Archive for Growth

Double Dip Recession for the UK Likely Unless Coalition Adopt a New Plan B

Middlesbrough South and East Cleveland Labour MP Tom Blenkinsop is warning today (November 7th 2011) that a double dip recession is likely in the UK unless action is taken to adopt a different economic cause.

Tom said “This isn’t me saying this, but one of the worlds leading economic forecasters. The National Institute of Economic and Social Research (NIESR) warns that without prompt action on the Eurozone crisis, there’s a 70% chance the UK will stumble back into recession.”

“NIESR has also slashed its UK 2012 growth forecast from 2% to just to 0.8%. The implications of these tiny increments are severe: the UK is facing its slowest economic recovery since the First World War.”

“This forecast is backed up today by leading accountants, BDO, whose latest Business Trends report published today which indicates that the UK economy faces a serious risk of contraction as early as the end of this year and into the coming months, primarily due to a faltering services sector.”

“BDO’s Output Index – which measures turnover expectations over the next three months – fell to 92.6 in October from 93.3 in September, its lowest level since June 2009. It is also the third consecutive month that the index has been below the critical 95.0 mark indicating on-trend growth, showing that the UK economy could already be contracting.”

“The faltering economic recovery, their report states, can be largely attributed to a slowdown in the crucial services sector, which makes up three quarters of the UK’s economic output.”

“A further cause for identified concern is the worsening situation in the labour market, where BDO’s Employment Index fell to 93.4 in October from 95.9 in September and showing that job hiring intentions in the UK are likely to remain weak.”

“What worries me about this is how our government’s inaction will hit industry and jobs on Teesside. On what we see at the moment, our coalition government could not fight its way out of a brown paper bag, let alone a recession. All they seem to be able to do is to make cut after cut to public services, not seeming to notice that public service is a big supplier of goods made on Teesside. Put simply, it would be Teesside steel that could build new hospitals, schools, roads and railways – but little chance of that given Mr Osborne’s attitude.”

“The need for such investment has been called for by Shadow Chancellor Ed Balls, and has been echoed by business leaders. With the government able to borrow long term at less than 2.5% and construction costs having reduced in recent years, there has probably never been a better time to improve the UK’s ageing transport network alone – something that would benefit the steels mills at Lackenby for one.”

“It’s time to think again and look to a Plan B.”

Teesside Firms Being Fleeced by Government to Pay For Their Successful Regional Growth Fund Grants

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, today (November 1st 2011) blasted Government industry and treasury ministers for the way in which firms are being asked to wait for ‘an inordinate time’ to receive their successful bids under the Regional Growth Fund so as to allow for ‘due diligence’ and also for the fact that the costs of this process are borne by the firms – this reducing the value of their grants.

Tom said “I tackled the Chief Secretary to the Treasury, Danny Alexander, about this on the floor of the House this afternoon, and was told by him that due diligence ‘takes on average 4-6 weeks’. How this can be squared with the fact that local and regional firms given grants in the first round last April are still waiting for the proverbial cheque in the post, I cannot comprehend.”

“Worse still is that whilst no-one would disagree with recipients of public monies being subject to due diligence, what is wrong is that this process appears to be netted by the Business Ministry from the actual grant. This is bonkers, allowing as it does, for these funds to be eaten away by expensive and probably overpaid lawyers. We have all seen cases of public expenditure where legal costs were almost as high as the actual project costs, and I fear that the same could happen here.”

“I feel strongly that the entire Regional Growth Fund structure and process should be looked at to make it fit for purpose – and there will soon be unemployed staff from the old Regional Development Agency who could well show how this could be done!”

Tom Blenkinsop MP Welcomes News of Teesside Firms Boost from Regional Growth Fund, But Warns of ‘Red Tape Delays’

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, today (31st October 2011) welcomed the news that Teesside firms were on the national list of companies benefiting from backing from the second round of the Government’s Regional Growth Fund, but warned ‘that red tape and box ticking’ by London based coalition politicians and civil servants could delay expansion plans.

Tom said “It is good that Teesside based firms like Able UK, Tioxide, Johnson Matthey, Darchem and PD Ports are on today’s list. These are firms at the cutting edge and are needed if we are to fight out of recession. It was good, too, to see that the Wilton based NEPIC – the process industry cluster for the region, and formed by the previous Regional Development Agency, ONEne, are also on the list.”

“But I am very worried that in the small print of today’s announcement is the glib civil service phrase that these are conditional approvals and ones subject to due diligence. This worries me in terms of how soon these offers can be converted into real cash, allowing projects to go ahead and for jobs to be created. Many regional companies made offers in the first round are still waiting six months on for the cheque in the post from Vince Cable’s London office, and if that is any guide, many of the firms on today’s list may still face a long wait.”

“I can only echo the comments made on the Today radio programme this morning by the North East Chamber of Commerce that all this was done more quicker and efficiently by the old Regional Development Agency – and which was a body based in the region and made up of regional interests. Today’s announcement has to be welcomed, but that mustn’t stop Labour looking to better alternatives for regional development.”