ENERGY secretary Chris Huhne has told Tyneside businesses he is prepared to stand up for them in the battle against Scottish competition.
The Liberal Democrat MP was in Newcastle yesterday to address green energy concerns at the city’s Centre for Life.
Mr Huhne set out his views on helping high energy consuming firms such as Northumberland’s Alcan site to work through strict Government carbon emissions targets.
And speaking to The Journal afterwards, he played down fears of a Scottish threat to the North East economy.
Earlier this month The Journal revealed how North Tyneside elected mayor Linda Arkley had written to the business secretary and the chancellor warning that Scotland’s renewable energy sector was targeting North East jobs and investment by offering incentives no longer available in the region.
Mrs Arkley said at the time that allowing Scotland to offer lower corporation tax, as is under consultation at the moment, would make a difficult situation much worse.
And she warned that such a move could undermine the region’s new enterprise zone, set up to offer financial help to firms bringing renewable energy jobs to the banks of the River Tyne.
But Mr Huhne last night insisted the threat would be met head on.
He said: “Clearly corporation tax is a reserved issue that is dealt with by the Treasury and I can’t see this changing.
“We have made it very clear that this is not something we want to change. We don’t want to see any change in that and I do not think it is very likely it will happen. We don’t want to see a situation where there are different tax regimes in different parts of the UK.”
He also said there was hope for Rio Tinto Alcan – which employs 630 people at its aluminium smelter and power station in Lynemouth.
The manufacturer is facing a £40m tax bill as a result of the Government’s intention to clamp down on carbon-heavy firms.
Alcan is awaiting news of support for renewable energy schemes which could reduce that bill, but which need some Government support.
Mr Huhne said: “Right now we are looking at a package to help the aluminium industry to adapt to these changes.
“Alcan is a perfect example of the sort of company we want to help. We are aware of the situation and looking into it.”
Page 3 - ‘Slow, sluggish’ recovery warning for the region >>
‘Slow, sluggish’ recovery warning for the region
THERE are opportunities for businesses to be innovative and prosper but the North East economy can expect “a slow sluggish recovery,” the director general of the CBI warned last night.
Director general of the business lobby group John Cridland, told The Journal: “It will not be pretty but there are still opportunities for businesses to dig deep, cut costs, and be innovative. As I have said before, necessity is the mother of invention.”
Mr Cridland is in the region to take the temperature of businesses as the economy continues to suffer.
Last night at a North East CBI dinner he called on the Government to boost activity in the housing market which could be a “game changer” for growth.
Today he is carrying on his fact finding tour in a Nissan leaf electric car which has been “pumped up” to carry the business leader 96 miles without the need of a recharge. The vehicle is symbolic, he said, because it helped to show the success stories in the region.
He added: “The Government does not need a Plan B or C as it was described at the Labour Conference, because the deficit needs to be tackled. But we do need a Plan A+”. He explained that the Government should “play a key role” in helping the private sector boost activity in the housing market and construction.
He said: “The Government has to pull levers to bolster infrastructure spending on power stations low carbon industries and transport. One example I can give is this. The Government can’t afford to dual the rest of the A1 so why not let the private sector do it, and charge motorists a road toll.”
One aspect of the North East economy that troubles Mr Cridland is the level of unemployment and the real prospect of more public sector workers facing the axe.
He said: “I am very very worried. When this happened before, there was a scarring effect on a generation.”
Mr Cridland accepts it is going to be “very tough” for households and the suggestion of growth last year failed to appear. But he remains hopeful: “I feel businesses in the North East are resilient out of it’s traditions. But now we have to look to the future and the new industries that are here.”