Press Story

ippr north welcomes the announcement that a white paper this summer will consider the most appropriate framework of incentives for local authorities to support growth, including exploring options for business rate and council tax incentives, which would allow local authorities to reinvest the benefits of growth into local communities.

However, cutting jobless programmes and withdrawing investment in manufacturing and health services in the North of England will all set back economic recovery. The increase in VAT, the cuts in benefits and the public sector pay freeze will also have a major effect on the Northern economy where there is proportionately higher numbers of people on low wages, benefits and working in the public sector. ippr north are also concerned that decisions taken today will affect poorer communities throughout the North as support is withdrawn.

In order to ensure that the Northern regions are not the most affected by this austerity package, the government must deliver on its promises to invest in private enterprise. What is important for the North is the creation of jobs as this is without doubt the best way to grow the economy. ippr north welcome policies to improve innovation and create jobs including the new tax scheme where the first 10 employees hired by a new business will be exempt from National Insurance. Attention must be paid to how public sector spending can actually help to grow the private sector, capital spending from the public sector is likely to be harder to come by after today which means there will be much less money in the North for construction firms. Government must realise cuts to the region's public sector will impact on the private sector too.

ippr north welcomes the commitment by the Chancellor George Osborne to invest in transport infrastructure in the Northern regions and connect those living in deprived areas to jobs in the wider city-regions. Significant questions remain however, about the relative merits of replacing RDAs with Local Enterprise Partnerships. The structure of these organisations is perhaps less important than how much power they have to actually make real changes in their area. This issue also needs to be approached region by region if we are going to see results.

In particular ippr north Director Ed Cox stressed that:

"Today's Budget clearly shows there are big challenges ahead, with poorest in our society and the North of England badly affected. However alongside these challenges there remain important opportunities for the Northern regions to lead not plead their way to prosperity. The North must now work closely with government on its decentralisation agenda to deliver solutions to the problems in our economy and transform our public services."

Contact:

Tamsin Crimmens, 0191 233 9051 / 07800 742 262 / t.crimmens@ippr.org