:00:33. > :00:37.Hello and welcome to this special programme as we examine the state
:00:37. > :00:42.of the region's economy. Thousands of public sector job losses, pay
:00:42. > :00:45.freezes and the rising cost of fuel have all taken their toll on
:00:45. > :00:48.families across the south-west in the last year. In the week of the
:00:48. > :00:52.Budget and with the government's measures to deal with the UK's debt
:00:52. > :00:55.being felt across the region, tonight we'll assess what impact
:00:55. > :00:59.they're having on households and businesses here, with the help of
:00:59. > :01:02.business leaders, tafpbged with moving the economy forward, job
:01:02. > :01:07.seekers desperate for work, experts who will assess the health of the
:01:07. > :01:10.economy and MPs, we'll aim to find out how well placed the South West
:01:10. > :01:14.is to deal with the ongoing austerity measures and look at
:01:14. > :01:18.where potential growth comes from. If you're looking for a job, what
:01:18. > :01:23.are your prospects of finding work? Do we have the skills in the South
:01:24. > :01:27.West that employers are looking for? Youth unemployment is at its
:01:27. > :01:31.highest level since current records began, what does the South West
:01:31. > :01:37.have to offer its young people? One award-winning student says not
:01:37. > :01:44.enough. My name is Sam Coumbe, I'm a
:01:44. > :01:48.student at Plymouth University. The award I won was because I started
:01:48. > :01:52.running the Farmers' Market. It's become a real success. My aim after
:01:52. > :01:55.I graduate is to enter the graduate job market in a position of either
:01:55. > :01:59.retail management or sales and marketing, though I have been
:01:59. > :02:03.rejected by several firms so far. I've had two interviews, with two
:02:03. > :02:08.different firms. But it is daunting when you receive e-mails from
:02:08. > :02:12.companies saying that they've had 13,000 applicants for less than 200
:02:12. > :02:15.positions. It does really put doubt in your mind. Through my placement
:02:15. > :02:19.search it became apparent there's little in this part of the country.
:02:19. > :02:24.If I want to get into a graduate position, I am going to have to
:02:24. > :02:27.move away to another part of the country or another part of the
:02:28. > :02:31.worldment The Government have got their policies in place in terms of
:02:31. > :02:35.the educational side of things. I feel they could be doing more when
:02:35. > :02:39.it comes to students leaving university. It's all well and good
:02:39. > :02:44.with a masters degree or PhD, but if you don't know what to do with
:02:44. > :02:46.it when you leave, it's really just a piece of paper.
:02:46. > :02:51.Chris Dawson what should someone like Sam do to single themselves
:02:52. > :02:55.out in the jobs market? They need to go direct to the employer, offer
:02:55. > :02:59.their services, for instance, we're forming an academy now which I'm
:02:59. > :03:04.going to lobby the Government and Sir Philip Green is doing the same
:03:04. > :03:09.thing. We will train those people, highly train them, so all our
:03:10. > :03:13.enterprises we hit the ground running at 500mph. If they get into
:03:13. > :03:16.our academy, I think it's better than any university. That's a
:03:16. > :03:21.generalisation of a degree. You're being trained right to go at the
:03:21. > :03:25.coal face. Believe it or not, we struggle to get trained managers.
:03:25. > :03:29.We pay the right rate, not over or under. I think the academy is the
:03:29. > :03:34.way forward. The Government need to get their hand in the pocket and
:03:34. > :03:39.help us with it. The academy is self-centred because we want these
:03:39. > :03:41.guys coming directly to us. Brent Ben if we're to drive the economy
:03:41. > :03:46.forward it's essential to keep people like Sam in the South West.
:03:46. > :03:49.How do we do that? I start by saying it's very good news that we
:03:50. > :03:53.have people like Sam with the skills set in the South West. It's
:03:53. > :03:59.good news that you want to remain in the south-west. You will look at
:03:59. > :04:04.regions where they don't have the education or the attractions to
:04:04. > :04:09.retain people. We need to sell the story of the South West to business
:04:09. > :04:13.leaders and it's getting out there. We have a job seeker here Nichola
:04:13. > :04:18.Wren, give us your experience of looking for a job. It's really
:04:18. > :04:23.difficult. There are so many applicants for each job. You'll
:04:23. > :04:29.apply for, I'm a PA, and I'll apply for a job that 300 people have gone
:04:29. > :04:33.for. I've applied for probably about 400 or 500 jobs in the last
:04:33. > :04:38.two years. I've had three interviews. Three? Yeah. You have
:04:38. > :04:42.youngsters who you're worried about as well? I have teenagers. I have a
:04:42. > :04:46.son who's 226789 he's just gone into an apprenticeship. My daughter
:04:46. > :04:50.is 17. She's at college at the moment. She's hoping to study
:04:50. > :04:53.criminal psychology. I'm just concerned that she's narrowing her
:04:53. > :04:57.field too much and that she should look at doing something that's a
:04:57. > :05:01.bit more useful. What are you thinking about in terms of her
:05:01. > :05:05.prospects? I don't think they're good at the moment. I just, I
:05:05. > :05:10.suppose I'm just at the end of my tether at minute. I'm feeling that
:05:10. > :05:14.it's like banging your head against a brick wall. Anne Carlisle, you
:05:14. > :05:21.wanted to say something? Yes I head up University college Falmouth,
:05:21. > :05:27.which is creative industries and if there's one skill we are imbueing
:05:28. > :05:34.in students and that's true of all the further education in the South
:05:34. > :05:37.West is entrepreneurial skills. Most of the sectors which are
:05:37. > :05:41.rapidly growing were not conceived of five years ago. The ability to
:05:41. > :05:45.set up a business and have graduate skills and join businesses already
:05:45. > :05:49.in existence is critical. We've got some fantastic statistics in the
:05:49. > :05:53.South West which are five times more likely graduates are more
:05:53. > :05:57.likely to set up their own businesses than in other parts of
:05:57. > :06:01.the UK. So it's not all doom and gloom. It's really about building
:06:01. > :06:07.on what is a truly entrepreneurial spirit and making sure we teach our
:06:07. > :06:10.students and graduates the skills to be able to go out and be
:06:10. > :06:14.innovators. How concerned are you about losing skills from the region,
:06:14. > :06:17.because there aren't the jobs here for people like Sam? We have to
:06:17. > :06:23.build the skills in the first place. When we've got them it's important
:06:23. > :06:26.to unlock the doors into employment. We've been working hard in Cornwall
:06:26. > :06:30.for some time. We have a scheme where we've funded graduates into
:06:30. > :06:34.firms for the first year and in that 12 months they grow the
:06:34. > :06:38.business and 90% of graduates have stayed on in that job because the
:06:38. > :06:43.firm is grown from it. We're looking to expand on that hugely
:06:43. > :06:48.now. We're also bringing together Cornish bursary to support up to
:06:48. > :06:52.600 Cornish students in graduate positions and guaranteeing them
:06:52. > :06:58.another year in employment, getting them in there, grow the businesses.
:06:58. > :07:01.It's good for the economy and the employee. Hugo Swire, clearly the
:07:01. > :07:05.Government's policies on employment aren't working at the moment.
:07:05. > :07:11.Unemployment is up again. We have youth unemployment at record levels.
:07:11. > :07:14.When is this oil tanker going to start turning? Youth unemployment
:07:14. > :07:17.rose year on year in the last Government at a time of record
:07:17. > :07:22.growth in the economy. It's nothing new. If you come oust further
:07:22. > :07:26.education owing a lot of money, already, then you can't get a job
:07:26. > :07:29.it's very debilitating. The Government is doing a lot with the
:07:29. > :07:33.youth contract, which will help a lot of people. What's going to help
:07:33. > :07:36.people is growth in the economy, stability in the economy and
:07:36. > :07:40.confidence in the economy. I think in the South West we're incredibly
:07:40. > :07:44.well placed with renewable energies. We should become the green
:07:44. > :07:49.peninsula around the world. Tourism, we have a lot going for us. Too
:07:49. > :07:53.often we sell ourselves short. It's going to take time. When it comes
:07:53. > :07:58.right, it will come right quite quickly. Alison Seabeck where would
:07:58. > :08:02.you like to see support targeted, particularly for young people?
:08:02. > :08:07.We've seen 183% increase in youth unemployment across the South West.
:08:07. > :08:11.We need very clearly to have real jobs with real wages with real
:08:11. > :08:14.chances at the end of it. This Government isn't delivering that.
:08:14. > :08:17.The youth contract is an interesting proposal, but it won't
:08:17. > :08:23.deliver what we need. You're talking about the guaranteed job
:08:23. > :08:28.for six months for young people. Absolutely, paid for out of a
:08:28. > :08:32.banker's bonus. The point is that you have the university, who
:08:32. > :08:36.Plymouth University, fantastic business sector within it, trying
:08:36. > :08:40.to encourage young people to do it. What the vice Chancellor has come
:08:40. > :08:45.out publicically and said is that they are expected a 10% drop off in
:08:45. > :08:48.young people who are not from wealthy families going in, young
:08:48. > :08:52.people with real entrepreneurial skills potentially, which so far
:08:52. > :08:56.have been growing. Government have got to look at this. We grow our
:08:56. > :09:00.young people in the South West. The reason the peninsula dental school
:09:00. > :09:04.came here is because we needed dentists here and we knew if we
:09:04. > :09:08.taught them here, they would stay here. We have to work really hard
:09:08. > :09:11.on that. I want to come back to Sam who featured in the film. What do
:09:11. > :09:16.you think of what you have heard? With the fees increasing, it's
:09:16. > :09:20.going to attract a certain calibre of student. It's going to be �9,000
:09:20. > :09:25.a year to attend university. Post graduate courses will be more as
:09:25. > :09:29.well. Academies are the way forward, integrating work experience. That's
:09:29. > :09:33.absolutely essential. I mean, it's extremely difficult to get a degree
:09:33. > :09:37.these days doesn't count as much as it did 20 years ago. You need to
:09:37. > :09:42.have the relevant work experience. That proves you can do it at the
:09:42. > :09:45.ground level and move through. I think the philosophy is changing
:09:46. > :09:49.with regards to degrees and work experience. More comments from the
:09:49. > :09:52.audience in a moment. The Government's mantra throughout the
:09:53. > :09:57.public sector cuts sthat private sector would pick up the slack. The
:09:57. > :10:01.figures for the greater South West for the last year suggest that's
:10:01. > :10:05.not happening. 37,000 public sector jobs were cut, just 6,000 private
:10:05. > :10:08.sector jobs have been created. Here's one public sector worker
:10:08. > :10:16.with the driver and vehicle licensing agency, who fears she's
:10:16. > :10:22.about to lose her job. I'm Louise Munn and I work for the
:10:22. > :10:27.DVLA. The Government are proposing to close the 39 regional offices of
:10:27. > :10:31.the DVLA. That will result in the loss of about 1200 jobs. It's
:10:31. > :10:37.insult,, did he grading. We work so hard to provide a public service
:10:37. > :10:41.where we k. We are a department that generates income for the
:10:41. > :10:45.Government through number plate transfers etc. I am personally fed
:10:45. > :10:49.up of the Government blaming the previous administration. It's not a
:10:49. > :10:53.blame game. We're here. We've got to deal with, it as we keep getting
:10:53. > :10:57.told, but why hit the public services? It is getting to the
:10:57. > :11:03.stage already where we're thinking, can we afford to fill the tank with
:11:03. > :11:07.petrol? We can afford �10 here and then we can only afford �20 worth
:11:07. > :11:12.of shopping or whatever. I've already faced redundancy through
:11:12. > :11:17.the MOD in Northern Ireland once. I relocated my family back home to
:11:17. > :11:25.Cornwall as a result to stay employed. My fear is that I'm not
:11:25. > :11:28.going to be able to continue supporting my family as I want to.
:11:28. > :11:32.What are the prospects of the private sector picking up the slack
:11:32. > :11:36.from the public sector cuts? problem with these things is always
:11:36. > :11:40.timing. Unfortunately the private sector may fill that gap over time,
:11:40. > :11:44.but it won't happen this year and probably not next year. I have
:11:44. > :11:47.confidence in the economy and entrepreneurial spirit, we've heard
:11:47. > :11:51.about, it will happen in time. You have to back the youth that is
:11:51. > :11:57.coming up behind us. But in the next year, the next couple of years,
:11:57. > :12:00.it is not going to happen. Demand is too weak. Are we replacing like
:12:00. > :12:05.for like. Some of the statistics suggest we are losing well paid
:12:05. > :12:09.public sector jobs, but they're being replaced by lower paid part-
:12:09. > :12:12.time private sector jobs. That's always the way in the down part of
:12:12. > :12:16.the downturn. We're in a period where we're losing jobs and the
:12:16. > :12:20.ones being created are not the high value, high productivity jobs that
:12:20. > :12:23.you need for the long-term. We have to make that adjustment through the
:12:23. > :12:27.cycle. At the moment it's not happening. I'm sure it will happen
:12:27. > :12:32.in the future. But we probably need measures now to help the economy
:12:32. > :12:38.grow better. We're not getting the productist or employment growth we
:12:38. > :12:41.need. We heard Louise's story at the DVLA, and Catherine Craig
:12:41. > :12:45.possibly staff face a change to pay because of this hint now that
:12:45. > :12:51.regional pay might be introduced. What do you think that would do to
:12:51. > :12:57.workers like Louise? Well, first of all, regional pay is not something
:12:57. > :13:00.new. It's been mooted right back at the beginning of the noughties.
:13:00. > :13:04.you think it would drive down public sector wages in this part of
:13:04. > :13:10.the world? Yes, of course it would. We know there's a pay freeze in
:13:10. > :13:15.place. We know that pension contributions are going up. If we
:13:15. > :13:18.find that pay is down and constrained in this respect, I
:13:18. > :13:21.think there will be a mass migration. The figures suggested in
:13:21. > :13:25.this debate in the run up to the Budget would suggest that the
:13:25. > :13:29.private sector cannot keep wais with some of the growth in public
:13:29. > :13:33.sector wages. The gap is something like 8% on average. Yes and that
:13:33. > :13:38.figure is a little bit fluid at the moment, because we know there's a
:13:38. > :13:45.pay freeze in place and job cuts and everything else. But of course,
:13:45. > :13:49.prior to that, prior to the recession, that gap wasn't so big.
:13:49. > :13:53.These differentials move a lot. In a boom time the private sector
:13:53. > :13:57.moves ahead. In a downturn the public sector moves ahead. You have
:13:57. > :14:03.to lock over a long period of time and see what the differentials are.
:14:03. > :14:08.If the Government is true to its theme, wanting growth, growth is
:14:08. > :14:12.about productivity and employment. The things that drive productivity
:14:12. > :14:16.are high value jobs, high skills which are well paid.
:14:16. > :14:20.comfortable are you with the idea of regional pay? I don't want to
:14:20. > :14:24.see regional pay pushing down the wages. I don't want to see that.
:14:24. > :14:27.I'm very uncomfortable with it. I want to see private sector pay
:14:27. > :14:30.increasing so that people can continue to share in a greater
:14:30. > :14:34.prosperity rather than penalising those who happen to work in the
:14:34. > :14:39.public sector. We have to remember that the last Government basically
:14:39. > :14:43.crashed our economy. In the last year in office, one of every �4
:14:43. > :14:47.they were spending was borrowed money. I can hear tuting, because
:14:47. > :14:50.we're living in the present. Absolutely. But the coalition
:14:50. > :14:55.Government is dealing with the mess that was left behind. Tackling the
:14:55. > :15:00.private finances, driving down the deficit has to be the priority.
:15:00. > :15:04.Let's talk about the public sector pay premium in the South West about
:15:04. > :15:08.7.5% according to the Institute for Fiscal Studies. The public sector
:15:08. > :15:12.pay freeze proposed that will bring back the pay premium close to
:15:12. > :15:15.levels of 2008 just before the final crisis. But we're kidding
:15:15. > :15:20.ourselves if we think we're going to get ourselves out of the
:15:20. > :15:23.financial crisis by paying more for the public sect or. We had a system
:15:23. > :15:27.where we're borrowing money at the moment to pay for the public sector
:15:27. > :15:32.we have. We spent too much money at the time, we didn't fix the roof
:15:32. > :15:36.when the sun was shining. Now we've paid for that. What we need to do
:15:36. > :15:39.is free up private enterprise. It is the private sector which will
:15:39. > :15:43.lead the recovery. At the moment too many small businesses, the
:15:44. > :15:49.lifeblood of the economy, they even struggle to take on an extra worker.
:15:49. > :15:54.Taking on one extra member of staff can double the amount of paper work.
:15:54. > :15:58.The real debate here and remember where the growth will come from.
:15:58. > :16:04.I'm glad the TPA here, I'd-a membership form, I don't know how
:16:04. > :16:08.you become ally of the TPA. TaxPayers' Alliance. It's almost
:16:08. > :16:12.like the mantra, blame Labour. I'm wondering we're two years into this
:16:12. > :16:17.coalition Government now, when do we get the coalition standing up
:16:17. > :16:20.and being counted? The criticism is often levelled at Labour that you
:16:20. > :16:25.didn't fix the roof when the sun was shining. How did we get where
:16:25. > :16:30.we are now? In my authority at the moment the leader of the council
:16:30. > :16:37.won an award two years ago for the most achieving council. One of the
:16:37. > :16:41.criteria was having built seven new schools with Government money from
:16:41. > :16:45.the Labour Government. We don't hear her blaming Labour for her
:16:45. > :16:48.awards. But there wasn't the public money to do this. We hear this like
:16:49. > :16:53.a mantra. Let's go back to regional pay. What Chris Dawson said is
:16:53. > :16:58.revealing. Good businesses like his are not interested in a race to the
:16:58. > :17:02.bottom on wages. They're not interested in having, they don't
:17:02. > :17:08.believe that public sector wages being cut is the way to equalise.
:17:08. > :17:11.What I'm saying at the moment is if we have regional pay for the South
:17:11. > :17:17.West, Plymouth can kiss goodbye, for example, to John Lewis ever
:17:17. > :17:23.coming here. I want to come back to Robertment
:17:23. > :17:26.People will see politicians quablg about whose fault it is the economy
:17:26. > :17:30.is broken. We need to get the economy growing. That has to
:17:30. > :17:33.involve tax cuts. That's the point I was going to make. Nigel has
:17:33. > :17:36.rightly said that the private sector growth will take a little
:17:37. > :17:41.time to come along. What we should be talking about now is the
:17:41. > :17:45.stimulus to the economy to make that private sector growth come
:17:45. > :17:50.along. I'm quite certain if we get the stimulus, the private sector
:17:50. > :17:56.has the oblt to take the slack from the public. That's what we should
:17:56. > :17:59.be talking about. Nobody wants to see redundancies particularly when
:17:59. > :18:04.it's dedicated public servants doing a great job. I want to give
:18:04. > :18:08.credit to the public sector employees who know what the big
:18:08. > :18:13.picture is. Cornwall we had an agreement with the unions taking a
:18:13. > :18:16.volume un tri3% cut in pay and other conditions. Everybody
:18:16. > :18:21.realises, including in the public sector, that an expensive public
:18:21. > :18:25.sector is not good for the economy. It's unsustainable, particularly
:18:25. > :18:29.when it relies on unsustainable borrowing. You know full well how
:18:29. > :18:33.important it is that your staff at Cornwall Council are reasonably
:18:33. > :18:37.well paid so they can spend in the Cornish economy. If there's this
:18:37. > :18:42.race to the bottom as Tudor Evans pointed out, what impact could that
:18:42. > :18:46.have on spending power from your employees and other public sector
:18:46. > :18:49.workers? It's a key factor. These people are the customers as well.
:18:49. > :18:54.We're not talking about a race to the bottom. It's about finding a
:18:54. > :18:58.reasonable level. I think the key point here is there's a big world
:18:58. > :19:01.out there. Throughout Europe there are lots of well paid jobs being
:19:01. > :19:04.created in renewable energy, one of the high growth sectors. The south-
:19:04. > :19:09.west is very well placed to take advantage of that. We have a
:19:09. > :19:13.fantastic set of universities. We have a dedicated renewable energy
:19:13. > :19:17.faculty at Exeter University in Cornwall and now the South West
:19:17. > :19:21.marine energy park. We should be looking at solutions. We will look
:19:21. > :19:25.at this later, the prospects of renewable energy being part of the
:19:25. > :19:29.drive of growth in the South West. Back to Hugo Swire. This emerged
:19:29. > :19:32.over the weekend, the idea of regional pay featuring heavily in
:19:33. > :19:38.the budget this coming week, what do you make of the idea? I think in
:19:38. > :19:41.principle it's a good idea. I think where you have very high cost areas
:19:41. > :19:45.to live in, particularly London and the south-east, you have cheaper
:19:45. > :19:50.places around the country and it makes sense to me to vary rates.
:19:50. > :19:53.The private sector do that in a number of ways. Why can't the
:19:53. > :19:58.public sector do it as well? cost of living is high down here,
:19:58. > :20:02.but we may end up with lower wages. That would no doubt be factored
:20:02. > :20:05.into whatever regional pay solution comes about. The fact is just going
:20:05. > :20:11.back to your earlier point, you can't have it both ways. You can't
:20:11. > :20:14.say that the country has got to stay on this fiscal course in terms
:20:14. > :20:19.of preserving economic cred yint and every time people say why are
:20:19. > :20:23.we on it, for instance we're paying in excess of �120 million a day for
:20:23. > :20:27.debt, everyone groans and let's live in the real world and forget
:20:27. > :20:31.that Labour got us into the mess. That's the real world we're in.
:20:31. > :20:36.want to come back to Louise, whose film we saw. You've had a pay
:20:36. > :20:40.freeze I think for a while now. pay freeze for three years.
:20:40. > :20:44.what about the prospects of regional pay? If you kept your job,
:20:44. > :20:49.let's face it first of all, your job is at risk, if you kept it,
:20:49. > :20:53.regal pay might be another prospect to confront. The gentleman needs to
:20:53. > :20:57.remember that yes, the higher cost of living in London is higher, but
:20:57. > :21:03.so is pay. In Cornwall for example, we have water rates, one of the
:21:03. > :21:11.highest in the countries, council tax etc. The cost of inflation has
:21:11. > :21:16.gone up, petrol has gone up. That's national. If the pay is frozen or
:21:16. > :21:20.reduced, I'm already worse off. Under your proposal I'm going to be
:21:20. > :21:24.unemployed trying to support my husband and child, pay rent,
:21:24. > :21:27.council tax, water rates, my living cost, try and pay off my debt that
:21:27. > :21:32.I already have due to your Government. We've frozen council
:21:32. > :21:38.tax for two years. Inflation and petrol charges are the same
:21:38. > :21:42.wherever you live in the country. You could reduce duty on petrol.
:21:42. > :21:48.have. We have frozen the increase in petrol duty. Let's see what
:21:48. > :21:51.happens in the Budget. We must move on. If the businesses are expected
:21:51. > :21:56.to be driving the economy forward with growth, what help are they
:21:56. > :22:04.getting to expand and take on more staff? Here's the view of one South
:22:04. > :22:07.West businessman. I'm a landlord at the White Hart
:22:07. > :22:11.Hotel in Holsworthy. The event business is somewhere I feel that
:22:11. > :22:14.can expand. In the last three years we've doubled business year on year.
:22:14. > :22:21.One of the issues is to get into events you have to tender, pay
:22:21. > :22:27.money up front. You would like to go to the bank and say "Can I have
:22:27. > :22:31.an overdraft" They say no. Six years ago, it wasn't a problem.
:22:31. > :22:36.They couldn't throw enough money at me. Even when I had a mortgage and
:22:36. > :22:40.a business loan, they said do you want some more? Now, I don't
:22:40. > :22:43.believe I could get a penny out of my bank. I have tried 14 different
:22:43. > :22:47.banks. One of the reasons they don't like to lend money, is they
:22:47. > :22:50.say we're in a sector that they don't want to lend to. The banking
:22:50. > :22:54.system has changed because of their failures. Sorting the country out
:22:54. > :22:58.is very important. If we keep squeezing small business, then
:22:58. > :23:05.without small businesses, what do we have? We are being crucified
:23:05. > :23:09.because of their failures. Richard Davis, why are you as
:23:09. > :23:12.bankers so reluctant to lend to someone like John? I can only speak
:23:12. > :23:16.for Lloyds and say that actually we're not. That's a sector we are
:23:16. > :23:19.growing in. It's interesting, it's a sector that's gone through a lot
:23:19. > :23:24.of difficult times, but like so many different secondors, there are
:23:24. > :23:27.winners in each sector and the answer is to pick them. On the
:23:27. > :23:32.wider point, clearly there is a lack of confidence amongst a lot of
:23:32. > :23:36.businesses at the moment. There's a big requirement amongst banks to
:23:36. > :23:44.help restore that confidence. You're still not quite delivering.
:23:44. > :23:49.Under Project Merlin you missed the most recent targets for lending to
:23:49. > :23:52.small businesses. Lloyds hit our targets. If you take one particular
:23:53. > :23:56.case, the economy in the South West today, one of the things we
:23:56. > :24:01.undershoot on is businesses that export. We don't have enough that
:24:01. > :24:05.export. One of the things I care passionately about, there's a range
:24:05. > :24:09.of things available to businesss to support exporting, funding
:24:09. > :24:14.mechanisms. Do I think they're widely known about? No I don't. My
:24:14. > :24:21.fear is there could be businesses who perhaps get a chance to sell to
:24:21. > :24:22.Germany, whatever, but are put off because they think it will be
:24:23. > :24:27.difficult. Now you've had difficulty trying to get lending
:24:27. > :24:31.from banks as well. It's a nightmare. My experience is that
:24:31. > :24:35.the entire banking industry has closed to what is described as buck
:24:35. > :24:42.and spade style hotels. There are two hotels adjoining my three
:24:42. > :24:46.hotels that are both closed down, boarded up, almost 50 fulltime jobs
:24:46. > :24:51.lost, because the entire banking industry will not give a mortgage
:24:51. > :24:56.to a hotel. The valuations, what this has resulted in, is one of my
:24:56. > :25:04.hotels I paid �1.2 million for ten years ago. Five years ago it was
:25:04. > :25:10.valued at �2.1 million. Lloyds have just come back in and revalued it,
:25:10. > :25:15.54-bed rooms, between �400,000 and �700,000. The reason the two hotels
:25:15. > :25:20.adjoining my hotels are empty and semi-derelict is because nobody can
:25:20. > :25:25.borrow a penny as a mortgage to buy a hotel in this part of the country.
:25:25. > :25:28.These are key industries for the south-west, the pub industry, hotel
:25:28. > :25:33.industry. Why are banks so reluctant to lend to them? Maybe it
:25:33. > :25:37.will help if I tell you on Friday we helped a Cornish business buy a
:25:37. > :25:41.prestigious hotel in Cornwall which they have great plans for actually.
:25:41. > :25:46.In a few years they will grow. do people like John and Mark need
:25:46. > :25:49.to do to get the lending freed up from the banks. You need to know
:25:49. > :25:54.your market, I've seen the television programme with Mark on
:25:54. > :25:58.it and he knows his market. You need to know the market, that
:25:58. > :26:03.applies to hoteliers and publicans. You need to provide what customers
:26:03. > :26:08.want. The point is because the banks have closed down the lending,
:26:08. > :26:14.what that's done to people in the hotel sector, not just Torquay, a
:26:14. > :26:22.lot of areas in the South West, it has driven the values down by 60%.
:26:22. > :26:26.Anybody with a 35% or 40% mortgage five years ago is now in negative
:26:26. > :26:29.equity, medium sized hotels, if you have a ten or 12 bedroom guest
:26:29. > :26:33.house and you're struggling a bit, previously you could have gone and
:26:33. > :26:37.got a bit of an overdraft to help up through to the next summer. Now
:26:37. > :26:41.the bank is more than likely definitely going to say no to any
:26:41. > :26:45.form of lending, borrowing, overdraft, and unbeknown to you
:26:45. > :26:49.you're in negative equity. So you can't think oh, well it's not great,
:26:49. > :26:53.I'll sell up and move on. You have to wait until the bank come and put
:26:53. > :26:58.the shutters up. John, we saw in the film a moment ago, you're
:26:58. > :27:03.trying to expand your business, the irony of all this, you realise you
:27:03. > :27:09.have to diversify, but the banks won't you -- give you the money.
:27:09. > :27:13.had the smoking ban, we hit the recession. 37 pubs were closing a
:27:13. > :27:17.week. In the film you said you tried 14 banks, does that include
:27:17. > :27:21.Lloyds? It does. One of the issues about the mortgages, they will only
:27:21. > :27:25.value my business on a closed premises, they will not give me a
:27:25. > :27:28.mortgage based on my business and my property value as it is.
:27:28. > :27:34.Everything is a close boarded business because we're high risk.
:27:34. > :27:38.Why is that? I would say when you look at that business, I mean, you
:27:38. > :27:44.may value it in many ways. I think picking up on Mark's point, I don't
:27:44. > :27:51.think the industry is to blame for those. Values are what they are. We
:27:51. > :27:55.reflect the economy. No, you are. If what had happened to the hotel
:27:55. > :28:01.market and borrowing happened to residential mortgages, because
:28:01. > :28:05.unless, all right you might lend �10 million to a boutique style
:28:05. > :28:09.hotel in London or specific things, but the road my hotels are in, I
:28:09. > :28:13.have a lot of hotels closed up. It's because the tap has been
:28:13. > :28:16.turned off. If that happened with residential mortgages people would
:28:16. > :28:22.be rioting in the streets if the value of all their homes dropped by
:28:22. > :28:24.65%. As someone who's trying to help the region's business
:28:24. > :28:32.community move forward, what do you make of the bank's position at the
:28:32. > :28:38.moment? Well, listening to Richard and not going into a bank -- banker
:28:38. > :28:42.bashing session, there is no doubt from the 63,000 VAT registered
:28:42. > :28:45.businesss in our area that they have a major problem in access to
:28:45. > :28:49.finance. That spreads right across the board. If we could free up
:28:49. > :28:53.lending to some of our brilliant small and micro businesses it would
:28:53. > :28:56.be great. But it is just not happening at the moment. If we look
:28:56. > :29:00.at some of the other systems near Europe, German model would be a
:29:00. > :29:03.good example, where there is much more localised banking, much more
:29:03. > :29:07.dedicated relationships with small businesses, greater commitment,
:29:07. > :29:10.then we might get somewhere. damaging do you think this is to
:29:10. > :29:15.the region's economy that businesses are not getting the
:29:15. > :29:18.lending they need? It's enormously damaging. The amount of growth
:29:18. > :29:22.potential in small businesses who want to employ, invest and get on,
:29:22. > :29:25.but they haven't got that liquidity to make it happen. Everyone along
:29:25. > :29:29.the front row wants to say something. Growth comes from
:29:29. > :29:33.investment and export growth. That requires credit. If the credit
:29:33. > :29:39.system isn't running, then the oil in the economy is not working and
:29:39. > :29:43.the engine stops. Innovation also requires money and risk taking.
:29:43. > :29:46.That is a truth. The other truth is every downturn I've experienced,
:29:46. > :29:50.the banks have done what they're doing at the moment. The hotel
:29:50. > :29:53.industry is one of those that they always pick on. They are seen as a
:29:53. > :29:57.higher risk. Chris Dawson, if you can't get lending from the bank,
:29:57. > :30:02.how do you expand? We haven't got any lending at all. How do you do
:30:02. > :30:06.it? Make money. We're very cash rich. We have been for a long time.
:30:06. > :30:12.We generate a few quid for sure. I have a question before you go into
:30:12. > :30:17.that. Richard, do you lend to the system, the person or the trade? If
:30:17. > :30:21.I come along for a loan what would you say? Your starting point, if
:30:21. > :30:24.you look at what is a successful business, it's the person running
:30:24. > :30:29.it. Why? Because they need to know their market, how they're running
:30:29. > :30:32.their business etc. You don't consider that any more. You used to.
:30:32. > :30:37.We get fed into a computer and if it ticks all the boxes well you
:30:37. > :30:43.might, but chances are you don't. They don't talk to the real person?
:30:43. > :30:47.No. Decisions are made a long way from here. In terms of credit, if
:30:47. > :30:52.you can't get it from the banks what do you do? It's a real
:30:52. > :30:57.challenge as we come out and try to expand the private sector as a
:30:57. > :31:03.driver for jobs is where is that growth capital going to come from?
:31:03. > :31:06.My view is that is one area, I'm a great believer the Government duds
:31:06. > :31:14.best for business when it lets business crack on with it. We have
:31:14. > :31:17.a failure in the system. What the Government should do is look to
:31:17. > :31:22.start disintermediating the provision of capital for business.
:31:22. > :31:25.Where are the signs of growth in the south-west? The BBC
:31:25. > :31:30.commissioned skpeerion to assess the health of businesses across
:31:30. > :31:33.England. It revealed that Exeter has the highest proportion of high
:31:33. > :31:37.growth businesses. Weymouth and Portland, the biggest percentage in
:31:37. > :31:41.business startups and Torbay perhaps surprisingly, the highest
:31:41. > :31:46.exporting potential in our region. One businessman from Torbay is with
:31:46. > :31:49.us now. Graham, what did you make of that statistics that there's a
:31:49. > :31:55.great exporting potential in Torbay? I didn't fully understand
:31:55. > :32:00.it. I don't associate the Torbay I see as somewhere that's ready to
:32:00. > :32:04.boom as an exporting town. You're an exporting business. We are.
:32:05. > :32:08.We've been in Torbay for 70 years. We didn't move to Torbay because
:32:08. > :32:12.the opportunity is there. Having said that, I think if you look at
:32:12. > :32:16.Torbay as a town and I see something, a town going the wrong
:32:16. > :32:22.direction. It's getting very tired. It's lacking investment in the town
:32:22. > :32:25.centre. We've talked about the hotels in the area. We're running a
:32:25. > :32:29.successful exporting business despite the area. I don't collate
:32:29. > :32:35.that report with the Torbay that I see. That's interesting. What one
:32:35. > :32:39.thing would encourage businesses to come to Torbay in your mind, what
:32:39. > :32:42.needs to be done? In my mind, if you have a successful, if you want
:32:42. > :32:48.to attract people to the town and you want to attract businesses to
:32:48. > :32:51.an area and make it grow, it starts from the centre. We have one of the
:32:51. > :32:54.greatest opportunities, it's a beautiful town. That's a key asset.
:32:55. > :32:59.We're seeing that being eroded, over years of lack of investment in
:32:59. > :33:03.the town centre. We're seeing... It's a beautiful town but is it
:33:03. > :33:07.enough to encourage a business to relocate there? It's part of the
:33:07. > :33:10.formula. We're competing. I mean a town is competing with other towns.
:33:10. > :33:15.Tim Jones from the Local Enterprise Partnership, that's one of your
:33:15. > :33:20.areas to drive the economy to a point where businesses see it as an
:33:20. > :33:24.attractive opportunity, was going wrong in Torbay then? 40 years of
:33:24. > :33:28.fiddling around waiting to put a decent road network in is one of
:33:28. > :33:32.the biggest problems. It was abandoned by the public investment
:33:32. > :33:36.in transport. Fortunately that decision has finally been made and
:33:36. > :33:44.Torbay has the chance to turn it around. Sthat key? I don't think so.
:33:44. > :33:47.The Torbay has basically sat on its hands wait for -- waiting for the
:33:47. > :33:53.road thinking it will end its problems. You have a centre where
:33:53. > :33:56.shops are closing on a week live basis. The council drive retail out
:33:56. > :34:01.of the town centre by charging rates beyond what businesses can
:34:02. > :34:06.afford. Thinking that putting in a road will change the economy.
:34:06. > :34:09.other tangible things are you looking at to stimulate growth in
:34:09. > :34:13.the area? Transport is high on the list. Access to finance is high on
:34:13. > :34:17.the list. At a local level, Broadband, which is a massive
:34:17. > :34:20.driver of productivity is a key component. If we could drive that
:34:20. > :34:25.into small businesses that would immediately translate no a better
:34:25. > :34:30.economy. You were previously with the RDA, which has effectively been
:34:30. > :34:35.replaced by the local enterprise partnerships. How well place ready
:34:35. > :34:40.they to deliver the stimulus? are very different animals from the
:34:40. > :34:44.RDA. They had a supply line of projects it was hoping to do. The
:34:44. > :34:48.LEPs were created but obviously there is a period where the new
:34:48. > :34:51.businesses, if that's what they are, need to get going. Have they got
:34:52. > :34:55.the same resources, access to finances behind them that the RDA
:34:55. > :34:59.had? The question isn't necessarily... Hang on. Let Nigel
:34:59. > :35:03.answer? Have they got the funding? They haven't got the funding in the
:35:03. > :35:05.right place for investment today. Because it's relying on the private
:35:05. > :35:09.sector again. When the private sector is healthy and wants to
:35:09. > :35:13.invest, I'm sure the money will come through. There are funds
:35:13. > :35:16.available, the regional growth fund. We have heard this week that
:35:16. > :35:20.Cornwall is getting more money after 2013 from the European system.
:35:20. > :35:27.There are funds available. But it's in a different place than it was
:35:27. > :35:29.when the RDA was in place. I find it interesting, my career was with
:35:29. > :35:33.a multinational, the conversation when you talk about the economy
:35:33. > :35:36.down here is where is the money to help. What we should be talking
:35:36. > :35:40.about is where are the opportunities. There are hundreds...
:35:40. > :35:44.So it's a different animal to the RDA. You're here to facilitate.
:35:44. > :35:47.find the opportunities, help them realise those. As Nigel said, the
:35:47. > :35:52.first thing is and this is why I don't necessarily agree with Tim
:35:52. > :35:55.wholly in the sense that the road and rail network are important, if
:35:55. > :35:59.your horizon is global or international, which is where
:35:59. > :36:02.Cornwall and the South West have to see the future and superBroadband
:36:02. > :36:06.makes that future very accessible as to the sort of people that Ann
:36:06. > :36:09.is turning out from Falmouth, if we have a global perspective and we
:36:09. > :36:13.really find the opportunity and work out the business case, there
:36:13. > :36:17.is every reason why the South West could perform better than any other
:36:17. > :36:22.region. Dr Antoinette Young an interesting statistic about the
:36:22. > :36:27.number of business startups in the area. Are you seeing that from the
:36:27. > :36:32.network of business people you talk to, are more people starting up
:36:32. > :36:36.their new businesses? I'm heavily involved with an organisation
:36:36. > :36:39.called Women in Business Networking. We had a meeting just before
:36:39. > :36:44.Christmas. This is over the South West. They asked, who expects their
:36:44. > :36:49.business to grow next year and every hand went up. We're talking
:36:49. > :36:51.about 80 women who are Seoul traders or they're decision makers
:36:51. > :36:58.in whatever organisation they work. I'm very optimistic about the
:36:58. > :37:04.economy. If you paraphrase warren Buffet, he said the problem is fear.
:37:04. > :37:11.People are afraid to spend and invest. If everybody holds steady,
:37:11. > :37:18.keeps patient, it will come back. You can't squash entrepreneurs.
:37:18. > :37:22.am extremely optimistic. Torbay is the most fantastic place to grow
:37:22. > :37:27.one of the biggest markets in the world, which is provision for an
:37:27. > :37:31.ageing population, health and well being. In the South West we have
:37:31. > :37:36.digital, environmental sustainability, we have all sorts
:37:36. > :37:41.of sectors which you can follow them all the way from the South
:37:41. > :37:46.West to enormous global markets. That's critical to growth not
:37:46. > :37:49.responding to microbusinesses, it's saying can we cluster, can we
:37:49. > :37:53.configure ourselves and play on very big fields and do it the way
:37:53. > :37:57.other economies do. We're well positioned to do it. The bulgt is -
:37:57. > :38:01.- Budget is this week. What do you want it to deliver to stimulate
:38:01. > :38:05.growth? I want to take the lowest pay out of paying income tax. The
:38:05. > :38:12.quicker we do that, the more we will deliver pound coins in the
:38:12. > :38:17.back pockets of people. Cutting VAT. That would be the quick fix. What
:38:17. > :38:19.one thing from the Budget? Just to maintain our international fiscal
:38:19. > :38:23.credibility, which will benefit every business up and down the
:38:23. > :38:25.country. We must leave it there. Plenty of concerns and questions
:38:25. > :38:29.about the region's economy have been raised during the course of
:38:29. > :38:32.this debate. We may get a clearer idea about some of the answers