Yahoo Finance Rishi Sunak set to plough billions into the north to 'level up' economy
The Chancellor is set to inject billions of pounds into the north of England at next week’s spending review, the government has confirmed, addressing the longstanding imbalances between different regions in the country.
Rishi Sunak will unveil in the House of Commons new investment to help “level-up” the UK economy and create jobs to drive the recovery from the COVID-19 pandemic.
This will include more than £1.6bn ($2.2bn) for local roads in 2021-22 to tackle potholes, congestion pinch-points and other upgrades as part of the government’s commitment to invest more than £600bn over the next five years.
The Treasury also revealed that it will set up a northern headquarters next year as part of a wider programme that will see thousands of civil servants move across the nation. The location will be announced in the coming weeks.
It is committed to relocating 22,000 roles out of London and the south east by 2030 and will make progress against this target in the next financial year through investment in the government hubs and departmental relocation programmes.
Sunak said: “We are absolutely committed to levelling-up opportunities so those living in all corners of the UK get their fair share of our future prosperity.
“All nations and regions of the UK have benefited from our unprecedented £200 billion Covid support package. And after a difficult year for this country, this Spending Review will help us build back better by investing over £600 billion across the UK during the next five years.”
Alongside the spending review, the government will publish its new national infrastructure strategy next week, setting out long-term ambitions on delivering an infrastructure revolution across the UK.
It will make a down-payment on a number of flagship infrastructure programmes, including fibre broadband, flood defences and key transport schemes, building on the £8.6bn package the government brought forward in the summer on decarbonisation, infrastructure and maintenance projects.
“The new bank will play a key role in delivering on the UK’s net zero commitments and levelling up across the country by co-investing alongside the private sector in vital infrastructure projects, like transport, renewable energy and digital connectivity,” the Treasury said in a statement.
The government will also publish the terms for the UK Shared Prosperity Fund, which will target funding at left-behind places and people in need, including towns, coastal communities and former industrial heartlands.
This will include £220 million next year for local areas to pilot programmes well before investment from EU Structural Funds starts to tail off across nations.
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Anneliese Dodds, Labour's shadow chancellor, called for next week’s review to "set the country on the right path".
"Communities up and down the country don't want to hear more empty rhetoric from this government," she said. “The Conservatives have been in power for ten long years, but their track record is a litany of failure and broken promises."
It comes as the UK economy grew by a record 15.5% between July and September, the Office for National Statistics (ONS) said last week, showing a partial recovery for the UK economy before the second wave of COVID-19 hit.
The ONS said its initial estimate of GDP growth in the third quarter of 2020 was 15.5%. Economists had expected third quarter GDP to grow by 15.8%.
The first estimate showed the UK made progress in reversing the historic economic slump caused by COVID-19 at the start of the year. The third quarter figures was the largest leap in GDP ever recorded by the ONS, stretching back to 1955.
The historic rise reflect the easing of lockdown measures during the quarter and a historic slump in GDP earlier in the year.
However, while the headline GDP number was encouraging, Britain’s economy still remains almost 10% below pre-pandemic levels. Growth also slowed throughout the third quarter.
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