Brown highlights measures to boost business in Yorkshire and the Humber

The Chancellor of the Exchequer – Gordon Brown – today used a speech at the Deputy Prime Minister’s Delivering Sustainable Communities Summit in Manchester to highlight the Government’s £1 billion Local Authority Business Growth Incentives scheme.

Starting in April 2005 the scheme – which could mean up to £120m for Yorkshire and the Humber alone – will allow local authorities to receive a proportion of increases in local business rate revenues to spend on their own priorities. It builds on the success of the New Deal, the Child Tax Credit and the Pension Credit. In Yorkshire and the Humber, 198,870 people were helped into work through the New Deal, 424,000 working families benefit from Child Tax Credit and 253,000 pensioner households are receiving Pension Credit.

Speaking at the summit, the Chancellor said:

“Because all their business rates income went to central government, in the past local authorities had no direct financial incentive to encourage new business creation. Now under our Business Growth Incentive scheme local authorities keep a proportion of the additional business rate income generated by new business creation.

“Based on historical data we estimate that in total as a result of this measure local authorities could gain up to £1 billion over the next three years – a further incentive to encourage local indigenous business creation.

“And a boost for business in every town, city and region - every community across the country benefiting from more business and more jobs.”

Notes for editors

1. The Local Authority Business Growth Incentives proposal was announced by the Chancellor in the Pre-Budget Report 2002 and will take effect from April 2005. The Government will publish the results of the second consultation on LABGI shortly, following responses from a range of stakeholders including local authorities and business organisations.

2. Based on historical data, and depending on the exact form of the scheme, it is estimated that the scheme could divert up to £1 billion in additional business rate income to local authorities in England and Wales. Possible gains in individual English regions have been estimated at:

Region	£m
East	80
East Midlands	60
London	150
North East	50
North West	130
South East	10
South West	85
West Midlands	150
Yorkshire & the Humber	120

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