Budget: New tax scheme could be just the job for 50,000 businesses in region

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Chancellor George Osborne said he wanted to reduce the imbalance in the UK economy.

As part of this strategy, he announced plans for a new tax scheme to create businesses in regions where the private sector "is not nearly strong enough".

He added: "For the next three years anyone who sets up a new business outside London, the South East and the eastern region will be exempt from up to 5,000 of employer national insurance payments, for each of their first 10 employees hired.

"We aim to have the scheme up and running by September, but any qualifying new business set up from today will also receive help.

"And the Treasury estimate that some 400,000 businesses will benefit – ensuring all parts of our country contribute to a more balanced and sustainable economic future."

The move was welcomed by Margaret Wood, regional chairman of the Institute of Directors in Yorkshire and the Humber, who said: "Anything that is going to encourage people to go into business has got to be welcomed. We have got to work our way out of this.

"There's still huge investment going on in London and the South East. We have to create jobs in Yorkshire. We have got to create wealth – we can't borrow it. We have got to encourage young people to go into business rather than the public sector. This is a start."

Helen Kaye, a director specialising in national insurance at Deloitte, said the move was "very good news" for anybody thinking about setting up their own business.

Janice Haigh, policy chairman of the Yorkshire and Humber Policy Committee of the Federation of Small Businesses, which represents the interests of 16,000 firms, said: "We welcome the Chancellor's action on national insurance contributions to support the launch of more small enterprises in this region and we feel it will be of some benefit.

"However, we would have preferred to see it applied to existing small businesses as those which are already trading may soon have the capacity to create more jobs and fuel a private sector-led recovery."