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Alex questions failure of Government funding to get business growing

There are no answers to be had from the Government to the rapid increase in unemployment in the North East – up 1,000 over the last quarter and 16,000 over the last year – evidenced in the House of Commons this morning.

Labour’s Member of Parliament for Stockton North has challenged Business Secretary Vince Cable over the continued failure to stimulate business growth across the Tees Valley and across the North East region.

Small and medium enterprises (SMEs) – the wealth creators within our economy – are struggling across the country to get the financing they need, and Alex Cunningham underlined the failure of Ministers’ schemes like Project Merlin and Funding for Learning to get banks lending to small firms and entrepreneurs.

Speaking during Questions to the Department for Business, Innovation and Skills in the House of Commons: Alex said:

“According to the Chamber of Commerce, unemployment in the North East has gone up by 1,000 in the last quarter and by 16,000 in the last year – 13,000 of them women.  We agree that small and medium sized businesses should be driving the economy up and unemployment down, but I’m told many in our region see the various Government schemes and the banks failing to give them the help and resources they need.”

He went on to challenge the Secretary of State to do something specific to help the North East share in the so-called upturn.

Following the Question session, Alex said:

“I’m very disappointed that the Secretary of State dodged my challenge and talked instead about the region’s success in securing help from the Regional Growth Fund, which isn’t really geared up to the needs of our small and medium sized businesses.

“It was clear he had no answers and no plans to help the North East reverse the trend which has seen more and more people out of work over the last year. 

“The Bank of England this week published figures that demonstrate shortcomings across the country, showing that net lending to business fell by an unbelievable £4.3 billion in the three months to November. 

“It is becoming clear that the Government’s so-called Business Bank has been little more than a rebranding exercise for existing schemes that have failed to assist the North East in recognising its potential.

“While SMEs in Britain have struggled, being the only major economy not to have a state-backed investment institution, economic powerhouses such as Germany have been able to maintain levels of lending to small business during the recession.

“The reliance on a fund that has only £3.2 billion to spend between 2011 and 2017 is short-sighted and has fostered unemployment in the North East instead of growth.  It is about time that the Government backed Labour’s plans for a proper British Investment Bank supported by a local and regional presence.”