Chancellor John Healey to portray UK economy as 'turning a corner' and unveil £150m northern fund

In a Monday speech Chancellor John Healey will frame the UK economy as not merely ‘turning a corner’ but resilient, optimistic and positioned to seize opportunities from new technologies and ideas.

He will also announce a £150m fund for companies in the north of England. The fund, drawn from money already allocated to the British Business Bank, will provide investments between £5m and £15m to the most innovative and fast-growing firms and is expected to back university spin-outs and other ambitious businesses across the north.

Healey plans to use public investment to unlock private investment, support the innovation economy and create new jobs in those areas. He will echo the prime minister’s diagnosis of past failings and argue for a fundamental shift that begins with putting power in the right places.

Ahead of his first Budget on 28 October, Healey faces pressure from rising government borrowing costs and inflationary impacts related to the war in Iran. Recent ructions in government debt markets have worsened constrained public finances, with the Treasury needing to fill possible multi-billion pound gaps caused by higher borrowing costs and the need to fund increased defence spending.

Critics reacted sharply. The Conservatives said Healey’s plans would do little to comfort hard-working families and businesses. Shadow chancellor Andrew Griffith said the plan would not reassure those worried about more tax rises and near 28-year-high government borrowing rates. Liberal Democrat deputy leader Daisy Cooper said re-announcing £150m for the whole north of England would barely move growth. Helen Miller, director of the Institute for Fiscal Studies, warned that achieving growth ‘in every postcode’ will be much harder in practice.

Downing Street has sought a sunnier tone to encourage higher saving consumers to spend and cautious businesses to invest, rather than foregrounding austere Budget measures.