Tagged: UK economy

George Osborne’s plans for the North East are stuck in the slow lane

The full challenge facing George Osborne’s plan to create a “Northern Powerhouse” is today highlighted by a former global banker who points to years of transport failures in the region.

Jim O’Neill, former chairman of asset management at Goldman Sachs, has published a report from his City Growth Commission in which he describes how the UK economy is being held back as officials in Whitehall keep control of local transport and infrastructure decisions.

The call to hand the North a bigger say over its own future comes weeks after the Chancellor said he wants to rebalance the economy away from the South East, with a major new high speed rail network linking up the likes of Manchester and Leeds among the projects proposed.

But without handing city leaders a say over improving outdated infrastructure, the commission says, the Chancellor faces a tough task in matching that ambition with real change.

In his report Mr O’Neill warned that meeting Mr Osborne’s ambition would require “significant change” from Government.

The report, based on hearings in Newcastle and other cities, says Metropolitan areas like Tyne and Wear must be given a bigger say over their own future. The commission found that the UK loses billions of pounds every year as a result of poor, overly-centralised decision-making that fails to encourage greater links between cities.

Plans for a new high speed rail network must be improved so links from the North are prioritised, the commission said.

Talking of the need to strengthen Northern “metro” areas, Mr O’Neil said: “We recommend the Government considers making two bold decisions regarding its infrastructure policy. The first is to provide metros with a strong, powerful voice that can influence and guide decision making at a national level.

“For too long, our cities have not had a seat at the table, and this has been to the detriment of Northern metros in particular, as well as the economic growth of the UK economy as a whole.

“The second is to place connectivity between metros at the heart of any infrastructure investment, in particular via multiple transport links between cities and better broadband technology.

“Whilst the UK is starting to move in the right direction – with the creation of Infrastructure UK and the Chancellor’s recent proposal for a connected ‘Northern Powerhouse’ – there is still some way to go.”

Those transport concerns were last night backed by Gateshead MP Ian Mearns, vice-chair of the All Parliamentary Rail in the North group.

He said: “The difference in spending on transport between London and ourselves is about 520 to one, and even just changing the funding system now will not address the historic deficit we face. Time and time again we have lost out, and will continue to do so while the Government makes spending decisions based on congestion rather than on helping us grow.”

The lack of a Northern advocate in Government has again been highlighted after yesterday’s Government reshuffle.

Former regional minister Nick Brown warned: “The position of the English regions is weaker now than before the reshuffle. The surprise announcement of William Hague and the dilution of Greg Clark’s City Minister responsibilities leaves the English regions even less represented than they were before. This is a Home Counties reshuffle.”

The Government recently went some way to addressing the transport issues facing the region with its local growth fund announcement. With local contributions, the Government decision paved the way for £95m of infrastructure improvements. A “Provisional Allocation” of £78.7m was also announced for a number of further schemes due to start in 2016.

Ministers have also recently signed off on a new North East super council, the Combined Authority, which they say will be used to devolve new powers down to city regions.

Source –  Newcastle Journal,  16 July 2014

McDonald’s claims it brings £10.2million to Sunderland’s economy

 

 

> From the company whose employment  policies gave us the term McJobs, we now appear to have a McEconomy…

McDonald’s and its suppliers serve up £10million a year for Wearside, says the fast food giant.

 The firm has commissioned an economic report to mark its 40th anniversary in the UK, which it says shows the business and its suppliers make a combined £10.2million annual contribution to the Sunderland economy.

The ‘Serving the UK: McDonald’s at 40 Report’ was researched by Development Economics to assess the overall contribution McDonald’s has made to the UK economy, local communities, its employees, customers and suppliers since it first started operating in the UK in November 1974.

The report found overall the business and its supply chain was worth an estimated £2.5billion a year to the UK economy.

> Or, as one one person commented on the Echo website – 

Yes, look at all the jobs created by McDonalds in: the Coronary Care Unit; the Diabetes Clinic.

Add up the cost to the health of Sunderland’s school children: McDonald’s claims about its input into the economy does not seem so positive.

Source –  Sunderland Echo,  19 June 2014

The Budget: George Osborne told to focus on North East

he Chancellor has been told his Budget today must address the North East’s unemployment record.

Businesses, house builders and unions have said the Government needs to start growing all parts of the UK economy, not just the South, and urged George Osborne to use his Budget to tackle the number of people out of work in the region.

At 10%, the region’s unemployment rate stands as the highest in the UK, remaining around that level even as unemployment falls in large parts of the rest of the country.

The North East Chamber of Commerce has already written to the Treasury calling for a renewed focus on tackling job creation in all parts of the UK.

Policy director Ross Smith said: “We have seen the recovery really accelerate over the past year. We now need to see measures that will sustain this for the longer term and make it better balanced – not a series of pre-election gimmicks.

“North East businesses are making a huge contribution to that recovery, but doing so within an economic system that is still skewed towards the South East. We need to see measures that will capitalise on the region’s export success, energy expertise and capacity for growth.

“That includes taking better account of the regional implications of taxes such as fuel duty and air passenger duty, better balanced delivery of infrastructure, and greater scope to ensure skills training matches the labour market needs in this region.”

The need for a regional focus was repeated by Beth Farhat, regional secretary of the Northern TUC.

She said: “Most people in the North East aren’t experiencing a real recovery and in fact for many here it’s getting worse, with unemployment for women rising 20% in the last year alone.

“We need a Budget focused on creating more North East jobs, with better quality work alongside with fairer pay. Ministers should end their ideologically obsession with cuts and privatisations to public services and focus much more on a thought-out approach to developing the economy, particularly in regions like ours.

“When eight out of 10 private sector jobs are being created in London it’s clear the current plan isn’t working and the economy is still geared towards London and the South East at the expense of everywhere else.

“There is a consensus across the region about what we need to do, so I’d urge the Chancellor to hand us the economic tools, powers and investment needed to enable us to contribute to regional success and balanced national growth.”

Newcastle Council leader Nick Forbes said house building was a key way of kickstarting the North East. He said: “What we need is a tax break to incentivise house building on brownfield development sites – this would help deal with the chronic shortage of housing and make it financially viable for construction companies to take on more apprenticeships.

> Would it ?  Or are we just talking about more housing that the majority of us couldn’t afford even if we are working ?

“The Government has announced their intention on building a New Town at Ebbsfleet, but a tax break like this would help us rebuild areas like Scotswood and Walker Old Towns.”

And the North East-based Home Group has also had its say, calling on the Government to force through better use of public land, making it easier for firms to build.

The affordable housing group called for the creation of special Housing Zones in which, like the business-led enterprise zones, incentives would be offered to kick start the building process.

Source – Newcastle Journal,  19 March 2014

Newcastle City Council leader tells MPs to give big cities more freedom

Letting Britain’s big cities develop their economies could save Britain from future economic downturns, the leader of Newcastle City Council has told MPs.

Coun Nick Forbes said the economic crash was partly due to the nation’s dependence on London, and its banking industry.

But a country with a more diverse economy and a number of successful cities would be better able to cope if there was another crisis.

Coun Forbes told the Commons Local Government Committee that major cities such as Newcastle should be able to raise far more funding locally, for example by keeping a portion of the business rates paid by employers rather than handing the entire sum to the Treasury – and use the cash to promote economic growth. But he warned there also needed to a complete rethink of the way national government redistributed cash to local authorities, so that councils with the greatest need – such as those in the North East – received more money to let them provide essential services.

Newcastle recently cut spending by £35m on top of previous cuts.

The council leader was at Westminster representing the eight “core cities” of Birmingham, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield. He said: “At the moment we have been absolutely ravaged by the recession.”

What Newcastle wanted was the ability to grow its own local economy rather than relying on handouts from London, he said – and argued this would make the entire UK economy more “resilient”.

“We have seen how London-centric the recession was. It was the collapse of the banking system that tipped us over the edge into it. We wouldn’t have that if we had a better settlement around the rest of the country.”

Newcastle was already proving what it could achieve with more independence by using a scheme called Tax Increment Financing, which allows it to invest cash collected from business rates in regeneration projects to attract new businesses, he said.

“We have managed to stimulate development activities on a number of key sites in the city which wouldn’t have happened otherwise but at he moment those powers are exceptions rather than a rule.

“We could do so much more as a country and as cities.”

And he urged the Committee to recommend that councils be given more powers to cut business rates and attract employers that way.

“I can see areas of Newcastle . . where you might want to give us a discount that would allow the introduction of new businesses.”

> No mention of Scottish independence, but I’m sure there will be proponents of it north of the border watching this with interest…

Source – Newcastle Journal,  11 March 2014

Scaremongering & Celebrity Obsession Obscures True Picture Of Life In UK

> A masterful summing-up of the UK today…

Scaremongering and celebrity obsession ensures the true picture of life in the UK remains forever obscured, writes Joyce McMillan

It’s never a good idea to fly into a rage in a public place; but there it was, a provocation so absurd and extreme that fury seemed the only sensible response. It was a magazine cover, lovingly displayed in a shop in central Edinburgh a few weeks ago; on it was a picture of Kate Middleton, the Duchess of Cambridge, with a caption that read, “Not only the woman of the year, but the woman of the century.”

No-one seemed to find this odd, even though the century has barely begun; no-one was objecting, at least in public, to the idea that the perfect role-model for a generation of young women, struggling to earn more than £7.50 an hour, is a woman whose career suggests that the world is your oyster, so long as you can arrange to be born rich, to marry into the royal family, and to devote all your energy to standing around looking silently pretty in weirdly old-fashioned clothes.

And although the bizarre values of the celebrity magazine that published this cover might seem a far cry from the current debate about the UK economy, and the strange “recovery” it is now experiencing, it seems to me increasingly clear that the nation’s tolerance for the economic policies to which it has been subjected since 2008 is somehow bound up with the hallucinatory extremes of celebrity culture that now pervade our national life, inviting people to empathise not with themselves and those around them, but with the rich and famous.

This week in the House of Commons, the Tory benches could be heard roaring with joy at the news that British economic growth has returned to the heady level of 2.4 per cent a year, and that unemployment has dropped to just over 7 per cent. And when Ed Miliband tried to point out that this “recovery” is not much use to an average British earner whose real income is still £1,600 a year lower than it was in 2008, he was literally shouted down, by Tory MPs hysterical with triumph at the news that their beloved financial sector is once again growing by leaps and bounds, promising ever more lavish times for their friends in the City.

Ed Miliband is in the right of the argument, of course, so far as the current round of statistics are concerned. As a TUC report released on Monday made clear, the current increase in economic activity in Britain is mainly confined to London, with unemployment still actually increasing in the north-east and south-west of England. 80 per cent of the new jobs created since 2010 are in sectors where the average worker earns less than the living wage of around £7.95 an hour. Many of those “in work” are on poverty wages, and are being forced to work part-time or on zero hours contracts.

And astonishingly, the government actually includes in its “in work” figure the large number of people – more than a million, since 2010 – who have been forced to work for nothing, either in unpaid internships, or as part of the government’s own workfare scheme.

The truth about Britain, in 2014, is that ours has become a low-wage, low-output, low-productivity economy, with chronic under-employment and little job security, and with economic growth driven only by increasing household debt; indeed it would be interesting to know what proportion of the current upturn is directly related to the recent development of yet another London property bubble, supported by the government’s generous help-to-buy subsidies to those already on the property ladder.

If this is the real story of what’s happening in the British economy, though – a steady corrosion of ordinary workers’ earnings and benefits as a share of the national wealth, all designed to pay for a deficit almost entirely caused by the banking crash of 2008 and the subsequent bailout – it is not a story that most people have ever heard. The controlling narrative, as we all know, is the one about how the financial crash was caused by excessive public spending and an over-generous benefits system; the one about how we were all “living beyond our means” and have to pay the price; the one about how blaming rich bankers for the crash they caused, or expecting them to change their behaviour, is pointless and immature; the one about how migrants and benefit scroungers are the problem, and attacking them will provide a solution.

And it’s not difficult to grasp how this desperately skewed account of reality – actually false at every point – meshes with a television schedule that ranges neatly from Benefits Street to Strictly Come Dancing, offering viewers first a precisely-chosen group of underclass hate-figures, then a sustained orgy of identification with a series of celebrities; it’s a perfect, instinctive symphony of elite ideology, designed to divide ordinary people against themselves, and so to continue to rule.

All of which is elementary stuff, of course, for any boss class facing troubled times; distract the people by hatemongering and scaremongering, provide enough glitzy distractions and royal events, convince them that economic problems are just symptoms of personal moral failure – and hey presto, you can fool most of the people, almost all of the time.

And this time, too the tiny elite who are now trousering an ever-greater share of the world’s wealth have a peculiarly strong advantage, in that there is almost no organised resistance; just the odd protest, a brief and disparate occupy moment, and a steady thrum of dissent from the beleaguered trade union movement, which is about to become the main victim of the fiercely authoritarian Lobbying Bill currently passing through Westminster.

The idea that there is no alternative to George Osborne’s tired 1980’s neoliberalism may be intellectual and historical nonsense, in other words, disproved by the very breath of history, here in Britain and elsewhere.

Yet unless those of us who oppose his world-view begin to unite, to organise, to start arguing out a more truthful and compelling narrative in every workplace and community on the planet, our chances of challenging this new age of extreme inequality will be slim indeed; as slim as Kate Middleton’s tiny waist, and – in the eyes of a bamboozled generation – not nearly so glamorous, so interesting, or so important.

 

Source – The Scotsman, 23 Jan 2014

What a difference a day makes

Yesterday we posted an item of “research” that stated that –

Two thirds of the region’s Small and Medium Sized Enterprises (SMEs) intend to recruit new staff in 2014, a study shows.

Research by Yorkshire Bank also found North East businesses which plan to create new jobs expect to grow employee numbers by 11%.

It also found that 64% of North East SMEs intend to recruit new employees.

On average, the North East’s 135,000 SMEs expect to recruit more than 7% more staff. If this figure is applied to the North East’s total SME workforce of 429,000, almost 31,000 new jobs could be created.

Alan Young, regional director for Business and Private Banking with Yorkshire Bank in the North East of England, said: “SMEs are crucial to the UK economy and its emerging recovery and we will continue to support them in 2014.”

What a difference a day makes ! We did warn yesterday that this was at best a guess and not a  statement of fact. Today we learn that –

A quarter of small and medium-sized firms are supporting their businesses with personal savings and handouts from family and friends, a report has claimed.

Business funding specialist Bibby Financial Services, which commissioned the research, said the reliance on personal finance prevented firms from being able to take advantage of the first stage of economic recovery.

The survey revealed that almost half of small and medium-sized enterprises (SMEs) used just one source of funding, with 20% of firms saying they relied on a bank overdraft and the same amount again using a bank loan.

Source – Newcastle Journal, 01 Jan 2014

Two days, two different pieces of “research” that appear to contradict each other. Who do you believe ?

Neither, I guess. You can only keep on keeping on as best you can, hope for the best but plan for the worst.

.

Study “is boost for North East jobseekers”. Maybe.

Two thirds of the region’s Small and Medium Sized Enterprises (SMEs) intend to recruit new staff in 2014, a study shows.

Research by Yorkshire Bank also found North East businesses which plan to create new jobs expect to grow employee numbers by 11%.

It also found that 64% of North East SMEs intend to recruit new employees.

On average, the North East’s 135,000 SMEs expect to recruit more than 7% more staff. If this figure is applied to the North East’s total SME workforce of 429,000, almost 31,000 new jobs could be created.

Alan Young, regional director for Business and Private Banking with Yorkshire Bank in the North East of England, said: “SMEs are crucial to the UK economy and its emerging recovery and we will continue to support them in 2014.”

Source – Newcastle Journal,  31 Dec 2014

Wow ! Great news, eh ? Happy days are here again !

Or maybe not. The important passage from the above is :

On average, the North East’s 135,000 SMEs expect to recruit more than 7% more staff. If this figure is applied to the North East’s total SME workforce of 429,000, almost 31,000 new jobs could be created.

And the important  words are expect and could.  All this amounts to  is a guess at what could happen, if the universe and, more to the point, the neo-liberal capitalist system we live under, played by the “rules”.

Its just as likely that the system will throw these SMEs to the wolves, should they decide it suits their agendas.

And produced by a high street bank ? With their well-proven  predictive and economic  insights ? Do me a favour…