Minister says enterprise zones will boost job hope

THE minister for employment says he cannot find a reason for Hull's high unemployment figures.

Figures reveal the city is officially the hardest place in the country to find work.

But Chris Grayling says enterprise zones in the region will in time attract more private sector firms to Hull.

Mr Grayling's department has been widely blamed for the unemployment crisis gripping Hull and the East Riding.

New Cabinet Office figures show 12,000 private sector jobs were lost between April 2008 and March last year in the constituencies of Hull East, Hull West and Hessle and Beverley and Holderness.

Mr Grayling said: "There is no obvious reason why the region would be disadvantaged compared to other regions.

"Transport connections are not bad and both into and out of the region you have got decent rail links, albeit Hull is at the end of the East Coast Mainline.

"You have, of course, got links to the continent so there is not an obvious reason why Yorkshire and the Humber would be at a disadvantage."

Across the Yorkshire and Humber region, 40,000 jobs were lost in private companies between June and September last year.

Figures show nearly 44 people are chasing every vacancy in parts of the city – the highest ratio in the country.

Mr Grayling says the focus must be on creating private sector jobs to fill the vacuum left by cuts in the public sector.

This is despite the fact many of the significant job losses in East Yorkshire, including those at BAE System's Brough site, Comet and in the caravan industry, have come from the private sector.

Speaking about the recent debacle over the caravan tax hike, the minister admitted the Government made a mistake with the proposed tax, which experts predict would have led to the loss of 7,000 jobs nationwide.

Mr Grayling said: "Industries, when they lobby, will always make a vociferous case and I think we felt it was not entirely logical to have a different rate of tax for caravans that sit statically on a site to exactly the same caravan being pulled by a vehicle.

"But equally we realised the impact of full VAT on those caravans was going to have a disproportionate impact in the economy in East Yorkshire and I think it is much more sensible that we say, 'Yep, we have got that one wrong – we'll change what we were going to do', rather than plough on blindly."

However, while he vehemently defends the Government against criticism it is not doing enough to get people back into work, Mr Grayling admits unemployment is still too high.

"Hull has clearly had some difficult times in the labour market," he said.

"But in the last quarter Yorkshire and the Humber has got better in that we have had a rise in employment and a fall in unemployment.

"But I think the reality is we are dealing with an extremely difficult set of economic circumstances."

Mr Grayling said one of the reasons the Government decided to set up two enterprise zones in the region is because Ministers recognised the need to attract more private sector firms to Hull.

But he says it could take some time for the zones to reap their rewards.

"I would love to say we could wave a wand and convoys of businesses would arrive overnight but it is not like that," he said. "But the enterprise zones will create the best possible environment for businesses to invest.

"Quite interestingly, Hull has proved to be one of the hotspots for people moving into self-employment with the New Enterprise Allowance (NEA).

"We have yet to publish more detailed figures, but it is ahead of most other parts of the country in terms of getting people started in the process of moving towards self-employment.

"That is good as well because it is good to have the investment from companies like Siemens, but we also want to have homegrown developments as well."

However, Mr Grayling admits that the Eurozone crisis, which some have argued is hitting this region harder than others due to its proximity to the continent, is dampening demand and the region's employment potential.

"The truth is that business is nervous about the Eurozone crisis and understandably so. It is undoubtedly affecting investment decisions and decisions by companies to take more people on, which is why we keep saying how important it is that we work with our European partners to resolve the situation," he said.

"I don't think Hull is particularly more exposed than other parts of the country because the impact on business confidence is everywhere."

Recently both Labour MP Alan Johnson and Tory MP David Davis accused the Government of having no plan for growth and of actually introducing measures, such as the caravan tax, which appear to be anti-growth.

In response, Mr Grayling said: "You support growth on two levels; firstly by supporting the general business environment as a whole by, for example, reducing corporation tax, by deregulating and lifting some of the burdens on business.

"Then it is about targeting support on regions that particularly need it, for example we have the two enterprise zones in East Yorkshire – one set up around the Humber estuary and one around the BAE plant when we had the job losses.

"You have got the money coming in through the Regional Growth Fund so we are trying to create a better business environment."