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Government cuts Liz Truss plans for low-tax, low-regulation areas Chancellor says he wants to 'energize growth' across the country Jeremy Hunt is set to announce a dozen new low-tax "investment zones" in Britain in this week's budget in a bid to boost growth and help "level up" areas outside London.
The chancellor is expected to unveil 12 zones clustered around universities, slashing a scheme introduced by former Prime Minister Liz Truss that saw hundreds of councils compete with one another.
The Treasury said each area would receive £80m in support over five years, including generous tax breaks to attract businesses to left-behind areas of the country.
The zones will cluster around universities and research centers and aim to drive growth in key sectors: technology, creative industries, life sciences, manufacturing and the green sector.
Eight councils in England (East Midlands, Greater Manchester, Liverpool City, North East, South Yorkshire, Tees Valley, West Midlands and West Yorkshire) have been shortlisted to host investment areas.
Rishi Sunak's government is working with devolved administrations to establish the final four sites in Scotland, Wales and Northern Ireland.
The Chancellor is also expected to announce a £100m investment in research and development projects in Glasgow, Greater Manchester and the West Midlands, as well as provide further funding to strengthen partnerships across England.
Saying he wanted to 'energize growth' across the country, Mr Hunt said: 'The real leveling has to be about local wealth creation and local decision-making to unlock the barriers to regeneration.'
Hundreds of councils are believed to have spent £12.5m to be part of a broader, low tax, low regulation investment zone scheme which was scrapped after Ms Truss was ousted from number 10 in the autumn.
In England some 626 bids were submitted, with councils spending an average of £20,000 to £30,000. Labor said they had been "forced to waste millions of pounds" on a "Hunger Games-style approach".
Henri Murison, chief executive of the Northern Powerhouse Partnership, said Hunt's plan appeared to be a "marked improvement" on the previous Truss-era policy.
The influencer said that by avoiding "a bidding type competition and going directly to the combined authorities, the government has avoided repeating previous mistakes."
The decision to boost 'infant industries' comes after the government was forced to intervene to facilitate the sale of the UK branch of the collapsed Silicon Valley Bank to HSBC to prevent dozens of tech companies from being 'wiped out'.
Sir Keir Starmer challenged the chancellor to lead the UK "off this path of controlled decline" ahead of Wednesday's budget.
The Labor leader urged Hunt to match his party's ambition to achieve the highest sustained growth in the G7 group of advanced economies.
Criticizing the slowdown in the economy under the Conservative government, Labor pointed to data showing there are 3,000 fewer high-growth companies in the UK than five years ago.
Sir Keir said: “This week the government has a real chance to show that it has the ambition and the ability to govern. They either show proper leadership and steer our country off this path of controlled decline, or step aside for a new Labor government.
PA wire
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