Westminster Comment by Sir Robert Smith MP: Positive news about UK economy

Sir Bob Smith
Sir Bob Smith

This week there were signs that the country is seeing positive news about the state of the economy, though here in the North-east we still face the consequences of a downturn in activity in the North Sea.

Locally, we are still to see the impact of that downturn where the total number of Jobseeker’s Allowance claimants is concerned.

In West Aberdeenshire and Kincardine, the number of claimants in January 2015 was 265. This represents a rate of 0.5% of the economically active population aged 16 to 64, the lowest rate of unemployment of any constituency. The number of claimants is 67 lower than in January 2014.

Unemployment in the UK is now 5.8% - the lowest level in six years. The number of unemployed people has fallen by 600,000 since 2010. On February 18, the Office of National Statistics announced that 30.9 million people are in work – more than ever before – and there are around 720,000 job vacancies across the country.

That is a rise in employment of 103,000 between October and December 2014 compared to July to September 2014 and a rise of 608,000 on this time last year. The annual increase in the UK employment level is the largest of all EU countries.

On January 27, the ONS announced that GDP grew by 0.5% in the fourth quarter of 2014. GDP is now above pre-crash levels. In 2014, GDP expanded by 2.6%. Pay nationally is rising faster than inflation. Compared to this time last year, pay is up 2.1%, while CPI inflation is 0.3%.

So GDP is growing and is back above the pre-recession levels of 2008, the deficit has been halved and more people are in work than ever before. The stability and reassurance to the markets flowing from the agreement of a coalition Government helped lay the foundations for these signs of recovery. At the same time, as a result of the coalition, we see the raising of the tax free threshold.

There is still much to do to rebuild the economy and we are not immune to events in Europe and further afield.

The Wednesday before last the North-east was host to the annual Subsea UK awards celebration.

This was a chance to recognise the excellence achieved by UK businesses that serve the offshore oil and gas industry.

A major centre for the industry is Westhill. This industry is one of our strong export earners.

While most visible here in the North-east, the industry is a UK success story as could be seen by the range of locations of the award finalists. Of course, like the rest of the oil and gas industry, it is not immune to the current downturn.

It is important to understand that many of the job losses and pay cuts we are now seeing are the consequence of decisions taken before the drop in oil price as projects were coming to completion and production costs were rising.

I, therefore, welcome the decision taken by my colleague Ed Davey as Secretary of State for Energy and Climate Change to set up the Wood Review during the boom time.

He had the foresight to see the longer term difficulties and set about tackling them.

We are now seeing the establishment of a new oil and gas authority to drive forward reform as well as more constructive engagement on fiscal measures.

Monday saw the publication of a report by the Energy and Climate Change Select Committee that put the spotlight on part of our energy bills.

We were looking at the companies that provide the wires and pipes that transport electricity and gas.

Currently the distribution costs are paid on a regional basis.

We have called for research on the practicality of levelling out those costs across the country.

Currently we pay more in the North because of the geography of the region.