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LG caught in middle of UK inward investment row

Welsh outbid Geordies by £150 million of taxpayers' dosh

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An almighty row has broken out over the use of UK taxpayers' money after it emerged that the Welsh Development Agency (WDA) offered £150 million more than another region to attract LG to the region. According to BBC Radio 4 programme, File on Four, the Northern Development Company (NDC), which operates in the north east of England, offered LG £100 million to set up its electronics and semi fabs there. But it was outbid by the WDA, which offered an additional £147 million, some of which was funded by the Welsh Office. Both organisations are ultimately accountable to the UK government, as is the Scottish equivalent, Locate in Scotland. According to the programme, development agencies in the UK bid against each other for inward investment, maintaining tight secrecy in order to win jobs for their regions. The programme quoted NDC director John Bowles as saying: "This clearly demonstrates there's a need for a level playing field." Earlier this year, Siemens shut its DRAM fab in the north east, and there have been similar announcements from Hyundai and also Fujitsu. There are questions over whether companies which withdrew after receiving large grants should repay money they were given. Siemens said at the time it would repay £50 million. This sum is, however, still forthcoming. Last week, as reported here, a third party Wall Street consultant, Arthur D. Little, was appointed by the South Korean Fair Trade Commission to decide how both Hyundai and LG's semiconductor businesses should be merged. Any decision that is reached by Little could make the row between the two UK agencies seem like a mere bagatelle. ® Related Stories from The Register Hyundai, LG appoint US third party to broker merger Blair and Siemens get knickers in a twist Siemens blames IMF backed Korea for DRAM closures Siemens accuses LG of patent infringement Siemens prepares to rid itself of semiconductor business Fujitsu formally announces fab closure Hyundai puts Scottish fab on ice

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