North East gives budget wishlist to Chancellor to help economy
Apr 22 2009 by Adrian Pearson, The Journal
ALISTAIR Darling has been urged to make the changes needed to ensure the North East economy does not buckle under the weight of the recession.
When the Chancellor stands up today to deliver his Budget he will do so knowing his Treasury department has been told it must act now to save Northern cities from mass unemployment.
Tax changes, investment in renewable energy and permission for city leaders to borrow millions in regeneration cash all form part of detailed submission sent to the Government from within the region.
With the recession deepening, the North East is again united in its call for taxes on empty business properties to be reconsidered as companies face the double blow of paying the Government just to own a closed down shop.
And the Government has been urged by council leaders in Newcastle to look to America where a city borrowing scheme has allowed spending chiefs to borrow millions of pounds to spend on vital construction jobs.
Other groups voicing concerns include pub landlords who claim a rise in beer taxes today could be “another nail in the coffin” for many struggling community pubs.
Last night Ross Smith, head of policy at the North East Chamber of Commerce, said it was vital the Chancellor seized the “limited opportunities” open to him and backed businesses.
He said: “I think out of all our aims here the two with biggest impact would be the changes to the empty property rates and bringing back staff hire concessions.
“Both of these measures would not need much to be done to provide help and while giving confidence to businesses just as they need it.
“There are certainly signs that we are in better position already. In 2008 we were seeing some rapid changes in the economy that caused a lot of concern.
“We are now at a point where there is a sense that while things are not improving they are not deteriorating quite so dramatically and businesses can see a way through this situation.
“This is exactly the point where we need steps to help the recovery, and that is what the onus should be on the Chancellor tomorrow.”
Tony Whelan, managing director of Whelan Construction, backed those calls and warned that without tax breaks the economy would get worse.
He said: “Tax incentives for those bringing more people into the workforce may also help halt that slide towards some of the highest unemployment figures in a generation.”
Mr Whelan added: “Unfortunately, I’m not expecting any ‘magic wand’ treatment.”
Peter Allen, the Newcastle councillor tasked with trying to find regeneration cash during a recession, said the Government could, if it wanted to, hand over access to more funds at very little cost.
He said: “I think the Chancellor has very limited scope to help the economy here and that is why we are saying here is a way to let us spend for little cost to yourself. All he has to do is let us keep the increased rates generated if we spend on city infrastructure and we can then enter into sensible borrowing which will create jobs in the city.”
Other pressure groups have said there is still room for optimism in the Budget. The North East could be the biggest winner in any plans to back renewable energy hotspots.
The British Wind Energy Association has told the Chancellor Blyth and North Tyneside could be the perfect place to locate a “wind industry hub” which needs Government support to ensure the infrastructure is in place to attract millions of pounds in private sector investment.
Dr Gordon Edge, director of economics and markets, said: “The North East is one of the leading candidates to be the manufacturing hub for wind energy in the UK.
“This could mean as many as 20,000 jobs created in the region. This jobs bonanza will only be delivered if Government seizes the opportunity and puts in place a pro-active strategy for winning this business.”
There is a sense that while things are not improving they are not deteriorating so dramatically
