GEORGE Osborne has met with North East business chiefs to discuss hopes of creating a £100m infrastructure fund.
On a visit to the region, the Chancellor was asked to back plans by a council and business partnership which would see new firms bring thousands of jobs to the region.
Mr Osborne saw the first local enterprise partnership success when he visited the Sunderland site of the £22m Vantec logistics factory yesterday.
Vantec are one of the first companies in the UK to set up in a new enterprise zone in which firms are helped with various tax allowances and broadband commitments.
The Chancellor agreed to extend the enterprise zone after the partnership told him of the interest from other firms looking to move near the Nissan site in Wearside, River Tyne and Port of Blyth.
Now pressure is mounting on the Government to back a £50m regional growth fund bid by the partnership. If successful, the board of council leaders and business chiefs will use the money alongside £22m secured for infrastructure work. Further funding will be sought to bring the total to £100m.
Mr Osborne’s enterprise zone extension comes with a 12-month deadline and follows lobbying by the partnership’s chief executive Ed Twiddy, a former senior Treasury officer.
Asked if there needs to be a sense of urgency to job creation in the region, the Chancellor said: “Yes we want to see more jobs and investment in the North East, we have a good example of this here and we want to see more. But I think the local enterprise partnership has done a great job, they made a very compelling case for why the enterprise zone should be expanded, they have had a lot of interest in these sites and I have been very happy to say yes let’s do that.”
Pressed on whether there was enough happening to offset the damage of public sector spending cuts, Mr Osborne said: “It is not just here, there are other North East projects, but what I would say is the region, like the rest of the country, needs more private sector jobs and business expanding to help us pay for excellent public services.”
Partnership chairman Paul Woolston said the increased tax allowances would build on efforts to bring in new firms.
He said: “At this site here we had two companies looking to invest, and the risk was we would use the allowances up while there was still interest. Now we can take the chance to look at what else we can do to bring in jobs to the region.”
Former regional minister Nick Brown said: “Now the Chancellor is visiting the North East to talk about enterprise zones he could take the opportunity to explain what the precise offer is from the existing North East zone. What are the precise tax reliefs, how long do they last, and what other constraints do they carry?”