Industry anger as investment zones policy rumoured to be scrapped

The industry is “hacked off” following speculation that investment zones will be scrapped, despite more than a hundred applications. Chancellor Jeremy Hunt (pictured) is set to kick Liz Truss’s flagship investment zones initiative into the long grass next week, barely three weeks after the deadline for submissions passed. A Whitehall source confirmed the rumours, saying simply: “They are dead.” Originally, Truss’s government had planned for the first 28 zones to have been approved and “up and running” in November. Instead, the entire policy appears to have been abandoned. One person involved in a submission said: “Well, that was a colossal waste of time, wasn’t it?” Authorities were given until 14 October to formally submit areas to be considered as investment zones. A total of 41 authorities submitted proposals, with most submitting multiple sites. Plymouth City Council submitted a total of 17, while Cornwall submitted 16. Alistair Watson, UK head of environment and planning at Taylor Wessing, captured the sense of anger from those involved in submissions. He said: “As an industry, we are hacked off with the time that has been wasted over this, with the ineptitude. This is not the way to attract development and investment to areas that badly need it.” The zones were intended to be the “shock troops of economic growth”, with relaxed planning rules and sweeping tax exemptions. Under the original plans, business rates and stamp duty would be lowered, with any income ring-fenced for the local area. Under the Truss administration there was to be no limit to the number of zones permitted, although the Treasury was understood to be keen to introduce a cap. However, they have now fallen victim to the cuts expected in the Autumn Statement, which is due on 17 November, as well as political opposition. As the Treasury looks to fill a £50bn fiscal hole, additional spending is not being looked at favourably. The Treasury had estimated that the zones could cost up to £12bn each year in lost revenue. Some sources suggested the government had been briefing about the policy’s demise to gauge the appetite for it. While it seems popular among the business community, it is understood the policy made little impact on ordinary voters. In addition, it is understood that levelling up secretary Michael Gove has no desire to spend his department’s time or resources on “someone else’s priority”. Gove is believed to prefer expanding the powers of Homes England to deliver housing-led regeneration. The British Property Federation has advocated for a pilot scheme to test whether the regulation- and tax-light zones would improve growth, but is intrigued by whatever Gove has planned. BPF chief executive Melanie Leech said: “If speculation around the future of investment zones is to be believed, and Michael Gove is looking to push plans for a series of “transformational” housing-led urban regeneration projects, we are pleased that our calls for the development of a new model of Town Centre Investment Zones within that has been heard. “In advance of the statement, we would urge the chancellor to consider the benefit of this town centre model, where we know there is demonstrable support for the idea having spent the past 12 months working with a number of local authorities to develop the model. “Our proven model is too good an opportunity to miss.” Taylor Wessing’s Watson added: “There were elements of this that were a good idea, just as there were elements of Robert Jenrick’s planning reforms that were good ideas. But once again the government has simply scrapped the lot. All of that good will has now been shredded. This government talks a lot about providing certainty, but all they are doing is adding to uncertainty.” To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Photo © George Cracknell Wright/LNP/Shutterstock