Plans to create low-tax zones in the North East face being axed, just days after it was claimed they could create tens of thousands of jobs.
Michael Gove announced over the weekend that he was putting the Liz Truss administration’s proposals to set up new ‘investment zones’ across England, where businesses would be given tax breaks and relaxed planning rules, under review. The Levelling Up secretary, restored to his post by Rishi Sunak after being sacked by Boris Johnson earlier this year, said that any initiatives that could weaken environmental protections is “out”, amid concerns from wildlife charities.
His announcement came less than two weeks after bids were unveiled for two sprawling investment zones running through Newcastle, Northumberland, and North Tyneside, which it was claimed would create “23,000 more job opportunities in the region and 8,000 new homes”.
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One would have included land surrounding the Northumberland Line railway, in the hope of attracting employers and housebuilders to towns served by the route between Newcastle and Ashington ahead of it reopening to passenger trains next year for the first time in decades. The second bid focused on an “Arc of Energy Innovation” based around clean energy industries in areas including the banks of the Tyne, the Newcastle International Airport Business Park, Blyth Energy Central, and Lynefield Park in Lynemouth.
Reacting to the potential Government U-turn, a North of Tyne Combined Authority spokesman said: “Our approach to Investment Zones has been built on cross-party consensus about the kind of inclusive growth we want to see in the region – boosting our green industries and supporting place-based regeneration that is sustainable over the long term. So whilst Government may consider policy changes in the short-term, we will continue to work with regional colleagues to ensure we are maximising our assets and ensuring that the region is a great place to live, work, invest and grow.”
North of Tyne metro mayor Jamie Driscoll had previously warned that investment zones could simply displace jobs from one area to another and urged ministers not to bring in “anything about reducing workers’ rights or environmental legislation”. Durham County Council had also lodged bids for investment zones at NETPark in Sedgefield and Aykley Heads in Durham City, while the International Advanced Manufacturing Park and Sunderland riverside were also put forward as possible locations.
Asked about the investment zone plan, which was part of ex-Chancellor Kwasi Kwarteng’s ill-fated mini-budget, Mr Gove said last weekend: “I’m reviewing them. We need to make sure that any change that we make is one which of course helps to support economic growth and good jobs for people, but also one of the concerns raised about investment zones was the impact on the environment.
“I’ve been very clear and the Prime Minister has been very clear that under no circumstances will we weaken environmental protections. So I will be looking with the Chancellor of the Exchequer, with the Environment Secretary and with the Prime Minister at the proposals that were drawn up when Liz was Prime Minister… and anything that might in any way undermine environmental protections is out.”
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