Osborne pledges jobs battle for BAe workers

The Chancellor rejected claims that Ministers were “standing on the sidelines” while 900 workers face losing their jobs at the defence giant’s plant at Brough and said the Government was “rolling up its sleeves”.

An Enterprise Zone, offering business rate discounts, tax incentives, relaxed planning rules and superfast broadband to firms setting up there, will be in place by April to try to attract hundreds of highly skilled jobs which could offer fresh hope to BAe workers facing redundancy.

But in an interview with the Yorkshire Post, Mr Osborne insisted that the Government has not given up on the BAe workers and will continue working with the company to try to save the jobs. BAe last week announced job cuts that will mean an end to the manufacturing of Hawk trainer aircraft at Brough.

Mr Osborne said: “This in no way interferes with the discussions we’re having with BAE to try to minimise or indeed or avoid any job losses at all but I think it’s good to prepare for a difficult outcome of that anyway. I think it will be a good thing to have whether or not there are job losses at Brough.”

The announcement came as Prime Minister David Cameron and Foreign Secretary William Hague launched a fierce defence of the Government’s growth strategy following criticism from Labour last week and the Tory chairman of the Treasury Select Committee on Saturday.

The Enterprise Zone will be the fourth in Yorkshire; others are already created to the south of Leeds, along the M1 in South Yorkshire and around the Humber, where there are high hopes of attracting thousands of jobs related to renewable energy. Ministers hope they will help ignite the private sector to create thousands of jobs.

Mr Osborne has agreed that extra zones can be created in Brough and in Lancashire, where hundreds more jobs are being shed by BAe. Ministers are aware that the 3,000 job losses announced by BAe are overwhelmingly in the North and could undermine their efforts to rebalance the economy.

The Chancellor added: “The idea is to use tax breaks to bring businesses into the Brough area and to create jobs which will hopefully offer an alternative to those who have lost their jobs at BAe.

“What we want is high-quality, skilled jobs of the kind that have been lost at BAe. We know the workforce there is among the most capable in Britain.

“BAe is the victim of some international circumstances like the Americans cutting their defence budget, which shows that Britain is not alone in having to make some difficult decisions. But what the Government’s doing is not standing on the sidelines while this happens but rolling up its sleeves, helping the people of East Yorkshire.

“You’ve got to remember this sits alongside the Enterprise Zone we’ve already announced in the Hull area, direct action to help people in East Yorkshire, listening to local people’s concerns and creating jobs.”

The announcement was welcomed by MPs, although Hull North MP Diana Johnson warned that the Enterprise Zone may not be enough to transform the area’s economy.

“The past experience of Enterprise Zones is that they do not, of themselves, provide the investment needed to transform local economies,” she said.

The chairman of the Humber Local Enterprise partnership, John Clugston, said: “Enterprise Zones give businesses extra incentives to invest in an area. Our existing Enterprise Zone is one of the most ambitious in the country and will help the Humber to become a centre for renewable energy.”