The UK government plans to introduce a £150m fund aimed at fostering economic growth in the north of England, leveraging public investment to catalyse private sector involvement.
Chancellor John Healey, in a speech scheduled for Monday, will detail the proposal to utilise public funds from the British Business Bank to stimulate development and create jobs by supporting emerging businesses and university spin-outs. Each allocation from the fund will range between £5m and £15m.
This announcement comes as Healey prepares for his first Budget on 28 October, amid increased government borrowing costs and inflation concerns attributed to the Iran conflict. Despite the initiative, the Conservative Party criticised it as insufficient to alleviate the concerns of families and enterprises. Shadow chancellor Andrew Griffith echoed similar sentiments, pointing out the persistent worries over potential tax increases and a record-high government borrowing rate not seen in 28 years.
The proposed measures are part of broader efforts to address the distribution of economic power across the UK. Healey is expected to emphasise the need for significant changes that decentralise economic authority to spur regional growth.
While many anticipate the potential benefits of these investments, Helen Miller of the Institute for Fiscal Studies warned that realizing growth universally could prove difficult. It’s more feasible, she suggested, to enhance major cities than to ensure equitable growth in every area.
The announcement also coincides with political debates around the nation’s fiscal health. During Prime Minister’s Questions, UK borrowing costs, which have hit an 18-year peak, were a focal point. Conservative leader Kemi Badenoch challenged Andy Burnham to address the debt issue, with Burnham condemning the former Tory administration while affirming his government’s commitment to fiscal responsibility.
Other political figures, including Liberal Democrat Daisy Cooper and Reform UK’s Robert Jenrick, have also expressed scepticism about Healey’s plan, arguing that the financial promise lacks the magnitude necessary to effect substantial economic change and fails to address urgent economic direction needs.
Reporting based on coverage first published by bbc.co.uk.