Balls demands ‘new deal’ for North

The Morley and Outwood MP said the Coalition had hurt regional economies by abolishing Regional Development Agencies such as Yorkshire Forward, before any adequate alternatives were in place.

He slammed the replacement Regional Growth Fund as being “random, chaotic and not fit for purpose”, and said Labour would offer a new deal for communities involving greater regional powers, devolved from Whitehall.

Despite having more than doubled in size since it was launched, the £2.4bn fund has been widely criticised for failing to get vital funds to cash-strapped economies quickly enough.

Mr Balls said that the Government must now offer immediate tax breaks for small and medium-sized companies to drive growth in the economy.

“On tax, on spending, on planning, on skills, we need to do a much better job,” he said.

“Right now the Government should have a temporary VAT cut, a second year of the bank bonus tax, a national insurance cut for small firms, cut VAT on repairs and maintenance to five per cent to help small businesses doing extensions and building, plus bring forward infrastructure.”

The former Treasury Minister added that a new investment bank should be established to further help struggling businesses.

“We’re looking at a British investment bank which could fill that gap in small business lending, and you need targeted programmes to support people who need to know how to start a business,” he said.

“That used to be done by Yorkshire Forward here, of course. The regional development agency has been abolished, and nothing has been put in its place.”