The Government’s promise to rebalance the economy has yet to be realised with ambitious rhetoric failing to translate into meaningful action.
We are still too over-reliant on the financial sector and the pre-2008 economic model which led to the global economic crisis. If we are to rebalance the economy both in relation to our over-reliance on the financial sector and the revival of the regions the Government must provide much more targeted support to encourage economic activity through selling goods and services abroad.
This requires investment in education and training to provide the 21st Century skills required to compete in a global market. This will require a more innovative approach than the blanket policies of the past, or funding streams for training courses that provide little benefit. The successful solution will invariably be those which are tailored to the local labour markets. There is no better example of this than the East Durham Employability Trust which works with NEETs (Not in Education, Employment or Training), providing real work experience on real contracts for local businesses. The results speak for themselves, of the 24 work experience placements in the last 12 months 21 young people have secured employment, a success rate of 87.5 per cent.
The majority of our manufacturing base remains in former industrial areas, in East Durham we have world leading companies such as Caterpillar, NSK, and the GT Group, but we need to do more to encourage their development and growth through a tax regime which encourages investment in plant, machinery, Research & Development and skills, as well as incentives for export businesses operating and moving to areas of high deprivation. Local businesses are already working together to attract new investment, companies and employment opportunity into the area and have established the Peterlee Business Park website to highlight the opportunities available. (For more information please visit www.peterleebusiness.co.uk)
The economic recovery has yet to reach beyond London and the South East, but if we are to lead a national recovery we need to unlock and utilise the skills in Britain’s former industrial areas, which represent nearly a third of the population. The coalfield communities have some of the lowest ‘job destiny’ figures in the country with just 48 jobs in the Durham coalfields per 100 residents of working age. The Government have pursued policies they state are to “make work pay”, however, in reality welfare reform and benefit cuts have been counterproductive. They have pushed the poorest households further into poverty, impacting people in and out of work, with figures showing that children below the poverty line are now twice as likely to come from homes with work, than homes without work. Welfare Reforms have done nothing to support the recovery in the weakest local economies with cuts taking spending power out of the area creating further pressure on employment. Cutting benefits will never reduce the number of people out of work until there are more jobs available. In reality, the only sustainable way to bring down welfare spending is through growth in the local economy, and rebuilding our former coalfield and industrial communities has the potential to slash billions from welfare spending.
The Government have an important role to play through public procurement and investment in infrastructure which lays the foundations for economic growth but also provides an immediate jobs boost and a source of new orders for business.
However, infrastructure investment has been focused on London. Research by IPPR North found that where infrastructure projects involve public sector spending, the spend per head of population is £2,595.68 compared to just £5.01 in the North East, which only widens the North South divide. The Governments complacency in this matter can be clearly highlighted by their decision to exclude Scotland and the North East from HS2, which will not reach the region for at least 20 years. If the Government believe HS2 will drive future economic growth there can be no excuse for denying some of the most deprived communities in the UK access to the service. In the meantime, those campaigning for the dualling of the A1 continue to have barriers put in there way despite showing it could generate £376 million for the local economy, and could create 2000 jobs and 12,000 new homes.
Public procurement contracts provide another opportunity to expand employment and training opportunities. While competition laws prohibit awarding a contract to a specific company based on location there is an opportunity to include certain requirements in contracts that would support local communities such as a need to create apprenticeships, recruiting the long term unemployed, a promise to use local supply chains, and a commitment to assign a proportion of sub-contracting business to small firms. It is imperative that we do all we can to support local business and not seek to award contracts based solely on the lowest price, but also the wider benefits they offer.
I welcomed the opportunity to meet the Business Secretary, and was encouraged by his support for developing new employment opportunities in the region. However, after four years of Coalition Government we no longer require empty promises but firm action that is seen and felt in our communities.