NEWS that the economy shrank again by 0.3 per cent in the last quarter of last year and the announcement of job losses at Flybe was not the cheery start to the year we would have wished for.
Until now, Exeter has done relatively well, in spite of the overall economic depression. Flybe has been hit by a big fall in domestic flying since the global financial crisis of 2008. The number of people flying within the UK has dropped 20 per cent, while the number of international passengers has only fallen two per cent. Flybe has also been hit by a 160 per cent rise in air passenger duty and the way that tax hits domestic airlines worse. Because it's a departure tax domestic passengers pay twice.
In spite of these difficulties, Flybe has actually managed to increase its share of the domestic market from 19 per cent to 28 per cent – no mean feat and something which should mean the company is well placed when the domestic flying market recovers.
But that recovery feels as elusive as ever as fears are raised we may be heading for an unprecedented "triple dip" recession. The latest minus 0.3 per cent "growth" figures mean the economy has basically not grown at all since George Osborne's emergency budget in 2010. Before that we'd had six quarters of growth at an annualised rate of more than two per cent. Even Nick Clegg and the International Monetary Fund are now calling for a change in policy. The national debt and borrowing are going up not down. The deficit will be higher this year than last. Yet what have we got to show for all this pain?
Instead of focusing on how to get growth into the economy and tackling the standard of living crisis facing many families, David Cameron has spent the last six months agonising over his speech on Europe.
Whatever your views on the EU and Britain's role in it, I cannot see how it is in our country's interests to announce that there might be a referendum on our membership in five years' time on the unknown outcome of an uncertain negotiation. As the chairman of the South West business organisation the CBI and boss of Westland Helicopters, Graham Cole, told a conference in Exeter following Cameron's speech – what business and investors need are certainty and policies for growth. This uncertainty can only damage confidence and investment and is a massive distraction from the real problems facing people and our economy.
But there are bright spots too in the local economy. Alcoa Howmet – one of Exeter's biggest manufacturing companies – appears to have stabilised its position after a few difficult years. Howmet has achieved a big improvement in the consistency and reliability of the turbine components they supply to giants like Rolls-Royce and Air Bus. That ought to augur well for the company and its highly-skilled workforce as the aerospace sector continues to grow long term.
The university too, which is Exeter's biggest income earner, is still expanding in spite of the difficulties facing higher education generally. And in January the city council published its "vision" document for the next 10 years outlining how it intends to further improve and develop Exeter and put the city on a strong, long-term footing.
Something which needs sorting in the short term, though, is the vulnerability of the railway at Cowley Bridge to flooding. Both the Government and Network Rail have been making encouraging noises about this since I raised it in Parliament during the first disruption in late November. But we're still waiting for the detail of what they intend doing and the timescale.