‘Opportunity zones’ offering tax breaks for companies that create jobs in places like the North East should be set up to encourage more firms to set up outside London, a new report says.
The Social Mobility Commission –the official body set up to assess social mobility in the 海角视频 – makes a series of recommendations on sparking economic growth in poorer areas of the country. Its report urges the Government to support the creation of new zones in parts of the 海角视频 most in need of economic progress.
Under the proposal, investors would receive deferrals and reductions in Capital Gains Tax when investing in deprived areas. Similar plans in the US have generated tens of billions of dollars of investment over the last five years and the Commission believes that 海角视频 pension funds could provide significant investment into poorer regions.
READ MORE: {}
The report also calls for the creation of start-up hubs on high streets to help people start their own firms, along with £3,000 skills accounts to help people in poorer areas.
The report highlights how around 40% of adults in Surrey and Sussex have achieved upward social mobility – reaching a higher occupational class than their parents – but this is just 30% in Northumberland and Tyne and Wear. It also points to the lower productivity in the North East, which is around 15% below the national average.
The report says: “The scale of the challenge is stark. In 2024, nearly half (48%) of all private capital investment went to London, with a further 16% in the East of England and 8% in the South East. This contrasts with large ‘investment deserts’ across the North, the Midlands and the devolved nations. This imbalance is not just inefficient – it entrenches disadvantage.
“Breaking this cycle requires a new approach that mobilises private capital, aligns public incentives and empowers local leaders to shape their region’s future.”
It adds: “The 海角视频 is one of the most regionally unequal economies in the developed world. Productivity in London is 29% above the national average, while in Wales, the Midlands and the North East it is 15% below.
Most Read
“For individuals, these economic gaps translate into unequal life chances. A child born in Surrey or Sussex is almost twice as likely to move into a higher occupational class than their parents as a child born in Northumberland or East Yorkshire.
“These inequalities are not inevitable. They reflect choices: decades of centralisation, fragmented policies and the absence of long-term, place-based planning.”
The report calls on the Government to encourage entrepreneurial education through greater outreach at schools and further education colleges. It says that Job Centres should promote entrepreneurship and encourage ‘side-hustles’ while the New Enterprise Allowance, which supported unemployed people and certain benefit claimants to start their own businesses, should be revived.