Ms Foody was speaking during a debate on the roundabout she secured in Westminster Hall. Fellow Northumberland MP Ian Lavery also backed the calls.
During the debate Ms Foody said: "Moor Farm is a blocker to growth and a blocker to opportunity. It is preventing business expansion, causing investment to be delayed or withdrawn.
"It is costing jobs and hampering growth. It is putting at risk not only existing development sites for employment and housing in Northumberland and North Tyneside, but the ability of these councils to update their local plans and meet the housing need.
"My constituency...has seen significant housing growth in the last 10 to 15 years, providing much-needed homes and opportunities for the area, with further development in current local plans. While that housing growth brings opportunities for growth and jobs, it also brings challenges.
"This issue goes far beyond the road network and beyond my area; it affects the entire North East region. It is about housing, local plans and devolution. It is also critical to several councils in the North East.
"There is significant congestion at Moor Farm roundabout, which causes misery to local residents. We frequently see substantial delays, especially as a result of accidents on or near it.
"In recent weeks, we have seen delays of hours due to incidents that are far too frequent.
"National Highways can issue holding recommendations on planning applications, in effect preventing them from moving forward. There are at least four holding objections on applications for housing and business development as a direct result of the Moor Farm roundabout."
Ashington and Blyth MP Mr Lavery added: "One of the main issues for Blyth and Ashington is the £10 billion investment in a new data centre that will be just along the road from Moor Farm roundabout. The idea is to create tens of thousands of jobs in a cluster in and around that data centre.
"If we cannot resolve this problem at Moor Farm roundabout, areas such as mine in Blyth and Ashington are going to suffer greatly economically. How much could we lose between now and then if we cannot overcome this ridiculous impasse?"
The Government's current position is that the scheme remains under consideration. The Department for Transport continues to consider the case for improving Moor Farm, along with nearby Seaton Burn, as as part of a pipeline of major enhancements that are being developed for possible delivery in a future Road Investment Strategy.
Assessments previously threw the future of the project into doubt after it was branded as "poor value for money". However, changes to the so-called Green Book test used by civil servants to assess the financial viability of major infrastructure projects, prompted hope that it could yet be approved.
Responding to the Northumberland MPs, Minister for housing and planning Matthew Pennycook said: "I understand from DFT [Department for Transport] officials that proposals in respect of Moor Farm roundabout are being considered by National Highways as part of the road investment strategy pipeline.
"While my Department and the DFT obviously work closely together on all aspects of legislation, policy and guidance concerning shared priorities, it is not for me to comment in any way on those specific proposals. My ministerial colleagues in the DFT are aware of her strongly held views on the matter.
"I will ensure that the points that she has made today are drawn to their attention. The Government are seeking to drive improvements across the whole system to prevent similar issues in future and to unlock development."