The North loses out to ‘unfair competition’ from Scotland

A UKTI director has said that the North is facing “unfair” and “disproportionate” tax breaks from Scotland, making it difficult to compete.

Simon Goon, who works with the UKTI’s Investment Services Team, slated a system that allows Scotland to offer business benefits that the northern regions cannot offer.

“It’s a disproportionate model. It’s wrong,” said Mr Goon, who was speaking at the Northern Growth Summit in Leeds yesterday.

The economic development director has a role to promote the ‘UK First’ proposition to existing foreign and overseas inward investors. However, Goon also has a remit to work alongside his colleagues in Scotland, who will be shocked to hear his view that businesses will “rue” decisions to move north of the border.

“Some business are going to make decisions that they will rue in the future,” was his comment in front of the packed room at the Royal Armouries.

Mr Goon also highlighted some UKTI statistics showing that inward investors were not interested in quality of life, and less interested in low costs than most Northern-based inward investment organisations have suggested.

“We don’t have a competitive offer in comparison to countries like Turkey,” he said. “(If you were to ask) how does the enterprise zone offer sit with the rest of the world, it doesn’t on its own, it has to be part of the bigger package.”

Alexandra Jones, chief executive of the Centre for Cities also warned that enterprise zones could simply lead to the displacement of jobs.

She looked at the examples from 1980s, highlighting the impact that enterprise zones can have when not located in cities. “Sunderland was a highly successful enterprise zone last time round, but the city centre lost jobs. I’m not necessarily saying it was because of the enterprise zones, but you need to think about it in terms of the overall strategy.”

She pointed out that 75% of the new enterprise zones were outside cities. Her analysis also showed that historically, proximity to a successful area was key. “(Looking at enterprise zones last time) they do better if they’re by an area that is doing quite well. Selection of location is important, as is good transport links – they have to be well connected, and tap into existing local skills.”

The conference, the eighth annual Northern Growth Summit, was hosted by Regeneration & Renewal and Planning magazines.