Town traders tell MP of economic gloom

Asked by town MP Gregory Barker for a show of hands, the vast majority of more than 50 business leaders attending a Chamber of Commerce and Tourism working breakfast said they were pessimistic about the economic outlook.

Only a handful said they were optimistic.

The Conservative MP lambasted Prime Gordon Brown for his handling of the national economy as Chancellor.

In answer to a question on capital reserves held by Rother District Council which could be used to pump-prime local economic initiatives, the MP called for local authorities to be unshackled from central government control and such decision-making given to locally-elected members.

Speaking at the newly-refurbished Cooden Beach Hotel, the MP said: "This is a great Bexhill success story."

The run-down hotel could have gone to an anonymous chain.

Instead, Bexhill entrepreneur James Kimber had returned to the town and done a "fabulous" job in "re-inventing" the Cooden Beach in a business enterprise of which the town could be proud.

Turning to Westminster, the MP contrasted his party's glee at the Labour Prime Minister's misfortunes with its concern for the national economy.

He told chamber members: "I am very concerned about the state of the economy. I would be very interested to get your feed-back.

"Politics aside, there is something very, very worrying going on now."

Technically, the nation was not in recession. This was defined as three consecutive quarters of negative growth.

But the indications that politicians were getting revealed growing problems.

"There are some sectors of the economy which are already in recession."

The housing sector, so important to the South East, had nose-dived, as the closure of estate agencies in Bexhill indicated.

"We very nearly had another banking crisis on our hands with the Bradford and Bingley on the lines of Northern Rock last autumn.

"We are by no means out of the woods with regard to a further down-sizing of the financial sector and the possibility of another banking crisis.

"We are in uncharted territory,

"It is not just the housing sector '“ I think the consumer in general is feeling the pinch.

"It is a combination of factors. Some is the result of the Government's actions and some to be honest is beyond their control.

"The spiralling cost of fuel for one. I filled up my car this morning. Ouch!

"The cost of many, many staples in the weekly food shop are going up."

Because of the way the inflation was now calculated many price rises were now not taken into account.

Inflation was said to be under five per cent but few people doing the weekly shop would consider this was accurate.

"Ten years ago when I was in the oil industry, oil was $10 a barrel. Now it is $140 a barrel and people are talking of $200 a barrel."

Banks were charging more for loans and it was becoming more difficult for both home-buyers and businesses to obtain loans.

Meanwhile, savings were at an all-time low.

"In 1997 the average British household saved 12.5% of household income '“ building societies, ISAs, PEPs and the like.

"It is down to two per cent.

"The British consumer is practically saving nothing and that as a long-term signal for the economy is bad.

"People are not saving for their old age. They are not saving for a 'rainy day.' Therefore they don't have as much of a cushion to fall back on as they did 10 years ago.

"Now they are struggling with the 'credit crunch' and with unsustainable mortgages that the cannot afford.

"We are now taxed more than we have ever been in the post-war period '“ possibly ever.

"That's why there was so much anger about ending the 10p tax band.

"I think the fact that there was so much anger was not just the unfairness of ending the 10p tax band but that people are starting to worry about the effect on their pockets...

"If you look at the most successful economies around the world they are low-tax economies '“ taking less money out of people's pockets and allowing them to spend more.

"If we want the British economy to do well in the long-term we have to have a better tax institution. We have to reduce taxation, particularly on small companies, entrepreneurs and risk-takers."

He said the news was not all gloom, particularly in Bexhill.

Locally, the tourist industry was holding up quite well. He was off to a meeting on the 37m High School building project with school principal Mike Conn and chairman of governors Cllr Brian Kentfield '“ a project vital to the town's young people.

The planned Bexhill-Hastings Link Road was a good example of cross-party working. He was lobbying hard with Hastings' Labour MP Michael Foster to see that the Government honoured its pledge and build the road, which was essential to create new jobs.

He concluded: "I think there are reasons for us to be optimistic in Bexhill because of the likes of the people in this room.

"Our greatest asset is people '“ the entrepreneurs, the risk-takers, the wealth-producers."

He wanted to help. That is why he now had a fully manned office in Bexhill.