Investment zones have failed in the past claim critics

Kwasi Kwarteng announced the scheme yesterday during his fiscal statement, seen by many as the successor to the levelling up project.

The policy will give tax breaks and cut red tape for the private sector in a local area, with the expectation that this will help drive growth.

"There’s nothing new about investment zones,” Lisa Nandy, Labour’s shadow levelling up secretary told the Yorkshire Post.

“George Osborne tried them and found they delivered only a fraction of the jobs he’d hoped.

"The Government has chosen to locate many of them in affluent parts of the country. If businesses there aren’t paying tax, businesses everywhere else will have to take the strain.

“That a big ask for small businesses struggling with energy costs and business rates right now."

Charlotte Alldritt, Chief Executive at the Centre for Progressive Policy said: "A government that claims to want to smash economic orthodoxies reveres the most pernicious of all: the false belief that trickle-down economics works.”

It is understood that local authorities will not be limited to the number of investment zones that they can bid for, and that this will not be limited to the initial 38 mentioned in the plan, as all local authorities will be given the chance to make their case for a zone in their area.

The expectation is that several agreements for investment zones will be announced over the coming weeks, with the Tees Valley expected to be among the first.

However, concerns have been raised that massive investment in the private sector could lead to an exodus from the public sector, with organisations like the NHS already seeing low wages and staff shortages.

Christina McAnea, the UNISON general secretary, told the Yorkshire Post: "Public sector employers are already struggling to hold on to staff. Pay is too low, and firms in other parts of the economy can offer more money, fewer hours and a lot less stress.

"With huge tax cuts for the rich coming, there won't be enough money to fund the NHS, councils and schools properly. The exodus of workers will continue apace, with few new recruits coming forward. Without the staff, key services will soon be unable to function."