NORTH East MPs clashed with the Government over a shake-up they fear could cost the region millions of pounds.
Yesterday’s Commons debate was secured by Sunderland Central MP Julie Elliott to question moves to overhaul the business rates system, which some believe could see Sunderland loses out on £58million in funding.
She told ministers the changes would be “unfair and unjust,” only benefiting already well-off areas.
Other North East MPs joined the protest, as they all agreed the proposals could have a huge impact on manufacturing in all of their constituencies.
Pat Glass, of North West Durham, said: “What the Government proposes would create derelict cites in the North.”
The shake-up would see local authorities able to retain all future business rate growth to spend on local services.
Currently this money has to be handed in to the Treasury and it is then redistributed to poorer areas from this central pot.
It if feared this could mean wealthier areas drop their rates, making it more attractive for businesses to start there, taking them away from more needy and deprived communities.
However, in response yesterday, the Coalition claimed that the reform would leave the North East better off.
Lib Dem Andrew Stunell, the local government minister, insisted the Labour MPs simply did not understand what was being proposed.
“This is not a zero-sum reform,” he said. “There is every prospect that the North East will do well out of this system of having an increasing flow of business rates.
“I thought there was general agreement that this country has the most centralised and complex local government finance system in the world.”
After the exchanges, Mrs Elliott told the Echo: “It went very well – we had a lot of people there.
“The point I was making was that we are in a consultation period in which we get to look at this.
“If this were to happen it would mean we would lose millions and millions of pounds.
“I drew attention to the fact that Sunderland and the North East relies very heavily on its manufacturing base – they need to start looking at that.”