BUSINESS Secretary Vince Cable has defended the need to make "painful" cuts - but insisted the Government is helping the region recover economically.

He acknowledged the North East, along with Wales, had struggled the most in the UK in terms of achieving growth and employment in recent years.

Unemployment in the North East rose by 11,000 in the three months to November to 153,000 people, or 12%.

Mr Cable said “unpleasant” cuts were vital to maintain Britain’s economic credibility in international money markets to deal with the national deficit.

But it was now time to end the “blame game” over who caused the wider financial crisis to focus on how to solve it, said Mr Cable.

And he declared the coalition was taking action to help the North East economy, although it was “not going to be easy” to tackle the North-South economic divide.

Mr Cable said unemployment statistics illustrated the scale of the problem, with figures showing Wales and the North East of England struggling.

“The idea of the North lagging behind the South and South East, then that’s happened for a very long period of time and it’s not going to be easy to turn that around,” he added.

But Mr Cable said there were reasons for optimism. The Redcar steelworks had reopened and the Government had taken a range of measures to help areas affected by cuts in public sector employment, such as the North East.

The Government was rebalancing the economy away from an over-dependence on the South East, he said, with its multi-billion pound regional growth fund playing a key role in boosting private sector jobs.

Mr Cable said for every public pound spent, several private pounds were levered in.

He yesterday confirmed that cash from the fund would go to another North East firm. Nifco UK, in Stockton, will use £1.65m towards an £11m project to equip a new factory and help the company move into the market for electric vehicle batteries. This is expected to create 128 new jobs and safeguard 158 current jobs.

He added the Government was boosting apprenticeships along with innovation centres developing new technologies, and supporting manufacturing and exporters.

A scheme to tackle youth unemployment was another example of action, said the Business Secretary.

Asked who voters should blame for the North East’s current situation, he said: “I could score party points, but I’m not sure it’s productive.

“This crisis we’re dealing with originated quite a long time ago with the bubble of the last decade, the boom in financial services that got out of control, the over large banks, the debt bubble and all the rest of it,” he said.

“The fact is that the problem is deep-seated. Dealing with it is going to involve some painful measures, which do involve cuts in public spending.

“And if I understand it correctly the main opposition party have now accepted that. So, in a way the blame game has hopefully reached a more mature level.”

Mr Cable was said he was now more positive about local enterprise partnerships, which bring together local council and business leaders.

They replaced regional development agencies, the abolition of which the Liberal Democrat Cabinet minister initially described as “Maoist”.

He said they were business-led and more closely related to local areas, adding: “I do get a sense already that although they started with no money and no blueprint, some of them are generating a real sense of energy.”

Decentralising powers to councils, for example over transport and housing, as well as handing them new revenue raising powers would also help boost the economy, said Mr Cable.