Chancellor to confirm Tees Valley Investment Zone
Chancellor of the Exchequer Kwasi Kwarteng is expected to announce today (23rd September) in a Growth Plan that the Tees Valley will become one of the first areas in the UK to pilot new economy-boosting Investment Zones.
Middlesbrough and Hartlepool Mayoral Development Corporations are set to be the first two areas put forward by the Tees Valley Mayor and will be up and running by the end of the year.
Investment Zones aim to turbocharge development, investment and job creation by applying similar tax incentives for businesses to those found in Freeports, but in doing so increasing incentives and cutting more red tape.
As it currently stands, half of the business rates go to Local Authorities, with the remaining half going to central Government. Under new Investment Zone proposals for new rate-payers within the zones, it is understood that 50% will go to Local Authorities and 50% will be retained by the Mayor to reinvest in projects that will boost the region. This will not affect council finances.
Changes to capital allowance rules and Employers National Insurance contributions will also increase private sector investment into these areas as they benefit from the reduced costs. Cutting red tape around planning rules will make it quicker, easier and smoother for companies to set up shop, removing the need for time-consuming negotiations between developers and local councils, in turn allowing jobs to be created and the region to benefit from investment in new shopping centres, restaurants, apartments and offices even sooner.
Mayor Houchen said: “These new Investment Zones will supercharge what we’re setting out to do with new Mayoral Development Corporations in Middlesbrough and Hartlepool and, as with the Teesside Freeport, we’re once again leading the way in doing things differently.
“These plans will go even further than before to boost local, national and international investment in our town centres, at a time when all eyes are already on us. We know what our region needs better than anyone, so by keeping all of the money from these investments in our region, rather than being in the hands of Whitehall to control, we’ll be able reinvest it to deliver on local development priorities.
“It’s a great cycle – as more businesses locate themselves here, we’ll have more funding to improve our towns, in turn attracting more companies, generating even more cash for regeneration. All the while, they’ll be creating the good-quality, well-paid jobs we need in our town centres, without a penny being paid by the taxpayer.
“This is chance to create town centres we can be proud of in Middlesbrough and Hartlepool by lowering taxes, simplifying planning and securing private sector investment even sooner.
“These Investment Zones will usher in a new age of investment so we can play to our strengths and take advantage of new opportunities for years to come.
Speaking in the House of Commons tomorrow, the Chancellor of the Exchequer, Kwasi Kwarteng, is expected to say: “The time it takes to get consent for nationally significant projects is getting slower, not quicker, while our international competitors forge ahead.
“We have to end this.
“To support growth right across the country, we need to go further, with targeted action in local areas.
“We will liberalise planning rules in specified agreed sites, releasing land and accelerating development.
“And we will cut taxes, with businesses in designated sites enjoying the benefit of generous tax reliefs”.
Speaking about his priorities in his speech to the House of Commons, the Chancellor of the Exchequer, Kwasi Kwarteng, is expected to say:
“Growth is not as high as it needs to be, which has made it harder to pay for public services, requiring taxes to rise.
“This cycle of stagnation has led to the tax burden being forecast to reach the highest levels since the late 1940s.
“We are determined to break that cycle. We need a new approach for a new era focused on growth.
“That is how we will deliver higher wages, greater opportunities and sufficient revenue to fund our public services, now and into the future.
“That is how we will compete successfully with dynamic economies around the world.
“That is how we will turn the vicious cycle of stagnation into a virtuous cycle of growth.
“We will be bold and unashamed in pursuing growth – even where that means taking difficult decisions.
“The work of delivery begins today”.