The Government is in ‘early discussions with nearly 40 places’ including Tees Valley and the West Midlands about creating new investment zones offering tax cuts for businesses, the chancellor has confirmed.
Kwasi Kwarteng revealed in in today’s fiscal statement that the Government’s Plans for Growth will include new investment zones to liberalise planning rules in specified agreed sites, ‘releasing land and accelerating development’.
Business rates on newly occupied premises will be abolished, said the chancellor. Businesses taking on employees in a tax site will pay ‘no national insurance whatsoever’ on the first £50,000 earned by each new hire.
Mr Kwarteng said the Government would cut taxes for businesses in designated tax sites for 10 years, with accelerated tax reliefs for structures and buildings and 100% tax relief on qualifying investments in plant and machinery.
He also announced there would be ‘no stamp duty to pay whatsoever’ on purchases of land and buildings for commercial or new residential developments.
Mr Kwarteng added: ‘That is an unprecedented set of tax incentives for business to invest, to build, and to create jobs right across the country.
‘I can confirm to the House that we are in early discussions with nearly 40 places like Tees Valley, the West Midlands, Norfolk and the West of England to establish investment zones.
‘And we will work with the devolved administrations and local partners to make sure that Scotland, Wales and Northern Ireland will also benefit if they are willing to do so. If we really want to level up we have to unleash the power of the private sector.’
Levelling up secretary Simon Clarke has today written to all local authority chief executives in England about the Government's investment zones offer. He explained there was 'no question of imposing investment zones on any area of the UK'.
He said the Government is poised to launch an expressions of interest process to invite all upper tier authorities and Mayoral Combined Authorities in England to come forward with proposals, 'working closely with leaders of district and county councils'.
The ambition, he added, is that investment zones 'go further than any government growth programme to date' and that they complement the Freeports programme.
He said the Government would be 'seizing the opportunity to turbocharge the Freeports programme by offering early discussions with all Freeports about the possibility of extending the investment zone incentives to them'.
Cllr Brigid Jones, Deputy Leader of Birmingham City Council and portfolio lead on the WMCA for devolution and levelling up, said: 'The West Midlands has been identified as a location for investment zones and, while we clearly need to see more detail from the Government, it is critical that East Birmingham is at the heart of efforts to level up the UK economy. We want to work with Government and the West Midlands Combined Authority (WMCA) to make that happen.
'We’ve developed a strong proposal with Solihull Council and the West Midlands Combined Authority (WMCA) that has been submitted to ministers for an at scale investment zone in East Birmingham and North Solihull, which has the highest concentration of deprivation outside of London. It is a place where growth is much needed and can take place at scale and pace. Our proposal would enable transport investment to address very poor connectivity, unlock employment sites, attract businesses, and improve public services including boosting training and support for people to get the jobs and better paid jobs.
'But we must be clear that to secure the strongest levels growth and for this to be sustained and to reach the areas and people that need it most, it will require public investment, not simply tax reliefs. '
Chairman of the District Councils’ Network Cllr Sam Chapman-Allen said: 'District councils are already using their knowledge of local communities and close relationships with local employers to ensure their local economies are buoyant and expanding so we fully support the Government’s aim of accelerating growth.
'District councils have unrivalled planning and regeneration expertise which will be crucial to making the investment zone concept work. It is essential that the part of government which is closest to local communities and local businesses plays an active role and is a full delivery partner.
'We are keen to learn more about the Government’s proposals. District councils will work with ministers and our local partners to develop investment zones in a way which brings about sustainable growth and is supported by our local communities.'
Solace spokesperson for local government finance and chief executive at Coventry City Council Martin Reeves said: 'The announcement of new investment zones is potentially positive for the places selected, especially for those areas most in need of levelling up, to help accelerate commercial growth and large-scale housing delivery but we look forward to seeing the detail of how these will operate in practice.'
The 38 zones are:
- Blackpool Council
- Bedford Borough Council
- Central Bedfordshire Council
- Cheshire West and Chester Council
- Cornwall Council
- Cumbria County Council
- Derbyshire County Council
- Dorset Council
- East Riding of Yorkshire Council
- Essex County Council
- Greater London Authority
- Gloucestershire County Council
- Greater Manchester Combined Authority
- Hull City Council
- Kent County Council
- Lancashire County Council
- Leicestershire County Council
- Liverpool City Region
- North East Lincolnshire Council
- North Lincolnshire Council
- Norfolk County Council
- North of Tyne Combined Authority
- North Yorkshire County Council
- Nottinghamshire County Council
- Plymouth City Council
- Somerset County Council
- Southampton City Council
- Southend-on-Sea City Council
- Staffordshire County Council
- Stoke-on-Trent City Council
- Suffolk County Council
- Sunderland City Council
- South Yorkshire Combined Authority
- Tees Valley Combined Authority
- Warwickshire County Council
- West of England Combined Authority
- West Midlands Combined Authority
- West Yorkshire Combined Authority
Commenting on the proposal, leader of Cheshire West and Chester Council Cllr Louise Gittins said: 'There are still many details to work through, but we welcome the chancellor’s recognition of the growth potential of our borough. We look forward to further discussions with government officials to determine a model for an investment zone that meets the needs of our local economy and our vision of a greener, fairer, stronger borough.
'I see this as an opportunity to speed our transition to the low carbon economy, securing the investment we need to create more high-quality skilled jobs and support our ambitions for this area to benefit our communities for decades to come.'
Elected Metro Mayor for the North of Tyne, Jamie Driscoll, said: 'We’re always up for a new scheme that boosts regional growth and improves residents’ lives. But whether it will work depends on one thing: is the Government investing more or less into the North of Tyne than it was before?
'We know what we’re doing here. We’ve already created thousands of jobs. We're already the number one region in the country for inward investment. We’re already taking real action to combat the climate emergency.
'We want to work with Government to see our region flourish, but these "investment zones" need to be part of a wider package – with more money, in transport, skills, and education, too. Only then will we have the wider investment and power our businesses and communities really need.'
