'North East must find a Salmond' to fight the region's case

THE North East needs its own Alex Salmond figure to fight for a level playing field against an increasingly powerful Scotland, it was argued last night.

THE North East needs its own Alex Salmond figure to fight for a level playing field against an increasingly powerful Scotland, it was argued last night.

As Mr Salmond prepares to give a speech in Newcastle tonight, a leading think tank warned the North East will lose out on jobs and investment to the Scottish unless it finds a regional ambassador to fight its case in Whitehall.

The IPPR North think tank said Scotland will continue to present a threat to the North East unless the region can convince ministers to compensate it for the increased spending and tax powers made available north of the border.

In 2014, voters in Scotland will have their say in an independence referendum, with even a No vote likely to generate further devolution of decision-making to Edinburgh.

An expectation of further powers, including the ability to lower corporation tax, has already been cited as one reason why internet bookseller Amazon dropped plans to open a Tyneside factory in favour of a move to Scotland. The snub to the North East was later repeated by an offshore energy firm.

Last night, the Scottish Government told The Journal it remained convinced that a 3% cut in corporation tax would create thousands of jobs.

Katie Schmuecker, IPPR North associate director, said the Borderland study showed that while the economic downturn would restrain Scottish tax changes, there were still many threats to consider when having a more powerful neighbour.

She added: “Northern leaders should learn from the ambitious outlook of the Scots, and champion decentralisation and further local powers to the North.

“This is a chance for the North to renegotiate its position with Westminster to ensure its future prosperity.

“It needs to ensure that whatever deal is reached between Westminster and Holyrood, the North is not unduly disadvantaged.”

The think tank report also urges the North to try and force Mr Salmond’s hand, arguing the region should look to international models and secure from an ever-more-powerful Scotland an agreement to abide by a more balanced “tax code of conduct”.

The North East is warned that it is vital to its own prosperity that it plays a role in deciding what powers a future devolved Scotland would enjoy, if its electorate rejects independence.

Mr Salmond is speaking tonight at the North East Economic Forum’s annual dinner, where he is expected to set out how people on both sides of the border can work together.

Last night, former regional minister Nick Brown said the North East would continue to lose out if ministers did not act on the IPPR advice.

The Newcastle East MP said: “Alex Salmond is a welcome visitor to the North East. We share a number of challenges as a result of the way the UK economy converges on the capital.

“But the problems is for the North East is worse because we do not have a regional minister in Government who can argue for what we need. I think the Government’s local enterprise partnerships are not up to the job of rebalancing the economy in that way and we will continue to lose out until this changes.”

A spokeswoman for the Scottish government said: “Corporation tax is one of the chief levers that government can use to promote growth, investment and jobs.

“Used wisely it can be a vital source of competitive advantage and there is clear evidence from around the world of the benefits to employment and the economy.

“Detailed modelling work by the Scottish Government estimates that reducing the headline rate of corporation tax from 23% to 20% would create an additional 27,000 jobs in Scotland over 20 years.

“However, as this report makes clear, corporation tax is far from the only lever which will be open to an independent Scotland to help achieve economic growth.

“Other tools, like air passenger duty, will also have an important role to play.”

 
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