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Chancellor Jeremy Hunt will use his first budget to set out plans for 12 new investment zones to “supercharge” growth in hi-tech industries.

The government said the scheme, which is backed by £80m of investment over five years in each of the new high-growth zones, is designed to accelerate research and development in the UK’s “most budding industries”.

Each of the new investment zones will be clustered around a university or other research institution, the Treasury said, bringing growth to areas which have traditionally underperformed economically.

They will be focused on one of a series of key sectors: technology, creative industries, life sciences, advanced manufacturing and the green sector.

Eight areas in England have been shortlisted: the East Midlands, Greater Manchester, Liverpool, the North East, South Yorkshire, the Tees Valley, the West Midlands and West Yorkshire.

The government is also in discussions with the devolved administrations over how investment zones can be established in Scotland, Wales and Northern Ireland to account for the final four locations.

Mr Hunt will also set out plans to accelerate the growth of “high-potential innovation clusters” in Glasgow, Greater Manchester and the West Midlands with £100m of investment in 26 “transformative” research and development projects.

More on Jeremy Hunt

The chancellor said: “True levelling up must be about local wealth creation and local decision-making to unblock obstacles to regeneration.

“From unleashing opportunity through new investment zones, to a new approach to accelerating research and development in city regions, we are delivering on our key priority to supercharge growth across the country.”

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What could be in the spring budget?

Tory and Labour mayors welcome announcement

The announcement was welcomed by both Labour and Conservative regional mayors.

Tracy Brabin, the Labour mayor of West Yorkshire, said: “West Yorkshire has a strong and thriving economy, and I’m pleased the government has recognised the strength of our innovation by choosing to work with us to deliver an investment zone.

“It will provide further opportunities for people across the region, as well as our world-leading higher educational facilities, building on our expertise in digital, technology, and health and life sciences.”

Ben Houchen, Tory Tees Valley mayor, said he was “incredibly supportive of this proposal”, a sentiment echoed by Tory West Midlands leader Andy Street and Labour mayor of South Yorkshire, Oliver Coppard.

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Trump peace plan: We could all pay if Europe doesn’t step up and guarantee Ukraine’s security

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Trump peace plan: We could all pay if Europe doesn't step up and guarantee Ukraine's security

The Donald Trump peace plan is nothing of the sort. It takes Russian demands and presents them as peace proposals, in what is effectively for Ukraine a surrender ultimatum.

If accepted, it would reward armed aggression. The principle, sacrosanct since the Second World War, for obvious and very good reasons, that even de facto borders cannot be changed by force, will have been trampled on at the behest of the leader of the free world.

The Kremlin will have imposed terms via negotiators on a country it has violated, and whose people its troops have butchered, massacred and raped. It is without doubt the biggest crisis in Trans-Atlantic relations since the war began, if not since the inception of NATO.

The question now is: are Europe’s leaders up to meeting the daunting challenges that will follow. On past form, we cannot be sure.

Vladimir Putin, President of Russia. Pic: Sputnik/Gavriil Grigorov via Reuters
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Vladimir Putin, President of Russia. Pic: Sputnik/Gavriil Grigorov via Reuters

The plan proposes the following:

• Land seized by Vladimir Putin’s unwarranted and unprovoked invasion would be ceded by Kyiv.

• Territory his forces have fought but failed to take with colossal loss of life will be thrown into the bargain for good measure.

Ukraine will be barred from NATO, from having long-range weapons, from hosting foreign troops, from allowing foreign diplomatic planes to land, and its military neutered, reduced in size by more than half.

Donald Trump meeting Vladimir Putin in Alaska in August, File pic: Reuters
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Donald Trump meeting Vladimir Putin in Alaska in August, File pic: Reuters

And most worryingly for Western leaders, the plan proposes NATO and Russia negotiate with America acting as mediator.

Lest we forget, America is meant to be the strongest partner in NATO, not an outside arbitrator. In one clause, Mr Trump’s lack of commitment to the Western alliance is laid bare in chilling clarity.

And even for all that, the plan will not bring peace. Mr Putin has made it abundantly clear he wants all of Ukraine.

He has a proven track record of retiring, rallying his forces, then returning for more. Reward a bully as they say, and he will only come back for more. Why wouldn’t he, if he is handed the fortress cities of Donetsk and a clear run over open tank country to Kyiv in a few years?

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US draft Russia peace plan

Since the beginning of Trump’s presidency, Europe has tried to keep the maverick president onside when his true sympathies have repeatedly reverted to Moscow.

It has been a demeaning and sycophantic spectacle, NATO’s secretary general stooping even to calling the US president ‘Daddy’. And it hasn’t worked. It may have made matters worse.

A choir sing in front of an apartment building destroyed in a Russian missile strike in Ternopil, Ukraine. Pic: Reuters
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A choir sing in front of an apartment building destroyed in a Russian missile strike in Ternopil, Ukraine. Pic: Reuters

The parade of world leaders trooping through Sharm el-Sheikh, Egypt, lavishing praise on his Gaza ceasefire plan, only encouraged him to believe he is capable of solving the world’s most complex conflicts with the minimum of effort.

The Gaza plan is mired in deepening difficulty, and it never came near addressing the underlying causes of the war.

Read more:
Ukraine war latest: Putin welcomes peace plan
Trump’s 28-point Ukraine peace plan in full

Most importantly, principles the West has held inviolable for eight decades cannot be torn up for the sake of a quick and uncertain peace.

With a partner as unreliable, the challenge to Europe cannot be clearer.

In the words of one former Baltic foreign minister: “There is a glaringly obvious message for Europe in the 28-point plan: This is the end of the end.

“We have been told repeatedly and unambiguously that Ukraine’s security, and therefore Europe’s security, will be Europe’s responsibility. And now it is. Entirely.”

If Europe does not step up to the plate and guarantee Ukraine’s security in the face of this American betrayal, we could all pay the consequences.

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Ukraine and Europe cannot reject Trump’s plan – they will play for time and hope he can still be persuaded to desert the Kremlin

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Ukraine and Europe cannot reject Trump's plan - they will play for time and hope he can still be persuaded to desert the Kremlin

“Terrible”, “weird”, “peculiar” and “baffling” – some of the adjectives being levelled by observers at the Donald Trump administration’s peace plan for Ukraine.

The 28-point proposal was cooked up between Trump negotiator Steve Witkoff and Kremlin official Kirill Dmitriev without European and Ukrainian involvement.

It effectively dresses up Russian demands as a peace proposal. Demands first made by Russia at the high watermark of its invasion in 2022, before defeats forced it to retreat from much of Ukraine.

Ukraine war latest: Kyiv receives US peace plan

(l-r) Kirill Dmitriev and special envoy Steve Witkoff in St Petersburg in April 2025. Pic: Kremlin Pool Photo/AP
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(l-r) Kirill Dmitriev and special envoy Steve Witkoff in St Petersburg in April 2025. Pic: Kremlin Pool Photo/AP

Its proposals are non-starters for Ukrainians.

It would hand over the rest of Donbas, territory they have spent almost four years and lost tens of thousands of men defending.

Analysts estimate at the current rate of advance, it would take Russia four more years to take the land it is proposing simply to give them instead.

It proposes more than halving the size of the Ukrainian military and depriving them of some of their most effective long-range weapons.

And it would bar any foreign forces acting as peacekeepers in Ukraine after any peace deal is done.

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Is Moscow back in Washington’s good books?

The plan comes at an excruciating time for the Ukrainians.

They are being pounded with devastating drone attacks, killing dozens in the last few nights alone.

They are on the verge of losing a key stronghold city, Pokrovsk.

And Volodymyr Zelenskyy is embroiled in the gravest political crisis since the war began, with key officials facing damaging corruption allegations.

Read more from Sky News:
Witkoff’s ‘secret’ plan to end war
Navy could react to laser incident

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Ukrainian support for peace plan ‘very much in doubt’

The suspicion is Mr Witkoff and Mr Dmitriev conspired together to choose this moment to put even more pressure on the Ukrainian president.

Perversely, though, it may help him.

There has been universal condemnation and outrage in Kyiv at the Witkoff-Dmitriev plan. Rivals have little choice but to rally around the wartime Ukrainian leader as he faces such unreasonable demands.

The genesis of this plan is unclear.

Was it born from Donald Trump’s overinflated belief in his peacemaking abilities? His overrated Gaza ceasefire plan attracted lavish praise from world leaders, but now seems mired in deepening difficulty.

The fear is Mr Trump’s team are finding ways to allow him to walk away from this conflict altogether, blaming Ukrainian intransigence for the failure of his diplomacy.

Mr Trump has already ended financial support for Ukraine, acting as an arms dealer instead, selling weapons to Europe to pass on to the invaded democracy.

If he were to take away military intelligence support too, Ukraine would be blind to the kind of attacks that in recent days have killed scores of civilians.

Europe and Ukraine cannot reject the plan entirely and risk alienating Mr Trump.

They will play for time and hope against all the evidence he can still be persuaded to desert the Kremlin and put pressure on Vladimir Putin to end the war, rather than force Ukraine to surrender instead.

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The Ashes live: Australia set 205 to win first Test after England bowled out for 164

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