A CROSS-BORDER war of words has broken out after the Scottish Government accused a senior Tyneside Conservative of leading efforts to “sabotage” the economy north of the border.
North Tyneside elected mayor Linda Arkley has been singled out for criticism by the Scottish finance secretary John Swinney in what he says is a political attempt to hold his country back from greater financial independence.
The row comes after chancellor George Osborne claimed the “instability and uncertainty that hangs over the Scottish economy” was as a result of the planned independence referendum, for which no date has yet been revealed.
In a letter Mr Swinney suggested the Chancellor’s remarks may have been “motivated by party political concerns” after he heard that Mrs Arkley had voiced fears that Scotland had an advantage in attracting jobs and investment.
The Journal revealed in September that book-seller Amazon had turned down the chance to bring 900 jobs to Tyneside after a Scottish quango stepped in to offer a £1.8m sweetener.
Mrs Arkley then started a sustained lobbying exercise as concern grew that several hundred more jobs were also being targeted.
Firms working in the offshore oil and gas sector have also warned that Scotland’s ability to offer businesses a lower tax rate than they would enjoy in the North East could undermine plans to rebuild the regional economy by attracting wind turbine manufacturers to the banks of the River Tyne.
A spokesman for Mr Swinney said the finance secretary’s bid to discuss economic problems with Mr Osborne had been snubbed as a result of political lobbying by Mrs Arkley.
The spokesman said: “The chancellor specifically refused to reply to his letter, leaving it instead to his Liberal Democrat deputy Danny Alexander.”
He said if the Treasury had “not been engaged in activities aimed at sabotaging investment in Scotland, then the only way that can be effectively resolved is for the Chancellor of the Exchequer himself to deny the charge”.
Mr Swinney’s spokesman added: “There is clear evidence the chancellor has been personally lobbied by the Tory mayor of North Tyneside on this very point, and it adds to our concerns on this matter that the Chancellor of the Exchequer has failed to respond to John Swinney’s letter and has left it to his Liberal Democrat deputy at the Treasury.”
Last night Mrs Arkley launched a strong defence of her lobbying activities, arguing that it was “common sense” for any elected politician to fight for local jobs.
She said: “We all know here that this is not a political thing, it is not about the Conservatives versus anyone, it is about the need, clear and visible, for a level playing field. And with that case being so clear I am surprised that the Scottish Government are taking this line.
“This is about jobs, that is what I said on Monday at the Treasury and what I will continue to make clear. We cannot have a situation where one area such as Scotland can offer around £4,000 per head for each job, Amazon was just one example of this but there are other areas in which we know we are vulnerable because we cannot offer the same support or incentives as what Scotland can offer.
“Add to that the corporation tax difference and the other financial powers which Scotland enjoys over England and you can see a real jobs threat, regardless of which political side you are from. The Treasury thankfully seemed eager to listen to what I have to say for any future examples to be brought to their attention, so I think ministers are aware that there needs to be a fairness in how jobs are supported, now we need Alex Salmond to realise that.”
James Ramsbotham, chief executive of the North East Chamber of Commerce, said: “All we are asking for in the North East is to be able to compete for business on an even footing with the rest of the UK.
“There is certainly no attempt to sabotage investment in Scotland.
“Indeed a healthy Scottish economy can be of great benefit to the region, but if the North East is missing out on vital inward investment and jobs because Scotland can offer enormous incentives and we can’t then that is just not right.
“We are not asking to be made a special case, just parity with the rest of the UK.”
Page 3 - Tory funds axe ‘gives Scotland advantage over North East’ >>
Tory funds axe ‘gives Scotland advantage over North East’
LABOUR has warned that the threat from the Scottish economy is a direct result of the Conservative’s decision to axe dedicated regional funds.
The £1.8m Scottish Enterprise grant offered to Amazon to switch 900 jobs away from Tyneside to Edinburgh was made after the coalition Government withdrew a similar English fund, the Grants for Business Investment scheme.
Scotland’s First Minister has accused the Conservatives of jealousy of the success enjoyed north of the border.
At the opening of the Amazon site earlier this month, Mr Salmond said: “There have been senior Conservatives in the North of England complaining about the number of international investments that have been made in Scotland in the last few months.
“I can only interpret George Osborne’s daft, juvenile, job-destroying mission to Scotland as being part of a response to the pressure he is under from his party.”
Last night Tynemouth MP Alan Campbell said it was clear on both sides of the border that the region had lost out as a result of Conservative policies. The Labour MP said: “There are concerns about the ability of the Scottish Government to attract investment which may otherwise come to the North East.
“Where the mayor of North Tyneside has a problem, however, is the fact that it is her Tory Government which is putting the North East at a disadvantage. Her party scrapped the One North East regional development agency. Her party reduced the funding to the North East for regional growth by two-thirds.
“And it was her Prime Minister who promised before the election that the North East would be the number one target for cuts. This is one promise David Cameron is keeping.”