North East can overcome spending cuts
Oct 20 2010 by Andrew Hebden, The Journal
ONE of Britain's most senior business leaders last night tipped the North East to overcome "whatever George Osborne chucks at you" in today's spending cuts announcement.
CBI director general Richard Lambert praised the “resilience, the dynamism, and sheer bloody determination” that has seen the region withstand the recession.
And, whilst he acknowledged that the Comprehensive Spending Review would be painful for the North East, he said those qualities would see it pull through.
Mr Lambert also criticised the Coalition Government’s handling of the establishment of Local Enterprise Partnerships (LEPs), which will replace the soon-to-be-abolished regional development agencies.
“Our view, frankly, is that the Government’s approach to LEPs so far has been pretty much of a shambles,” he said. “We hope it’s not too late to get the show back on the road – which will require strong business leadership and sensible economic scale.”
Addressing the CBI North East annual dinner at the Hilton in Gateshead last night, he described the eve of the much-anticipated spending review announcement as a “strange and rather tense moment”.
“It’s a bit like if you were about to step into a boxing ring with Mike Tyson,” he said. “You wouldn’t know exactly where you were going to get whacked. But you’d have a pretty good idea that it was going to hurt.”
But he said the North East economy was in a “much more robust state” than in the past and highlighted success stories such as Nissan, Greggs, Shepherd Offshore, Sage and Thorn Lighting, as well as the survival of Northern Rock as reasons for optimism.
“(The North East economy) is much more diversified in character, and more entrepreneurial in nature,” he said.
“Despite all these changes, there are likely to be bumpy times ahead. The North East still has a relatively high exposure to the public sector, and an uncomfortable level of unemployment.”
Mr Lambert, who will stand down next year after five years at the head of the CBI, said most of his members supported the broad approach taken by the Government to tackling the public spending deficit.
“The general view is that the job’s got to be done, and we’d better get on with it,” he said. “The economy still feels a bit fragile to be taking very strong medicine, and could falter over the winter months and into the spring. But our best bet is that unemployment is now close to a peak, and that output next year could rise by something like 2%.”
Meanwhile, Greggs chief executive Ken McMeikan, who has taken over as chairman of the CBI in the North East, called on the region’s business leaders to rise to the challenge of filling the void left by the shrinking state.
And he said it was time for leaders in the region to work together rather than spending too much time on “inward-looking debates” if the North East is to avoid being left behind by other regions.
“At a very practical level, the most influential people need to give a little more of their time to get round a table and to generate ideas to lobby and put forward very intelligent, well-thought-through business cases for continuing to invest in the North East,” Mr McMeikan said.
