Chancellor John Healey is set to unveil a £150m fund for companies in the north of England as part of a wider plan to generate more economic growth around the UK.
In a speech on Monday, he is expected to outline his proposal to boost development by using public investment to attract private capital.
The speech comes against a challenging backdrop as the chancellor faces pressures ahead of his first Budget on 28 October, including concerns about a jump in government borrowing costs and the inflationary impact of the Iran war.
In response to Healey’s plan, the Conservatives said that what was being proposed would “do little to comfort hard-working families and businesses”.
Healey is set to announce a new £150m allocation from the British Business Bank which would offer support to the “most innovative and fast-growing firms”.
He will detail plans to use public investment to “unlock private investment, to support our innovation economy, and to create the new jobs their areas need”.
The fund, from money already allocated to the British Business Bank, will provide investments of between £5m and £15m.
It is expected to back university spin-outs and other “ambitious businesses” across the north.
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.”
Helen Miller, director of the Institute for Fiscal Studies, said: “Economic growth in every postcode sounds great and is something we would all love. I think it’ll actually be much harder to achieve in practice.”
She said it would be easier to see how the government could make stronger second and third cities than to see “how it would drive growth in literally every postcode”.
During his first Prime Minister’s Questions on Wednesday, Andy Burnham faced scrutiny over rising UK borrowing costs.
Conservative leader Kemi Badenoch urged him to say how he would deal with the UK’s increasing debt, after the cost of borrowing for the UK reached a new 18-year high.
Burnham blamed the previous Tory administration, and said his government would be “grounded in fiscal responsibility”.
Shadow chancellor Andrew Griffith said Healey’s plan would 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”.
He added: “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% of GDP on defence.”
Liberal Democrat deputy leader Daisy Cooper said: “Re-announcing £150m across the entire north of England will barely shift the dial on growth.”
Robert Jenrick, Reform UK’s economic spokesman, said: “Days after a market meltdown, when grip and direction are required, John Healey has revealed himself to be an empty vessel with no idea about how to rescue our economy.”
