LABOUR has today (Friday, July 1) called on the Tory-led Government to think again on the level of support it’s providing for the region.

Round two of the Tory-led Government’s Regional Growth Fund (RGF) closes today, with hundreds of bids likely to be submitted from all over the country for the £950m fund.  56 projects in the North East were rejected from the first round of the Regional Growth Fund, which was oversubscribed by six to one.
Labour is calling for a repeat of the bankers’ bonus tax to fund regional growth by an extra £200m this year.  The extra money would be used to stimulate growth and create jobs.

Labour’s Shadow Business Minister Gordon Marsden said:

“This Tory-led Government has shown the North East that it totally underestimates the scale of the challenge facing the region.  By already rejecting 56 bids to the Regional Growth Fund round one, it is clear that they are failing to prioritise growth and jobs across the North East and have instead chosen to cut too far and too fast.
“They have cut regional growth funding by two thirds.  Labour is calling for an extra £200m to be put into the second round of the RGF, funded from repeating the bankers’ bonus tax – a fair and efficient way to stimulate growth and boost jobs in the region.

"This Tory-led government should explain why they’re not prepared to give England’s regions the same access to funding and assets they’ve allowed London to keep - worth hundreds of millions of pounds. 
"We believe money and assets intended for the regions should stay in the regions. They should think again on regional growth and support the North East in creating the jobs we need for the future.”

The Regional Growth Fund's £1.4bn over three years represents a two thirds cut in the regional investment delivered by the Regional Development Agencies, which are being scrapped. Only 50 projects nationwide were given financial support from the £450m first round, from the 464 project bids that totalled £2.78bn.
In contrast, an independent evaluation of RDAs has shown that overall, every £1 invested by RDAs generated at least £4.50 for the regional economy.


Editors’ Notes:
1.) Parliament next week will debate a Labour amendment to the Finance Bill which would repeat last year’s bankers’ bonus tax. With the £2 billion that, on a cautious estimate, could be raised this year from repeating the bank bonus tax, Labour says £200m would be allocated to boost the Regional Growth Fund and help support businesses in the region.

2.) In 2009, an independent evaluation of RDAs by accountants, PricewaterhouseCoopers, showed that RDAs were making a real difference to the economy: overall, every £1 invested by RDAs would generate at least £4.50 for the regional economy. (Department for Business, Enterprise and Regulatory Reform, Impact of RDA spending – a report by PricewaterhouseCoopers, March 2009, p. viii,