England

PM answers fears that Scotland could steal North jobs

  • 4 October 2011
  • From the section England
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The North East and Cumbria need as many jobs as they can get in the current climate.

So you can understand why some are worried that vital investment is being lost to Scotland because of its extra money and clout.

North Tyneside appears to have been the most recent to lose out.

Internet giant Amazon had looked to bring 900 jobs to the area.

But when it was offered a £1m plus grant by development agency Scottish Enterprise, it decided to take the jobs to Edinburgh.

Job fears

North Tyneside Mayor Linda Arkley has raised the issue with ministers, and has now also highlighted it at the Conservative conference in Manchester.

She says her council cannot possibly compete with the might of devolved Scotland, as it could never offer a grant of £1m to a business.

The North East has of course lost its regional development agency One North East, and it lacks the power centre offered by the Scottish Executive.

And Mayor Arkley also fears that the situation could get worse.

Scotland is hoping to get powers to vary corporation tax for businesses, with legislation passing through parliament at the moment.

If it could undercut England on taxes as well, then Linda Arkley fears even more jobs could head north.

She says the impact on the North East (and for that matter Cumbria) needs to be considered carefully because of the proximity to the border.

Tough competition

She said: "The North East has found it difficult to attract jobs in the past, so it would be an absolute travesty if when it did get some interest, the jobs ended up going to Scotland.

"We just cannot compete with the grants on offer from Scotland, let alone tax incentives.

"If something isn't done to make it a level playing field, it will be very bad for the North East."

Linda Arkley
North Tyneside mayor Linda Arkley fears the North East could lose thousands of jobs to Scotland

As I had an interview scheduled with the Prime Minister after I'd spoken to Linda Arkley, so it was the perfect opportunity to raise her concerns.

David Cameron was keen to trumpet what he believes the government is already doing for the North East and Cumbria.

He mentioned the Regional Growth Fund and the region's two enterprise zones, plus he talked about the good news stories such as Hitachi's investment in a train factory at Newton Aycliffe.

But he didn't seem to be prepared to halt Scotland's ambitions.

He said: "Remember we are cutting corporation tax anyway which will help the North East. But we have devolution now so Scotland has the right to make its own decisions.

"But at the end of the day if the Scots choose to spend more money - and most of their politicians want to talk about that - they won't have the money to cut the taxes."

Economic growth

The PM was generally bullish about what the government was doing for the North East, even though he accepted there was a growing unemployment problem.

I did though raise the Regional Growth Fund with him.

It's one thing the government always trumpets when it talks about what it's doing for the North East.

And the region did get a big slice of the millions of pounds on offer in the first round - probably around £40m.

But six months on from the grants being announced, it appears that none of them have been paid.

The Prime Minister agreed that was unacceptable.

He said: "It is unacceptable, and we are doing everything humanly possible to get them paid out.

"It is frustrating, but you do need to do all the checks on every organisation when public money is being handed out to ensure money isn't wasted."

With unemployment rising, and Scotland to compete with, those grants are certainly needed as quickly as possible.