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Chancellor Must Act to Rebalance Economy

 

The region's largest business membership organisation has called on the Chancellor to take action to ensure the North East is at the forefront of economic recovery.

The region's largest business membership organisation has called on the Chancellor to take action to ensure the North East is at the forefront of economic recovery.

The North East Chamber of Commerce (NECC) urged George Osborne to take immediate action if he is serious about rebalancing the UK economy between the regions.

In a letter to the Chancellor ahead of his Budget Statement, NECC called for radical proposals to support regional business strengths to boost growth.

The submission, from NECC Chief Executive, James Ramsbotham, urges the reprioritising of spending, targeted tax reductions and accelerating much-needed infrastructure spending.

It also calls for planning reform; further easing of monetary policy to boost credit availability to businesses and the priority placed on investment and exports.

Mr Ramsbotham said:

"If the Government's aims of re-balancing towards the private sector, towards exports, and towards manufacturing are to be achieved, we believe re-balancing towards regions such as the North East which have the potential to perform much more strongly is essential.

"The region's sustained excellence in export performance contributes enormously to UK Plc, but by playing to strengths in this field and manufacturing and utilising regional capacity for further business development the North East could be contributing so much more.

"The region's businesses continue to generate wealth and jobs for the region, our export performance is a demonstration of that, but if we are to fulfill our economic potential we must have the same opportunity as the South East to be globally competitive.

"While we appreciate that change does now occur overnight, we are demonstrating the strategic and economic value a high-speed rail network would bring to the region or much needed upgrades to the A1 and A19, highlighting that our airports continue to be hit by heavy taxation and that acceleration of broadband funding would enormously boost our digital network.

"Without addressing these issues immediately the North East will always be entering the fight for economic growth with one hand tied behind its back."

NECC, which represents more than 4,000 businesses who in turn employ around 30% of the region's workforce, has called on more support for exporters to build the North East's reputation as the only region in the country with a consistently positive balance of trade and the highest level of exports relative to GDP, both driven by our strong manufacturing base.

NECC's North East Business Barometer survey shows exports continuing to grow but also demonstrates that action is required to address a worryingly weak domestic demand, which is leaving the service sector flat.

NECC urged the Chancellor to do all he can to protect business interests in the face of immense cuts to the public sector in the region, particularly highlighting a number of issues that could be tackled in the emergency Budget:

• Reducing regulation: NECC has called for swift action to deliver planning reform to maximize North East's environmental resources and lack of congestion.

• Credit easing:
Must be delivered through an agency with strong connections to the regions to ensure flow of credit to businesses in all parts of the country.

• Reprioritising expenditure to promote investment and exports:
This includes increasing the annual investment allowance, restoring empty property rate relief, promoting and rewarding energy efficiency and additional export support.

• Boosting growth by reprioritising tax and spend policy: This includes a National Insurance reduction and enhanced capital and investment allowances. This would aid regions which retain a strong manufacturing base, such as the North East.

• Accelerated infrastructure spending:
Upgrades to important projects have been postponed – some indefinitely – leaving this the only region in the country not linked to the national motorway network. Re-starting these schemes should be prioritised. Furthermore, the provision of broadband funding should be accelerated to help speed up investment in broadband infrastructure in the North East.

Mr Ramsbotham added:

"The North East does not want, nor does it require special attention, but we do deserve parity with the rest of the UK when it comes to investment in planes, trains and automobiles infrastructure, energy, broadband networks and taxation.

"Our broad business base has absorbed the impact of the recession and if the private sector is to lead the recovery then we require the tools to helps us do the job."

{phocadownload view=file|id=52|text=Autumn Statement 2011 - NECC Submission|target=s}