THE North-East is set to receive a £15m Government cash boost to help it match the levels of business creation seen elsewhere in the UK.

It is bottom of the league when it comes to entrepreneurship and business creation.

The region creates just 203 businesses per 10,000 head of population, 90 below neighbouring Yorkshire and Humberside (293) and 283 behind London (486).

The average for the UK is 353 businesses per 10,000 people.

Together, the North-East and Yorkshire and Humberside will receive £40m of Government aid.

Yesterday, Chancellor Gordon Brown, Trade and Industry Secretary Patricia Hewitt and Education and Skills Secretary Estelle Morris set out a package of measure to tackle the productivity gap with the UK's major competitors, and gave details of Regional Venture Capital Funds (RVCFs) which will make it easier for firms to obtain funding from the private sector.

The chancellor said: "If the levels of entrepreneurship and business activity in the North-East were to match the South East, this would mean an extra 40,000 businesses - with more jobs and more wealth creation for the entire community.

"Having put stability into the economy and employment, we must now tackle our productivity gap and create in Britain a true enterprise culture where the chance to start and succeed in business is open to all."

The announcement included measures to:

* Sharpen incentives for enterprise with further cuts in capital gains tax and improvements to the taxation of share options.

Strengthen competition with radical reforms in the competition regime.

Create a better tax environment for small firms, with improvements to VAT.

Modernise of the laws of bankruptcy and insolvency.

Deepen the enterprise culture, with more work on enterprise in education.

Progress on taking enterprise to the regions through the RVCFs will be backed by £80m of Treasury money and by the European Investment Fund, which has agreed in principle to invest £60m in the initiative.

Patricia Hewitt said: "This Government will help UK firms to get the future first. Enterprise is key to our future prosperity, and we must remove obstacles to innovation and make competition work properly for the consumer."

The North-East Chamber of Commerce has welcomed the chancellor's plans to boost the North-East economy.

Michael Bird, chief executive of the chamber, said: "Moves to increase enterprise, innovation and entrepreneurship are very much needed in the North-East which has one of the lowest business start-up and highest new venture failure rates in the country.

"Figures released a year ago show that 11 of the worst 18 performing districts in terms of new business per head of population were in the North-East, with just over half surviving beyond three years.

"We need to create more of an enterprise culture and the economic conditions in which it can flourish.

"I very much hope the Government will address this in the months ahead. The chamber will, of course, do everything it can to help."