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Budget 2014: Beer and bingo not enough for a resilient economy

By Leek Post and Times  |  Posted: March 20, 2014

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Reacting to yesterday's Budget statement, Ed Cox, Director of Institute for Public Policy Research (IPPR) North, said: “The Chancellor promised a budget for the regions and for resilience. But this rhetoric is wearing very thin.

"Whilst growth forecasts may look better one year on, the recovery is looking very different depending on the part of the country you live in with today’s unemployment figures showing a 2.3 percentage points gap between the North East and the England average.

"And in truth there were very few announcements that are likely to narrow that gap and nothing to boost the powers and funding devolved to Northern cities.”

On transport spending, he said: “The £270 million credit guarantee for the Mersey Gateway Bridge – welcome as it is – will do very little to reverse the gaping disparity between infrastructure investment in London and the rest of the country.

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"Changes to air passenger duty are welcome too but fall some way short of the kinds of regional variation that might encourage airlines to operate new flights out of Northern airports.”

On business investment, he said: “Encouraging businesses to increase investment is crucial if the recovery is to be sustained and spread.

"Doubling the investment allowance for businesses to £500,000 a year is a good move and extending business rate discounts and enhanced capital allowances in enterprise zones are welcome too.

"However, a one-size-fits all approach ignores the fact that different areas have different barriers holding back their growth.

"If Osborne doesn’t invest in the regions, businesses won’t either.

"Infrastructure and R&D investment remain painfully skewed towards the capital at the expense of the regions.”

On help to buy, he said: “Current house hunters will welcome Osborne’s announcement of an extension to Help to Buy, the government’s controversial scheme to support people to buy homes they could not ordinarily afford.

"But as the policy will add fuel to house prices the affordability crisis in parts of the London and the South East could easily spread North.

"Rather than pumping up prices of houses, the government should be building more properties that people can afford.”

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