Chancellor John Healey vows to cut red tape and unlock investment in first major growth speech

Chancellor John Healey has promised to cut regulatory barriers to UK investment, create new testing freedoms for emerging technologies and use government purchasing power to help domestic companies scale, placing innovation and advanced manufacturing at the heart of his first major growth speech since taking office.
 
Speaking at the Manufacturing Technology Centre in Coventry on September 7, Healey also committed to cutting the cost of business regulation by 25% by the end of Parliament and extending reforms intended to restrict judicial reviews that delay major infrastructure projects.
 
The measures form part of a wider growth programme built around investment, innovation and jobs, alongside a substantial transfer of economic powers from Whitehall to Britain’s regions.
 
“I dedicate myself to this mission as Chancellor, to make Great Britain, Growth Britain again – with more investment, more innovation and more jobs,” Healey said.
 
He acknowledged that energy bills, regulation, planning restrictions and labour costs facing businesses had risen since the pandemic, adding: “And I want to draw the line.”

Government plans new route for companies to test drones and other emerging technologies

For technology companies, one of the most significant announcements was Healey’s intention to have new regulatory “sandboxing” powers ready for use across the economy next year.

The approach would allow companies to test technologies under controlled conditions without being prevented from doing so by existing regulations.
 
“Sandboxing powers, what this means is that businesses and innovators, inventors, can safely test frontier technologies from pavement robots to drones to lifesaving medical treatments,” Healey said.
 
He also set an ambition to double the number of UK unicorn companies and said the government would identify promising businesses that could use the state as an early customer to help them expand.
 
Healey linked that approach directly to his previous experience at the Ministry of Defence, saying: “I did this at Defence, I announced this for Sovereign AI last week, we’re doing it with today’s scale-up fund for the North.”

The Chancellor said further government departments would be encouraged to earmark funds to support UK innovation.
 
Artificial intelligence also featured prominently. Healey described AI as a general-purpose technology capable of transforming companies and public services, while acknowledging potential effects on employment and risks to national and business security.
 
“As Chancellor, I will not let this opportunity of AI pass Britain by, but nor will I allow this technology to proceed with no oversight,” he said.

Treasury rules will change as Healey seeks to unlock private investment

The Chancellor said UK business investment had increased 4.9% since the election but argued that Britain continued to suffer from one of the lowest investment rates among G7 economies.
 
He announced that the discount rate used in the Treasury’s Green Book would be reduced from 3.5% to 3%, a change intended to improve the prospects of projects whose economic benefits emerge over a longer period.
 
The government will also introduce an “economic potential analysis” when assessing investments, considering what an area could become rather than relying solely on its existing economic position.
 
Healey said the government’s public financial institutions, which he said are backed by £200 billion, would be more closely aligned with government priorities. Public procurement would also be used to support British companies.
 
At the same time, judicial review reforms already planned for energy infrastructure will be extended to all major infrastructure.
 
“I will take an axe to the thicket of consultation, litigation and administration that has a stranglehold too often on private investment,” Healey said.
 
That announcement was accompanied by a joint letter from Healey, First Secretary of State Louise Haigh and Attorney General Ellie Reeves telling ministers to reduce administrative delays across government. 
 
It sets out changes covering consultation, legal risk and judicial review, including a presumption that ministers should make decisions without formal consultation unless there is a legal, fairness or policy reason for one.

£150 million fund accompanies shift of economic powers away from Whitehall

 Healey also announced £150 million from the British Business Bank for fast-growing companies in northern England and launched the “Northern 500”, bringing together 500 mid-sized northern businesses.

South Yorkshire, Liverpool City Region, North-East England and Cardiff Capital Region will meanwhile become strategic partners of the National Wealth Fund, giving them support to develop investment pipelines.
 
A wider roadmap for fiscal devolution will be set out at the Budget. Healey said this would include greater retention of business rates and, from 2028, replacing central government grants to Mayoral Strategic Authorities with a share of local income tax.
 
Despite the emphasis on investment, Healey said fiscal discipline remained his first priority. 

He committed the government to balancing the books with a buffer against uncertainty, controlling borrowing and reducing long-term pressure on public finances.
 
“Fiscal credibility is indivisible from growth,” he said.