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Tonight, we're going to lift the lid on the hopes and fears for the


South's economy. Inflation may be falling but unemployment is rising


falling but unemployment is rising falling but unemployment is rising


and people are being squeezed, so how can this region, often the UK's


powerhouse, lift itself into recovery? That is what we are here


to discuss tonight. Our economy, I'm Sally Taylor and welcome to the


UK headquarters of Linde. The company here sells forklift trucks


and there has been a unit here since 1949. More than 200 people


work here. Tonight I am joined by people from all walks of life and


we will begin by hearing from Ellie Hallmark, a mother of four. She has


regularly missed meals when there is not enough money to feed the


whole family. There just wasn't enough money to go round to buy the


food to feed us, so something has to give. My oldest daughter said,


Mum, I'm with you on this. We went without food. We just did not eat.


Everything was going up in price, but your wages do not go up. My


rent from the 2nd April will go up 7.1 per cent, so in effect it is


another �40 a month they are expecting me to find, from where I


don't know. I'm not on minimum wage, far from it. I am willing to work


every hour there is but the more I learn, the more they take and I'm


sure of there's loads of other people like me out there and the


Government are just ignoring it, just ignoring it.


That is Ellie's story. Sadly Ellie cannot be with us tonight but it is


a typical story of some people and I will talk to Hayley. You are a


public sector worker. Most public sector workers have had their pay


frozen, you have had yours cut. How has it affected you? I'm basically


�250-�300 worse off because they have imposed a pay cut in order to


save jobs. We have not seen the jobs that have been saved but I


find it difficult. Every month I have to plan what I spend my money


on. What have you given up? I have to buy own-brand food now, I can't


not afford, my nutrition has probably suffered, I cannot buy as


much fruit and veg as I would like to. Do you ask yourself, is it


worth me having this job or would I be better off on benefits? For me I


do not think it is an option. The reason I went into public service


work was I wanted to make a difference. Although it is


extremely difficult, I deal with people every day who are in worse


scenarios than I am, people who are living in poverty while in their


sixties or seventies and eighties. Do you blame anyone? The Government


is likely to blame. A lot of these cuts have come and they will hit


women, especially women with children. We are expected to


continue to work but the attacks on child tax credit, working tax


credit, I do not see how we will get out of it. Penny, your party is


always saying we are always in this together. You heard this story of


Ellie and Hayley. They are not untypical. They will not think they


are in it with you. This is very common but I do encounter a lot of


people who are in... What do you say? We have managed to do quite a


lot and before we came in, someone in Ellie's position, there was no


incentive for them to work. If they tried to increase their salary,


they were taxed 98 per cent because of the benefits that were taken


away from them as their earnings went up. What we did was change


that. Should it have got to this stage where somebody decides it is


heating or eating? It should not. It is very difficult, I do not know


Ellie's whole situation but what we need to do is keep raising tax


thresholds. We have done that, we have lifted 1.1 million people out


of paying tax altogether, we have increased child tax credits.


could list these things but there are still people who are in these


pockets of poverty that we have. Daisy, Lib-Dem councillor. You are


in coalition here. It is partly for you to be blamed as well, is it?


can really relate to what Ellie was saying because in my ward, children


in poverty is an expanding number. You are in a position where you


were having to get rid of hundreds of jobs. We had tough choices to


make. I was in charge of adult social care and we had to look at a


situation where the council had to subsidise people who paid for that


care and I had to prioritise those who could not afford to pay. This


is an acute situation and I want to see an increase in the raising of


tax threshold. George, Labour peer. I am looking at a change to the


working tax credit situations coming in April, so that if you are


working like Ellie or Hayley, but if you are earning less than


�17,500 you will be worse off as a result of those tax credit changes.


What is the solution? Some say you got us into this mess. We've raised


the issue of the working tax credit problem a month ago and we said how


we would pay for it by getting rid of the stamp duty loophole. I am


pleased to see on the BBC today George Osborne closing that


loophole but he did not say he would make work pay for those


people on working tax credit. Andrew, you are a graduate. You


spent a long time trying to get a job. You now have a job. Can you


tell me what that process was like? It was humiliating to say the least.


Seeking employment is hard enough at the moment but the very people


you come into contact with who are supposed to ease that process can


be quite judgmental and I am not saying the JobCentre is all


judgemental. There were some very nice people who were very helpful


but the process itself, that process they are working in is


repressive. How did it affect you? You are well qualified and there is


nothing. I'd got a good degree, I worked hard throughout university,


I got as much experience as I could and you would assume that


employment would come with that naturally, but it did not. Aston,


you are from the Isle of Wight. You are what a recall a NEETs, not in


education, employment or training. Now you are an apprentice. Isle of


Wight, so many people chasing so few jobs, what was it like? It was


frustrating. You cannot find anything and if you do, it is


either working in a residential working in a residential home but I


cannot bring myself to do that. I don't have that kind of caring


instinct, and seasonal work as well. Then after that, you go back on the


dole for the winter months. Is it difficult to motivate yourself when


you get rejections? All the time. But I went on a course and that


ignited the spark of organisation and motivation in myself and with


these apprenticeship courses, I reckon that is a very good idea for


the government to be bringing up because it is very valuable and the


variety is amazing. You are on an apprenticeship scheme now. What


about friends of yours? What is the future looking like for them?


There is not a lot there. Most of my friends are going off the island


now and it is awful. My friends are all having to go off and go to


other places. Some cannot seem to bring themselves to do anything.


Motivation has gone. You are sitting next to Michael from the


Institute of Personnel Development. You help people in recruitment.


What you are hearing from Aston, Andrew, is this typical?


certainly is typical. What we are doing, what we are producing out of


schools, out of university are individuals who are not necessarily


well prepared for the world of work, do not have the skills that we need,


so we need to find some way of bridging that from taking them from


education into work. Through apprenticeships, vocational


training that is the bridge you need. It is not a political point,


it is a point that we need to make sure that the young people today


are given these opportunities in order they make that transition.


it the case that you hear people, I have applied for hundreds of jobs,


is it that they are getting something wrong or is it simply


that it is that tough? It is tough. There is a tsunami of CVs out there


but if you ask employers, actually recruiting skilled, qualified


candidates is still remarkably difficult. There is a mismatch


between the skills and education people have got and the


opportunities. Where are the opportunities, the sectors where


there are jobs? Financial services, even manufacturing and construction,


IT, professional services - all these have got opportunities but


when we look at opportunities, all too often the people applying for


them do not have the prequisite skills. Linda, you run an IT


company. You are nodding, yes there are jobs out there. You started up


your company and would you say that to other people, go and do it


yourself? There is a need for some kind of bridging. There is a gap


because we have been hiring and the quality that we get, sometimes I


wonder how frustrated people really are in this sector, how much that


plays a part. You employ a small number of people. That is right. We


have ended up having less staff because we have not been able to


fulfil the roles. I run, one of my businesses is a web internet


retailer and we try and get people to load product, write web sites


and sometimes we cannot get anyone. Are they not trained? We put


adverts out and we are looking for basic requirements and we are


saying, where are these one million 16-24 year olds on these jobs? The


other side is I put ads out and then I have 80 people. We need to


skill the young people up and equip them for the jobs for the future


which may not be retail, it may be in internet companies. It is making


sure because we have the young people, if they do not have skills,


they do not have the jobs. You run a company, how many do you employ?


We employ five people. We have grown 500 per cent, which is


fantastic and we want to grow more. There's plenty of applications and


we are not looking for certain skills, just people with the right


attitude and there were people like that with in the debate here. There


are lots of companies that are just looking for people that have the


right attitude, want to get involved and are passionate.


Unfortunately, SMEs are not as attractive as the big guys. SMEs,


small, medium enterprises. Just finding that information is like a


lost box. I felt like I was in the right place at the right time with


the right people trying to help me. Penny, as a Conservative MP, why


are you not listening to young people more instead of just saying


this is what we are going to do. What we are going to do is change


in part the advice that people are being given because the theme


running through this is that the job hunter is given very poor


advice. One of the most depressing things I see is someone shows me a


file full of 200 certificates they have got from being put on one


course or another. No one has given them good, one to one advice about


the skills they have, their ambitions and what is happening in


the workplace where they live. The welfare-to-work programme is about


giving people that one-to-one advice, including people who have


been out of work for a long time. That is a very welcome change.


have this business that basically has hit hard times because of the


cuts in subsidy. How many people did you start with. Now we have 35.


That is because of the subsidies. It grew very fast because the


subsidies were too generous. What is that like having to get rid of


people? That is very difficult especially in a climate when there


is not a lot fold them to go out to. It is a different kettle of fish


for you, Nick. You make these stair lifts. You have just given workers


recently a 2% pay rise. You might be saying, what downturn? For us,


we are growing. We are exporting. Most of our sales are export sales


instead of market. We export all around the world and we know that


there is inflation and so we need to keep hold of our staff. What are


you doing right? For asked the sector we are in, it is a growing


market. That helps us a lot. Innovation is really important,


research and development, getting your product right, finding your


markets around the world is really critical. All of that comes from


having great people working for you and that is what is really


important. Listening to Aston, apprenticeships are really key. We


have apprenticeship schemes and that is really important in terms


of training. We will come on to that but I want you to meet another


businessman. Rick runs a coffee shop. He started it with his own


money because he could not get a loan from the bank. It is such a


success that he has now opened a second one. This time he has not


We submitted our business plan to our new bank manager and our


business plan was passed around between three different branches


and on our opening day, as it became closer, we had no money so


in the end we had to take out personal loans. Week Max doubt our


credit cards. It was really risky. Our business survival was at stake


and we felt really let down. To be honest, the large high street banks


do not really have a lot of interest. We were looking for


�40,000 and once our application went live on the internet, five or


six hours later, we had 40 grand. First of all, congratulations, but


what is your relationship like with the bank now? First, Aiko own the


coffee shop with my business partner and we took out loans


together. Our relationship with the bank is pretty good. But we do not


do a lot that involves the bank apart from taking our money there


on a weekly basis. Was it frustrating not getting a loan?


It was not so much frustrating, I could have accepted that because


they start a business can be high risk in an economic downturn, but


it was the way we were treated by the bank. What was that experience


like this? There was not a lot of input into our application. There


was not a lot of feedback in terms of what we would need to improve


our chances. Our application was passed around to different bank


managers because ours was on holiday. We could not track down


who had our application. There was a lot of confusion and you were not


focusing on one person. He went to something that is called peer-to-


peer funding. In a nutshell, very simply explain what that is. Peer-


to-peer funding is essentially Internet-based business which


matches buyers with lenders. If someone wants to lend money, they


can get a higher interest rate by going through the bank's and


borrowers can get a lower interest rate. Linda, it is possibly


something that you could think of here. You want to expand. Would you


go down that road of peer-to-peer funding? The idea is great. It is a


growing concept, and the internet makes it easier. With Investment,


the balance is more about the people you bring on board. People


in the internet world talk about a funding gap. It is getting the


right expertise on your board, getting the growth to join you. The


funding gap in the UK means the focus means you have to prove your


business more than in the States. Before I come to Geoff, I want to


go to David Branston. 70 % of small businesses, I am told, relied on


people starting up with a savings and family in hennaed -- family


inheritances because they cannot get loans. We are hearing this


story all the time. Banks are not performing as they should. The


targets have not been nest. They are �5 billion short of what they


should be. Where banks have the targets to loan to it new loans.


There are alternatives to this. You'd think it is a great idea?


There is nothing wrong with peer- to-peer funding. Indeed, there is


an emergence of money coming out of families into business just to make


sure they are going. We have to do something. The banks say they have


plenty of money to lend, but they do not lend it, or they put


restrictions on it that it is not worth. Let me bring in Geoff French.


What is your response? One of the things that got fed back to us was


this issue of accessing finance. Now we are working with the banks


to try and close that gap, to close the office this connect there is


between the banks and business. That, sadly, is essential. That is


why you could say it to the government, that it is the link


between the two. They need to work together. Clearly that project


failed. It is great to hear about finance other than banks. The


publicity work the Federation of Small Businesses is doing is great,


though we cannot let the banks of the hook. There are two things that


need to happen. Those targets were having existing loans and calling


them new loans. Clearly, at the right so -- right structures were


not put in place by the government. Things have improved slightly, but


not enough. What it is going to take, we have got an opportunity,


we own part of banking and we should be setting the bar much


higher. We have got new providers coming on as well, with Virgin,


Metro, who are claiming they will be producing financial products


that will meet people's needs. We ought to be having more competition


in the banking world for people to do that. Two thing should happen:


First, we need to get back to people making local decisions, been


able to sit in front of people who are setting up start ups and making


good business judgments about what will work and what will not. That


does not happen now. We have got to have better services and products


for business, but also for people who want mortgages and so forth.


There is a complete disconnect between what people need to be


starting on the property ladder. You are talking about a wider


strategy. There is an increasing appetite for risk of. What Linda


was saying about in the US, there is not the same stigma attached to


business failure. It is regarded as something you can learn from so the


next business will be successful. Local bank managers are great if


they have more responsibility as long as they feel like they can


take a risk and some of a warm-up the work and it will not be scored


against them during their career. In your business, the business that


you set up his medical supermarket. It is to sell suppliers to GPs who


have this consortium now with the new health reforms. If the


government changed their mind over this, where does that leave you?


is interesting. Do you worry about it? To a degree, yes it. We are


slightly different because the economy is quite a buckle and what


we are doing naturally businesses are looking at their overheads and


challenging their existing cost so. That is what medical supermarket is


doing, helping those businesses in the health sector whether you are a


large care home group or a local GP service, looking out what they are


spending and hopefully challenging them and helping them achieve cost


savings. To a degree, if the government does change what is


going on, it could affect us, but not as bad as other industries.


you do not worry about the future in terms of changing government


policy that might impact you? necessarily, but we started again


through family savings, my business partner and I. If you want to grow


and prosper, we have proved we have got people that we want to employ


and do more, but banks are not supporting us. We are talking about


small businesses. The government talk the talk but they do not walk


the walk. Small businesses are always the poor relation. There is


not a Cabinet minister who has responsibility for small businesses,


yet the Prime Minister says small businesses are going to be the


salvation of the economy. Why do we have a Small Business


Administration like they have in America? We need to change our


mindset and take power back from banks and the government and say


councils have responsibility for economic development. Credit unions


are expanding rapidly in Berkshire for example. We need to take power


back and make decision-making easier. Councillors are the best


people in the world for that. A Cabinet minister may not have that


experience. This has to be a government initiative to support


the small businesses. Governments can make decisions on small


business. If you have got a champion around the Cabinet table,


that would help. The health service example, beat Solar subsidy, a


great example where decisions are clumsily made and can have a bad


effect. Equally, an investment in housing, but less than 100


affordable houses were built around the country last year. It could


create a huge number of jobs. was talking about a Cabinet


minister champion there. You are a real industry champion, Nigel,


onto? You believe let's sell I work in the marine sector which


is worth �1 billion to the country. We do not shout about that. The


marine sector is issued in Britain. Britain is all about quality yachts,


but you do not hear that. We have to go and shout about it. Why is


that? We are very English about it, very understated, we want people to


find out about a little gem and that we have. When people see the


quality we are doing, the hand- finished, we do not shout about


this. You are very much involved with the links to India and you are


saying, come on, let's shout about doing more trade with India. There


is no doubt the emerging economies provide us an opportunity to grow


hours or so. Our European counterparts are exporting more to


India, Brazil, China and given the traditional links we have to


India... You must be delighted that Vince Cable has been to India to


talk about trade. What is the problem? It is a combination of


factors. Once it is very much cold full, we are very much English and


we need to promote that bilateral trade. I think the government could


do more, so I think from -- the initiative is fantastic in


commercialising that. It is a combination of factors. Geoff, you


wanted to say something about that. It is just the basic statistic that


four-fifths of our export art to the developed world and not the


developing world and we have to change that focus. You want to do


more with other countries, but this year, what have you got, �15


million funding? Yes. Last year, there was 126 million. The Scottish


Enterprise has 300 million, how can you compete in a Chinese company


comes here? We would struggle to compete and the funding we have got


is not to encourage industry is to come in that way. The 50 million we


have -- 15 million is to invest in infrastructure that will promote


economic growth. It is the way we will be administering it in our


Beria, to invite bids for that money from both the public and


private sector and it has to be projects that promote economic


growth. Commercialisation is important for developing that


infrastructure. There must be certain sectors where we know there


is a potential for growth. It could be in renewable energy, the digital


economy, in services for the elderly because we know as we


project forward to the future that there are some industries where we


have a good chance of building growth. Let's talk more about


growth and bring in Nick. You work with apprenticeships. You believe


apprenticeships are crucial in your business. Absolutely. It is an


important part of our business in terms of being able to bring people


into our business and train them, give them the skills and experience


they need in our business. We are an engineering business, we have


lots of the print ships coming through our doors and that works


for us. The other thing is our customers tell us around the world,


in emerging economies, they love for buying British products and


that is great for us. We need to shout about that more. How much of


your workforce is apprenticeships. About 90 %. We started when there


was help to do it three or four years ago. The first year is the


hardest. The government needs to get behind companies in that first


year. After the first year they start to pay their way. You have to


put money in it to get these kids of the street. Tom, you are an


apprentice. Yes. The amount of training I get is substantial. I


have done a confined spaces training because I am in


construction. After the first year, I think they do need to be


supported because after the first year, you can give back. As an


apprentice do you feel positive about the future? Yes, because I


believe that I can after this are printed, I can go to university and


say to businesses, I have done this before, I know what this is about


that is why you should pick me. apprenticeships are really


important. What Geoff will take you is that with Enterprise is the


apprentice champion for enterprise emissary. I sit on the board in


Dorset. In many ways I am envious. He has a �15 million, I have six.


That will not even build a roundabout! I said earlier about


there is no doubt apprenticeships are really important but I also


think for people leaving school without qualifications, we need to


put work experience in there. It is a pity the debate recently was


about taking the benefit away from people because there is no doubt


work experience is the gateway in. A third of all work experience


leads to employment. For every school to offer work-related


learning to every pupil is essential. What I want to do is


move on to how we feel about the future and how we are looking to


the future and what sort of mood we are in. This is a big influence on


the economy. Even if you have the money or perhaps you are too afraid


or worried about spending it, here are some views from the street in


Brighton. We are both retired and you make do.


The wages do not go up so you end up having one pizza between two.


are OK, we are fine. You have to have a positive attitude in life.


You can see many people are dining out, or the pubs of all. More I


partner is out of work and cannot supply our house, so there is only


one wage going in and that is tight. I am noticing that the shopping


bill is expensive now. And the petrol. Yes. On the whole, the


country is looking up rather than down so I think if everybody goes


about it with a good attitude, all is well.


The views on the streets of Brighton on Friday night. Hayley,


do you see light at the end of the tunnel? No, absolutely not. For me


my wages have gone down and will continue to go down and the prices


will go up. I do not see how this would end. I feel like I am a


choice -- I am left with a choice, I would like to have a family and


looking at barely's story, I do not want to be in that position. I do


not know whether I want to stay here, why should I put into a in


economy that will not support me. Hayley is talking about her


individual situation but what I have to say is the F S B carries


out a major survey. Two years ago there was a lot of pessimism. This


last survey, there were 12,000 small businesses and their shows


that people are beginning to think there is light at the end of the


tunnel. I worked for the public sector and it is pessimistic.


believe it is down to consumer confidence because if nobody is


willing to go for it and spend more in the economy and not cut back on


the luxury is so much, it will never pick up. If people are too


scared of a rainy day or they will be the next to have their job cuts,


we will not get any work. Aston, how do you feel about the future?


Definitely. I have a job I love and it is amazing just going out and


doing what I can. That is how I feel and it is not a broad sense of


everyone but for me, I am just carrying on going through life.


Maybe my social life has taken a battering, but my career is going


up tenfold and I am appreciative of the help I have gained and the


people I have met along the way. Thank you very much or the view for


being here tonight. The Chancellor's Budget is on Wednesday


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