The North East’s largest business organisation has urged Chancellor Jeremy Hunt to invest in the North East as a way of helping the UK out of its economic malaise.
The North East England Chamber of Commerce has written to the Chancellor ahead of the Budget on March 15, calling on him to commit to greater fiscal devolution and high-quality education which targets local skills needs. The Chamber has taken up the four Es of Mr Hunt’s recent economic plan - enterprise, education, employment and everywhere - but added three more: energy, exports and everyone.
Despite long-term economic challenges in the North East, the region has been punching above its weight in some areas, and last year was named as the top region in the UK for attracting inward investment. A devolution deal agreed between the Government and seven councils has also offered hope that local people can help drive improvements to the region’s economic fortunes.
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In a letter to Mr Hunt, Chamber chief executive John McCabe said that schemes which get the one in four adults currently classed as ‘economically inactive’ back into the workplace are vital for long term growth.
He added: “The North East is the ideal place to invest in the creation or growth of business. Last year, we created more jobs through inward investment than any other English region outside of London. This is one of our strengths. Investment in the North East is a down payment on future growth and prosperity.”
The Chamber’s pre-Budget submission covers a range of issues, including levelling up, the net zero agenda, skills and the impact of rising costs on business. It comes after recent surveys of business members have shown low levels of business confidence in the region.
Earlier this month, the International Monetary Fund (IMF) warned that Britain’s economy will slam into reverse this year as the cost-of-living crisis hits households. IMF economists said the UK was likely to see the worst performance of all the advanced nations, primarily due to high energy costs and a tight labour market.
Mr Hunt admitted that the UK faces “short-term challenges” but said that “the UK outperformed many forecasts last year, and if we stick to our plan to halve inflation, the UK is still predicted to grow faster than Germany and Japan over the coming years.”
Yesterday’s Bank of England decision to increase interest rates to 4% puts further pressure on many businesses and households, with the Federation of Small Businesses warning that many smaller firms have taken on substantial debt during the pandemic and the costs of paying that back are now increasing.
The number of companies falling into insolvency in England and Wales last year surged to its highest since 2009, official figures released this week showed. Total company insolvencies registered in 2022 leapt by 57% to 22,109 from the previous year, new data from the Insolvency Service revealed.
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