Britain Bets on Regional Powers to Revive Growth

In his first major speech since taking office, British Finance Minister John Healey outlined how Prime Minister Andy Burnham’s plan to devolve power from central government could help revive economic growth. City regions are to be given greater authority to develop local industrial strategies and attract private investment.

Healey also pledged fiscal discipline and action to rein in rising costs for businesses and the public. He aims to cut regulatory costs by 25% by the next general election, due in 2029. He said growth remained fragile but had been the fastest in the G7 in the first half of the year, while productivity was beginning to rise after decades of lagging behind other countries.

Of funding already allocated by the British Business Bank, £150m ($203m) will be earmarked for companies in northern England. Individual investments of between £5m and £15m are intended to attract additional private capital.

Ahead of his first budget on 28 October, Healey faces investor concerns over the inflationary impact of rising oil prices caused by the war with Iran, shrinking budget headroom and growing spending commitments. The government has pledged to stick to the fiscal rules adopted by its predecessor, but plans to expand social care and increase defense spending are putting pressure on Healey to raise billions of pounds in taxes.

(Reuter, bak)