'Investment zones’ with huge tax cuts for businesses announced for Lancashire

Chancellor Kwasi Kwarteng announced the creation of low-tax, low-regulation investment zones in his mini-budget on Friday.

The Government is in talks with dozens of local authorities in England to set up zones, including Lancashire County Council and Blackpool Council, which runs as a unitary authority.

What does it mean?

It is thought that businesses will receive “accelerated” tax reliefs for 10 years for structures and buildings, and 100 per cent tax relief on investment in plant and machinery in the specified zones.

There will be no stamp duty on purchases of land and buildings in those zones, and no business rates for newly occupied business premises.

While full details have not been provided, the Treasury said areas will only qualify to be investment zones – with the associated planning liberalisation – “after local consent is confirmed”.

"Targeted action”

The Chancellor told the House of Commons: “The time it takes to get consent for nationally significant projects is getting slower, not quicker, while our international competitors forge ahead. We have to end this.

“To support growth right across the country, we need to go further, with targeted action in local areas.

“We will liberalise 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”.

"The devil will be in the detail”

Babs Murphy, chief executive of the North & Western Lancashire Chamber of Commerce (NWLCC), welcomed the news.

She said: “Businesses across the UK will enthusiastically welcome the Chancellor’s pledge to focus on economic growth and speed up new infrastructure development.

“The Chamber Network is a great believer in giving firms the tools and support they need to create the wealth that funds Government tax revenues.

“It is also good news to hear the Chancellor has woken up to the need to take action on our creaking planning system. But we need to see this reform across the country, as it is currently too slow, complex and uncertain. It stifles business investment, expansion and growth.

“Inevitably, the devil will be in the detail of these proposals, and they must strike the right balance between reform and providing for a sustainable future.

“The introduction of Investment Zones also has the potential to finally deliver on the Government’s long-standing promise to level up, if the scheme is truly UK-wide.

“Lessons also need to be learned from the past, it will be crucial to get these zones right from the start, otherwise they can simply displace growth and investment from one area to another without creating new economic activity.

“But this is a bold start, and the Chancellor must now use this as a springboard to develop a comprehensive long-term economic strategy.”

Blackpool MP

Scott Benton MP welcomed news of the Blackpool Investment Zone.

He said: “The new Investment Zones will help Blackpool’s local economy immensely and create jobs and business opportunities. It will kickstart a new economic period that sees increased investment in Blackpool. These incentives are welcome news for local businesses and my constituents.''