First priority is to keep people in employment

The themes were supposed to be energy, environment and transport, but the state of the economy will probably overshadow everything.

The Conservative Shadow Chancellor George Osborne is one of the keynote speakers at today’s forum. Here he outlines what he is going to say.

THE news that Nissan is reducing production at its Sunderland plant is yet another sign that the credit crunch is hitting families in the North- East. This follows the sad news about Woolworths and MFI, and reminds us of the human misery that Labour’s recession is bringing as boom turns to bust.

With unemployment levels in the North-East already the highest in the country, many readers of The Northern Echo will be understandably anxious as the recession bites.

One of the points I will be making at the North-East Economic Forum is that, instead of helping people, Labour are making things worse by storing up future tax rises and recklessly borrowing beyond our means. Unfortunately, we’ll all be paying a heavy price for Gordon Brown’s economic incompetence in the years ahead.

Let me explain how in more detail.

First, the staggering scale of Mr Brown’s borrowing binge is now clear. He is planning to hit us with the largest amount of borrowing ever undertaken by a British government – one trillion pounds.

The North-East’s share of that debt is a massive £42.5bn – equivalent to £40,000 for every family.

It’s a confirmation of the truth that, in the end, all Labour chancellors run out of money and all Labour governments bring this country to the verge of bankruptcy.

Second, it is hard-working families in the North-East who will be hit with tax rises to pay off Labour’s borrowing binge. What happened last week is now clear: the PM offered us a temporary VAT change, paid for by higher taxes for life.

Mr Brown’s national insurance increase means that more than 300,000 people in the North-East will be hit with higher taxes. And we know Labour has plans to increase VAT to as much as 20 per cent after the next election will leave the entire country out of pocket.

It’s what will come to be known as Labour’s 20/20 tax bombshell – 20 per cent VAT and higher taxes on incomes over £20,000.

And that’s even before Labour’s latest stealth tax raids on alcohol and petrol.

The Conservative Party has a clear plan of action to get the British economy back on track and help families in the North-East and across the UK.

Our first priority is to keep people in work. That is the best way to help families and prevent people from losing their homes.

We would introduce new government guarantees to get credit moving through the veins of the economy, so that businesses can keep going and people are kept in work.

We would encourage new jobs by cutting national insurance for those companies that take on new staff.

And to help struggling families pay their bills, the Conservatives would freeze your council tax bill and cut the energy bills of six million homes.

Unfortunately, Mr Brown is doing none of this. Having led us into this recession, he is now making things worse.

So the choice faced by people across the North-East at the next election could not be clearer: a record borrowing binge and a lifetime of tax rises under Labour or fiscal sanity and lower taxes that last under the Conservatives.

Sky political editor takes the chair

ADAM Boulton, Sky TV’s political editor, is returning to his roots to chair today’s North-East Economic Forum.

“I’m not over-familiar with the region, but it is one of those places I’ve visited all my life because my mother’s family owned a farm at Lynesack, in County Durham, and my father was born at Bishop Auckland,”

said Mr Boulton. “He became a doctor, but his family were involved in banking.

“And I certainly remember Lynesack Farm. It was the muckiest farm I had ever been to with all the animals in the byre.”

However, it is for his political nous that 50-yearold Mr Boulton has been asked to chair the forum, and although the forum’s themes are transport, environment and energy, economics is also certain to be discussed.

“We are undoubtedly in a recession that is hitting white collar people and the Home Counties harder, partly because it started in the financial sector and the North-East, although it had Northern Rock, isn’t as vulnerable as it has been in the past because employment is more diversified,” said Mr Boulton, who has been Sky’s political expert since the station began in 1989.

“The one crumb of comfort in this so far is that it hasn’t been like the Eighties, with industrial confrontation. It isn’t the complete meltdown of the system and people are able to go about their lives if they are still in employment. How long will it last, is the question.

“Some people say there is £2 trillion of bad money in the banking system and by that measure, we have probably accounted for 40 per cent of it, or £800m.

“Against that, the Government says we will be back in growth in the second half of next year, and not everyone is cynical about that.”

Mr Boulton’s career highlights include winning the Royal Television Society’s Judge’s Award and also becoming the only journalist to “doorstep” the Queen on live television.

‘Prophet of doom’ back in North-East

VINCE CABLE is returning today to the North-East with a crumb of economic comfort – although it is only a crumb.

Mr Cable, the Liberal Democrats’ Shadow Chancellor, who has proved to be something of a soothsayer for the economic recession, last addressed the forum two years ago.

“The concern then was that the North-East was lagging behind the rest of Britain, as it was bottom of the league in terms of economic performance,”

he said. “Now, two big factors are dragging down the rest of Britain – the over-extended financial sector and the housing bubble that got out of control.

“They are less of a problem here than elsewhere, so the region may be spared the worst of this recession.”

That is where the optimism ends. “We are at the beginning of this, rather than the end,”

he said. “It’s very nasty. The collapsing housing and debt bubble is coinciding with international banking crisis. We have never had anything like this before and it will continue well into next year, if not beyond.”

The collapse of Northern Rock last year coincided with Mr Cable’s 64 days as party leader, and he was the first to call for it to be nationalised.

Now, he believes the bank’s orders should be changed.

“It was very properly told to repay its Government loan as quickly as possible, so it is running down its mortgage book and getting rid of its loans to other banks,” he said.

“That has been overtaken by events. Dumping their assets on the market is now not helping the situation.”

Mr Cable, who was born in York and was the city’s unsuccessful SDP/Liberal candidate in two elections in the Eighties, believes the biggest obstacle to recovery is the banks’ unwillingness to lend.

“The main fault lies with the Government because it is giving contradictory requests to the banks,” he said. “It is saying they must lend more while the Financial Services Agency is instructing them to build up more reserves.

“Having put in all this taxpayers’ money, the Government should get a firm grip by putting members on the banks’ boards and making sure that loans are maintained to existing customers.”