10-point plan to boost economy

Jan 13 2009 By Adrian Pearson, The Journal

Businesses need action to survive downturn

NORTH East businesses warned they face "rapidly deteriorating" conditions as the country slips into recession.

The North East Chamber of Commerce last night told the Government urgent action was needed to ensure the difficulties facing businesses did not spiral out of control and lead to much deeper problems in the region.

Businesses replying to a Chamber survey reported a dramatic downturn in sales and orders made, prompting fears of a further large scale job losses still to come. Manufacturing business in Northumberland alone have reported a huge drop in sales, with the region nationally reporting some of the sharpest falls in sales.

Last night the Chamber said the region would find it much harder to survive the recession if the Government did not start to reduce "needless" business taxes and red tape such as empty property rates.

James Ramsbotham, NECC chief executive, said: "The North East has very strong businesses with good medium and long-term prospects that are facing tremendously difficult short-term challenges. We cannot allow businesses that have the potential to drive economic growth for years to come to be weakened by any failure to respond.

"The data in NECC’s business barometer should be seen as a call to action for those organisations that can bring the change needed to help companies get past these challenges."

Despite experts insisting the region is now well placed to survive the worst of the recession, North businesses have been particularly hard hit by the economic downturn, with 1,300 employees made redundant at Northern Rock, mainly at its sites in Gosforth, Newcastle, and Doxford Park, Sunderland.

And last week Nissan UK announced the loss of 1,200 jobs at the UK’s biggest motor plant in Sunderland.

Kevin Rowan, the TUC’s regional secretary, said he was still hopeful the Government would offer enough support to help the North avoid another economic collapse similar to that seen in the 1980s.

He said: "I think today’s jobs summit demonstrates how much pressure the Government is under to tackle these conditions and that at the moment they are doing all they can to help.

"There is a lot of support available and more coming but the biggest problem that still has not been addressed is the huge problem facing businesses trying to access bank credit.

"Yes the region is better placed than it was during the last recession but I think the employment figures of late and the announcements made this year show we are still going to suffer very badly in the next few months in terms of jobs losses."

Mr Rowan’s concerns follow comments by the Prime Minister recognising the help businesses now need.

In an interview Mr Brown said: "We want to resume the normal functions of banking – sometimes by using non-bank institutions to do so because the banks are not able to start that function or are unwilling to do so."

Click here to read the Chamber of Commerce 'North East Business Barometer Q4 2008' report, in full.

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