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Northern Echo Article
I have had some good reaction to the article below, which was published in the Northern Echo today:
The Northern Echo report about employment last Friday only looked at on side of the equation – job losses. It was myopic picture of a regional economy which is dynamically changing. Jobs are being created too – in Tees Valley marginally more gains than losses in recent months. Our exports are strong, the manufacturing sector is investing and a new type of Government support is emerging which targets help in different ways.
David Cameron has been demonstrating something that has gone out of fashion in politics: integrity. The Government has decided to stick to simple orthodox economics – spend only what you can afford; borrow only what you can repay and only cut taxes if you can balance the books.
Everyone knows we need the economy to grow. But that growth cannot come at the expense of losing world-wide credibility on public finances. The Government's bitter medicine is slowly starting to work. I don't duck the hard facts that times are tough but some indicators are starting to move in the right direction. Inflation is starting to come down. Many North East people have kept more of their pay packets as lower rate tax thresholds rose. Interest rates have been low and stable for many months, saving a fortune in household mortgage repayments.
The Regional Growth Fund has put targeted resources directly into areas like the North East. The Enterprise Zones offer incentives in areas of need. The cuts to corporation tax will give companies a bit more cash to play with when they invest.
In addition there is the smart idea of using public money to ease credit for small and mid-size firms; which need access to funds on better terms than banks are providing at the moment.
Our regional economy is in a period of transformation. Change is hard and it hurts. But to have a long term sustainable future we need successful private sector firms. Some sectors are performing really well. The offshore supply sector is a good example, so it's the automotive supply sector. There are four new factories and facilities projects in the Tees Valley: Nifco the automotive parts manufacturer; Lotte Chemicals; Cleveland Potash; the AV Dawson facility on the River Tees. Also, TAG Energy recently opened the largest factory in England in five years. Two major inward investment projects have happened in the last 12 months: The purchase of the Corus steel plant by Thailand's SSI and the announcement that Hitachi trains will locate its massive UK production facility at Newton Aycliffe.
Tees Valley was one of the first Local Enterprise Partnerships and won 10% of total of the first Regional Growth Fund bids. The newer Northern LEP is now working; its local authorities and businesses preparing serious proposals. Targeted initiatives have been given the green light for Government funding in recent weeks: Neptune Energy Park on the River Tyne. Central Gateway, in Newcastle leading to development of Stephenson Quarter. The Enterprise Agency Consortium - six leading enterprise agencies combined with The National Enterprise Network and Barclays Bank with a business start-up programme for the North-East.
Since September 2010 over 36,000 new jobs have been announced - I know this because they were covered in the inside pages of The Northern Echo and I keep a tally - but most are in small firms and wouldn't stand out as a front page headline. When added together they are significant and are part of the rebalancing our economy so urgently needs.
Critically important, more people are establishing small businesses. These did not figure in the Northern Echo's report on Friday. However, the Barclay's Regional Business Index now puts the North East in first place for SME confidence, up from fourth place last year.
I run a small but growing business. Business like mine create jobs, keep wealth here and are tremendously loyal to staff in hard times. In the last two months my business has created two jobs; both pay higher than minimum wage and were given to young unemployed people. The second job was created after a company called Triage contacted me. They have been hired by Government to persuade employers to hire registered unemployed people. It saves going through the hassle of job centre advertising and pre-screens applicants. In other words, the system accesses the all-important 'unadvertised jobs market'. It is an innovative approach and part of a wide ranging series of initiatives that form the Government's Work Programme.
I was at a meeting of the Institute of Directors recently and witnessed the frustration among business leaders and entrepreneurs about the media talking up our economic woes but ignoring good news. The Northern Echo cannot be accused of that but the mood music from Labour can. Labour's commentary starts from a premise that prospects are bleak and then highlights the worst but offers no credible alternatives while refusing to apologise for getting us in the mess in the first place.
'There is no money left'; the only real truth spoken by a Labour politician in recent times in a jokey note from a Labour Treasury Minister to the new team after the last election.
Fortunately, in an uncertain world North East businesses are showing real resilience and are creating jobs when possible. The Government has set out to deliver macro-economic policies which will create the long-term stability that these businesses need to invest and grow.