Special report: Is the Sussex economy turning the corner?

After more than five years of financial misery, it seemed the light at the end of the tunnel was coming ever closer.

Critics dismissed the Chancellor’s upbeat report, saying traders were still struggling and hard-up families were still floundering in mounting debt.

But in Sussex the statistics suggest business is brisk and confidence is rising.

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According to business website Duport, the first half of 2013 saw a new record for company registrations in the city, with more than 1,000 new firms formed.

Other figures also revealed Brighton and Hove is now the microbusiness capital of the UK, with more than 2,000 new minifirms founded in 2012.

Gavin Stewart, manager at the Brighton Business Improvement District, said: “There is certainly a more positive air than in previous years. The outlook, in general, is quite hopeful.

“As we move out of the recession new businesses are certainly noticeable in the city centre, with many of the long-term vacant premises being taken up by firsttime entrepreneurs.”

But the rosy outlook is not shared by many of Brighton and Hove’s poorest residents, according to Brighton Pavilion MP Caroline Lucas.

She said the government’s “damaging” austerity drive had stifled the recovery and made it much harder for city businesses to thrive.

She said: “In recent times Brighton and Hove has weathered the recession much better than many other cities.

“But businesses could have been doing so much better, had the Government not embarked on such a damaging and counterproductive austerity agenda.

“Many of the constituents I meet are still struggling with personal debt, benefit cuts and job losses, and simply wouldn’t recognise the rosy picture the Chancellor is trying to paint.”

However, the figures show jobless figures in Brighton and Hove plummeted to a new low last month.

In the first half of 2013, according to the latest Government figures, the number of people in the city claiming Job Seekers’ Allowance plunged by 15% to 5,205.

But the business recovery has not just been limited to Brighton and Hove.

The unemployment figure also fell across Sussex with 449 fewer people claiming Job Seekers’ Allowance month-on-month.

Wendy Bell, general manager at Sussex Enterprise, the county’s chamber of commerce, said that figures showed there was a “renewed sense of optimism” among Sussex firms.

She said: “The county has always been comparatively buoyant but the news that the figures are at their lowest point since 2008 is really welcome.”

And it seems business leaders are taking note of the warmer economic climate.

Philip Johnson is director of Locate East Sussex, a one-stop shop designed to attract new investment into the county.

He said firms were beginning to think “more positively” about their future and were looking to expand into new areas.

He said: “It’s clear from the number of enquiries that Locate East Sussex is receiving that companies of all types and sizes are starting to look more positively at their prospects over the coming years.

“This return of confidence – based particularly on economic certainty – is prompting companies to plan for the longer term.”

New developments in East Sussex alone include developments at Rye Harbour, at Priory Quarter in Hastings, at North Bexhill where work on the new‘Innovation Mall’ will soon be starting, in Eastbourne at Sovereign Harbour and in Newhaven, where work is soon to start on the new University Technical College.

Mum: ‘I don’t see any signs of recovery’

The downturn has forced many Sussex families on to the breadline, with many parents struggling to feed their children.

Worried mother Danielle Garraway-Shaw from Hurstpierpoint said there was “no way” life was becoming any easier.

She said: “I don’t see any signs of recovery from where I’m sitting.

“I don’t think politicians are telling the truth. I think if they had to live on the money we do they’d soon think differently.”

Ms Garraway-Shaw, who lives in Hurstpierpoint with her one-year-old baby Lily Sue and her partner Jamie Gray, said the couple had been forced to work part-time because of spiralling childcare costs.

She said: “Everything’s going up except wages. I know the government are trying to make childcare cheaper so that might help a bit.

“I just hope things will improve for families like us, rather than just big businesses.”

‘No doubt things are looking up’

One business leader said the new positive outlook for the Sussex economy had been built with bricks and
mortar.

Ian Poysden, managing director of IEP Financial, a Hove-based firm of financial advisers, said he had “no doubt” things were looking up.

He said: “In 2006 and 2007 we were firefighting and it was all about damage limitation, but I’m now genuinely
optimistic.

“We are a nation of house builders and one of the best economic yardsticks is how much the British bricklayer is getting paid each day. And with that in mind you don’t have to drive very far in Sussex to see thousands of new properties being built, wherever you are based.”

Mr Poysden insisted the supply chain supporting the new construction boom meant wealth was being created “at
every level”.

He said: “At IEP we’ve just taken on five new staff and are looking for two more. The economy isn’t out of the woods but I’m convinced we are back on an upward curve of growth.”

‘Little evidence of a revival...’

Many thriving streets became ghost towns at the height of the recession, with shoppers staying away in their
droves.

For decades Preston Street in Brighton was a “go to” destination for hungry visitors leaving the seafront and major hotels – but the downturn has hit the area hard.

By 2009, the beleaguered street had 13 empty shops and was in a state of disrepair.

George Shahata, who owns the Medusa Bar in Preston Street, said traders there had seen “little evidence” of George Osborne’s promised revival.

He said: “The last few months haven’t been fantastic. September hasn’t been great and neither was August.

“I don’t think George Osborne is looking at it from the same perspective as people like me.

“I’ve run my business for 10 years so I know what’s what. I can’t see any turning point at all.”

No change in number of calls for help

Personal debt levels have soared during the downturn, with hundreds of hard-up householders across Sussex facing financial meltdown.

Since the recession hit in 2008, the Brighton Housing Trust has helped around 400 people facing eviction every year – mostly as a result of rent and mortgage arrears.

Linda Wilmot, from the Brighton-based debtors’ charity St Luke’s Advice Service, said her team of volunteers had seen “no improvement” in the numbers of people coming forward for help.

She said: “Our statistics show us the reasons why people call us. It could be that they have lost their job, or have just fallen deeply into debt.

“I have to say we haven’t had a reduction in our call volumes at all.”

Mrs Wilmot said her charity was often forced to direct people to other agencies because they were deluged with so many calls.

She said: “I certainly don’t think the recovery has filtered down to the people at the sharp end, yet.

“But I hope that things will start to improve soon.”

‘Too early to tell if we’ve turned corner’

Small business owners have borne the brunt of the economic downturn, with hundreds of struggling Sussex firms forced to close their doors.

David Sewell, owner of the Pavilion Gardens Cafe in Brighton, said it was “too early to tell” whether the economy had really turned the corner.

He said: “I think shops in Brighton are probably doing better than many other places in Sussex.

“Recently it’s been pretty good, especially when we had a lovely nine weeks of summer.

“But it’s difficult to tell whether it’s just because of the nice weather or people are gradually feeling more confident about spending their money.”

Mr Sewell, who is also chair of the North Laine Traders’ Association, said small business owners were a “hardy bunch” who were well used to both triumph and disaster.

He said: “I would say the mood among small businesses is good. We go through these downturns and we usually come out the other end.

“You will always survive unless your business is not a good one in the first place – and we’re still here.”