The North East economy needs its own regional version of Labour’s proposed British Investment Bank, the Shadow Chancellor Ed Balls has told an event in the region.
Ed Balls told an audience at Newcastle’s Great North Museum that regional firms needed better access to finance and a Government-backed investment bank could provide the stimulus they need.
Building on the idea introduced Labour in 2013, he said: “We’ve talked about building a British Investment Bank to address the lack of funding for small businesses.
“There’s got to be a North East version of that bank — one that will respond to businesses that want to grow and invest.”
Rebuffing claims that Labour was the “anti-business” party, Mr Balls said Labour would cut business rates, provide tax rebates for businesses paying the living wage, guarantee apprenticeships for young people, tackle late payment and develop measures to introduce more competition in the UK.
He said: “Productivity not only occurs with invest, it takes an environment where good businesses can expand and grow and bad businesses go bust.
“I don’t want to walk away from a market economy anymore than I want to walk away from the EU, but we need an economy with more competition. New firms need to be able to enter the market; a system of governance needs to make sure investors are confident for the long term and a banking system which provides for people with good ideas who want to grow.
“None of these things happen easily. They don’t happen because of a free market, they happen because businesses and Government work on a proper plan.”
Taking questions from the audience, Mr Balls reiterated some of the pro-business policies outlines in his editorial for The Journal this week.
The senior Labour politician said his party’s plan would place more emphasis on the needs of small and medium sized businesses.
He said: “Until now all the action has been about cutting corporation tax for very large companies. I think we need to do more on the tax regime for small businesses.
“Come May next year we wouldn’t have a cut in corporation tax for large firms. Instead we would use that opportunity to cut business rates for small businesses.
“Secondly, we have Graham Cole, the chief executive of helicopter manufacturer Augusta Westland, conducting a review for us on how we can better help small business who want to export.”
Emphasising he did not wish to favour small business over large business, Mr Balls added: “It’s ridiculous that we live in a country where small business are being damaged by late payments. They have no means to be represented and no rights to reclaim interest and there is no accountability for late payments. We want to change that.
“If you’re paid late as a small business, you should be able to claim interest on that payment.”
Mr Balls also said North East firms were best placed to dictate their own growth strategies, following his promise that Labour would make an ambitious devolution of powers to the region.
He also promised to arm the regional local enterprise partnerships (LEPs) with more “clout” to execute their strategic plans.
Mr Balls said the dismantling of the regional development agencies, including One North East, was a “terrible act of economic vandalism”, but pledged to work with the LEPs.
He explained: “We’re not saying we’d go back to those models, I’m determined to make the LEP system work for the future. I want to give them more leverage, resource and clout than they have at the moment.”