BANKS should be taxed more so that the North-East does not miss out on major projects in future, the shadow business secretary said.

John Denham, who will be in the region today, said that the taxes could be used to invest in the sort of projects that the Grant for Business Investment (GBI), which the Government has axed, used to.

He said this would encourage businesses to invest in the North-East, and Britain as a whole, as Nissan did when it decided to award European production of the Leaf and its associated battery factory in Sunderland.

Then-business secretary Lord Mandelson provided Nissan with a £20.7m GBI when the Japanese car maker announced last March that the Leaf would be produced in Sunderland from 2013.

Winning the work on the car and battery plant is expected to create or preserve about 2,250 jobs in the region.

Mr Denham said: “I think this is the big challenge. All of those groups of funding, The Strategic Investment Fund and the GBI that Nissan said helped create or support jobs in the North-East, they have all been stopped.

“The problem is not with things we have funded in the past, but when the next opportunity comes up “We should put fair taxes on the banks. The banks are having their taxes cut this year, not increased.

“That would enable us to put several billion pounds of new money into investment for growth and jobs.

“I am worried that there are going to be really good projects, like Nissan in the past, coming up in the North-East, and if we can’t work in partnership with private companies, we might lose it.”

The GBI scheme was also important in making investments of sometimes only a few thousand pounds to smaller North-East companies, leaving them with nowhere to turn, it was claimed this week.

The new Regional Growth Fund only accepts applications for at least £1m – and its first round of bids was seven times oversubscribed.

Mr Denham said: “Regional development agencies across the country were spending £1.4bn a year, including a fair amount in the North-East.

“The Government now has a single regional fund, based in London, and it is worth £1.4bn over three years. It is just not enough and everybody is piling in and bidding to it.”

Labour claimed last month that the Government’s bank levy was due to raise less this year than Labour’s one-off bonus tax had last year, in effect cutting taxes on the bank, a charge denied by Prime Minister David Cameron.