RISING optimism across North-East businesses must be harnessed and used to drive forward economic growth in 2014.

That is the view of the North East Chamber of Commerce, which has called on the Chancellor to be bold when he outlines his Budget next month/later this month and ensure that spending and cuts are distributed evenly throughout the country in order to unlock the full potential of the North East private sector.

In a letter to George Osborne, NECC Director of Policy, Ross Smith, outlined the economic progress made over the last year in the region and detailed how backing regional strengths will stimulate growth, employment and attract inward investment.

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“North-East business is driving forward economic growth,” said Ross. “In January we unveiled the most positive Quarterly Economic Survey in over a decade, national GVA estimates demonstrated we are closing the gap on the rest of the UK and growth in the North East Local Enterprise Partnership area has outstripped that of the rest of the UK in the last few years.

“All this progress has been made in the face of major cuts across the public sector, cuts which have impacted harder on our region than most.

“In our Budget Submission, we have outlined the policies we believe will drive on the regional economy and stimulate further development, helping the North East contribute more to UK PLC and realise some of its undoubted untapped potential.”

NECC’s submission urges a robust approach to infrastructure investment, with priorities such as upgrading the A1 north of Newcastle, securing a pledge to extend HS2 to the North-East, addressing the disproportionate impact of Air Passenger Duty on North-East airports and calling for greater support for the construction of the world’s biggest offshore wind farm at Dogger Bank.

Mr Smith said: “With strong performing manufacturing and energy sectors, connectivity is a priority for our region. We welcomed the investments on the A1 and A19 announced in the past year, but we need that work, and the feasibility study into dualling the A1 north of Newcastle, to be started as soon as possible.

“UK infrastructure in many areas outside of London simply is not up to scratch. Our economy can grind to a halt in bad weather. A commitment to address the issues impacting on our trains, planes and automobiles would go a long way to increasing business optimism further.”

Addressing rising jobless figures remains a key priority. Unemployment in the North East stands at 10%, the highest of all regions and above the national average.Youth unemployment remains an acute concern, with almost one in four 16 to 24-year-olds unemployed.

“Improving the regional skills base to ensure school leavers are equipped with the abilities to fill regional job vacancies will help us address youth unemployment,” said Ross. “Harmonising funding for apprenticeships will help rectify the steep drop in funding between the age groups and make apprenticeships viable to a greater number of employers.

"Our region also has some fantastic examples of businesses working with schools. This work must be recognised with support to encourage schools to initiate this kind of good practice. This is particularly important if the North-East is to grow its private sector and create jobs.”

NECC believes that greater incentives for companies to invest in training and take on apprentices will aid worker retention and help fill potential future skills gaps.

The North-East’s capacity for development is considerable, given the region’s cheap land; low population and job densities; and vast resource availability. Despite these advantages and the changes to the planning system, housing development remains constrained.

Mr Smith added: “The North-East should be viewed as a prime development site. The easing of planning regulations, while welcome, has not addressed a lack of development.

“Onerous conditions, slashed planning department budgets and a lack of political willpower at local levels continue to stymie the region’s housing industry. Likewise, an absence of Government leadership over the development of greenfield sites must be addressed. Greater incentives, a robust planning system and strengthened political support at a local level are all necessary to support the housing industry.”

KPMG has supported NECC during the budget briefings process. Mick Thompson, Office Senior Partner at KPMG in Newcastle, said: “The latest macro-economic indicators suggest business confidence in the North-East is on the increase, mirroring the national picture.

“To ensure the region is best placed to capitalise on the upturn, we would like to see a commitment in the Budget to improve the underlying infrastructure and connectivity in the North-East. This would provide businesses with greater opportunity to achieve their growth ambitions.” 

The North East Chamber of Commerce full Budget Submission can be read here: http://bit.ly/1ifuIRA