Jobs Risk for City as Government Cancels Investment Aid (Manchester Liberal Democrats Online)

Manchester Liberal Democrats Online <info@manchester-libdems.org.uk>

Jobs Risk for City as Government Cancels Investment Aid

November 8, 2006 12:49 AM

Labour's Funding Cut Will Harm Manchester's Jobs Market

A Government decision to cut investment aid for Manchester has caused concern amongst the City's business community. Despite all-party representations from Manchester City Council, the Government has just announced the cancellation of the Regional Investment funding that brought companies such as the Bank of New York, Michelin, Ticketmaster and Esure to Manchester.

A report to the Council's Executive Committee in July warned that delivering up to 112,000 jobs in the City region would be made more difficult if the investment aid were cancelled. The Committee agreed unanimously to lobby the Government to drop the proposals, but the Council was recently notified that their attempts to overturn the Government's proposals had been unsuccessful. The Government has now confirmed the UK's final regional aid map for 2007- 2013, which removes Manchester's "Assisted Area" status.

Councillor Paul Shannon, who is Manchester Liberal Democrat Deputy Leader, stated:

"This is a bitter blow for Manchester. It seems Labour politicians in London believe that joblessness in Manchester is a thing of the past - in fact, Manchester's unemployment rate is still much higher than the UK or Greater Manchester average, and there is high dependence on incapacity benefit in the city."

Councillor Shannon concluded:

"The Department of Trade and Industry say they recognise that the loss of Assisted Area status will cause some problems, so they will ensure that "alternative support" for businesses in those areas is available. But we still do not know what form this support will take."

"Manchester needs every penny of investment funding it can get to attract more companies to re-locate to the city. This is a serious blow to Manchester's economic future. Manchester Liberal Democrats are disappointed that the Government has ignored the Council's lobbying."

End

Notes to Editors:

Nine Manchester wards were eligible for Regional Investment Aid, in the form of "Selective Finance for Investment" (SFI).

Business sectors that will no longer be eligible for Investment aid include manufacturing (most manufacturing businesses are eligible to apply at the moment); and businesses in service industries supplying the national market.

Extracts from Manchester City Council's Response to Stage 2 of the Draft Assisted Area Map for 2007 to 2013, submitted to Government on August 7th 2006 but rejected by Government in their October 2006 announcement:

"removing Manchester from the Assisted Area Map, the City Council will lose an important economic intervention."

"It has removed the regional centre at the core of the conurbation from the Assisted Area Map thus weakening the competitive edge of one of the most important areas of economic opportunity within the city region. "

.."over the last six years the availability SFI has been used to great effect, helping to attract new businesses and to continue the diversification of the economic base of the city"

"the Council's ability to attract new strategic investment will be severely hampered by our inability to utilise Selective Finance for Investment. This will serve to undermine not only the Regional Centre but also the region as a whole."