Analysis: Truss wants jobs but how will tax cuts help North East?

Liz Truss said she wants more people in the North to be in the higher tax bracket

The prime minister has insisted her government's mini-budget will bring jobs and investment to the North East, even though tax cuts for high-earners benefit far more people in London and the South East.

In an interview with BBC Look North (North East and Cumbria), Liz Truss said she was determined to see more investment come to the region and too much had gone to the capital in the past.

She said dualling the A1 in Northumberland was a "huge priority" for her.

But the prime minister would not commit to narrowing the north-south divide, saying she wanted to see "growth everywhere", and that her focus was on "growing the pie" of the whole economy rather than arguing over how it was divided.

• Listen To Liz Truss on BBC Radio Tees

However, Ms Truss did say "left-behind areas" would be prioritised for new Investment Zones.

They will offer tax breaks and planning reforms in a push to create jobs and build more houses. Talks have begun with local leaders in the Tees Valley and North of Tyne areas about hosting them.

She said Chancellor Kwasi Kwarteng's mini-budget had offered tax cuts to all, and had given vital help to cushion soaring energy bills for the next two years.

Chancellor Kwasi Kwarteng visited Darlington on Thursday

She rejected that the North East had little to gain from removing the top 45p income tax rate, even though Treasury figures indicate only 5,000 people in the region had benefited from the cut, compared to 250,000 in London and the South East. The rate was paid on earnings over £150,000.

"We have cut taxes across the board from National Insurance to the basic rate," she stated.

"What I want to see is people in the North East earning more money, what I want to see is more growth and investment.

"What I am about is growing the size of the pie, keeping taxes low so more people are able to get into work, get up the earnings ladder, set up their own businesses. If we have tax rates that are too high, we get less revenue in."

Liz Truss's government has said it will stand by Kwasi Kwarteng's mini-budget

She said it was in everyone's interests for financial services to be strong, and for companies to have the money to invest.

"What that will ultimately mean is higher wages, I want to see more people in the North East in the top tax bracket."

Ms Truss aims to attract more jobs into the region through the freeport in Teesside, and new Investment Zones.

Liz Truss said making the A1 all dual carriageway through Northumberland was a priority

"I particularly want to focus on the areas that are most left behind," she said.

"What I want to make sure that there is investment in new roads, so dualling the A1 is a huge priority for me.

"Too often in the past most of the investment has gone into London and the South East and I am determined to rebalance that."

There has not, though, been any analysis of the mini-budget's impact on growth, tax revenues or the public finances by the independent Office for Budget Responsibility.

Labour has called for it to be scrapped and Parliament to be recalled after the recent turmoil in the financial markets, the withdrawal of hundreds of mortgage products and an intervention by the Bank of England to stabilise the economy.