Chancellor John Healey is set to announce a new £150 million fund that will offer investments of between £5 million and £15 million to help North East firms expand. The fund, delivered through the British Business Bank, is designed to support the most innovative and fast-growing companies across the North of England.
Fund details and purpose
The British Business Bank will commit up to £150 million to the new fund, using money already allocated to the Government-owned bank. The investments will help university spin-outs and other innovative companies grow, as part of Mr Healey's vision of an "active state" working with private businesses to create opportunity.
The Chancellor will detail plans to spread growth more widely across the UK by using public investment to attract private capital. The Treasury hopes the fund will draw in additional private cash. Mr Healey will also task the British Business Bank and the National Wealth Fund with doing more to support investment and innovation across the UK.
Strategic partnerships and local power
As part of this, the National Wealth Fund has agreed strategic partnerships with mayoral authorities in South Yorkshire, Liverpool City Region and the North East, as well as Cardiff Capital Region. This will give local leaders direct access to the fund's investment expertise to help develop infrastructure projects, the Treasury said.
Speaking at a manufacturing site, the Chancellor is expected to say: "The Prime Minister laid out a clear diagnosis of what has gone wrong in the past. The solution is a fundamental shift that starts with putting power in the right places. The next chapter of Britain's growth story will be written in more places."
He will say that No 10 North was set up as "a strong, strategic centre wired to enable local leaders and their ambitions" by "removing obstacles" and red tape. "I want to see wealth creation in this country. I want to see businesses make a profit," the Chancellor will say. "And to create the conditions for that we need an active, accountable state at all levels to remove blockages and create the conditions for more investment."
Fiscal discipline and political reaction
Mr Healey will say that boosting growth must go hand-in-hand with maintaining fiscal discipline, particularly at a time of global uncertainty. He will say that growth will help Britain navigate that turmoil with "an optimistic story – one of resilience, pride, huge latent potential".
The speech comes against a challenging economic backdrop ahead of his first Budget on October 28, with a leap in Government borrowing costs amid concerns about the inflationary impact of the Iran war threatening his fiscal headroom. Economists have warned that Mr Healey may need to raise taxes or cut departmental spending to protect the fiscal buffer built up by his predecessor Rachel Reeves at her last budget.
The Tories described the trail of Mr Healey's speech as a "policy-light word salad". Shadow chancellor Andrew Griffith said: "It will do little to comfort hard-working families and businesses across the country who are worried about more tax rises or the fact that government borrowing rates are near a 28-year high. Commitments to reduce red tape are welcome but given this Government's track record with its Employment Rights Act and other anti-business measures, people will rightly question their sincerity."
