The State of Britain

Nissan’s Sunderland Plant the Blueprint for Sustainable Inward Investment and has the Northern Powerhouse 5 years on ‘Powered up the North’

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Unemployment in the North East increased by 7,000 or 0.6% to 72,000 between February and April, at 5.7% it was the highest in the UK. At 2.7% the SW of England had the lowest rate in the country. The UK unemployment rate stands at 3.8%.

North East average property prices surged by 5.0% to £130,388 during the month which meant annually prices increased by 2.0%; the monthly increase was more than double anywhere else in the UK. In comparison, UK prices increased by 0.7% to £228,903 during April, which held the annual growth rate at 1.4%.

Research by the think-tank, the Institute for Public Policy Research North, showed the North East has seen the biggest percentage cut to public sector jobs (24%) of all of England’s regions, with 72,000 fewer public-sector workers in the region than a decade ago. The North West lost most jobs overall with 133,000 less employees. With northern regions of the UK more dependent on the public sector than other parts of the UK, the Government’s austerity programme has had more of an impact. Figures from the ONS last month showed that, with the exception of London and the East and South East of England, most regions of the UK have a fiscal deficit, with the North East having the highest in England. The think tank also compared the Northern Powerhouse’s performance over its first five years with the UK average, citing successes in economic growth (10.7 % v 10.6%), productivity (11% less productive v 12%) and employment (6.9% v 6.2%.)

Echoing the North-South divide, during the month, 33 newspapers across the north of England, including the Newcastle Chronicle, Northern Echo and Teesside Gazette, jointly demanded the government accelerates devolution to help deliver economic growth. The campaign, labelled Power up the North, also targeted more funding for the Northern Powerhouse Rail.

Nissan’s Sunderland factory has now produced 10m cars since 1986. Despite her mixed reputation in the North East, securing Nissan was arguably the most successful sustainable inward investment project achieved by Mrs Thatcher, who visited then Nissan chairman, Katsuji Kawamata, to personally put the case for Sunderland. Since 1986, Nissan has received an estimated £347m in EU and UK public funds, in return the firm has invested c£4bn in Sunderland and made it its European base.

No surprise that banknote and passport printer De La Rue is to cut 170 jobs at its Gateshead factory. Last year the government awarded a contract to Franco-Dutch firm Gemalto to make UK passports following Brexit.

On transport, Spanish firm CAF, Swiss manufacturer Stadler and Japanese firm Hitachi, have been shortlisted to build a fleet of new trains for Tyne and Wear’s Metro system. Hitachi built the East Coast Mainline’s new Azuma trains at its Newton Aycliffe site. The winner of the £500m contract is due to be announced by operator Nexus in January 2020 with the 42 new trains expected to replace the existing carriages between 2021 and 2024

North East councils have also agreed a £377m bid to the government’s Transforming Cities Fund to overhaul the region’s transport. Part of the bid will include £108m for twin tracking of the Metro between Pelaw and Tyne Dock.

The Tyne and Wear Passenger Transport Executive (also known as Nexus) could take control of bus services according to Northern Powerhouse minister, Jake Berry. In the UK, only in Northern Ireland are bus services state-owned but in London services are more regulated than in the North East. Jake Berry’s brief was expanded to include the Department for Business, Energy and Industrial Strategy this month. This added to his role at the Ministry of Housing, Communities and Local Government – all may change again when Theresa May exits Downing Street.

Plans to impose a toll on motorists in Newcastle City Centre would cause economic damage according to businesses. Newcastle, Gateshead and North Tyneside have been consulting on imposing either a Clean Air Zone in which the highest-polluting vehicles would be charged a daily fee of £12.50 or a £1.70 toll on the three central bridges across the Tyne. Analysis by Newcastle City Council has suggested the tolls could damage the region’s economy by £140m. A decision is expected in the autumn.

On development, revised plans have been submitted for the ‘Whey Aye Wheel’ on the site of the former Spillers Flour Mill. The £100m leisure development on Newcastle’s Quayside will include a 460ft observation wheel taller than the London Eye. The project will include a family entertainment centre, a virtual golf club and a 12m tall sculpture called The Geordie Giant.

Also, plans for a £60m skyscraper on the Gateshead Quayside are to be replaced by designs for an even bigger high-rise hotel to serve a new arena and leisure complex – Gateshead Quays. Under the new plans the building would be 21 storeys tall at its highest point. The Gateshead Quay’s development will cost £260m and include a 12,000-seat music venue, a conference centre, hotels, and restaurants and will replace the Utilita Arena in Newcastle. If it opens in 2023, it could boost the regional economy by c£30m pa, attract an extra c300,000 visitors to the North East, and create 1,140 new jobs.

On interventions, a £4.9m SME fund has been launched in County Durham. The three-year County Durham Growth Programme has been launched by Business Durham, the economic development arm of Durham County Council, using funding from the European Regional Development Fund.

The costs of repairing Stockton’s Grade II-listed art deco Globe Theatre are now more than £26.5m. Stockton Council’s 2011 business plans envisaged the £4m project would create 23 permanent new jobs and 72 construction jobs, attract about 82,500 visitors a year and boost the local economy by £2.5m.