Posts Tagged 'Private sector'

Brighton & Hove’s local economy – reasons to be optimistic

Last week at our Full Council meeting we had a very interesting debate on the possible effects of reductions in public spending on the local economy. The Green Party, who put forward the motion for debate argued strongly that cuts to the public sector will have a damaging effect.

For my part, I argued that we have good reason to be optimistic here in Brighton & Hove and that talking the economy down in this way does nobody any good. By and large the driver for local (and national) economic growth is the private sector and in Brighton & Hove there are very encouraging signs:

  1. The Centre for Cities have once again singled Brighton & Hove out as performing strongly post-recession. One quote from their report explains why: “Cities with strong private sector economies and limited public spending cuts, such as Brighton and Cambridge, will be well placed to drive the UK’s economic recovery.”
  2. Just last week the Argus highlighted that recruitment specialists are reporting a surge in vacancies with firms returning to pre-recession staff levels. They also reported that the number of young people starting apprenticeships is rising faster in Brighton and Hove than anywhere else in the South East. Both very welcome pieces of news.
  3. Amex announced last week that they are looking to expand still further in Brighton by relocating a significant number of jobs from their Madrid office.
  4. And developers are still looking to invest in Brighton & Hove. For example, the exciting proposals for a new hotel on the old ice rink site in Queen’s Square.

So, although clearly there are going to be tough times ahead, particularly for us in the public sector, I do retain a sense of optimism about our future prospects.

And I have to say that what would really damage the local economy is the massive increases in taxes on business that the Greens advocate. Just last month, Caroline Lucas put forward proposals to introduce a new ‘business education tax’ on companies – supposedly to pay for free higher education. I’m sure that businesses would be delighted to have this extra burden imposed on them at this time. It would certainly ensure that there would be far fewer jobs for all the new graduates to go into!

And just think what the effect on local businesses would be if the Greens ever got to introduce their cherished congestion charge? As we have seen in London, a Green candidate for the Mayoral elections – Jenny Jones – wants it extended to cover the whole City and the charge to be raised to £50! This really would kill the economic recovery stone dead and I think it would be extremely bad for this City if they ever got the chance to bring it in.

UPDATE: Further good news yesterday on the jobs front. According to a survey by BrightonandHoveJobs.com, more than a third (36%) of local employers plan to create new jobs and take on new staff over the next 12 months, while 17% said they expected higher than average growth which could lead to new jobs. A mere 4.3% said they were looking to reduce staffing. Very encouraging.

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National Insurance hike would hit Brighton & Hove Hard

The Government’s proposed 1% rise in National Insurance would not only hit residents hard, it would also be another body blow for businesses in Brighton & Hove, at a time when they can least afford it.

At the City Council we have calculated that if it goes ahead, the rise will cost us – as the City’s largest employer – an extra £1.5 million a year. That is £1.5 million of local council tax payers money going straight back into Treasury coffers to pay off the massive debt they have racked up over the last 10 years or so. And at a time when our budget is under such pressure, it is £1.5 million we can ill afford to lose.

Councils wouldn’t be the only public sector organisation to lose out – nationally, the NI increase would cost the NHS £208 million, schools would have to fork out £66 million (equivalent to something like 2,000 teachers) and the Police would face an increased tax bill of £43 million.

Paying off the national deficit has to be the top priority for whichever Government is at the helm next month. But bringing in another tax on jobs (which would hit both private and public sector employers and employees) is surely not the way to go about it. The only long-term way of addressing the underlying structural deficit is to make it easier for businesses to set up and expand. The private sector generates the wealth which enables us to have an NHS, state schools, policing and roads. Sadly, the parties of the Left seem unable to grasp this most basic of economic truths.


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