Business leaders have sent a hard-hitting letter to Chancellor Sajid Javid, saying they are “tired of opportunities to address the economic imbalances in this country being missed”.
The North East England Chamber of Commerce has written to Mr Javid ahead of the Government’s Spending Review calling for investment in the region’s infrastructure, a review of business rates and better funding for colleges.
Chamber chief executive James Ramsbotham has repeated previous warnings that a no-deal Brexit would be particularly damaging to the North East, and calls on the Government to do everything possible to avoid that outcome.
And Mr Ramsbotham describes information on the Government’s planned replacement for European funding - the Shared Prosperity Fund (UKSPF) - as so poor that it was “almost laughable”.
The Government’s spending review has been brought forward to Wednesday, with hints that it would contain one-off spending pledges for schools, police and the health service ahead of a possible General Election.
But with uncertainty around Brexit having hit key North East industries, particularly the automotive sector, the Chamber has called on the Government to prioritise the economy in regions like the North East.
Mr Ramsbotham said: “This is a critical time for our economy. The uncertainty surrounding Brexit is causing demonstrable harm to business confidence and performance and is resulting in delayed or cancelled investment. This harm is being compounded by the Government’s willingness to embrace ‘No Deal’ as an acceptable outcome.
“We remain steadfast in our opinion that ‘No Deal’ will be hugely damaging to the economy of the UK as a whole and to North East England in particular. The Treasury’s own analysis has shown us to be the region most exposed to any negative consequences of Brexit.
“The Spending Review is therefore an opportunity to both improve the resilience of our economy and to make good on your party’s manifesto commitment to close the performance gaps that exist between different regions.
“We do not believe that the North East is a problem to be solved. It is an asset which, with the right support and investment, can deliver so much more for the country.
“Constraints are placed on the growth of our economy by unreliable, inefficient and outdated infrastructure. Even in an increasingly digital economy, our businesses rely on physical connections to access markets, customers and staff. Large scale investment in transport infrastructure will pay dividends in terms of growth and productivity.
“Government must commit to the funding and rapid completion of both HS2 and Northern Powerhouse Rail (NPR). However, problems with existing rail infrastructure must not be overlooked. We call on you to back the Chamber’s Fast Track East Coast campaign for much needed investment in the East Coast Mainline. Within the next spending period, Network Rail must be mandated to address capacity issues on a vital artery for the country.”
The Spending Review comes at a time when recent progress on job creation in the North East have gone into reverse, with the region reclaiming its unwanted title of having the UK’s highest unemployment.
There has also been frustration that spending on transport schemes in London continues to outstrip money spent in the North East, with a recent study suggesting that the North East still receives just £1 in transport funding per person for every £7 spent in the capital.
A Government decision to review the HS2 rail scheme has also brought criticism from the region, with business leaders and politicians saying the scheme is essential to tie in with rail improvements in the North and reduce pressure on existing lines.
