The Scottish Government is ready to step in to try to block an English council’s plans to offer a fish firm a cash incentive which could cost a north-east town hundreds of jobs.
Young’s Seafoods unveiled plans last month to close its factory in Fraserburgh – leaving a question mark over the futures of 900 workers.
A deal has since been struck with the Scottish Government to retain 250 staff at the plant Watermill Road plant.
But 650 people are still facing redundancy and now a new threat to their jobs has emerged.
North East Lincolnshire Council (NELC) has announced more than £1.3million of aid for Young’s in an effort to keep its three Grimsby plants operational.
The factories have a combined workforce of 1,800.
Senior politicians north of the border believe the joint funding offer from the local authority and the UK Government may breach EU rules on state aid.
European legislation regulates how much direct funding can be provided to private enterprises.
Scottish Government ministers met yesterday to discuss the Young’s crisis and Business Secretary Fergus Ewing confirmed they would continue to work to protect Fraserburgh’s interests and make a “compelling” case for the town.
Last night, Mr Ewing said: “Young’s continue to engage closely with the Scottish Government and public sector partners and any support we offer to the company must be legal and comply with state aid rules.
“We are therefore seeking urgent clarification from the UK Government on the nature of its proposed support for Young’s Grimsby plant.”
Following talks between NELC and Westminster officials earlier this week, the council announced that up to £1.346million of aid will be made available to Young’s in Grimsby.
It is estimated that the cash injection from the UK Government’s Regional Growth Fund could not only safeguard 250 jobs but actually create 200 new positions.
When NELC made the announcement council leader Ray Oxby said: “With the help of the Department of Business, Innovation and Skills, we’ve been true to our word and now we’ll be working with Young’s to ensure their future, and that of their workforce, remains secure in Grimsby.”
Banffshire and Buchan Coast MSP Stewart Stevenson said it was vital differences in legal interpretations in England and Scotland did not leave Fraserburgh at a disadvantage.
Young’s chief executive Pete Ward said he and his team would consider the aid package on offer.
“We now need to review the details and discuss this development,” he said.
No one at the Department for Business, Innovation and Skills was available to comment last night.