Lord Bates: The North East of England shows policies are hurting - but working

Lord Bates of Langbaurgh was the Conservative Member of Parliament for Langbaurgh 1992-7, and Paymaster General 1996-7.

As 2012 draws to a close there are reasons for hope to be found in the North East of England that suggest that in an area of traditionally high unemployment, and heavy reliance on the public sector, the policies being pursued are beginning to yield results.

Employment

In the Labour Force Survey from this month, we can see that there are now more people in employment in the North East of England than in 2010 and unemployment has fallen over the past year by 17.9% in the North East of England.

KPMG's Report on Jobs from earlier this month suggested that many of those entering jobs are being able to find sustainable employment - as the growth in permanent job placements in the North of England is at a 29 month high. Apprenticeships have also increased: a parliamentary question answered on the 4th December revealed that the number of apprenticeships in the North East of England has more than doubled since 2009/10 from 18,510 to 37,760 in 2011/12.

Infrastructure

New homes construction in the North East during the first three quarters of 2012 was 25% up (3,048) on the same period in 2011 (2,427) and 47% up on the same period in 2009 (2,073), according the NHBC Quarterly New Homes Statistics for 2012.

As the Chancellor, George Osborne, announced in his Autumn Statement, the A1 will receive a £317 million investment to be upgraded to motorway status. The North East is currently the only region to the country not to be connected to a neighbouring region by motorway, and connection to the motorway network will provide a major boost for trade and foreign direct investment.

Government help

Another parliamentary question answered this month showed that the North of East has received £382 million of investment from the Regional Growth Fund, which has helped create or safeguard 72,000 jobs. The Government's tax policies have also made a great difference for working people in the North East: since 2010, 90,000 people in the North East have been lifted out of Income Tax altogether as a result of increases in the basic tax threshold.

Santander has also increased lending to Small to Medium Sizes Businesses in the North East by 24% over the past year, as a result of accessing finance from the Government’s Funding for Lending Scheme.

Private investment

The Government announced the go-ahead for a £4.5 billion investment by Hitachi in Newton Aycliffe for a new generation of agility trains which had been shelved by the Labour government in February, 2010. The factory will create 730 skilled jobs – hundreds more than had been planned originally – with a further 200 workers needed to build the test track and the plant itself.

Another exciting turnaround is with Nissan’s car production plant in Washington, near Sunderland, which will soon become the first factory in the United Kingdom ever to produce more than 500,000 cars per year. It has just announced the investment of a further £250 million to build the luxury Infiniti model. In January 2009 Nissan announced they were cutting 1,200 jobs from the 5000 workforce. The new investment will take employment at the plant to 6,000: a record level.

Perhaps the most symbolic investment in the region was in April 2012, when the famous blast furnace on Teesside, which was mothballed under the Labour government in February 2010 with the loss of 2,000 skilled jobs, was re-lit following a billion dollar investment from SSI of Thailand. Soon the plant will be back to full production, employing 1,800 people and producing 3.5 million tonnes of steel each year, all of which will be for the export market in Asia.

Business growth

North East towns are seeing record numbers of new business start-ups: Darlington saw record start-ups of 140 in Q1, 2012 and Sunderland saw it’s highest ever level of company formations - 171 in Q2, 2012. In Newcastle and Middlesbrough, start-ups in Q1 and Q2 2012 saw a return to pre-2007 levels of company formation.

Exports from the North East are also promising: according to HMRC and UKTI, they reached record levels in the year to June 2012, amounting to £14 billion - an increase of 7.8% on the previous year. The North East is now the only region in the UK which exports more than it imports.

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There is no doubt that bringing the economy and the public finances back from the brink over the past two and a half years have been extremely tough for many hard-working families but there are reasons to hope that we are through the worst and the North East of England will emerge from it with a stronger, more dynamic and more sustainable economy than it had when it went into it.