North East firms holding off on investment ahead of Scottish independence

Around 12% of North East firms have said they are holding off on major spending decisions until after the September 18 referendum

Leader of Newcastle City Council, Coun Nick Forbes
Leader of Newcastle City Council, Coun Nick Forbes

The possibility of Scottish independence is putting off North East investors even as the region continues a charm offensive north of the border.

Around 12% of North East firms have said they are holding off on major spending decisions until after the September 18 referendum while they wait and see what will happen with Alex Salmond’s bid for an independent Scotland.

The North East Chamber of Commerce said its figures showed the impact of uncertainty in the UK.

At the same time as the research was being published Newcastle Council was joining leaders of the country’s biggest cities for a special Glasgow meeting aimed at pushing through a different type of devolution.

The Core Cities group, which Newcastle is a member of, says handing them more spending powers would be a better alternative for Scotland and England than independence.

“Government has to focus on devolution to cities, rather than just regions, to drive UK growth and boost jobs,” the Core Cities group said.

In a letter to the Herald newspaper in Scotland, the group said: “While the question of independence is one for the people of Scotland, we need to add our voices to those who believe that devolving more power to cities to let them create jobs and grow their economies is a more radical constitutional agenda than establishing a border at Carlisle.

“This challenges the centralising tendencies of all governments, whether in Westminster or Holyrood. We are in favour of radical constitutional change. But this cannot merely be left to a tussle between parliaments.”

The Core Cities Group - made up of the leaders of the city councils of Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield - added the UK’s cities need “better connectivity rather than greater separation.”

Newcastle Council leader was among those leaders looking at closer connections, including the eventual possibility for the cities to be joined up with high speed rail links.

He said: “I joined the core city leaders in Glasgow today alongside the leaders of the major Scottish cities to set out an alternative approach to devolution based on cities taking greater responsibility for economic growth.

“The centralisation of powers in Britain is holding back our ability to create more and better jobs, and swapping Westminster powers for Holyrood powers simply changes the handbrake to the footbrake for Scottish cities.”

He was speaking as North East research showed that 4% of firms think independence could have a negative impact on sales and orders.

Ross Smith, the Chamber’s director of policy, said: “Given that we need businesses to continue investing to sustain the recovery, the uncertainty that this referendum inevitably creates needs to be minimised.

“As we get closer to the referendum people on both sides of the debate need to be careful not to heighten concerns through unhelpful hyping of political rhetoric.

“We also need reassurance and clarity that whatever the outcome the transition will be managed in a way that makes continuity of trade as easy as possible.”

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer