THE Chancellor of the Exchequer was last night accused of imposing a “bonkers” Budget on the North East after details emerged questioning the effectiveness of a flagship Government policy.

Labour MP Kevan Jones made the claim amid questions over the creation of 21 new enterprise zones, including zones on Tyneside and the Tees Valley, in his Budget on Wednesday.

George Osborne declared that “helping all parts” of the country was the goal, with companies offered up to 100% discount on rates, new superfast broadband and other potential tax breaks in the zones.

But the small print of the Chancellor’s scheme reveals a time lag in terms of that aim being delivered as well as limits to his plans.

The law must be changed to allow councils to discount business rates in their areas, with the Government hoping the measure will come into effect from April 2012.

On top of that, companies must locate in the zones by April 2015 if they want to benefit from a five-year business rate discount.

That incentive is also fixed at around £55,000 a year per business because of European Union state aid rules, with Whitehall reimbursing the local council the cost.

However, cash-strapped councils will have to pay the “market price” for land for zones if they are currently owned by regional development agencies, such as One North East, that are being wound down.

On superfast broadband, the Government has actually promised to ensure roll-out in zones by “guaranteeing the most supportive regulatory environment, and, if necessary, public funding”.

Ministers also expect most enterprise zones will turn out to be between 50 and 150 hectares, with funding limiting their size.