Regional differences in the Budget
The budget proved a mixed bag for the English regions. The TUC welcomes the government’s commitment to fund key transport projects in Manchester, the North East and Birmingham as well as the upgrade of the rail link between Liverpool and Leeds. Likewise the announcement of a ‘Regional Growth Fund’ is welcome – though the extent to which this fund will counter-balance the significant reductions in business support seen through the short term cuts to RDA funding and key infrastructure spending in the regions remains to be seen.
Less positive is the news that London and the South East will not benefit from a new scheme to give NIC tax-breaks to new businesses. While the TUC is sceptical about the value of these tax-breaks in creating good quality employment – particularly when private sector demand is low and is likely to be hit hard by the spending cuts – the fact that London and the South East have been excluded sends out all the wrong political messages.
While many parts of southern England are prosperous, its clear that this prosperity is not evenly distributed. A recent TUC analysis of Jobseekers Allowance (JSA) claimants and vacancies advertised in Jobcentre Plus showed that London has nearly eight JSA claimants for every job vacancy. Seven of the top ten unemployment black spots are in London, including Hackney where claimants outnumber vacancies by a shocking 24 to 1, and one is in the South East.
In addition, contrary to popular opinion, its also clear that spending cuts could have a devastating impact upon public sector employment in large parts of the South & East.