Shopping around

Fergus Hewison Reporter Politics Show North East and Cumbria

Can "buy local" campaigns help the North fight its way out of recession? Fergus Hewison reports.

We live in an age when goods and services are bought and paid for at the click of a button and dispatched from all corners of the globe; when globalisation dictates what we eat, wear, watch on television, and what luxuries we fill our homes with.

With the internet and online sales, 'shopping around' means the world is our oyster (even if it is oysters you are after).

So in a global economy, and in a global recession, why shop or buy locally when this could restrict your choice and potentially increase the cost?

Well, there is a feeling that doing just that - buying and shopping locally - may be a way the region's economy can take shelter from the worst effects of the economic storm.

The idea is that in difficult times supporting businesses closer to home may help us all weather the downturn.

Multiplier effect

Using a complex economic model called Local Multiplier 3, a recent study for the regional development agency One North East estimated that each £1 spent locally results in the circulation of £1.80 within the region's economy.

This compares to just £1.21 if that £1 was spent outside of the region.

£1 spent could generate £1.80 for the regional economy

But this is not just about you and I buying locally smoked kippers on our visit to the fishmonger, or fruit and veg from the local farm shop.

It is about spending across the whole economy.

For instance, the North East Chamber of Commerce (NECC) has estimated that the region's economy would grow by £1.35bn, and an extra 6,000 jobs, if the public sector spent an additional 1% each year contracting services to local businesses.

And Durham Business School, part of the city's university, is undertaking a major study of a buy local campaign conducted by one of the region's largest construction companies, the Esh Group.

The people with the calculators say that phase one of this study shows that by using regional suppliers, contractors, and by recruiting locally, the Esh Group is generating a further £1.38 for every £1 spent in the North East.

Downsides?

But are there any downsides?

Well, taken to their ultimate degree, critics say buy local campaigns would mean firms that largely spend and trade outside of their respective regions becoming isolated or penalised.

Critics say 'buy local' campaigns penalise some firms

And if businesses collaborate and agree to buy from each other regionally, then this could diminish competition, which in turn could lead to higher prices - with the consumer being the loser.

And when does local, regional, or national pride spill over into protectionism, the very thing that many economists fear will make the recession more damaging and longer lasting?

Local loyalty

In Scotland, the Scottish Nationalist Party MSP Aileen Campbell put forward a proposal to her party's conference to encourage shoppers to buy products produced north of the border.

Scotland - proposals for a Saltire symbol on till receipts

Under the scheme people buying these goods would see a Saltire symbol appearing on their till receipt, with stores then giving customers loyalty points.

All well and good, but critics point out that this could fall foul of European laws designed to outlaw anti-competitive practices and create a level playing field between goods from across the continent.

The Politics Show looks at the North East's buy local campaigns - and hears from the critics.

Watch the Politics Show on BBC One at 1500 on Sunday.

---

Use the reply form below to let Politics Show NE & Cumbria know what you think...