AT some point over the last few months or so, we passed, without fanfare, one of the most important economic milestones of the last six years – the UK economy is now bigger than it was before the recession began in 2008. The GDP figures are the official confirmation that we have now returned to pre-recession levels.
It has taken six years of hard work by British businesses and workers to recalibrate our economy. The recession was deep and the effects were felt throughout the UK, not least here in Yorkshire and the Humber where the local economy shrank by 3.8 per cent between 2008 and 2009.
But it is also a source of encouragement. It is a reminder of how far we have come since the depths of the recession in 2009. Growth is up, investment is up, business is innovating more and unemployment is now at its lowest level for five years. In particular, a revival in private business is underpinning the UK’s recovery and creating jobs – over a million new jobs in the last year alone.
Yorkshire and the Humber is no exception. More than 41,000 jobs were created here between March 2012 and March 2014, showing the resilience and promise of the region.
The coalition government was formed to tackle an economic emergency. In 2010, the Government faced an enormous deficit as a result of a collapse of Government revenue after the failure of the banks under the last Labour Government. Although there is much still to do, we are on track to eliminate the deficit in 2017/18. This has required painful and difficult choices to be made, but the country is now in a much safer position.
But deficit reduction alone was never going to be enough. That is why my Department has been working on a long-term plan to support companies growing and investing, job creation, and training our future workforce from apprentices to PhD scientists.
At the heart of this has been a new industrial strategy for the UK, which my party – the Liberal Democrats – has championed across government in building a stronger economy and a fairer society. Industrial strategy is a long term partnership between government and business, which attempts to work beyond the usual short term political timetables. We want to make sure that the UK is able to earn a living through our world-beating industries such as cars in the Midlands or the oil and gas supply chain in Scotland, or the food, agri-tech and bio-renewables sector in Yorkshire and the Humber. We aim to show that the UK is the right place to set up companies, invest and create long-term jobs.
We are also working to ensure that the workforce is ready to take the new opportunities being created as the economy recovers. Almost two million new apprenticeships have been started since we came to office in 2010 and we are investing in colleges like Askham Bryan College, to ensure everyone has access to the skills they need to succeed in the world of work, vocational and academic alike.
But there is more to do. Our recovery needs to be better balanced. Growth needs to be sustainable and we need every part of the UK to be firing on all cylinders. We cannot risk a repetition of the disastrous growth paths of the past when it depended on consumption financed by growing personal debt, depending in turn on inflated house prices. The emphasis must be on exports, investment and new technologies.
We must stop small and medium sized businesses being suffocated by the lack of bank credit. I speak to companies with world-beating ideas, including in York and Sheffield, which cannot get the financial backing they need to seize the opportunities offered to them. So two years ago I launched a new British Business Bank to open up new avenues of finance for business who are struggling to get anything from the high street banks. We are also investing in British supply chains through the Regional Growth Fund. And we are promoting new green technology through the Green Investment Bank which my party has long championed.
We also need to ensure that the UK can pay its way in the world economy, by boosting the exports of goods and services and bringing back production that went overseas over the past decades.
Finally, the Liberal Democrats making sure that the economic recovery benefits everyone in the form of improved take home pay. Despite the effect of the economic crisis on living standards, the Liberal Democrats have cushioned the impact by lifting 2.7 million people out of income tax all together and given a £700 tax cut to more than 20 million people. So far in Yorkshire and the Humber, wages grew by just 0.5 per cent in the last year. Until this picture changes, we will not tire in our efforts to raise productivity, to ensure people have the skills and the opportunities to succeed in the world of work and to expect their incomes to grow as a result.
The recovery is in full swing. The challenge now is to ensure that the good news story is one about every part of the UK and is sustained over the long term.
• Vince Cable MP is the Business Secretary. He was born in York.