Newspaper article The Journal (Newcastle, England)

Leaders Risk a New Slump in the North East; Warning about Massive Cuts in Spending

Newspaper article The Journal (Newcastle, England)

Leaders Risk a New Slump in the North East; Warning about Massive Cuts in Spending

Article excerpt

THE North faces a new recession if politicians slash public spending too quickly, a report warns.

All three main political parties are committed to public spending cuts to slash Britain's record pounds 178bn debt after the General Election, increasingly expected this May.

But in a new report, regeneration expert Michael Parkinson has warned that early cuts could choke off the region's recovery and hit the national economy.

Around one in three of the North East workforce is employed by the public sector, which the report says has played a key role in picking up the slack left by private firms hit by the credit crunch.

It says the Government, regional development agencies (RDAs) and local authorities have stepped in to keep momentum going where possible.

But a "public sector recession" could jeopardise the development of many projects vital to economic growth in the North of England, according to the report commissioned by the Northern Way development agency. The report stresses it is not a "begging bowl", with the region having played an increasingly important role in UK plc over recent years and still offering major opportunities to private business.

The Journal's Great North Revolution Campaign has been highlighting how the region is leading the world in the development of electric vehicles, green energy, manufacturing, digital and bio-medical products.

Prof Parkinson said: "After a very good period, much of the North has been badly affected by the crunch and recession.

"Many good people are doing many good things on the ground to limit the potential economic, social and physical damage to places in the North.

"We have shown many examples of what is possible even in adversity. But often their levers are limited and their resources declining. It is crucial policymakers nationally and locally do all they can to sustain the gains made in the North and to limit the damage threatened by the worst credit crunch and deepest recession in living memory. …

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