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Lord Shore of Stepney: My Lords, perhaps I may--

Lord Grenfell: My Lords, is my noble friend aware--

Noble Lords: Order!

Lord Williams of Mostyn: My Lords, the feeling seems to be that we should hear from the noble Lord, Lord Shore.

Lord Shore of Stepney: My Lords, I congratulate my noble friend on the wisdom and common sense of his reply. Will he please communicate to the Governor of the European Central Bank similar advice to that

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which he has given in responding to that question today? If he did, would there not be just a chance that the euro might begin to stabilise?

Lord McIntosh of Haringey: My Lords, I am grateful for that unusual compliment from my noble friend Lord Shore. I am not sure quite what advice he is asking that I should give to the Governor of the European Central Bank, particularly as we are not among his subjects, so to speak. My noble friend will know, as the House will know, that the intervention which took place in September was not the initiative of the European Central Bank but of G7, including the Bank of Japan and the Federal Reserve Bank.

Lord Newby: My Lords, does the Minister agree that the real lesson of the intervention is that the UK is now a bit player in world monetary affairs, that the decisions on intervention in support of the euro were in essence taken by the US, the Japanese and the EU, and that the Bank of England tagged along meekly behind, after the real discussions had taken place and the real decisions had been taken? Is that not the real lesson of being outside the euro-zone?

Lord McIntosh of Haringey: My Lords, the noble Lord is clearly more privy to the internal discussions within G7 than I am. It is a matter of fact that our participation in the intervention in September was relatively small in comparison with that of other countries, but I cannot accept any of the noble Lord's further speculation.

Lord Grenfell: My Lords, is my noble friend aware how we on these Benches would have been most fearful for the continuation of his genial, authoritative and reassuring presence on the Front Bench if he had uncharacteristically confounded the House by seeking to satisfy the noble Lord, Lord Willoughby de Broke, on the substance of his Question?

Lord McIntosh of Haringey: My Lords, I do not think that the noble Lord, Lord Willoughby, expected an answer to his Question in the terms in which it was couched. We all recognise that euro-sceptics around the House seek a variety of opportunities to discuss their antagonism or support for the euro. The House is none the poorer for that.

Lord Saatchi: My Lords, if the Minister does not want to deal directly with my noble friend's Question, perhaps I may ask him to cast back his mind to 9th October, which was the day that he performed his extraordinary volte-face on the subject of intervention in the foreign exchange markets to support the euro. I remind him of what he said. He justified the 180 degree U-turn in the Government's position by saying:


    "Circumstances change and we change with them; if we did not we would be very foolish".--[Official Report, 9/10/00; col. 4.]

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Does the Minister agree that that kind of unreliability and change of mind is what in the end causes the public to lose faith in politicians of all kinds?

Lord McIntosh of Haringey: My Lords, I recall precisely what I said on 9th October. The noble Lord, Lord Blackwell, asked me whether I still agreed with what I had said in March. I do not usually refer to what I have said in the past, but I shall repeat my words; namely, that,


    "attempts to intervene are unlikely to have the desired effect in most cases".--[Official Report, 28/3/00; col. 729.]

That was true in March, it was true on 9th October and it remains true today, 31st October.

Baroness Williams of Crosby: My Lords, does the Minister agree with the comment made during evidence recently given to the Delegated Powers and Deregulation Committee by Eddie George, the Governor of the Bank of England? He stated that:


    "The integration of European capital markets would be an unqualified benefit".

Does the Minister also agree that long-term interest rates in Europe and in the United States are now virtually the same?

Lord McIntosh of Haringey: My Lords, I was not familiar with the comment made by Sir Eddie George to the House of Lords Select Committee. It sounds sensible, but I should need to read it in context to know whether it could possibly be supported as government policy.

The North East: Economic Prospects

2.51 p.m.

Lord Dormand of Easington asked Her Majesty's Government:

    What further steps they are taking to improve the economy of the north-east of England.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, it is important that the North East, along with other regions, should benefit from economic growth and prosperity. This Government have and will continue to provide new opportunities for a regionally focused approach to tackling these problems. In July, the Chancellor announced an additional £500 million for regional development agencies by 2003-04. One NorthEast will receive its full share of this extra money. That is good news for the region.

Lord Dormand of Easington: My Lords, I thank my noble friend for that encouraging reply. I acknowledge that the Government are doing a great deal for the North East, but it is a fact that unemployment in the region remains the highest of any region in the United Kingdom--worse now than in Northern Ireland. My noble friend referred to RDA budgets. Can he say,

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first, how the budget for One NorthEast compares with the budgets for other regional development agencies? Secondly, are levels of unemployment considered to be among the most important criteria when budgets and grants are determined?

Lord Whitty: My Lords, the share of the total RDA budget depends to some extent on inherited programmes. Decisions as regards the allocation of the additional moneys to which I referred have yet to be made in final detail. However, I can assure my noble friend that One NorthEast will receive an allocation that is appropriate to meet local economic problems, including the locally higher rate of unemployment.

Lord Elliott of Morpeth: My Lords, I can assure the noble Lord that last week's successful win of an MoD contract by the famous yard, Swan Hunter, has given an enormous boost to the morale of the people of the North East. Some 2,000 new jobs are to be created for a minimum of five years. However, is the noble Lord aware of the strategy put forward by One NorthEast to secure a European grant of £130 million to aid small and medium-sized businesses? Is he further aware that Commissioner Monti has held up this grant on a legal point for some 18 months? Does the noble Lord agree that, if this long delay could be brought to an end, the grant would be a further great aid to the region?

Lord Whitty: My Lords, as regards the European grant, discussions on the delivery of those moneys have been held between One NorthEast, officials from the relevant government departments in the North East and representatives of the Commission. I believe that any difficulties will shortly be resolved and that the grant will be rightly allocated to the North East. I join the noble Lord in underlining the importance of the award by the Ministry of Defence of the two ALSL contracts to the Swan Hunter shipyard. Those contracts will certainly provide substantial additional employment opportunities in the region. Furthermore, the US company Atmel has recently decided to take over the former Siemens plant on Tyneside, and a further 1,000 jobs are being created at Orange on North Tyneside. Substantial movements have been made by employers, who recognise the attractiveness of the workforce in Tyneside. Although rates of unemployment are still relatively high, employment figures are improving and unemployment is starting to fall.

Baroness Masham of Ilton: My Lord, does the Minister agree that the University of Teesside is a very successful institution?

Lord Whitty: My Lords, yes. I am not entirely sure what lies behind the intervention of the noble Baroness, but I am happy to confirm that not only is the University of Teesside extremely successful. It has also greatly improved its facilities in recent years.

Lord Puttnam: My Lords, does my noble friend agree that, along with the high rates of unemployment

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prevalent in the North East, it is also true to say that the economy of the region is extremely fragile? One reason is that many of the new jobs being created are technically quite vulnerable to change. I am thinking in particular of the new call centres. Can my noble friend confirm that sufficient resources will be made available to the North East to enable people to be retrained in work for the changes which will undoubtedly occur in jobs over the next five to 10 years?

Lord Whitty: My Lords, my noble friend raises a number of complex issues. It is certainly the Government's intention, as it will be for the regional development agency, One NorthEast, and other agencies, to ensure that adequate training is provided. Such training and retraining will be provided both for those in work and those out of work in recognition of the fact that training is an extremely important element of the skills of the local workforce. The North East has seen a substantial shift of employment opportunities into the service sector, including new jobs in call centres. Although such developments may be regarded as fragile, they nevertheless form an important part of the service economy. Indeed, the North East has been particularly successful in maintaining its share of such work. As technology and communications develop, no doubt skills will need to be built on and further developed. However, I underline a point that I made earlier; namely, that substantial investment is being made in manufacturing industry. The North East continues to be a major manufacturing region.


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