Category: Economy

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In the shadow of the stones

Summer Oxlade

English Romantic poet Samuel Taylor Coleridge visited Castlerigg stone circle in 1799 with William Wordsworth and noted that “the mountains stand one behind the other, in orderly array as if evoked by and attentive to the assembly of white-vested wizards”.

Trucking hell

Robin Tudge

Why would they come? Even if they could cope with the added discomfort of waiting for days either side of the Channel, by dint of turning Kent into a massive Portaloo park, it doesn’t work. With the opportunity cost of missed work elsewhere thanks to delays, that hauliers are paid by the kilometre, and inertia earns nought, and the risk of penalties for later deliveries and spoiled goods … they won’t come.

Parental grief: coping with bereavement at Christmas

Carol Westall

Henry Dancer Days is a charity supporting children with cancer and helping their families with life changing essentials. This includes providing support with physiotherapy equipment to help with winter heating bills, and even buying tablets and mobile phones enabling the young people to have a crucial connection with loved ones during their long spells in hospital getting treatment.

Virus at the centre of Britain

Kim Sanderson

“I’ve really got a bee in my little Northern bonnet today. The ‘Breaking News’ that London is moving into Tier 3 has really highlighted how embarrassingly biased and London-centric this country’s media is. When the focus was on infection rates in the North, we were branded ‘rule breakers’ and the restrictions deemed ‘too complex for people to understand’. Now that infections are rising in the South East, the focus is entirely on a new strain of the virus and how this MUST be affecting the rise in infection rate. Hours and hours on @bbcradio4 explaining how Tier 3 affects what you can and can’t do. Where was this programming for those in Newcastle who have lived under the harshest restrictions for months? Both the government and media in this country treat the North as if it’s a grey, distant land of simpletons and quite frankly, I’m f****** bored of it. #NorthernNotStupid”

Are we still a nation of homeowners?

Stephen Lambert

For millions, owning your own home is still an aspiration. 29% of people, known as ‘generation rent’’, are trapped in costly, insecure and often grotty private rented accommodation up from 11% a decade ago. One in four adults, aged 20 to 34, are still living with their parents. In the meantime houses have soared by 75% since 1995, overtaking both inflation and salary increases. The average house price is now eight times the average wage. For the hosing pressure group a growing number of people could be ”locked out of homeownership potentially for ever”. According to the English Housing Survey in 2007, 72% of those aged 35 to 44 owned their homes. By 2014, this had fallen to 52%.

UPDATED

Part 1 Teesside Airport: “The People’s Airport is safe in our hands”

A S Hunter

During the years of economic decline in the North East, there was less inward migration here than elsewhere in the country. Figures from The Migration Observatory show that immigration into the North East was considerably less than any other region of the UK, and, in particular, migration of people from EU members states . It states that total migration to the region from EU member states was just 60,000. Of the English regions, the next lowest was Yorkshire and the Humber with 236,000. This, in turn, impacts on the amount of travel in and out of the region:

No deal, no good

Keith Burge

Get Brexit Done. The three-word slogan that won a General Election, turning red seats to blue in parts of the North East that had never seen the like in decades, if ever. And yet, here we are just over 12 months on, and that victory is not so much ringing hollow as sounding a death knell for crucial elements of the region’s economy.
According to ONS there are around 3,500 exporting businesses in the North East. The North East is unusual among the regions of England in having a trade surplus in goods. Exports account for a higher proportion of regional output than in any other English region (26 per cent).
More specifically, the North East relies disproportionately on the European Union as its largest export market. In 2019, around 60 per cent of the value of all North East exports went to the EU, significantly higher than the UK average of just over 48 per cent and indeed the highest of all English regions.
But as from 1 January 2021, everything changes. The Government is imploring business to ‘Check. Change. Go.’ Which is all well and good, apart from the minor details of being unable to tell them what to check, what to change and where to go. Of course, this will hurt businesses across the UK, but given the disproportionate reliance of North East exporters on EU markets, the region looks set to suffer more pain, in relative terms, than any other part of the country.
The North East Chamber of Commerce – which has been lobbying on behalf of and providing practical support to exporters for decades – recently hosted a ‘Brexit Support Week’, a series of 13 sessions on different Brexit-related topics that will impact businesses including new customs responsibilities, data regulation etc. These events attracted around 850 attendees, representing many hundreds of businesses, all of which want to prepare, have not had the information to be able to do so and see the cliff edge looming. It seems likely that many of them will each already have spent thousands of person hours making preparations for different scenarios, at a significant cost to their businesses. For the smallest exporters, lacking capacity and unable to make that sort of investment, it seems to be more a case of shutting their eyes and hoping they survive the impact. Ordinarily, many would rely on the expertise of freight forwarders, logistics providers and customs specialists, but their capacity is limited and a massive increase in demand has seen their prices increase markedly.
And of course, some of those attending these events will have been importers, trying to work out how they can continue to work with suppliers across the EU. It has been reported anecdotally that some are so fearful of disruptions to supply chains and higher costs brought about by a combination of a deteriorating exchange rate, the application of tariffs and an abundance of bureaucracy, that they have been trying to find alternative suppliers within the UK. Import substitution: that has to be a winner, no? Well, maybe, but then if it was such a good idea, why haven’t buyers done this already? The usual answer is quality and/or cost.
As an alternative, some manufacturing businesses whose operations rely on a continual supply of goods entering the UK from Europe, have been stockpiling goods. The cost of this additional warehouse space is another unwelcome burden.
And whilst businesses employing staff from EU countries face no immediate pressures in theory, in practice there are reports of some EU nationals opting to return to their countries of origin amidst the uncertainty (and, in some instances, to escape the toxicity of Brexit). Replacing lost staff or trying to hire additional staff from outside the UK using the new points-based immigration system may well be a daunting prospect for many employers.
Still, it isn’t as if businesses have had anything else with which to contend over the past 9 months.
So how might things look under a No Deal Brexit (or even a last gasp hard as nails deal)? Firstly, there is the bureaucracy. But that’s OK, say the champions of Brexit: businesses already export around the globe and are used to this. Except, many businesses who export to (and import from) the EU have no dealings outside the EU and so have never been exposed to the bureaucracy of non-EU international trade. According to the head of HMRC, the cost of all of this new paperwork will amount to £7.5 billion a year. A year! How much this will cost North East businesses is difficult to estimate, but will certainly run into hundreds of millions of pounds. A very high cost from which they will derive no benefit whatsoever.
Secondly, there are tariffs. Farmers will see the cost of their exports rise to unaffordable levels and demand collapse. Manufacturing and processing businesses face the double whammy of having to pay tariffs on imported components and raw materials and then seeing their final product having a tariff imposed upon it, thereby eroding their competitive position. For example, under WTO rules there are tariffs of 4.5% on car parts and 10% on cars. In its evidence to the House of Commons International Trade Committee, Nissan said that tariffs will add £500m a year to costs. It then has to try to absorb those costs, rather than pass them on in the form of higher prices, given that cars exported to the EU (its key market) become 10 per cent more expensive anyway.
And that’s not all of it. Which brings us to problem number three. The Nissan plant relies wholly on operating on a Just-in-Time basis. At any one time it holds a maximum of half a day’s stock and if it runs out of parts that is very serious. Honda reckons that an hour’s lost production costs it several millions of pounds. So why not stockpile? Build some warehouses? Toyota has said that if it built such a warehouse it would be the third biggest building on the planet.
Many businesses and their representative organisations have raised concerns about the digital infrastructure required post-Brexit. The fact that these are either set to be finished or upgraded in the next few weeks means that businesses will have very little time to get to grips with them. This increases the risk of mistakes being made and the associated problems that would then arise e.g. border delays and additional costs to businesses. Of course, anything that risks border delays presents a serious risk for Just-in-Time supply chains.
Fourthly, EU Rules of Origin require producers of final goods to include a minimum proportion of that item by value to be sourced within the EU. With the UK outside of the EU that means UK manufactured components no longer count. Anecdotal evidence suggests that UK suppliers are already being excluded from supply chains in favour of EU27 suppliers who enable producers to continue to comply with EU Rules of Origin. A trade deal may or may not have been able to address this; a No Deal Brexit certainly will not.
So, all in all, pretty terrible. Oh and I nearly forgot: all of this uncertainty has meant that new investment – especially from international investors deciding whether to invest further in their North East-based plants or place investments elsewhere – has stalled. Of all English regions, the North East has the highest percentage per head of jobs created by Foreign Direct Investment, with overseas-owned firms employing tens of thousands of people across the region. If there are two things international investors hate they are uncertainty and instability.
And if you’re looking for flowers – as a mark of sympathy or to cheer yourself up – that too might be problematic. Of all flowers sold in the UK, 70 per cent come from the Netherlands and are delivered fresh every day. In the first three years after the EU Referendum 1900 florists closed, seemingly due to the 20% devaluation in Sterling caused by Brexit which made importing unaffordable. After 1 January, the deliveries won’t even get through.
Photo – Tyne and Wear Archives and Museums wikimedia

Part 6 Teesside Airport: where the buck never stops

A S Hunter

Unless evidence emerges to the contrary, we shall have to assume that it is in TOP TEAM that strategic decisions are made, but it is not at all clear to whom this group is answerable. It is also not at all clear why this group isn’t the board of TIAL itself. This is the case at Cardiff, why not at Teesside?

MPs fight back for Northern culture

Jane Neville

The North’s cultural industry has been hit hard and faces an historic challenge as the global pandemic continues to affect our everyday lives. The Northern Culture APPG will promote and champion the huge economic contribution made by the North’s cultural sector, build consensus and fight for what the government needs to do to level-up and build back the North’s cultural potential now and in the longer term.

BREAKING

Sunderland residents protest over No Deal Brexit

Louise Brown

Nissan’s Chief Operating Officer, Ashwani Gupta, has repeatedly said that the plant in Sunderland would be unsustainable with a no deal Brexit. He also stated they need a Brexit deal with a sustainable business case for their UK commerce to be viable. Mr Gupta said that the EU was Sunderland factory’s biggest customer and warned that Nissan’s commitment could not be maintained if there was not tariff-free EU access.

Christmas with the Hobs

Kim Sanderson

“We know that freelance performers, technicians and artists have really struggled while venues have been closed, and many people have been unable to access government financial support – so it’s vital that we do our bit to help. Christmas with the Hobs gave us an opportunity to bring together North East arts professionals to create a magical Christmas gift from Northumberland. We hope you enjoy it!”

All party parliamentary group and March for Change launch interim report on the coronavirus pandemic

Kate Bredin

Dr Whitford spoke about the more effective use of local public health teams by all the devolved nations. She expressed disappointment that after a lot of progress in Scotland over the summer with no deaths for six weeks of people who had tested positive for the virus, too much of a relaxation being signalled from Westminster had effectively undone the work. She expressed concern about the planned relaxation this Christmas potentially coming at a very high cost.

Boris Johnson’s blame game

Giuseppe Bignardi

Fishing is a sticking point in the Brexit negotiations. The UK has rejected an offer to reduce the EU states fishing quota by 15-18%. Fishing is of relatively little importance to the UK (0.1% of our GDP) but it has become a symbolic issue. Our government wants an exclusive right to set fishing policies as a demonstration of UK sovereignty.

Homelessness is blighting the north of England – a radical housing programme could alleviate it

Stephen Lambert

Although the number of rough sleepers in Newcastle is much lower than Manchester and other core cities, with up to 20 individuals sleeping out in the city centre on any given night, many thousands more make up the ‘hidden homeless’. Some sofa-surf in friends’ flats. Others sleep in cars or stay in charity-run hostels, grotty B&B hotels and other costly forms of temporary accommodation. According to the housing campaign group Shelter, a staggering 320,000 people are homeless in modern Britain.

W(h)ither women’s work

Sally Young

Although it’s been illegal in the UK to pay women less than men for fifty years, a 15.5% gender pay gap still exists. This year the Equal Pay Day in the UK was 20 November, the day women effectively start to work for free because, on average, they are paid less than men. Sadly there will be many redundancies after furlough and the perilous state of childcare means a disproportionate number of these are likely to fall on women.

International day for disabled people: the need for an inclusive approach

Julie Ward

In 1984 I found myself running an arts and disability agency for the north of England, and encountered the tail-end of the mass segregation programme that had resulted in millions of people with mild to severe physical and mental disabilities being locked away in large institutions, forced to do menial work for pocket money and with little say about any aspect of their lives. The arts activities that my organisation ran often opened up deep emotional scars from years of abandonment, disregard and abuse. Paintings, poems and performances were littered with powerful symbols of imprisonment and freedom.

Covid-19: a catastrophe for women

Ann Schofield

Women on low pay, are not just having to choose between the basics of eating and heating, as many families living in poverty prior to Covid-19 had to do. They must now choose between food, warmth and all the required expensive sanitizers and masks needed to keep their families safe. In ensuring their family’s survival, many women are going without essentials. This includes safe, hygienic sanitary products which they can no longer afford and aren’t freely available because of the closure of centres and schools that distribute them.

Part 5 Teesside airport: does Houchen have any mates at Stobart’s?

A S Hunter

Throughout the report the joint venture partner is referred to as ‘the preferred operator’, and in one table TVCA Chief Executive Julie Gilhespie is charged with identifying one by March 2019. However, on page fifty-one of the document there is an apparent lapse in their editing, and in a table Stobart is named where presumably ‘preferred operator’ should be.

3p in my bank account: the story of Tony and Boris – both ‘just about managing’

Peter Benson

Tony is so proud he hates asking for help and always says there are so many others who are worse off than him. He volunteers at a charity in London; manning the library, sorting new books received, and handing them out. He loves it as he is on a rota and has a few buddies. There he is valued. He would never reveal just how badly-off he actually is as he doesn’t want people to know.

Poetry Corner

Longview

Harry Gallagher

The North, chipped and scavenged in these standing stone days, does not fall asunder nor domino down in sight of barber surgeons with their slingshots, chippings. Long abraded by high seas, we stack lean as limestone, holding our breath like we have held our noses, impassive in the face of this flitting ephemera. We Danelaw […]

BREAKING

The government needs to do more to save the High Street: a response to the Arcadia group administration news

Yvonne Wancke

Jessie Joe Jacobs, candidate for Tees Valley Mayor said: “Our High Streets are the heart and soul of our communities, my family’s business Jacobs’ carpets began on Stockton High Street and I am committed to seeing new life breathed back into it. Today’s news about the Arcadia group is desperately sad but we won’t go down without a fight.”