BRITAIN needs to find a better balance between North and South, David Cameron said yesterday on a visit to the North-East.

“We need to shrink the country,” he said. “We need to make it easier to get goods, people and services around so that we have a new, balanced economy.”

Before heading to Sunderland to meet Nissan representatives, the Conservative Party leader was shown round the MCE plant, on the Preston Farm Industrial Estate, in Stockton. The company, which employs between 30 and 120 people depending on the time of year, makes valves for the European petrochemical and power generation industries.

It has high hopes for its new environmentallyfriendly product – the first valve guaranteed not to leak for four years.

Speaking amid the noise of the manufacturing plant, Mr Cameron said: “In the short term, we have to get credit moving in the economy again.

The real problem is the fact that banks aren’t lending to businesses. We need a national loan guarantee scheme that guarantees £50bn of lending from banks to businesses.

“In the long term, we need a more balanced economy, balanced between North and South, between manufacturing and finance, between the industries of the past and the green technologies of the future.”

The key plank of closing the divide between North and South, he said, was better communication. “We need a high speed rail link,” he said.

“I know there’s disappointment in the North-East that our early plans are for it to go from London to Birmingham, Manchester and Leeds. In the longer term, I’d like that to come to the North-East as well.”

A month ago, the shadow chancellor, George Osborne, told The Northern Echo that, should the Tories win the next election, building the new line could start in 2015 with the North-East being connected in a second phase.

Mr Cameron continued: “There are certain things manufacturing needs. You can get a software programme exported around the world down a fibre optic pipe, but to get manufacturing goods moving, you need better ports, better railways, better road junctions – good transport links.

“You also need skills and apprenticeships – we have been arguing that you need 100,000 more apprenticeships and you need a better system to encourage small and medium- sized enterprises to take apprentices on.”

Building railways and roads is not cheap. At a time when the Conservatives are condemning the Government for its level of borrowing, where will the money come from?

Referring to the recent 2.5 per cent cut in the rate of VAT, Mr Cameron said: “The question is the priorities. This Government’s priorities seem to be wasting £12.5bn encouraging people to go shopping.

“We need to plan public spending properly so that we have less waste and you spend the money on things that are needed.

“A government that got control of spending would be able to spend the money on the things we really need.”

Go online for the full interview

YESTERDAY’S full interview with David Cameron in Stockton can be seen on the latest Northern Decision Makers television programme on The Northern Echo’s website. Hosted by Graham Robb, who stood for the Conservatives in Sedgefield in 2007, and Nick Wallis, the Darlington Labour councillor who is standing in this May’s European elections, this month’s guest on the programme is Timothy Kirkhope, the Yorkshire and Humber MEP. In December, Mr Kirkhope was elected leader of the Tories in Europe. On the programme, he defends the Conservatives’ approach to Europe, saying: “You can be positively negative about things you don’t like. We don’t want the Lisbon Treaty. I don’t believe my constituents will get any benefit by having a constitutional straightjacket around them You’ve got to be negative about that.” The other guest is David Hartley, the managing director of the Wensleydale Creamery, in Hawes.