A Conservative MP in the North-East has echoed Labour alarm that Scotland will be rewarded with extra powers if voters reject independence.

James Wharton, the Stockton South MP, protested that the region was already at “a competitive disadvantage” because of past devolution to Edinburgh.

The rising Tory star highlighted how the Scottish Enterprise development agency was able to attract companies to invest north of the border, rather than in Teesside and Tyneside And he told ministers: “There should be a level playing field, with fair conditions on both sides of the border, when companies make that choice.

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“After Scotland votes to remain part of the United Kingdom, as I am sure it will, my concern is that the North of England will face a challenge.

“We must not allow unfair competition that would unjustifiably and unfairly penalise the people we represent in the North of England.”

During a Commons debate, Mr Wharton also suggested there would be a renewed campaign for a North-East elected assembly, if Westminster ignored the unfairness.

He added: “The push would be for further regionalisation. We had a vote, some years ago, on whether we wanted a regional assembly and the proposal was rejected in an outstandingly clear result.

“My concern is that that movement and impetus would arise again, out of a feeling of unfairness about Scotland being able to compete in a way that disadvantaged the North of England.”

The warning came during a debate, led by Sedgefield Labour MP Phil Wilson, about the implications for the North-East from the independence referendum.

Scottish Labour is poised to call for key tax and welfare powers to go to Holyrood, to make it responsible for 40 per cent of the money it spends – up from 12 per cent at present.

But Mr Wilson wants his colleagues in Scotland to step back, saying: “Labour is a national party – not a nationalist party. Helping people shouldn’t stop at the border.”

Meanwhile, both the Conservatives and Liberal Democrats are weighing up a generous “devo max” offer, to try to erode support for a ‘Yes’ vote.

However, quizzed by The Northern Echo at Westminster, cities minister Greg Clarke poured cold water on Scottish-style devolution within England.

There are growing calls, including from Conservative-led North Yorkshire County Council for the handing over of key tax-and-borrowing powers from Whitehall.

And England’s biggest cities, including Newcastle, have joined forces with London Mayor Boris Johnson to demand the devolution of property tax revenues.

With the ability to make changes to council tax, stamp duty, land tax and business rates, the cities would enjoy similar muscle to Scotland.

But Mr Clarke said devolution in England would be “practical rather than theological” – focusing on spending pots, rather than control over areas of taxation.

BUSINESS chiefs in the region have been set a four-point test before they can scoop tens of millions of pounds of Government cash.

Local Enterprise Partnerships (LEPs) have until the end of the month to bid for a slice of the £2bn annual Local Growth Fund, devolving spending from Whitehall.

They can bid for cash to improve transport, further education, skills and infrastructure, after a landmark report by Tory peer Lord Heseltine.

Now Mr Clarke has set LEPs – including Tees Valley, North Yorkshire and the North-East (including County Durham) - a four-point test for successful bids.

And he warned he would not hesitate to reject applications that failed to prove:

  • That economic growth will be higher than if funds were allocated from Whitehall.
  • That other funds can be “leveraged” in from public and private sources.
  • That jobs will be created – perhaps by showing employers interested in investing, or vacant sites to be brought into use.
  • That schemes are quickly deliverable – rather than vague, long-term plans.

Asked if areas would receive nothing, if they failed to show ministers they could deliver, Mr Clarke replied: “Absolutely.”

He added: “The alternative is for the money to be held centrally and administered on their behalf. If they can’t make a convincing case, then it won’t be devolved.”

Bids must be submitted by March 31, after which there will be further negotiations with ministers ahead of decisions in mid-July.