 1.8% in real wages. Furthermore, it seems grossly unfair that whilst the pay of a 21 year old will be at least nominally increasing, the pay of someone a few months younger with exactly the same experience, doing exactly the same job will not necessarily be going up.”

Middlesbrough South and East Cleveland Labour MP Tom Blenkinsop said: “It is wrong for the Government to imply that the best way to tackle youth unemployment is to effectively cut the wages of young people in Teesside.

There is no strong evidence to suggest that the minimum wage has an adverse effect on employment. The reason companies are not hiring young people is not because of the National Minimum Wage, but because business has no confidence in this Government’s economic policy.”

“Housing Green Investment Bank in Edinburgh Only Benefits Banks – Not Areas Like Teesside – Tom Blenkinsop MP

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, today (8th March 2012) hit out at the announcement that the coalition government’s much vaunted ‘green bank’ will be sited in Edinburgh.

Tom said “For a whole number of reasons this is a loony decision. The government say it is because London and Edinburgh are the financial centres of the country and that this makes it a good fit. It will be a good fit – but for the bankers, not manufacturers. It will mean that decisions will be controlled by financial interests and for financial interests. The logical place would have been in a manufacturing area like Teesside where green industry – in sectors like renewable energy, new leaner chemical processes and clean coal power generation – are already here on the ground. But instead the bank will be just one more bank in the city that gave us Fred Goodwin and RBS.

There is another consideration too. Scotland will be holding their referendum on independence in 2014. This will cast a shadow over the green bank from day 1 and will hinder its growth. This was a wrong decision taken for the wrong reasons and the coalition should think again.”

Government “Must Heed the North East Chamber of Commerce Warning Over Barriers to Business Growth”

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, today (7th March 2012) warned Government Ministers to heed the warnings being made by
the North East Chamber of Commerce (NECC) over ministerial barriers to public procurement opportunities open to local businesses.

Tom said “the NECC is the representative voice of business and industry in the North East and anything they say is based on that lead position.

They have now issued a document on public procurement and the opportunities for local firms to get into pole position to secure state contracts. However, they also instanced a number of areas where Ministerial policies were blocking the ability of local firms to compete effectively.

Amongst the issues they identified was in the education sector. They instanced as an example the National Framework for Academies programme run
by Partnership for Schools for constructing academy schools. In their words “This is split into North and South panels, but nine of the 12 companies
involved in each are identical. Turnover requirements meant North East firms with strong experience of building schools locally were unable to make
it onto the framework and have therefore missed out on opportunities which fit squarely within their expertise”.

They also instance the pressure to centralise public buying elsewhere in the state sphere. They instanced issues within the NHS where the laid down
approach to procurement is centred around encouraging greater use of national NHS Supply Chain contracts. NHS Chief Executive Sir David Nicholson has stated his aim is to ensure the NHS Supply Chain offer is so good that trusts “cannot not use it”. This means that a London based civil service will increasingly be central to the securing of long term business contracts – and possibly, yet again, a southern bias in awards.

It is not as if there is no local expertise in purchasing development and building structures where local businesses and suppliers can meet potential
purchasers. In local government, we have had, for many years, bodies like the North East Purchasing Organisation (NEPO) and the Yorkshire Purchasing
Organisation (YPO) both of which have built up expertise and unrivalled contact books. Their work, together with the mentoring and advisory role of
bodies like the NECC and the Federation of Small Businesses can deliver results here in the region, and I believe that government is missing a trick
if they do not take this expertise on board.”

Government ‘Forced to Come Clean’ on Income Reduction from Cut Backs of Tax Credits’ – Tom Blenkinsop MP

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, today (March 5th 2012) said the Coalition Government ‘had been forced to come clean’ about just how much many families will be losing when the cut backs in Tax Credits they plan start to bite.

Tom said “On figures announced by Work Minister, Chris Grayling, today, a working family living on the Minimum Wage, but entitled at present for Tax Credits, would lose a massive £73 per week – crippling their household income and almost certainly helping to drive them into poverty.

On the assumption that as of now a family who are working 16 hours a week on the minimum wage, getting Working Tax Credits, Child Tax Credits, Child Benefit and Council Tax Benefit on a council tax of £1,000, would have an income of around £330 a week – not grand certainly. But, on coalition plans, from 1st April coming, they will not be eligible for Working Tax Credits and would see their income drop to around £257 per week – a massive cut of £73 in real cash, amounting to £4,000 a year.

This will be cash that will impact on all members of that family and especially on the needs of their growing children. This is a sure route to poverty for many families and will especially hit those families prepared to look for work, however low paid, to preserve their dignity and self-worth and to keep themselves in the labour market.

Together with the threats to means test Child Benefit, this shows the real and callous face of the coalition.”

Government needs to crack down on supermarket fuel profiteering

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, today hit out at news that the big supermarket chains are increasing petrol and diesel prices at the pump as a response to refinery closures and a strike by a group of tanker drivers – including local drivers at distribution company Wincanton based at Stockton-on-Tees.

Tom said “According to what I have been told by both the RAC and the AA, the big supermarket chains have put up to 1p a litre on the price of diesel and unleaded petrol and that, on average across the UK, diesel has risen to 142.32p (from 142.21p) per litre and is now within a fraction of a new record. Petrol has risen to 134.03p per litre (from 133.89p).

This is sheer profiteering and is based on scare stories that there may be a fuel shortage – scare stories that are driving people to fill up their tanks.

The reality is that Petroplus is in administration, and the administrators are working flat out to find a new buyer to resume production. In terms of the Wincanton drivers dispute, the onus is clearly on the company to withdraw their plans to cut wages by up to 20%. According to my research this firm saw its profits soaring by £0.5 billion last year – a 37% increase on 2009, and that directors pay has increased by £500,000 – 41.7%. Given this, it is little wonder that the strike ballot was won by a margin of 83%. Wincanton should withdraw the pay cut threat and instead sit down with their drivers and their union to settle the dispute.

All of this just shows how the ordinary public – who need their cars to get from A to B – are being ripped off by big business.”

Fall in GDP led by manufacturing “show that Cameron’s policies are still hitting Teesside hard”

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, said today’s news that the country’s Gross Domestic Product (GDP) was still in free fall, particularly due to a slump in manufacturing, “shows how bad things are for industrial areas like Teesside.”

The Office for National Statistics said that GDP had fallen by 0.2% in the last quarter of 2011 and that this decline was most noted in construction and manufacturing.

Tom said “On a day when the jobs of over 60 workers at the North Tees Petroplus oil storage and distribution plant are in jeopardy following the firm’s bankruptcy, these figures are sobering for Teesside.”

“Teesside has been hit by a double whammy in manufacturing. Firstly, the squeeze on personal incomes imposed by the coalition has hit purchasing power and thus less demand for household goods – many of which have Teesside chemicals as their base – whilst the decimation of public sector investment has meant that goods like steel products for new schools and hospitals are simply not now being purchased.

David Cameron and George Osborne are failing to reduce the deficit and are failing to reduce the national debt. Their policies look set to plunge the UK into a double dip recession. The Government’s economic policies are hurting places like Teesside, but they are not working; Teesside will find it hard to prosper until the UK takes a new economic course.”

Tom Blenkinsop MP Speaks Out in Commons Against Pay ‘Dash to the Bottom’

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, used a House of Commons debate on Tuesday (10th January 2012) to speak out against possible government plans to try and break up central national pay bargaining for public sector workers.

Tom said “For some time now the government have been looking at trying to ‘regionalise’ public sector pay. This is nothing more or less than an attempt to start a drive to push for worse wages and conditions in areas like Teesside.

It would be an expensive and bureaucratic nightmare. Imagine every secondary or primary school in England and Wales suddenly becoming a separate bargaining unit! All this would do is to take the head teacher and governors away from teaching and management, and force them to become pay bargainers.

It would also reinforce and entrench the existing regional divide. How would lower pay in – say – the North East or on Teesside boost the local economy? All it would do would be to reduce local purchasing power and by that reduce employment in the private retail, service and manufacturing sector.

In the debate I also highlighted the fact that many public service workers work across boundaries. The most visible example of that in recent months was the deployment of officers from the Cleveland Police to London and other cities as back up in the recent riots there. Can you imagine the views of bobbies if they were expected to undertake such dangerous and hazardous work on lower wages than their fellow bobbies next to them?

The Coalition dreams of regionalisation of public sector pay are, in fact a nightmare. I and my fellow Labour MP’s will back all public service workers in standing up against these crazy proposals.”