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A low-tax investment zone for part of the A11 ‘tech corridor’ is expected to be created following the Chancellor’s statement on the economy.
Kwasi Kwarteng unveiled plans in his ‘mini-budget’ to establish 38 such zones across the country, designed to drive business growth through lower taxes and lighter regulation for local companies.
The Eastern Powerhouse, a business-led lobbying organisation chaired by former Cambridgeshire and Peterborough mayor James Palmer, expects the investment zone for the East of England to encompass the A11 tech corridor, overlapping with the Prime Minister’s own constituency of South West Norfolk.
While this could cover parts of the Cambridge-Norwich technology corridor, it is expected to be focused at the Norfolk end.
Members of the Powerhouse, including Jaynic Property Group, Lotus Cars and Hethel Innovation, welcomed the move, but Mr Palmer argued the scope of the scheme should be expanded beyond Norfolk.
“We welcome the government’s investment zones plan, which would be a hugely positive step towards levelling up the UK’s regions,” he said.
“However, the East of England would benefit from a different spatial strategy than the one currently proposed. Rather than limiting the plan to a single ‘central investment area’ in Norfolk, the government should extend the benefits to multiple locations across the region.
“This would help to connect the smaller, less concentrated points of economic light in the East – and avoid the risk of opportunity and prosperity agglomerating in one area.
“As the 4th largest economy in the UK, the East has enormous untapped potential – and a fully decentralised network of investment zones could be the key to unlocking it.”
Mr Palmer pointed out that the precedent for multiple, complimentary ‘growth zones’ across the East was set by Freeport East, announced in March 2021 by then Chancellor Rishi Sunak.
It created a “special economic zone” in Felixstowe with loosened customs rules, including tax reductions. Gateway 14 in Stowmarket – a new business, innovation and logistics park – is to offer low tax and low regulation benefits as part of the Freeport Zone.
George Freeman, MP for Mid Norfolk and former Parliamentary Under-Secretary of State for Science, Research and Innovation, said: “I strongly support calls for Norfolk and the Eastern Region to be home to new ‘growth zones’ as part of the government’s commitment to ‘Levelling Up’ and boosting economic growth.
“For too long, rural and coastal areas have suffered from entrenched poverty from a lack of connectivity and business investment.
“Growth or investment zones would be a very positive first step as part of a longer term strategy to support our cluster of science, technology and innovation here in Norfolk – by properly grasping the huge opportunities for business growth here in the East – particularly in agriTech, cleantech and biotech – and spreading new jobs, opportunities and prosperity across our entire region, especially our more rural and deprived towns and villages.”
While growth and productivity could be fostered by an investment zone, helping to tackle poverty, the Eastern Powerhouse argued that areas that are already relatively well-developed would be well-placed to make the most of the opportunities.
Phillip Blond, director of ResPublica and co-founder of the Eastern Powerhouse, said:
“All places where businesses are exporting British ideas and products around the world should have the opportunity to benefit from investment zone status. Many of the UK’s Enterprise Zones, first introduced in 2011, were aimed at assisting parts of Britain that had ‘missed out’. This was a noble ambition, however in practice it limited the success of the project by shackling many such schemes to urban areas experiencing market failure.
“The government must not make the same mistake with investment zones, which should focus on what is already succeeding in places that could do far more than they currently are. The potential gains for the region are palpable and real.”
Cambridge BID CEO Ian Sandison said: “We await more information on the low tax zones. It would be a great boost to our regional economy if Cambridge was in one.”
Meanwhile, Cambridge’s Labour MP Daniel Zeichner said he was “astonished” by the tax cuts announced by the Chancellor “for the super-rich”.
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