Chancellor Healey Sets Out Growth Plan with Fiscal Devolution and Northern Investment

John Healey delivered his first major speech as Chancellor of the Exchequer on 7 September 2026, announcing plans to give Mayoral Strategic Authorities a share of local income tax from 2028, direct £150 million from the British Business Bank to northern scale ups, and cut business regulation by 25% by the end of Parliament. Four new areas, South Yorkshire, Liverpool City Region, North East England, and Cardiff Capital Region will also become Strategic Partners of the National Wealth Fund, gaining direct access to its investment pipeline and hands on support.

Speaking at the Manufacturing Technology Centre in the West Midlands, a facility he described as 1,000 people strong, with £35 million of government investment and turnover of nearly £130 million, Healey framed his agenda around three drivers, investment, innovation, and jobs. He acknowledged that UK growth remains "still fragile" despite being the fastest in the G7 in the first half of 2026, and that national debt has risen from 64% of GDP in 2009 to close to 100% today, with government borrowing costs at historic highs.

Mayors to Receive a Share of Local Income Tax from 2028 Under the Devolution Roadmap

The most structurally significant commitment in the speech was the fiscal devolution roadmap. At the forthcoming Budget, Healey said he would set out plans for local councils to retain more business rates and for central government grants to Mayoral Strategic Authorities to be replaced by a share of local income tax from 2028. He framed the case in economic rather than political terms, arguing that a transport bottleneck in South Yorkshire is invisible from Whitehall but has a measurable effect on business investment decisions. London remains what Healey called "our powerhouse," but he argued that if British city regions matched the performance of their equivalents in France and Germany, national growth would be transformed.

To back northern growth specifically, the government is directing £150 million from the British Business Bank towards scale up firms in the North, targeting the most innovative and fast growing companies in the region. The Northern 500 initiative will bring together 500 of the North's most ambitious mid sized businesses in a single growth community, led by the Great North partnership of Mayors with support from the private sector and central government. Healey also confirmed that South Yorkshire, Liverpool City Region, North East England, and Cardiff Capital Region will become Strategic Partners of the National Wealth Fund, joining the West Midlands.

Green Book Discount Rate Drops to 3% as Treasury Sets 25% Target for Business Regulation Cut

The Treasury's Green Book, the framework that governs how government investment decisions are appraised will change immediately. The discount rate, which determines how much weight future benefits receive in a cost benefit calculation, falls from 3.5% to 3%. The practical effect is to make longer term projects and investments in regions outside established economic centres more likely to clear the investment hurdle. Alongside this, a new "economic potential analysis" will be introduced into government spending decisions, so that areas are assessed on what they could become rather than what they are today.

On regulation, Healey set out a package of reforms he described as taking "an axe to the thicket of consultation, litigation and administration" that he said has a stranglehold on private investment.

Healey also said the government's public financial institutions which he described as already backed by £200 billion will be sharpened to align more closely with government priorities, and that public procurement will be used as a strategic tool to back British firms across a greater share of the public sector.

Nearly a Million Young People Not in Work and the Plan to Double British Unicorns

On innovation, Healey set an ambition to double the number of unicorn companies in the UK privately held companies valued at more than one billion dollars and said he and Business Secretary Reynolds would identify the next wave, with the state acting as an early customer to help them scale. New sandboxing powers are expected to be in place and ready to deploy across the economy next year. The powers would give businesses and inventors the ability to safely test frontier technologies from pavement robots and drones to medical treatments that are currently blocked by existing regulatory frameworks but have not yet caused the kind of harm that would justify permanent prohibition.

The jobs strand of the speech was anchored by a figure Healey described as a , close to one million people aged 16 to 24 are not in education, employment, or training, with two thirds having never held a job. He said tackling that was both a moral duty and a fiscal one, a person coming off benefits and into work reduces public expenditure and eventually generates tax revenue. The Chancellor confirmed that Alan Milburn will publish his full recommendations to government on how to address youth unemployment this autumn, and that the Global Talent Taskforce remains the government's mechanism for attracting skilled workers from overseas.

What Happens Next? No10 North, the National Economic Council, and the Upcoming Budget

Healey described two institutional pillars for delivering the growth agenda. No10 North a new strategic centre created by the Prime Minister and led by the First Secretary of State will work alongside the Treasury to remove obstacles, drive productivity, and give local leaders and businesses on the ground the conditions to grow. A National Economic Council, set up as a joint enterprise between central and regional government, will be convened to coordinate growth decisions across every postcode. Healey described it as a mechanism for greater public control and leadership over the essentials, transport, energy, housing, and utilities that create the predictability private investment needs.

The Budget, the Prime Minister's 10 Year Plan, and the Spending Review will follow the framework the Chancellor set out on 7 September. Healey acknowledged the government would not deliver everything immediately, but said the speech represented "the start of it today," with good growth in every postcode as the test the government has set for itself.