Jeremy Hunt wants to scrap Truss plan for investment zones

Liz Truss’ plans for low-tax investment zones to boost Britain’s economic growth are set to be scrapped by Chancellor Jeremy Hunt in next week’s autumn statement.

Two Whitehall insiders said Leveling Secretary Michael Gove had been campaigning hard for the zones to be abandoned in favor of a revised urban regeneration policy.

Although final decisions have not yet been made and the zones could alternatively be dramatically reduced by Hunt, government officials said the Chancellor was expected to scrap Truss’s pet project.

The former prime minister wanted up to 200 investment zones as part of her pledge to boost growth by incentivizing businesses to locate in low-tax zones.

The proposed zones would include tax breaks including bank holidays at business rates and employer social security contributions for new workers earning less than £50,000 a year.

During Truss’s tenure as Prime Minister, the Treasury Department calculated that the zones were spending “up to $12 billion each year.”

The zones would also include streamlined planning permits and reduced environmental assessments, drawing strong opposition from conservation groups.

As chancellor, Rishi Sunak had pursued a program of low-tax “free ports” to “level” left-behind areas and reduce regional disparities, and these bore similarities to Truss’ investment zones.

Officials said Hunt undertook a review of the investment zones program ahead of the Nov. 17 fall statement.

Local authorities made initial bids to house the zones last month after being given short notice deadlines.

“Everyone is just so screwed,” said an adviser who advised local authorities who had applied for the government’s adjustment funds. “They were being taken up the hill for something they didn’t want to do and didn’t believe in.”

Gove, the long-time architect of Boris Johnson’s re-opening agenda, which was brought back into government by the current Prime Minister, told the BBC last month that Truss’ investment zones had “raised some concerns”.

“One thing is, we’re going to look at them, we’re going to check them out, but by no means are we undermining our environmental protection,” he said.

Whitehall insiders said Gove had told Downing Street that Truss’ investment zones should be “put on hold” and that leveling department officials had “laid down tools” in relation to the policy.

They added that instead of the zones, Gove is pushing ahead with plans for a range of “transformational” housing-focused urban regeneration projects across the country.

A government insider with knowledge of Gove’s thinking said he favors an interventionist approach – with housing agency Homes England being given a more “activist” role to spur regeneration by buying and clearing land for development.

Such a move could be combined with mayoral development companies serving as regeneration bodies in some areas.

The Treasury declined to comment. The leveling department said: “All spending decisions will be considered in the fall statement round.”

Andrew Carter, head of the Center for Cities think-tank, said he expects the Treasury Department to seek to rebalance investment zones away from tax stimulus and toward easing plans.

“The Treasury is keen to plan reforms as a means to achieve growth, but not remotely interested in tax breaks,” he added.

https://www.ft.com/content/3e2b4842-1295-4b9e-9704-82456f069c95 Jeremy Hunt wants to scrap Truss plan for investment zones

Adam Bradshaw

TheHitc is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@thehitc.com. The content will be deleted within 24 hours.

Related Articles

Back to top button