THE North-East must brace itself for more austerity, Chancellor George Osborne has warned.

Mr Osborne told The Northern Echo more action is needed to nurse the economy back to full health.

Speaking during a visit to the region, he did not rule out making further cuts, but claimed the situation would be worse under a Labour Government.

Mr Osborne also acknowledged criticism of his Autumn Statement, particularly comments from the Institute of Fiscal Studies, which said £55bn of spending cuts were still to come.

However, he said his approach was making a difference and urged voters to show understanding.

He said: “If you look at the North-East economy, it is creating jobs faster than almost any other part of the country.

“But we have got to do more to rebalance the economy and make sure we don’t put the bets on London, as the last lot (Labour) did.

“There is further to go and we are putting the hard work in.

“People must ask themselves if they want to go with the long-term plan that has created jobs or go back to square one and the chaos of the past?”

Mr Osborne was speaking in a visit to Carillion Training Services’ (CTS), near Middlesbrough, where the firm revealed plans for 5,000 new apprenticeships in five years.

The company, which is already the UK’s largest employer of construction apprentices, has 13 UK training centres, including bases in Sunderland and Gateshead.

It said hundreds of the new roles will be based in the North-East and will cover construction and support services, which includes road maintenance and rail and energy work.

During his visit, Mr Osborne met joinery and bricklaying apprentices and got his hands dirty in a drilling task before picking up a trowel to help build a brick wall.

His tour came just days after setting out plans in his Autumn Statement to allow employers taking on apprentices from April 2016 to avoid paying national insurance for people under-25.

He added: “I can feel the enthusiasm here and it is brilliant news we have people getting the skills they need to have good careers.

“When a business is giving a young person a chance in life, we are very clear that we must support them.”

Carillion’s Middlesbrough centre provides training to about 100 apprentices every year, and Ray Wilson, CTS’ director and general manager, said: “We are enormously proud of our track record in providing employment and training for young people.

“We welcome the support for apprenticeships in the Autumn Statement.”

Mr Osborne’s North-East trip also saw him visit Newcastle University, which came after his Autumn Statement announced £20m funding for a new innovation centre.

He said the development, known as The National Centre for Ageing Science and Innovation, which the university is match-funding, will support about 1,300 jobs.

The site is expected to bring together academics, the NHS and public and private sector experts to develop technologies capable of treating the aging population and reducing reliance on healthcare services.

Mr Osborne added: “I want science to be at the heart of delivering a Northern Powerhouse.

“This research will not only help boost the regional and national economy, bringing jobs and investment, but will improve people’s lives by developing technologies to support our ageing population.”