New PM faces tough balancing act

INCOMING Prime Minister, David Cameron, will have to carefully balance investment, targeted cuts and tax rises if he is to avoid plunging the North East economy back into recession, according to one of the region’s most influential businessmen.

Martyn Pellew, president of the North East Chamber of Commerce (NECC) has written to the new keyholder to 10 Downing Street advising him that the balancing act must be successful to ensure businesses continue to recover and grow.

Speaking on behalf of NECC’s 4,000-strong membership, Mr Pellew said that sustained economic recovery remained the top priority for the new Government. In a letter to Mr Cameron, Mr Pellew also acknowledged that private sector growth must be backed by action to tackle the public finance deficit.

Getting the balance right will be a considerable challenge and NECC has highlighted a number of key areas that will help the Prime Minister focus activity in the areas that will generate the greatest benefit. These include the development of infrastructure to support North East industry, improving performance by using public resources to develop competitive businesses, and removing barriers to business growth.

The letter urges the new coalition Government to subject all policy decisions affecting the North East to NECC’s economic recovery test which assesses whether new measures will help or hinder North East businesses in delivering the recovery. Any that hinder should be abandoned.

In the letter, Mr Pellew, writes: “Enabling sustained economic recovery is clearly the top priority for your Government. However, this clearly cannot be achieved without action to tackle the public finance deficit. The public sector will therefore not be in a position to contribute to economic and employment growth and the private sector alone will be in a position to deliver the recovery.

“In the North East, where the public sector plays a larger role in the economy than in many other UK regions, this creates particular challenges. The balance between continued investment, targeted cuts and tax rises must be carefully considered to make sure the capacity for the private sector to grow in this region is not undermined.”

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