Despite nearly 10 years of Blair’s government, the North of England remains in many ways as poor and deprived as ever.

The Gross Value Added per head of population in the North East is 79% of the UK average, and in Cumbria it is only 76%.

While unemployment in Cumbria is 79.5%, in the North East only 71% of people of working age have jobs. The North East has the highest percentage of workless households among the designated regions of Britain.

Median gross weekly earnings in the North East and Cumbria are respectively 87% and 91% of the UK average. In parts of the region, first-time house buyers need to raise a mortgage more than 10 times their salary.

30% of workers in the North East are denied training.

Nearly 1/3 of children in the region live in poverty, and over 41,000 are taught in classes of more than 30.
In the North East, life expectancy is 3 years less than in the South East. Cumbria fares somewhat better, but across the North there are enormous variations. Poor housing, lack of education, an unhealthy diet, high unemployment and a lack of regular exercise are major contributing factors.

Manufacturing still accounts for 21% of employment in the North East and 17% in Cumbria. However, there has been a significant and continuing haemorrhage under the impact of the global market - championed by ‘New Labour’ - and the free movement of capital. Well over 60,000 manufacturing jobs in the region have been lost in the last decade. In shipbuilding, now that Swan Hunter on Tyneside has closed – following McNulty Offshore and Amec – only VSEL Barrow remains in the region, and that is dependent on nuclear submarine contracts. Elsewhere, there have been closures or redundancies at Ellington Colliery, Vald Birn, TT Electronic, Europa Magnetics and Procter & Gamble in Northumberland; Goodyear Dunlop, Rohm and Haas, O’Donnell Brothers, Circatex, Stag Furniture, Saia-Burgess and Corning in Tyne & Wear; LG Phillips, Hugh Mackay Carpets, MMP and Solvitol in County Durham; Corus, Alcan Pechiney and Sekers in Cumbria; and Croda on Teesside. Goodacre Carpets in Kendal have moved production to Poland.

In the food industry Nestlé (Newcastle), Rye Valley Foods (Hartlepool) and Cheviot Foods (Amble) have all announced redundancies. Call centre workers at Zurich Insurance (Newcastle), Orange (Peterlee), Siemens (Killingworth), Hewlett Packard (Gateshead) and Lloyds TSB (Newton Aycliffe) are also losing their jobs, many of which are being outsourced as far away as India.

Over 2006, unemployment in the region rose from 80,000 to 90,000, but employment also rose, by 32,000 to 1.44 million. This increase can largely be accounted for by inward migration: 40,000 Eastern Europeans have registered for work in the North East following EU expansion in 2004. The overwhelming majority of such migrants work in construction (meeting the skills gap), agriculture, food processing, hospitality, cleaning and care, generally low-paid jobs. In the Lake District, many eastern European workers are taking seasonal, temporary jobs in hotels for less than the minimum wage. There have been two successful actions against this in Ambleside. In Kendal and Penrith, eastern European Big Issue sellers have taken over pitches formerly held by local homeless people.

Regional development agency One North East claims to have helped create or safeguard 16,000 jobs. This is meagre in comparison with the continued deindustrialisation, and the problems are likely to worsen in future. As a result of EU expansion, European structural adjustment funds to Britain – worth £675 million to the North East in 2000-6 - will be cut by about 40% for 2007-13. The number of assisted areas in the North East has been reduced from 347 to 278.

The Organisation for Economic Co-operation and Development has criticised plans for reviving the North East economy as unrealistic, inconsistent and lacking in base evidence. It says that there are too many weak bodies running the region, and they lack democratic mandates. The OECD also regards Newcastle’s ‘Science City’ plans as unlikely to produce the hoped-for boom, as ‘the areas in which the region’s universities have world-class strengths are only a handful’. It argues that in the short term it is better to support existing businesses, and to focus on industries which may have lower productivity but are more employment-intensive.

The lack of sites available for industrial development within Tyne & Wear illustrates the problem. In Gateshead there are none, in South Tyneside only 2.5 acres held by the council, and in Sunderland only a handful of sites. One North East has disposed of virtually all the land accumulated by its predecessor English Estates. Many prime industrial locations have been turned into office parks or sold off for housing – as may happen with Swan Hunter. On the other hand, while house-building continues at Newcastle Great Park, Sage remains the sole industrial building there, despite grandiose forecasts.

A study by the Institute for Public Policy Research reveals that the 5 worst areas in Britain for levels of business activity are all in the North East – Easington, Wansbeck, Redcar & Cleveland, South Tyneside and Derwentside. It argues that more should be done to encourage big companies to invest in deprived areas. Low employment in the North cannot simply be tackled by helping people off benefits, it says. ‘Business-deprived areas need more jobs rather than more start-ups.’ Existing firms should be supported through better transport and skills.

The region’s transport infrastructure has been the focus of a ‘Go for Jobs’ campaign run by The Journal of Newcastle, Middlesbrough’s Evening Gazette and the North East Chamber of Commerce. The object, ultimately successful, was to get the Highways Agency to lift Article 14 notices which block development which could put extra traffic on the A1 and the A19. The campaign has claimed to have secured 12,000 jobs in Hartlepool, Sunderland, Bowburn and Team Valley. However, the A1 is already gridlocked at rush hours and ultimate road widening – not till 2008 at earliest - will only make things worse.

There is an expectation that workers will simply travel to where jobs are. But above-inflation fare rises, and lack of adequate services, are forcing people off public transport into their own cars. Unless something is done, there is expected to be a 1/3 increase in traffic on the A1 and A19 by 2021, and a 6% fall in public transport use over the same period. Home-working is promoted as cutting travel, but suits only certain types of job, and results in workers being isolated and probably unorganised and subject to increased exploitation.

What is urgently needed is an industrial strategy which sites jobs and services near to the people who use them and focuses around public transport nodes. And public transport needs to be publicly owned, adequately subsidised and democratically controlled – not the con of giving councils the right to award bus contracts to single monopoly operators, nor the proposed franchising of Tyne & Wear Metro as the price of the needed refurbishment. The débacle of GNER, the Cumbrian rail crash, the award of the Sunderland to London rail franchise to a company which had no trains, the scandal of using prisoners as cheap labour for rail maintenance work, and draft franchise proposals to prevent Virgin cross-country trains going as far as Bournemouth and Southampton – all of these indicate the necessity of bringing rail travel back into public ownership.

The argument for improved, affordable, public transport, and for an industrial development strategy which cuts travel-to-work distances, is also an argument for reducing carbon dioxide emissions which are contributing to global warming. Despite the long-range targets in the government’s Climate Change Bill, however, carbon abatement will not happen without measures which run directly counter to market mechanisms and the profit motive in society. The oil and gas industries remain in the hands of transnational corporations, who are interested in continued burning rather than conservation.
Even supposedly ‘green’ measures from government and business often have a down side. Wind farms can save on conventional electricity, but the number which will be required for a significant effect is likely to be enormous: already plans are in the pipeline for more than 400 turbines across the North East, 1/3 in Northumberland. This raises major concerns about blight on rural landscapes. Offshore siting would be much better, but that of course is more costly. Tidal power has possibilities, but awaits efficient design and technology.

Nuclear power, which the government is now promoting, is not carbon neutral and may in fact generate as much carbon dioxide as conventional electricity generation, when power station construction and decommissioning, and nuclear fuel processing are taken into consideration. It is expensive and dangerous. It still has the same problems it had 30 years ago – unsolved radioactive waste disposal, plant safety issues and above average rates of cancer in the areas surrounding plants. Only 18 months ago, a serious leak at Sellafield went undetected for over a month. More recently we have learned of the scandalous practice of removing deceased workers’ body parts without relatives’ permission, to test for the effects of radiation. The government has now made it much harder to object against the siting of nuclear power stations. Given that there are existing nuclear plants at Hartlepool, Sellafield and Torness, the chances are that those locations will be favoured for new stations.

Government regulations requiring 5% of diesel or petrol to be of biological origin have given something of a boost to the regional biofuels industry, with refineries being built on Teesside. However, while the NFU calculates that Britain’s farms can easily supply the wheat needed for the bioethanol target, worldwide the 5% will require a significant turnover of agricultural land, and rapid drawing down of water reserves in underdeveloped countries, with debatable savings in greenhouse gases. Already conversion of corn to bioethanol in the USA has led to a sharp rise in grain prices; ultimately the boom in bioethanol is a competition between the 800 million people who own automobiles and the 3 billion who live on less than $2 per day.

The National Union of Mineworkers has made the case for a carbon abatement strategy based on continued use of British deep-mined coal. New, more efficient, coal-fired power stations, with clean technology and carbon sequestration and storage, can operate with much reduced carbon dioxide emissions. Instead the gas is pumped into disused oil wells, where it can be sealed away. Centrica is building the first such plant on Teesside but meanwhile UK Coal is selling off land, and coal is being imported into Blyth instead of mined at Ellington.

Tackling climate change offers major opportunities for British manufacturing industry, whether in coal mining, power engineering or new technology for renewable energy. In the construction industry, all new houses should by law have to conform to the lowest energy and water consumption levels, built in terraces rather than semis or detached, with solar panels, high insulation levels, underground heat pumps, turf- or sebum-covered roofs, rainwater collection – any or all as practical.

None of this will happen as long as everything is left to private ownership and the market – or else, working class people will end up paying, as has happened with the increased gas and electricity prices over the past year.

Market mechanisms mean that bus services have had to be cut to support the interests of the bus companies, whose sole motivation is maximum profit – because the Government’s grant for free travel for the elderly was too low. Market mechanisms elsewhere in public services have been a disaster. The new ‘payment by results’ system in the NHS means that 7 primary care trusts in the region expect to make a £17.4 million loss in 2006/7. Some already had major 2005/6 deficits. Despite this, they now have to cut waiting time to 18 weeks. Hospitals in the region have been told to slash the number of operations, see fewer people as outpatients and reduce patient time in hospital. Massive job losses are in the pipeline – up to 700 at Co Durham & Darlington Acute Hospitals Trust, at least 90 at North Tees & Hartlepool, 237 at South Tees, 500 at Sunderland. It is proposed to close the coronary, stroke and emergency units at Westmorland General Hospital in Kendal, thus doubling the travelling time for acutely ill patients from central Cumbria, who would have to go to Carlisle or Lancaster. In-patient care at Cumbrian cottage hospitals is being closed, Hexham and North Tyneside hospital maternity units are being downgraded, and the Government says it will further involve private companies to tackle ‘bottlenecks’ in diagnostic waiting times. There could be no NHS dentists left in the region within 2 years. A Washington family GP practice has just avoided being privatised – for the time being. Public services are being cut or privatised and in some areas fortnightly waste collection has led to increased risks to public health.

The privatisation of local authority housing is gathering momentum. Wansbeck and Castle Morpeth both have well advanced plans to transfer their properties to housing associations. In Berwick, tenants rejected the first proposed landlord, but the council has now come back with another. Chester-le-Street succeeded in bribing tenants to vote in favour of transfer, with promises of ‘double glazing within 2 years’, despite a tenants’ campaign to resist. Part-privatised Sunderland Housing Group now wants to limit council involvement in its governance, so that it can find work elsewhere in the region, since it now faces massive losses with the end of its own renovation programme.

11 councils in the North built no social housing in 2004-5, and waiting lists have gone up massively in the last 5 years. New houses being built in the NewcastleGateshead regeneration plan are skewed towards sale rather than rent. Either way, workers in less well-paid jobs can’t afford the higher rents and rocketing house prices. Public services are being cut or privatised and in some areas fortnightly waste collection has led to increased risks to public health.

Privatisation of our state secondary school system had already been set in motion before 2006, with the promotion of private contractors for ‘Building Schools for the Future’ (a McAlpine-led consortium in Newcastle), and forcing local authorities to establish privately-backed City Academies just to get those funds for refurbishment. The appointment of Lord Irvine Laidlaw as backer for Newcastle’s Academy has emphasised the corrupt nature of the whole scheme, since he is revealed to be domiciled in Switzerland in order to avoid tax in the UK, and has not fulfilled a promise to repatriate his money. There have been further decisions to set up Academies in Blyth, Ashington and Peterlee. Meanwhile, because of falling rolls, and despite parent protests, Gateshead has decided to close 3 primary schools and Northumberland its whole middle tier of 44 schools.

The Education and Inspections Bill, passed by Parliament in 2006 with Tory support, takes privatisation of schools a major step further. Only 3 of the region’s Labour MPs were among those who voted No. The Bill is based around establishing Trust schools, freed from local authorities and able to decide their own partners. Already Monkseaton High School in North Tyneside is teaming up with Microsoft to become one of the first 3 such schools in the region. North Tyneside Council in fact is considering that all schools should adopt trust status within 4 clusters and the local authority itself should become a trust. Essentially, every school will become a business.

In Further and Higher Education, the privatised future is already here. Newcastle College broke off merger talks with Gateshead College, only to go for a link-up with other FE colleges in Skelmersdale and Keighley. Newcastle University has privatised its English Language Centre though an earlier attempt by Northumbria University was called off after union resistance. Meanwhile, changes in government funding priorities for adult education mean that ESOL programmes, foreign-language courses and courses for disabled people are being cut. Overall, there is a drive to make people pay for education, and students are graduating from higher education with massive debts.

North Tyneside Council is not only privatising its schools, but subjecting most other services to ‘market testing’ – a first step to contracting out. It is perhaps no accident that this is happening in a borough where, with a directly elected Mayor, local democracy has been eroded. However, senior managers in Newcastle are also planning a radical overhaul of the council, taking more control over key city institutions and putting service delivery into private hands. The recent local government White Paper rules out imposing directly elected mayors but does project further privatisation through encouraging city development companies, with more powers than the councils at present. It also calls for proposals for abolishing the two-tier system the shire counties. In Northumberland and Cumbria, county and district councillors are battling over proposals, all of which will involve reduced democracy and (in Northumberland at least) increased privatisation; in Durham, the county council wants a single unitary authority but the districts are standing firm for retaining the current system.

Against this background of relentless assaults on the working class locally, District-wide and nationally, the recent period has seen a notable uplift in the class struggle, mostly in public services. In January 2006 10,000 PCS members at Jobcentres, benefit offices and the Child Support Agency walked out for two days over job cut threats. In March, 150,000 public sector workers struck to protect the Local Government Pension Scheme. RMT members held a series of one-day strikes in a pay dispute with Virgin Rail, TSSA balloted for action after GNER announced a staffing review, and bus drivers at Arriva and Stagecoach walked out over pay. Hospital cleaners at South Tyneside held 3 one-day strikes and a week-long strike over pay, and UNISON balloted its members at the Prescription Pricing Authority over privatisation and threatened job losses.

In education, NUT members at Heaton Manor School in Newcastle struck several times over changes in pay, lecturers at Gateshead and Northumberland Colleges walked out over job cuts, and higher education saw its longest ever pay dispute, involving one day-strikes and assessment bans by members of NATFHE and AUT. At Northumbria University lecturers mounted a further strike and tightened action to prevent redundancies, and matters came to a head when the University stopped the pay of 24 union members and the union responded with a threat of all-out, indefinite strike action.

There is widespread disaffection with New Labour policies and relief that Blair is going but many illusions that a Brown-led government would somehow be different. In fact Gordon Brown is one of the architects of New Labour and has backed Blair’s policies all the way. Replacing Blair by Brown means more of the same policies, don’t rock the boat and then disaster at the next General Election. Furthermore, the disillusionment with Labour is providing an opportunity for fascist organisations like the BNP to gain a foothold in the region.

There is an alternative and the labour movement needs to be won to adopt it. The Left-Wing Programme drawn up by the Communist Party of Britain provides the basis for building left unity and mass action for a change of course, to reclaim the Labour Party for working class policies. Individually, the policies of the LWP are in line with those of many trade unions, but more importantly it links those policies together in a comprehensive framework. It needs to be promoted and popularised in the District, in the battles over civil service jobs, for defence of the NHS and state education and in the forums of the labour movement, so that the movement adopts such an alternative as its own. The Labour leadership campaign mounted by John McDonnell has articulated a similar framework of policies and has therefore contributed significantly to building understanding of, and support for, such an alternative. Whatever the outcome of the leadership battle, the struggle for the LWP will continue.

Policies without action will however always be ineffective. There is a lethargy in the structures of the trade union movement, mirroring the disillusionment of many members. A vision of an alternative is essential, but it also has to be accompanied by education and organisation, involving a much greater emphasis on mobilisation.

In this context the role of the Morning Star is essential. As the only daily paper projecting an alternative to the capitalist media, it is valued by many activists in the labour movement. Its profile has certainly been raised by the invaluable support from the Durham NUM, in paying for free distribution at the Miners’ Gala and the Northern TUC Annual Conference, by the annual Tyneside Bazaar and by the three Regional Conferences staged by the Tyneside Readers’ and Supporters’ Group. However, a real breakthrough on daily circulation has yet to be won. Distribution difficulties are far from being the sole reason for this. Left activists in the labour movement need to be won to see that their own work will be more effective if they take the Morning Star on a daily basis – even if the paper is late – and that it will help them give confidence to their own members.

Our Party’s record since the last District Congress shows that successes can be achieved in our work, even with our limited resources. Within the labour movement and pensioner organisations, a small number of comrades are playing key roles. Individual comrades in south Cumbria are playing an important part in the peace movement. Overall, however, our roots in these areas of work are too shallow, simply because they are limited by numbers.

Electoral work on Tyneside has maintained the Party’s profile, mobilised supporters as well as members and won respect in the movement for our policies. While the 2005 General Election vote was still low, it was the best achieved since contests began in Newcastle East & Wallsend in 1997. The local election contests likewise are providing a platform for projecting communist policies to an audience both within and beyond the immediate electoral area. However, campaigning has generally taken place only at election times.

Over the past two years we have shown significant success in raising funds for the National Appeal and in recruiting new members. However, we are missing out on potential recruits because of the state of our organisation. Most branches do not meet and even Newcastle/Gateshead Branch meetings are often poorly attended – despite interesting discussion topics. The Young Communist League has all but disappeared and the proportion of women activists in the Party is far too small.

Congress welcomes the formation of the Cumbria Branch as a step to developing Party activity but recognises that Cumbria is the third largest county in England, with an area of 6800 square kilometres, and that travelling time between its two main cities, Carlisle and Barrow-in-Furness, is two hours by road and over two and a half hours by public transport in each direction. Communication with the west coast towns is even more problematic. Congress therefore asks the new District Committee to monitor carefully the level of activity which the Branch is able to achieve and to review in 6 months’ time, by discussion with the members, whether the formation of two branches, one in the north and one in the south of the county, would be more effective.

Congress calls on the new District Committee to give special attention to organisation, and in particular to:

convening meetings of the South Tyneside and Teesside Branches on a bimonthly basis, at least;

taking steps to bring young members and YCL supporters together, to re-establish the YCL;

producing the Northern District News at least twice a year;

considering extending DC meetings to allow for educational sessions open to all members;

holding at least one New/Prospective Members’ School and at least one other District-wide educational event each year;

holding a District Industrial Aggregate at least once a year, to discuss and take forward trade union work;

establishing the District’s own web site, linked to the Party national web site, with a bulletin board to highlight activities and events;

raising the Party’s profile on international issues;

developing propaganda, issuing press statements and, from time to time, calling action days within the new Newcastle East constituency, in preparation for a potential General Election contest in two years’ time;

developing the Party’s own anti-fascist work and co-operating with others to counter the rise of the BNP;

taking the initiative to establish a broad-based Regional Morning Star Campaign Committee;

revitalising the Tyneside Morning Star Readers’ and Supporters’ Group as a genuine broad organisation and seeking to establish other Groups in the District.