The State of Britain

A significant drop in NE unemployment, changes at Nissan and the Borderlands Growth Deal moves forward.

Reading Time: 4 minutes

Unemployment in the North East fell by 4,000 to 65,000 between November and January; the drop of 0.4% to 5.1% was one the best performances in the UK. At 2.9% and 5.2% the SW of England and Yorkshire & Humberside had the lowest and highest unemployment rate in the country respectively. The UK unemployment rate stands at 3.9%.

In March average earnings in the North East increased to £523 per week. London had the highest average earnings of £846; the North East had the lowest. In the UK average earnings grew by 3.4% or by 1.5% after inflation.

North East average property prices fell by 3.3% to £125,333 during the month which trimmed the annual growth rate to 0.9%. In comparison UK prices dropped by 0.8% during March which cut the annual growth rate to 1.7%. The North East market was also slower with the latest figures to September 2018 showing volumes down by 1%.

Government figures released this month forecast that the North East would be the worst hit area of the country if there was a no deal Brexit. The figures predicted the region’s economy could shrink by more than 10% over 15 years.

The restructuring of the global car industry continues to affect one of the North East’s key employers. Nissan’s decision to build its new X-Trail model in Japan has been followed by plans to end the production of two of its Infiniti cars at Sunderland. As a result the Q30 car and QX30 sports-utility vehicle will no longer be made in the UK. The Infiniti brand has struggled in Eastern Europe – last year sales halved to 5,800. About 70,000 of Infiniti cars have been made in Sunderland since production began in 2015 – 250 staff could be affected. Additionally the Unite union says it will be talking to Nissan about reports that the firm are considering plans to change production shifts. There are also claims that a production line making Qashqai and Leaf electric cars may have its number of daily shifts reduced from three to two – 400 jobs could be affected. More positively Mitsubishi is considering moving some production to the UK with Sunderland on the short list as Nissan is in a cross-shareholding alliance with Mitsubishi. The firm could take up spare capacity in the factory, which is capable of producing more than 500,000 cars a year – but last year only made 442,000.

Production at a Teesside biofuels plant has resumed after a fourth pause in production since 2011 caused by a dip in global bioethanol prices. German owner CropEnergies said the facility would run at reduced capacity; 100 staff are employed at the Wilton facility which converts wheat into fuel-grade alcohol, animal feed and carbon dioxide for the beer and fizzy drinks industry.

More success for Newcastle based Greggs which credited the launch of its vegan sausage roll to help drive sales through £1bn for the first time. Pre-tax profit last year rose 15% to £82.6m, the fifth consecutive year that profits have increased, reflecting the firm’s repositioning from a bakery chain to a healthier food to go proposition.

Notable regional transport developments included the potential sale of Sunderland based transport group Arriva which runs Northern Rail and bus services in the North East. LNER has announced its Newton Aycliffe built Azuma trains will enter service on 15 May. The fleet of trains – Hitachi-built and modelled on the Japanese bullet train – will eventually reach 65 and will cut journey times by accelerating faster than existing rolling stock. Also two months after a £40m scheme to bring Durham Tees Valley Airport back into public ownership was approved by the Tees Valley Combined Authority (‘TVCA’), Stobart Group has been named as the new operator. Stobart will have a 25% stake in the company running the site with the remaining 75% owned by the TVCA. The firm also operates Carlisle Lake District Airport and London Southend Airport as well as Stobart Air and Stobart Aviation Services. The airport was losing £2.5m pa under its previous owner, Peel Group, and aims to increase passenger numbers to 1.4m by 2022. It is likely that the involvement of Stobart will have assisted in ensuring that TVCA’s purchase of the airport is compliant with state aid rules.

The only North East project currently earmarked for support from the Borderlands Growth Deal is the Berwick Theatre and Conference Centre. The Scottish and UK governments have confirmed funding of up to £345m for the Borderlands – the council areas of Dumfries and Galloway, Scottish Borders, Northumberland, Cumbria and Carlisle City. The Scottish government committed £85m over a 10-year period followed in his Spring Statement by Chancellor Philip Hammond who pledged £260m.

The major regional beneficiary of the Government’s Coastal Communities Fund was the Crimdon Coastal Hub with a £1.3m grant towards a £2.2m project to create a visitor and events centre for Crimdon Beach. Smaller awards go to Redcar’s St Mark’s Church and the project to restore Tynemouth’s lido for public use. In County Durham work has started on the £20m TVCA funded project to redevelop Hartlepool Waterfront. Plans include the regeneration of the National Museum of the Royal Navy Hartlepool, a new visitor attraction, viewing deck and water activity centre. Tees Valley Mayor, Ben Houchen, and the TCVA have also approved the use of a Compulsory Purchase Order to secure the remaining 870 acres of land at the former SSI steelworks in Redcar. The controversial move has occurred after negotiations – which have been taking place since May 2017 – with the Thai banks which hold charges over the site broke down.