Chancellor set to confirm two investment zones in Tees Valley

Tees Valley CA expects to be unveiled as one of the first areas to pilot low-tax investment zones as part of today’s ‘mini-budget’ in a move which will see more business rates retained locally.

The chancellor of the exchequer, Kwasi Kwarteng, is delivering a statement to parliament this morning setting out plans to grow the economy, including relaxing planning rules in some areas.

Middlesbrough and Hartlepool Mayoral Development Corporations are expected to be the first two areas put forward by the Tees Valley Mayor to become investment zones with the expectation that they will be up and running by the end of the year.

Investment zones aim to increase development, investment and job creation by offering similar tax incentives for businesses to those found in freeports.

Currently half of the business rates collected in an area go to local authorities, with the remaining half going to the central government. But under the investment zone proposals of rates raised from 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 is not expected to affect council finances, an announcement today said.

The government hopes to encourage private sector investment in these zones through cuts to employer’s National Insurance contributions and other cuts to ‘red tape’.

Ben Houchen (Con), mayor of Tees Valley, 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 centers, 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 to reinvest it to deliver on local development priorities.”

Mr. Kwarteng is expected to say: “To support growth right across the country, we need to go further, with targeted action in local areas.

“We will liberalize 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.”

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