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'City deals' will help West to bring in business, says Cable

By Western Morning News  |  Posted: April 20, 2013

By Graeme Demianyk

VinceCable

Vince Cable

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Business Secretary Vince Cable has warned of "worrying disparities" in the economic health between different parts of the country – but indicated he would not let struggling regions slip into "managed decline".

The Liberal Democrat minister's remarks come after the Western Morning News published stories underlining how parts of the Westcountry economy are trailing much of the UK. Productivity in Cornwall and the Isles of Scilly is the fourth lowest of 134 regions across Great Britain, with wealth creation in the area 27% below the national average. Neighbouring Torbay is 21% off the pace, and Devon 14% below.

Meanwhile, the number of workers employed in the private sector in Cornwall has fallen by 9,000 since the coalition Government came to power – though in Devon 37,000 extra people were employed by business, according to official figures. Mr Cable, speaking at a conference designed to boost Local Enterprise Partnerships, the Government's chosen vehicle for regional business growth, said: "There are worryingly high disparities between economic performance and employment prospects in different parts of the UK, and those areas that become highly dependent on the public sector face particularly difficult challenges.

"Sustainable private sector growth is not going to occur spontaneously but will need support through infrastructure and training.

"I do not believe in managed decline for regions that are under-performing. Even after the major crisis and contraction in London's banking sector, the South East maintains a more buoyant economy, reflected in property and retail markets for example, than most other parts of the country."

The minister said rebalancing was not just about switching to exports and manufacturing, but was geographical as well. He insisted English regions need a strong voice to attract investment and employment.

The Government is rolling out a series of "city deals", and has already given Manchester, Bristol and other urban centres greater power over transport, training and regeneration. Plymouth is set to get a "city deal" in the second wave of the scheme, and a "Cornwall deal" is being worked up that could prove to be a template for rural areas.

Mr Cable also said the Local Enterprise Partnerships – the Westcountry has one for Devon and Somerset, and another for Cornwall and the Isles of Scilly – were more business-led and more responsive to local conditions than Labour's regional development agencies (RDAs).

However, RDAs were given significantly more money to invest than the successor £2.6 billion Regional Growth Fund, which has seen firms including Princess Yachts in Plymouth and luxury leather goods firm Mulberry in Bridgwater, Somerset, awarded state investment cash.

Other coalition Government initiatives to boost regional growth include 24 "enterprise zones", which offer tax breaks to firms moving to the area, including one in Newquay.

Mr Cable's aides stressed that he was not proposing any short-term change in policy, or implicitly criticising the legacy of the Thatcher administration.

It may, however, reflect concern about the impact that the scale of the cutbacks in public sector jobs may have had on some regional economies.

Regional unemployment figures, published this week, also underline Mr Cable's argument. The unemployment rate in the North East is 10.1% compared to 6.8% in the South East.

The greater South West has a rate of 6.2% – the lowest in the UK – but the figure is propped up by jobs growth in Bristol and the M4 corridor rather than Devon and Cornwall, experts say.

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