Healey launches £150m northern scale-up fund
Chancellor John Healey is to pile £150m into start-ups in the North of England as part of the government’s bid to use devolution to drive economic growth.
Healey will announce a new fund designed to back university spin outs and other start-ups in Liverpool, Manchester, Leeds, Sheffield and Newcastle.
The Chancellor will announce the fund, which will come from the British Business Bank’s existing budget, in a speech at a leading British manufacturing site this morning.
He is expected to say that the initiative will be used “to get behind the most innovative and fast-growing firms. This is not sentimentality, it’s supply side economics”.
Healey’s announcement will seek to provide economic backing to Prime Minister Andy Burnham’s ambitious devolution drive, which he says will deliver “growth in every postcode”.
The £150m of government funding will be intended to attract further private investment into Northern businesses.
Healey: ‘Stronger state will deliver growth’
Healey is expected to say that he will provide backing to “city regions with real power, supported by a stronger state, creating local industrial strategies and using public investment to unlock private investment, to support our innovation economy, and to create the new jobs their areas need.”
The Chancellor will set out the government’s vision for creating “good growth” across the country. He will say: “Ask an economist what growth is and you’ll get a number. But ask the country and you’ll get a different answer.
“A young person getting a new job in a company that’s on the up. A sole trader winning a new contract that pays for a holiday with their kids. A business winning a new export order, giving the community around it a new lease of life.”
Treasury officials said that the Prime Minister believes he has set out a “clear diagnosis” for the problems facing the UK. Burnham has blamed neoliberalism, de-industrialisation and austerity for “decades of low growth”.
Healey’s Northern scale-up fund will form part of the government’s new push to convince voters and business leaders that it has the right vision for delivering economic growth.
“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,” the Chancellor will say.
‘Policy-light word salad’
Healey will also set out how the newly-formed No10 North fits into his economic plans for the country. It will work as part of a “dual mission” with the Treasury to “drive growth and productivity,” he will say.
The Chancellor will say: “Instead of getting in the way with complexity and red tape, we need a strong, strategic centre wired to enable local leaders and their ambitions.
“I want to see wealth creation in this country. I want to see businesses make a profit. 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.”
The government’s vow to deliver growth in the UK’s regions comes as Healey gears up to deliver his first Budget as Chancellor next month.
He is facing calls from business leaders to tackle the ‘cost of doing business’ by easing employment costs, reforming business rates and lowering energy bills for firms.
The Conservatives have hit out at Healey’s announcement, describing the trail of the Chancellor’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.
“We are facing serious threats from Russia and Iran on our doorstep, as well as threats to the Falkland Islands. Yet the Chancellor, the man who resigned over defence spending, seemingly does not want to mention our Armed Forces or how we will reach 3 per cent of GDP on defence.”