ALARM was growing tonight (Wednesday, January 22) that the North-East is still in the grip of a jobs crisis – even as recovery finally arrives in the rest of the country.
The region recorded a shock rise in unemployment of 1,000 in the latest three-month period, leaving more one in every ten people out of work.
The grim picture was revealed as economists spoke of a “staggeringly strong” drop in the UK jobless count, to the delight of David Cameron in the Commons.
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The total number of people out of work – not simply those claiming benefits – plunged by 167,000 to 2.32m, in the three months to November.
The fall was the biggest drop since the autumn of 1997, while the number of people in work rose by 280,000 to reach 30.15m – the biggest increase since 1971.
But 134,000 people in the North-East are still unemployed, after the rise of 1,000 – or 10.3 per cent. The South West was the only other region apparently left behind.
Worried North-East MPs warned of a “two-speed Britain”, demanding an urgent rethink on ever-harsher spending cuts and the axing of the region’s development agency.
Furthermore, an analysis by The Northern Echo shows the jobs divide has been widening for the past year, despite Mr Cameron’s flagship pledge to “rebalance the economy”.
In the 12 months to November last year, unemployment fell by 173,000 across the UK, while the numbers in work leapt by 450,000.
In gloomy contrast, the North-East shed a further 10,000 jobs – while the number out of work continued to rise sharply, by 15,000.
There is now the very real respect of a job-choking rise in interest rates to calm the booming South-East, even while unemployment in the North-East remains stubbornly high.
The Bank of England said it will consider hiking rates from 0.5 per cent when unemployment hits seven per cent –not expecting that to happen until 2016.
But today's (Wednesday) fall brought the UK unemployment rate down to 7.1 per cent, just a whisker shy of putting a rate rise on the agenda.
Tom Blenkinsop (Middlesbrough South and East Cleveland) said: “This shows that, yet again, our towns and villages in this region are at the bottom of David Cameron and Nick Clegg's list of priorities.”
Phil Wilson (Sedgefield) highlighted the death of the One North-East development agency, arguing that inward investment had fallen by one-third since its demise.
He said: “We need a body that can provide a strategic overview of how to develop the region. We simply don’t have that that.”
That point was echoed by Kevan Jones (North Durham), who added: “The Government needs to stop punishing the North in terms of public spending, to benefit the South.
“It has got a policy of a two-speed Britain. They have written off the North-East – and, without a change of direction, it’s going to get worse.”
But Esther McVey, the work minister, said the overall number of “economically inactive” people in the North-East had fallen by 21,000, over three months.
Furthermore, the numbers in work – although down year-on-year- did rise by 22,000, between September and November.
Ms McVey said: “It is welcome news that inactivity levels in the North-East fell by 21,000 and the rate fell by 1.3 points, which is the largest fall in the UK.
“It’s clear that the Government’s long term economic plan to get people off benefits and into work so they can secure their future is proving successful.”
In the Commons, Labour leader Ed Miliband said average wages were down £1,600 since the election, adding: “Ordinary families are working harder, for longer, for less.”
But the prime minister hit back hard, saying: “The fact is that we are recovering from the mess you left us.
“You are like an arsonist who goes around setting fire after fire and then complains when the fire brigade aren't putting out the fires fast enough.”