Rising unemployment dwarfs the Coalition’s Keynes-lite Growth Fund
Almost half the 27,000 jobs supported by the Coalition’s growth fund, announced today, are in the north of England, described as Government attempts to “counter job losses in areas most dependent on public sector employment.” But unemployment has risen by 43,000 in the two Northern regions since the recession (January ’08). It’s 10.2% in the North East. Around 107,000 are jobless in the 2 regions, four times the direct jobs announced today. The Business Secretary said the £450m in grants for 50 companies would leverage £2.5bn of private investment. It’s welcome, but nothing like enough. The investments will doubtless be spread over time. And no Minister is claiming that this is a green stimulus programme.
Does industry have an appetite for a Government-led growth strategy? Yes – BIS received 464 bids totalling £2.8bn. But that’s double the whole three-year, £1.4bn programme. Labour came late to an active industrial strategy. But Budget 2009 provided for a £1.4 billion package of targeted support to boost Britain’s low-carbon sectors. The Coalition has wasted a year scrapping the Regional Development Agencies, although an independent assessment has shown that they brought real and lasting economic benefits.
On support for green industries, a quick trawl finds a handfull – Nifco UK (Teeside), awarded £1.65m to expand its automotive customer base and the supply of critical components for new vehicles including electric vehicles (128 new jobs and the safeguarding of a further 158). Kirkby-based chemicals company Ames Goldsmith benefits in new plant for silver powders for use in electronic and solar energy sectors.
|Region||Direct jobs||Indirect jobs|
|East Midlands and South East Midlands||1730||3140|
|South East & East of England||427||361|
|Yorkshire & Humber||7628||2716|
Across the whole North-east the successful applicants led by Local Enterprise Partnerships said they would create more than 5,200 direct jobs and more than 8,300 indirect ones. Among the factories being secured by grants is German sweet maker Haribo’s Wakefield plant, which the Business Secretary said: “[It’s] a factory that would probably have closed down and moved somewhere else but because of the additional investment we are willing to make, through a project on the same site, both have been safeguarded and expanded. So we are safeguarding over 500 jobs and creating almost 300 new ones.”
And step forward the banks – contributing £30m (!) to this stimulus. Lord Heseltine announced: “I am also pleased that a number of high street banks are joining the Government in supporting microfinance through the Community Development Finance Associations. £30m of Regional Growth Fund will be matched by a further £30m from two banks.” So that’s alright, then.