Ms Arkley, who is once again standing as the Conservative candidate, has defended the set up.
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Alistair Arkley was part of the Steel Task Force on Teesside that brokered the deal.
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She defeated Conservative incumbent Linda Arkley, who took 36% of the votes, and Liberal Democrat John Appleby, with 8%.
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If it could undercut England on taxes as well, then Linda Arkley fears even more jobs could head north.
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And Mayor Arkley also fears that the situation could get worse.
In North Tyneside, Ms Arkley's cabinet was made up entirely of Tory councillors, but has not always had enough seats on the council to get her budget through.
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