CHANCELLOR Gordon Brown has handed out a cash boost to Newport to help Gwent recover from the loss of steel jobs.

His pre-Budget statement announces plans for a new tax incentive to help the Newport Urban Regeneration Company, established in the wake of the end of steel making at Llanwern and the closure of the Ebbw Vale steelworks.

The new tax incentive, available to all urban regeneration companies, is to encourage donations towards their running costs. It is intended to help them play an effective role in stimulating regeneration.

Welsh councils will also be allowed to retain some or all of any additional increases in business rates from new firms which they help to create themselves.

Newport's URC, so far funded with £10 million each from the Assembly and the Welsh Development Agency, has taken over from the Newport Development Board which had been attracting investment to the city centre following the government's refusal to sanction a barrage across the Usk.

The URC will have more flexibility to engineer investment in jobs and top quality offices on the back of the £100 million planned redevelopment of the city centre.

The government will outline details of URC funding in the new year but the move comes at a time when Welsh council leaders are pressing to have restored to them the power to set and collect business rates on existing firms. At present business rates are distributed by the government along with the contribution from the national taxpayer towards council funding which is channelled through the National Assembly.

Regions minister Nick Raynsford is to head a review into the balance of funding between central and local government for council services.

Around 350 enterprise areas in Wales will also benefit from the Chancellor's announcement that he will press ahead in scrapping stamp duty for commercial property development to encourage business start-ups and new jobs.

The Chancellor's decision not to cut public spending means that the bumper public spending boost he announced in his Budget a few months ago will remain, bringing Wales an increase of about £10 billion in spending this year and £12.5 billion within three years.

Welsh secretary Peter Hain, said the boost came at a time when the evidence showed a shift in Wales from large scale low skill jobs to diverse high quality jobs. This trend had been reinforced by an increase in self-employed jobs in Wales of nearly 9,000 to 165,000 - 13.3 per cent of the Welsh workforce.