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The Spotlight Debate

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Hello and welcome to this special programme as we examine the state

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of the region's economy. Thousands of public sector job losses, pay

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freezes and the rising cost of fuel have all taken their toll on

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families across the south-west in the last year. In the week of the

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Budget and with the government's measures to deal with the UK's debt

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being felt across the region, tonight we'll assess what impact

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they're having on households and businesses here, with the help of

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business leaders, tafpbged with moving the economy forward, job

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seekers desperate for work, experts who will assess the health of the

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economy and MPs, we'll aim to find out how well placed the South West

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is to deal with the ongoing austerity measures and look at

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where potential growth comes from. If you're looking for a job, what

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are your prospects of finding work? Do we have the skills in the South

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West that employers are looking for? Youth unemployment is at its

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highest level since current records began, what does the South West

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have to offer its young people? One award-winning student says not

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enough. My name is Sam Coumbe, I'm a

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student at Plymouth University. The award I won was because I started

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running the Farmers' Market. It's become a real success. My aim after

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I graduate is to enter the graduate job market in a position of either

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retail management or sales and marketing, though I have been

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rejected by several firms so far. I've had two interviews, with two

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different firms. But it is daunting when you receive e-mails from

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companies saying that they've had 13,000 applicants for less than 200

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positions. It does really put doubt in your mind. Through my placement

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search it became apparent there's little in this part of the country.

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If I want to get into a graduate position, I am going to have to

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move away to another part of the country or another part of the

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worldment The Government have got their policies in place in terms of

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the educational side of things. I feel they could be doing more when

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it comes to students leaving university. It's all well and good

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with a masters degree or PhD, but if you don't know what to do with

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it when you leave, it's really just a piece of paper.

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Chris Dawson what should someone like Sam do to single themselves

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out in the jobs market? They need to go direct to the employer, offer

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their services, for instance, we're forming an academy now which I'm

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going to lobby the Government and Sir Philip Green is doing the same

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thing. We will train those people, highly train them, so all our

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enterprises we hit the ground running at 500mph. If they get into

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our academy, I think it's better than any university. That's a

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generalisation of a degree. You're being trained right to go at the

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coal face. Believe it or not, we struggle to get trained managers.

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We pay the right rate, not over or under. I think the academy is the

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way forward. The Government need to get their hand in the pocket and

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help us with it. The academy is self-centred because we want these

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guys coming directly to us. Brent Ben if we're to drive the economy

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forward it's essential to keep people like Sam in the South West.

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How do we do that? I start by saying it's very good news that we

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have people like Sam with the skills set in the South West. It's

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good news that you want to remain in the south-west. You will look at

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regions where they don't have the education or the attractions to

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retain people. We need to sell the story of the South West to business

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leaders and it's getting out there. We have a job seeker here Nichola

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Wren, give us your experience of looking for a job. It's really

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difficult. There are so many applicants for each job. You'll

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apply for, I'm a PA, and I'll apply for a job that 300 people have gone

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for. I've applied for probably about 400 or 500 jobs in the last

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two years. I've had three interviews. Three? Yeah. You have

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youngsters who you're worried about as well? I have teenagers. I have a

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son who's 226789 he's just gone into an apprenticeship. My daughter

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is 17. She's at college at the moment. She's hoping to study

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criminal psychology. I'm just concerned that she's narrowing her

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field too much and that she should look at doing something that's a

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bit more useful. What are you thinking about in terms of her

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prospects? I don't think they're good at the moment. I just, I

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suppose I'm just at the end of my tether at minute. I'm feeling that

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it's like banging your head against a brick wall. Anne Carlisle, you

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wanted to say something? Yes I head up University college Falmouth,

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which is creative industries and if there's one skill we are imbueing

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in students and that's true of all the further education in the South

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West is entrepreneurial skills. Most of the sectors which are

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rapidly growing were not conceived of five years ago. The ability to

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set up a business and have graduate skills and join businesses already

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in existence is critical. We've got some fantastic statistics in the

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South West which are five times more likely graduates are more

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likely to set up their own businesses than in other parts of

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the UK. So it's not all doom and gloom. It's really about building

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on what is a truly entrepreneurial spirit and making sure we teach our

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students and graduates the skills to be able to go out and be

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innovators. How concerned are you about losing skills from the region,

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because there aren't the jobs here for people like Sam? We have to

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build the skills in the first place. When we've got them it's important

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to unlock the doors into employment. We've been working hard in Cornwall

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for some time. We have a scheme where we've funded graduates into

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firms for the first year and in that 12 months they grow the

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business and 90% of graduates have stayed on in that job because the

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firm is grown from it. We're looking to expand on that hugely

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now. We're also bringing together Cornish bursary to support up to

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600 Cornish students in graduate positions and guaranteeing them

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another year in employment, getting them in there, grow the businesses.

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It's good for the economy and the employee. Hugo Swire, clearly the

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Government's policies on employment aren't working at the moment.

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Unemployment is up again. We have youth unemployment at record levels.

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When is this oil tanker going to start turning? Youth unemployment

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rose year on year in the last Government at a time of record

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growth in the economy. It's nothing new. If you come oust further

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education owing a lot of money, already, then you can't get a job

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it's very debilitating. The Government is doing a lot with the

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youth contract, which will help a lot of people. What's going to help

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people is growth in the economy, stability in the economy and

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confidence in the economy. I think in the South West we're incredibly

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well placed with renewable energies. We should become the green

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peninsula around the world. Tourism, we have a lot going for us. Too

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often we sell ourselves short. It's going to take time. When it comes

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right, it will come right quite quickly. Alison Seabeck where would

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you like to see support targeted, particularly for young people?

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We've seen 183% increase in youth unemployment across the South West.

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We need very clearly to have real jobs with real wages with real

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chances at the end of it. This Government isn't delivering that.

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The youth contract is an interesting proposal, but it won't

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deliver what we need. You're talking about the guaranteed job

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for six months for young people. Absolutely, paid for out of a

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banker's bonus. The point is that you have the university, who

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Plymouth University, fantastic business sector within it, trying

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to encourage young people to do it. What the vice Chancellor has come

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out publicically and said is that they are expected a 10% drop off in

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young people who are not from wealthy families going in, young

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people with real entrepreneurial skills potentially, which so far

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have been growing. Government have got to look at this. We grow our

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young people in the South West. The reason the peninsula dental school

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came here is because we needed dentists here and we knew if we

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taught them here, they would stay here. We have to work really hard

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on that. I want to come back to Sam who featured in the film. What do

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you think of what you have heard? With the fees increasing, it's

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going to attract a certain calibre of student. It's going to be �9,000

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a year to attend university. Post graduate courses will be more as

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well. Academies are the way forward, integrating work experience. That's

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absolutely essential. I mean, it's extremely difficult to get a degree

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these days doesn't count as much as it did 20 years ago. You need to

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have the relevant work experience. That proves you can do it at the

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ground level and move through. I think the philosophy is changing

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with regards to degrees and work experience. More comments from the

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audience in a moment. The Government's mantra throughout the

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public sector cuts sthat private sector would pick up the slack. The

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figures for the greater South West for the last year suggest that's

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not happening. 37,000 public sector jobs were cut, just 6,000 private

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sector jobs have been created. Here's one public sector worker

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with the driver and vehicle licensing agency, who fears she's

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about to lose her job. I'm Louise Munn and I work for the

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DVLA. The Government are proposing to close the 39 regional offices of

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the DVLA. That will result in the loss of about 1200 jobs. It's

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insult,, did he grading. We work so hard to provide a public service

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where we k. We are a department that generates income for the

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Government through number plate transfers etc. I am personally fed

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up of the Government blaming the previous administration. It's not a

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blame game. We're here. We've got to deal with, it as we keep getting

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told, but why hit the public services? It is getting to the

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stage already where we're thinking, can we afford to fill the tank with

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petrol? We can afford �10 here and then we can only afford �20 worth

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of shopping or whatever. I've already faced redundancy through

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the MOD in Northern Ireland once. I relocated my family back home to

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Cornwall as a result to stay employed. My fear is that I'm not

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going to be able to continue supporting my family as I want to.

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What are the prospects of the private sector picking up the slack

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from the public sector cuts? problem with these things is always

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timing. Unfortunately the private sector may fill that gap over time,

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but it won't happen this year and probably not next year. I have

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confidence in the economy and entrepreneurial spirit, we've heard

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about, it will happen in time. You have to back the youth that is

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coming up behind us. But in the next year, the next couple of years,

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it is not going to happen. Demand is too weak. Are we replacing like

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for like. Some of the statistics suggest we are losing well paid

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public sector jobs, but they're being replaced by lower paid part-

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time private sector jobs. That's always the way in the down part of

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the downturn. We're in a period where we're losing jobs and the

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ones being created are not the high value, high productivity jobs that

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you need for the long-term. We have to make that adjustment through the

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cycle. At the moment it's not happening. I'm sure it will happen

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in the future. But we probably need measures now to help the economy

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grow better. We're not getting the productist or employment growth we

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need. We heard Louise's story at the DVLA, and Catherine Craig

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possibly staff face a change to pay because of this hint now that

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regional pay might be introduced. What do you think that would do to

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workers like Louise? Well, first of all, regional pay is not something

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new. It's been mooted right back at the beginning of the noughties.

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you think it would drive down public sector wages in this part of

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the world? Yes, of course it would. We know there's a pay freeze in

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place. We know that pension contributions are going up. If we

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find that pay is down and constrained in this respect, I

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think there will be a mass migration. The figures suggested in

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this debate in the run up to the Budget would suggest that the

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private sector cannot keep wais with some of the growth in public

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sector wages. The gap is something like 8% on average. Yes and that

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figure is a little bit fluid at the moment, because we know there's a

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pay freeze in place and job cuts and everything else. But of course,

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prior to that, prior to the recession, that gap wasn't so big.

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These differentials move a lot. In a boom time the private sector

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moves ahead. In a downturn the public sector moves ahead. You have

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to lock over a long period of time and see what the differentials are.

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If the Government is true to its theme, wanting growth, growth is

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about productivity and employment. The things that drive productivity

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are high value jobs, high skills which are well paid.

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comfortable are you with the idea of regional pay? I don't want to

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see regional pay pushing down the wages. I don't want to see that.

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I'm very uncomfortable with it. I want to see private sector pay

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increasing so that people can continue to share in a greater

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prosperity rather than penalising those who happen to work in the

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public sector. We have to remember that the last Government basically

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crashed our economy. In the last year in office, one of every �4

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they were spending was borrowed money. I can hear tuting, because

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we're living in the present. Absolutely. But the coalition

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Government is dealing with the mess that was left behind. Tackling the

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private finances, driving down the deficit has to be the priority.

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Let's talk about the public sector pay premium in the South West about

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7.5% according to the Institute for Fiscal Studies. The public sector

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pay freeze proposed that will bring back the pay premium close to

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levels of 2008 just before the final crisis. But we're kidding

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ourselves if we think we're going to get ourselves out of the

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financial crisis by paying more for the public sect or. We had a system

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where we're borrowing money at the moment to pay for the public sector

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we have. We spent too much money at the time, we didn't fix the roof

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when the sun was shining. Now we've paid for that. What we need to do

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is free up private enterprise. It is the private sector which will

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lead the recovery. At the moment too many small businesses, the

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lifeblood of the economy, they even struggle to take on an extra worker.

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Taking on one extra member of staff can double the amount of paper work.

:15:49.:15:54.

The real debate here and remember where the growth will come from.

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I'm glad the TPA here, I'd-a membership form, I don't know how

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you become ally of the TPA. TaxPayers' Alliance. It's almost

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like the mantra, blame Labour. I'm wondering we're two years into this

:16:08.:16:12.

coalition Government now, when do we get the coalition standing up

:16:12.:16:17.

and being counted? The criticism is often levelled at Labour that you

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didn't fix the roof when the sun was shining. How did we get where

:16:20.:16:25.

we are now? In my authority at the moment the leader of the council

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won an award two years ago for the most achieving council. One of the

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criteria was having built seven new schools with Government money from

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the Labour Government. We don't hear her blaming Labour for her

:16:41.:16:45.

awards. But there wasn't the public money to do this. We hear this like

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a mantra. Let's go back to regional pay. What Chris Dawson said is

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revealing. Good businesses like his are not interested in a race to the

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bottom on wages. They're not interested in having, they don't

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believe that public sector wages being cut is the way to equalise.

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What I'm saying at the moment is if we have regional pay for the South

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West, Plymouth can kiss goodbye, for example, to John Lewis ever

:17:11.:17:17.

coming here. I want to come back to Robertment

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People will see politicians quablg about whose fault it is the economy

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is broken. We need to get the economy growing. That has to

:17:26.:17:30.

involve tax cuts. That's the point I was going to make. Nigel has

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rightly said that the private sector growth will take a little

:17:33.:17:36.

time to come along. What we should be talking about now is the

:17:37.:17:41.

stimulus to the economy to make that private sector growth come

:17:41.:17:45.

along. I'm quite certain if we get the stimulus, the private sector

:17:45.:17:50.

has the oblt to take the slack from the public. That's what we should

:17:50.:17:56.

be talking about. Nobody wants to see redundancies particularly when

:17:56.:17:59.

it's dedicated public servants doing a great job. I want to give

:17:59.:18:04.

credit to the public sector employees who know what the big

:18:04.:18:08.

picture is. Cornwall we had an agreement with the unions taking a

:18:08.:18:13.

volume un tri3% cut in pay and other conditions. Everybody

:18:13.:18:16.

realises, including in the public sector, that an expensive public

:18:16.:18:21.

sector is not good for the economy. It's unsustainable, particularly

:18:21.:18:25.

when it relies on unsustainable borrowing. You know full well how

:18:25.:18:29.

important it is that your staff at Cornwall Council are reasonably

:18:29.:18:33.

well paid so they can spend in the Cornish economy. If there's this

:18:33.:18:37.

race to the bottom as Tudor Evans pointed out, what impact could that

:18:37.:18:42.

have on spending power from your employees and other public sector

:18:42.:18:46.

workers? It's a key factor. These people are the customers as well.

:18:46.:18:49.

We're not talking about a race to the bottom. It's about finding a

:18:49.:18:54.

reasonable level. I think the key point here is there's a big world

:18:54.:18:58.

out there. Throughout Europe there are lots of well paid jobs being

:18:58.:19:01.

created in renewable energy, one of the high growth sectors. The south-

:19:01.:19:04.

west is very well placed to take advantage of that. We have a

:19:04.:19:09.

fantastic set of universities. We have a dedicated renewable energy

:19:09.:19:13.

faculty at Exeter University in Cornwall and now the South West

:19:13.:19:17.

marine energy park. We should be looking at solutions. We will look

:19:17.:19:21.

at this later, the prospects of renewable energy being part of the

:19:21.:19:25.

drive of growth in the South West. Back to Hugo Swire. This emerged

:19:25.:19:29.

over the weekend, the idea of regional pay featuring heavily in

:19:29.:19:32.

the budget this coming week, what do you make of the idea? I think in

:19:33.:19:38.

principle it's a good idea. I think where you have very high cost areas

:19:38.:19:41.

to live in, particularly London and the south-east, you have cheaper

:19:41.:19:45.

places around the country and it makes sense to me to vary rates.

:19:45.:19:50.

The private sector do that in a number of ways. Why can't the

:19:50.:19:53.

public sector do it as well? cost of living is high down here,

:19:53.:19:58.

but we may end up with lower wages. That would no doubt be factored

:19:58.:20:02.

into whatever regional pay solution comes about. The fact is just going

:20:02.:20:05.

back to your earlier point, you can't have it both ways. You can't

:20:05.:20:11.

say that the country has got to stay on this fiscal course in terms

:20:11.:20:14.

of preserving economic cred yint and every time people say why are

:20:14.:20:19.

we on it, for instance we're paying in excess of �120 million a day for

:20:19.:20:23.

debt, everyone groans and let's live in the real world and forget

:20:23.:20:27.

that Labour got us into the mess. That's the real world we're in.

:20:27.:20:31.

want to come back to Louise, whose film we saw. You've had a pay

:20:31.:20:36.

freeze I think for a while now. pay freeze for three years.

:20:36.:20:40.

what about the prospects of regional pay? If you kept your job,

:20:40.:20:44.

let's face it first of all, your job is at risk, if you kept it,

:20:44.:20:49.

regal pay might be another prospect to confront. The gentleman needs to

:20:49.:20:53.

remember that yes, the higher cost of living in London is higher, but

:20:53.:20:57.

so is pay. In Cornwall for example, we have water rates, one of the

:20:57.:21:03.

highest in the countries, council tax etc. The cost of inflation has

:21:03.:21:11.

gone up, petrol has gone up. That's national. If the pay is frozen or

:21:11.:21:16.

reduced, I'm already worse off. Under your proposal I'm going to be

:21:16.:21:20.

unemployed trying to support my husband and child, pay rent,

:21:20.:21:24.

council tax, water rates, my living cost, try and pay off my debt that

:21:24.:21:27.

I already have due to your Government. We've frozen council

:21:27.:21:32.

tax for two years. Inflation and petrol charges are the same

:21:32.:21:38.

wherever you live in the country. You could reduce duty on petrol.

:21:38.:21:42.

have. We have frozen the increase in petrol duty. Let's see what

:21:42.:21:48.

happens in the Budget. We must move on. If the businesses are expected

:21:48.:21:51.

to be driving the economy forward with growth, what help are they

:21:51.:21:56.

getting to expand and take on more staff? Here's the view of one South

:21:56.:22:04.

West businessman. I'm a landlord at the White Hart

:22:04.:22:07.

Hotel in Holsworthy. The event business is somewhere I feel that

:22:07.:22:11.

can expand. In the last three years we've doubled business year on year.

:22:11.:22:14.

One of the issues is to get into events you have to tender, pay

:22:14.:22:21.

money up front. You would like to go to the bank and say "Can I have

:22:21.:22:27.

an overdraft" They say no. Six years ago, it wasn't a problem.

:22:27.:22:31.

They couldn't throw enough money at me. Even when I had a mortgage and

:22:31.:22:36.

a business loan, they said do you want some more? Now, I don't

:22:36.:22:40.

believe I could get a penny out of my bank. I have tried 14 different

:22:40.:22:43.

banks. One of the reasons they don't like to lend money, is they

:22:43.:22:47.

say we're in a sector that they don't want to lend to. The banking

:22:47.:22:50.

system has changed because of their failures. Sorting the country out

:22:50.:22:54.

is very important. If we keep squeezing small business, then

:22:54.:22:58.

without small businesses, what do we have? We are being crucified

:22:58.:23:05.

because of their failures. Richard Davis, why are you as

:23:05.:23:09.

bankers so reluctant to lend to someone like John? I can only speak

:23:09.:23:12.

for Lloyds and say that actually we're not. That's a sector we are

:23:12.:23:16.

growing in. It's interesting, it's a sector that's gone through a lot

:23:16.:23:19.

of difficult times, but like so many different secondors, there are

:23:19.:23:24.

winners in each sector and the answer is to pick them. On the

:23:24.:23:27.

wider point, clearly there is a lack of confidence amongst a lot of

:23:27.:23:32.

businesses at the moment. There's a big requirement amongst banks to

:23:32.:23:36.

help restore that confidence. You're still not quite delivering.

:23:36.:23:44.

Under Project Merlin you missed the most recent targets for lending to

:23:44.:23:49.

small businesses. Lloyds hit our targets. If you take one particular

:23:49.:23:52.

case, the economy in the South West today, one of the things we

:23:53.:23:56.

undershoot on is businesses that export. We don't have enough that

:23:56.:24:01.

export. One of the things I care passionately about, there's a range

:24:01.:24:05.

of things available to businesss to support exporting, funding

:24:05.:24:09.

mechanisms. Do I think they're widely known about? No I don't. My

:24:09.:24:14.

fear is there could be businesses who perhaps get a chance to sell to

:24:14.:24:21.

Germany, whatever, but are put off because they think it will be

:24:21.:24:22.

difficult. Now you've had difficulty trying to get lending

:24:23.:24:27.

from banks as well. It's a nightmare. My experience is that

:24:27.:24:31.

the entire banking industry has closed to what is described as buck

:24:31.:24:35.

and spade style hotels. There are two hotels adjoining my three

:24:35.:24:42.

hotels that are both closed down, boarded up, almost 50 fulltime jobs

:24:42.:24:46.

lost, because the entire banking industry will not give a mortgage

:24:46.:24:51.

to a hotel. The valuations, what this has resulted in, is one of my

:24:51.:24:56.

hotels I paid �1.2 million for ten years ago. Five years ago it was

:24:56.:25:04.

valued at �2.1 million. Lloyds have just come back in and revalued it,

:25:04.:25:10.

54-bed rooms, between �400,000 and �700,000. The reason the two hotels

:25:10.:25:15.

adjoining my hotels are empty and semi-derelict is because nobody can

:25:15.:25:20.

borrow a penny as a mortgage to buy a hotel in this part of the country.

:25:20.:25:25.

These are key industries for the south-west, the pub industry, hotel

:25:25.:25:28.

industry. Why are banks so reluctant to lend to them? Maybe it

:25:28.:25:33.

will help if I tell you on Friday we helped a Cornish business buy a

:25:33.:25:37.

prestigious hotel in Cornwall which they have great plans for actually.

:25:37.:25:41.

In a few years they will grow. do people like John and Mark need

:25:41.:25:46.

to do to get the lending freed up from the banks. You need to know

:25:46.:25:49.

your market, I've seen the television programme with Mark on

:25:49.:25:54.

it and he knows his market. You need to know the market, that

:25:54.:25:58.

applies to hoteliers and publicans. You need to provide what customers

:25:58.:26:03.

want. The point is because the banks have closed down the lending,

:26:03.:26:08.

what that's done to people in the hotel sector, not just Torquay, a

:26:08.:26:14.

lot of areas in the South West, it has driven the values down by 60%.

:26:14.:26:22.

Anybody with a 35% or 40% mortgage five years ago is now in negative

:26:22.:26:26.

equity, medium sized hotels, if you have a ten or 12 bedroom guest

:26:26.:26:29.

house and you're struggling a bit, previously you could have gone and

:26:29.:26:33.

got a bit of an overdraft to help up through to the next summer. Now

:26:33.:26:37.

the bank is more than likely definitely going to say no to any

:26:37.:26:41.

form of lending, borrowing, overdraft, and unbeknown to you

:26:41.:26:45.

you're in negative equity. So you can't think oh, well it's not great,

:26:45.:26:49.

I'll sell up and move on. You have to wait until the bank come and put

:26:49.:26:53.

the shutters up. John, we saw in the film a moment ago, you're

:26:53.:26:58.

trying to expand your business, the irony of all this, you realise you

:26:58.:27:03.

have to diversify, but the banks won't you -- give you the money.

:27:03.:27:09.

had the smoking ban, we hit the recession. 37 pubs were closing a

:27:09.:27:13.

week. In the film you said you tried 14 banks, does that include

:27:13.:27:17.

Lloyds? It does. One of the issues about the mortgages, they will only

:27:17.:27:21.

value my business on a closed premises, they will not give me a

:27:21.:27:25.

mortgage based on my business and my property value as it is.

:27:25.:27:28.

Everything is a close boarded business because we're high risk.

:27:28.:27:34.

Why is that? I would say when you look at that business, I mean, you

:27:34.:27:38.

may value it in many ways. I think picking up on Mark's point, I don't

:27:38.:27:44.

think the industry is to blame for those. Values are what they are. We

:27:44.:27:51.

reflect the economy. No, you are. If what had happened to the hotel

:27:51.:27:55.

market and borrowing happened to residential mortgages, because

:27:55.:28:01.

unless, all right you might lend �10 million to a boutique style

:28:01.:28:05.

hotel in London or specific things, but the road my hotels are in, I

:28:05.:28:09.

have a lot of hotels closed up. It's because the tap has been

:28:09.:28:13.

turned off. If that happened with residential mortgages people would

:28:13.:28:16.

be rioting in the streets if the value of all their homes dropped by

:28:16.:28:22.

65%. As someone who's trying to help the region's business

:28:22.:28:24.

community move forward, what do you make of the bank's position at the

:28:24.:28:32.

moment? Well, listening to Richard and not going into a bank -- banker

:28:32.:28:38.

bashing session, there is no doubt from the 63,000 VAT registered

:28:38.:28:42.

businesss in our area that they have a major problem in access to

:28:42.:28:45.

finance. That spreads right across the board. If we could free up

:28:45.:28:49.

lending to some of our brilliant small and micro businesses it would

:28:49.:28:53.

be great. But it is just not happening at the moment. If we look

:28:53.:28:56.

at some of the other systems near Europe, German model would be a

:28:56.:29:00.

good example, where there is much more localised banking, much more

:29:00.:29:03.

dedicated relationships with small businesses, greater commitment,

:29:03.:29:07.

then we might get somewhere. damaging do you think this is to

:29:07.:29:10.

the region's economy that businesses are not getting the

:29:10.:29:15.

lending they need? It's enormously damaging. The amount of growth

:29:15.:29:18.

potential in small businesses who want to employ, invest and get on,

:29:18.:29:22.

but they haven't got that liquidity to make it happen. Everyone along

:29:22.:29:25.

the front row wants to say something. Growth comes from

:29:25.:29:29.

investment and export growth. That requires credit. If the credit

:29:29.:29:33.

system isn't running, then the oil in the economy is not working and

:29:33.:29:39.

the engine stops. Innovation also requires money and risk taking.

:29:39.:29:43.

That is a truth. The other truth is every downturn I've experienced,

:29:43.:29:46.

the banks have done what they're doing at the moment. The hotel

:29:46.:29:50.

industry is one of those that they always pick on. They are seen as a

:29:50.:29:53.

higher risk. Chris Dawson, if you can't get lending from the bank,

:29:53.:29:57.

how do you expand? We haven't got any lending at all. How do you do

:29:57.:30:02.

it? Make money. We're very cash rich. We have been for a long time.

:30:02.:30:06.

We generate a few quid for sure. I have a question before you go into

:30:06.:30:12.

that. Richard, do you lend to the system, the person or the trade? If

:30:12.:30:17.

I come along for a loan what would you say? Your starting point, if

:30:17.:30:21.

you look at what is a successful business, it's the person running

:30:21.:30:24.

it. Why? Because they need to know their market, how they're running

:30:24.:30:29.

their business etc. You don't consider that any more. You used to.

:30:29.:30:32.

We get fed into a computer and if it ticks all the boxes well you

:30:32.:30:37.

might, but chances are you don't. They don't talk to the real person?

:30:37.:30:43.

No. Decisions are made a long way from here. In terms of credit, if

:30:43.:30:47.

you can't get it from the banks what do you do? It's a real

:30:47.:30:52.

challenge as we come out and try to expand the private sector as a

:30:52.:30:57.

driver for jobs is where is that growth capital going to come from?

:30:57.:31:03.

My view is that is one area, I'm a great believer the Government duds

:31:03.:31:06.

best for business when it lets business crack on with it. We have

:31:06.:31:14.

a failure in the system. What the Government should do is look to

:31:14.:31:17.

start disintermediating the provision of capital for business.

:31:17.:31:22.

Where are the signs of growth in the south-west? The BBC

:31:22.:31:25.

commissioned skpeerion to assess the health of businesses across

:31:25.:31:30.

England. It revealed that Exeter has the highest proportion of high

:31:30.:31:33.

growth businesses. Weymouth and Portland, the biggest percentage in

:31:33.:31:37.

business startups and Torbay perhaps surprisingly, the highest

:31:37.:31:41.

exporting potential in our region. One businessman from Torbay is with

:31:41.:31:46.

us now. Graham, what did you make of that statistics that there's a

:31:46.:31:49.

great exporting potential in Torbay? I didn't fully understand

:31:49.:31:55.

it. I don't associate the Torbay I see as somewhere that's ready to

:31:55.:32:00.

boom as an exporting town. You're an exporting business. We are.

:32:00.:32:04.

We've been in Torbay for 70 years. We didn't move to Torbay because

:32:05.:32:08.

the opportunity is there. Having said that, I think if you look at

:32:08.:32:12.

Torbay as a town and I see something, a town going the wrong

:32:12.:32:16.

direction. It's getting very tired. It's lacking investment in the town

:32:16.:32:22.

centre. We've talked about the hotels in the area. We're running a

:32:22.:32:25.

successful exporting business despite the area. I don't collate

:32:25.:32:29.

that report with the Torbay that I see. That's interesting. What one

:32:29.:32:35.

thing would encourage businesses to come to Torbay in your mind, what

:32:35.:32:39.

needs to be done? In my mind, if you have a successful, if you want

:32:39.:32:42.

to attract people to the town and you want to attract businesses to

:32:42.:32:48.

an area and make it grow, it starts from the centre. We have one of the

:32:48.:32:51.

greatest opportunities, it's a beautiful town. That's a key asset.

:32:51.:32:54.

We're seeing that being eroded, over years of lack of investment in

:32:55.:32:59.

the town centre. We're seeing... It's a beautiful town but is it

:32:59.:33:03.

enough to encourage a business to relocate there? It's part of the

:33:03.:33:07.

formula. We're competing. I mean a town is competing with other towns.

:33:07.:33:10.

Tim Jones from the Local Enterprise Partnership, that's one of your

:33:10.:33:15.

areas to drive the economy to a point where businesses see it as an

:33:15.:33:20.

attractive opportunity, was going wrong in Torbay then? 40 years of

:33:20.:33:24.

fiddling around waiting to put a decent road network in is one of

:33:24.:33:28.

the biggest problems. It was abandoned by the public investment

:33:28.:33:32.

in transport. Fortunately that decision has finally been made and

:33:32.:33:36.

Torbay has the chance to turn it around. Sthat key? I don't think so.

:33:36.:33:44.

The Torbay has basically sat on its hands wait for -- waiting for the

:33:44.:33:47.

road thinking it will end its problems. You have a centre where

:33:47.:33:53.

shops are closing on a week live basis. The council drive retail out

:33:53.:33:56.

of the town centre by charging rates beyond what businesses can

:33:56.:34:01.

afford. Thinking that putting in a road will change the economy.

:34:02.:34:06.

other tangible things are you looking at to stimulate growth in

:34:06.:34:09.

the area? Transport is high on the list. Access to finance is high on

:34:09.:34:13.

the list. At a local level, Broadband, which is a massive

:34:13.:34:17.

driver of productivity is a key component. If we could drive that

:34:17.:34:20.

into small businesses that would immediately translate no a better

:34:20.:34:25.

economy. You were previously with the RDA, which has effectively been

:34:25.:34:30.

replaced by the local enterprise partnerships. How well place ready

:34:30.:34:35.

they to deliver the stimulus? are very different animals from the

:34:35.:34:40.

RDA. They had a supply line of projects it was hoping to do. The

:34:40.:34:44.

LEPs were created but obviously there is a period where the new

:34:44.:34:48.

businesses, if that's what they are, need to get going. Have they got

:34:48.:34:51.

the same resources, access to finances behind them that the RDA

:34:52.:34:55.

had? The question isn't necessarily... Hang on. Let Nigel

:34:55.:34:59.

answer? Have they got the funding? They haven't got the funding in the

:34:59.:35:03.

right place for investment today. Because it's relying on the private

:35:03.:35:05.

sector again. When the private sector is healthy and wants to

:35:05.:35:09.

invest, I'm sure the money will come through. There are funds

:35:09.:35:13.

available, the regional growth fund. We have heard this week that

:35:13.:35:16.

Cornwall is getting more money after 2013 from the European system.

:35:16.:35:20.

There are funds available. But it's in a different place than it was

:35:20.:35:27.

when the RDA was in place. I find it interesting, my career was with

:35:27.:35:29.

a multinational, the conversation when you talk about the economy

:35:29.:35:33.

down here is where is the money to help. What we should be talking

:35:33.:35:36.

about is where are the opportunities. There are hundreds...

:35:36.:35:40.

So it's a different animal to the RDA. You're here to facilitate.

:35:40.:35:44.

find the opportunities, help them realise those. As Nigel said, the

:35:44.:35:47.

first thing is and this is why I don't necessarily agree with Tim

:35:47.:35:52.

wholly in the sense that the road and rail network are important, if

:35:52.:35:55.

your horizon is global or international, which is where

:35:55.:35:59.

Cornwall and the South West have to see the future and superBroadband

:35:59.:36:02.

makes that future very accessible as to the sort of people that Ann

:36:02.:36:06.

is turning out from Falmouth, if we have a global perspective and we

:36:06.:36:09.

really find the opportunity and work out the business case, there

:36:09.:36:13.

is every reason why the South West could perform better than any other

:36:13.:36:17.

region. Dr Antoinette Young an interesting statistic about the

:36:17.:36:22.

number of business startups in the area. Are you seeing that from the

:36:22.:36:27.

network of business people you talk to, are more people starting up

:36:27.:36:32.

their new businesses? I'm heavily involved with an organisation

:36:32.:36:36.

called Women in Business Networking. We had a meeting just before

:36:36.:36:39.

Christmas. This is over the South West. They asked, who expects their

:36:39.:36:44.

business to grow next year and every hand went up. We're talking

:36:44.:36:49.

about 80 women who are Seoul traders or they're decision makers

:36:49.:36:51.

in whatever organisation they work. I'm very optimistic about the

:36:51.:36:58.

economy. If you paraphrase warren Buffet, he said the problem is fear.

:36:58.:37:04.

People are afraid to spend and invest. If everybody holds steady,

:37:04.:37:11.

keeps patient, it will come back. You can't squash entrepreneurs.

:37:11.:37:18.

am extremely optimistic. Torbay is the most fantastic place to grow

:37:18.:37:22.

one of the biggest markets in the world, which is provision for an

:37:22.:37:27.

ageing population, health and well being. In the South West we have

:37:27.:37:31.

digital, environmental sustainability, we have all sorts

:37:31.:37:36.

of sectors which you can follow them all the way from the South

:37:36.:37:41.

West to enormous global markets. That's critical to growth not

:37:41.:37:46.

responding to microbusinesses, it's saying can we cluster, can we

:37:46.:37:49.

configure ourselves and play on very big fields and do it the way

:37:49.:37:53.

other economies do. We're well positioned to do it. The bulgt is -

:37:53.:37:57.

- Budget is this week. What do you want it to deliver to stimulate

:37:57.:38:01.

growth? I want to take the lowest pay out of paying income tax. The

:38:01.:38:05.

quicker we do that, the more we will deliver pound coins in the

:38:05.:38:12.

back pockets of people. Cutting VAT. That would be the quick fix. What

:38:12.:38:17.

one thing from the Budget? Just to maintain our international fiscal

:38:17.:38:19.

credibility, which will benefit every business up and down the

:38:19.:38:23.

country. We must leave it there. Plenty of concerns and questions

:38:23.:38:25.

about the region's economy have been raised during the course of

:38:25.:38:29.

this debate. We may get a clearer idea about some of the answers

:38:29.:38:32.

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