North East economy grows but familes feel the pinch, new figures show

The North East's economy is growning but life for many families is growing harder according to new statistics

People in the North East have been forced to economise and cut back on the amount they spend on luxuries
People in the North East have been forced to economise and cut back on the amount they spend on luxuries

Business leaders urged the Government to back the North East economy as they welcomed new figures showing output is growing.

But the positive output figures came as separate statistics found that life for many families across the region was growing harder rather than easier.

New figures show that the North East economy grew by 1.7% last year. The North East Chamber of Commerce said the growth showed that the North East could contribute to the UK economy and deserved Government backing. Ross Smith, director of policy, said: “The North East saw growth well above the national average, which is a good indicator that we are catching up with the rest of the UK after some incredibly tough years.”

But the Office for National Statistics (ONS) also published separate statistics looking at household spending, which suggested economic growth has not yet led to higher living standards.

People in the North East have been forced to economise and cut back on the amount they spend on luxuries. The average weekly spend on alcoholic drinks in the region is £6.80 for a household - down by 62p compared to 2011, once figures have been adjusted for inflation.

Even the average weekly spend on food, with alcohol excluded, is down by 30p per household to £43.40 a week.

By contrast, the average weekly cost of rent for those who rent their housing rose from £96 in 2011 to £132.20 in 2012, an increase of more than third.

A report by think tank the Institute for Public Policy Research today warns that families were under “enormous strain”. The centre-left think tank said that many families fear for the future of their children.

Half of young people who don’t own their home don’t expect to do so within the next decade; there are over one million young people not in education employment and training, and one in five teenagers with low level qualifications are neither working nor studying by the time they are 20.

It also warned that childcare was becoming more expensive and a part-time nursery place now costs over £100 a week, having risen by 77% over the last decade, twice as fast as general prices. And a separate study by Real Life Reform, a research body backed by housing organisations in the North East, warned that households were increasingly getting in to debt as they struggled to pay bills such as council tax.

Gateshead Labour MP Ian Mearns said: “This report shows the Government’s ideologically driven welfare reform policies have resulted in an increasing number of households now spending less than £20 a week on food, while over half have no money left after paying essential weekly bills.” He added: “One group of mums even split the cost of Sunday lunch and cook in each other’s houses to make sure their children get to eat ‘some decent food’.”

For more on the growth figures, turn to page 27.


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