Reaction as East Midlands set to get three low tax 'Investment Zones' in bid to drive growth

The East Midlands could get three low tax “Investment Zones” in a bid to drive growth as the new Government desperately tries to outmanoeuvre the looming recession, rising inflation and businesses desperately trying to keep their heads above water.

Chancellor Kwasi Kwarteng has said the new low-tax zones would see planning rules relaxed and business taxes cut to encourage investment. They were part of a raft of tax cuts announced in the mini-budget – which will cost the Exchequer billions of pounds – and are above and beyond plans already under way for a freeport around the East midlands Airport, Ratcliffe on Soar power station and the East Midlands Intermodal Park in Derbyshire.

The Investment Zones would see businesses benefit from time-limited tax benefits, more land for housing and commercial development and extra financial support for Mayoral combined authorities hosting the zones.

The Government says they will be “carefully designed to encourage investment and new economic activity, supporting growth and jobs”.

The three East Midland council areas where discussions have taken place – out of 38 in total – are Derbyshire County Council, Leicestershire County Council and Nottinghamshire County Council. All are Conservative controlled.

David Pendle, a Nottingham-based partner at planning consultancy Marrons Planning, hopes the Investment Zones could encourage growth thanks to the lower taxes, simplified planning and less red tape around environmental protection.

He said: “The country is facing many challenges and the public sector – certainly at a local level – is trying to work out how to extract more funding from development. It will be interesting to see the proposals and work out how they fit together into broader plans.”

East Midlands Chamber policy and external affairs director Chris Hobson said the Chancellor’s fiscal statement was a bold attempt to keep the economy on track.

He said: “We’ve been crying out for the economic pressure valve to be released, and businesses will welcome many of the policies featured in the Growth Plan, including a reversal in national insurance contributions, cancellation of the planned corporation tax rise, a wholesale energy price cap for firms and making the annual investment allowance permanent.

“These are measures that will give businesses more headroom at a time when spiralling costs for energy, people, fuel and raw materials have forced many to tighten their belts and restrict investment plans, which are vital to kickstarting our economy.

“There were a lot of big statements that businesses will cling to – in particular, getting the basics right in terms of streamlining planning rules for commercial development and promising to accelerate infrastructure projects in key areas like road, rail and digital.

“However, these aren’t new concepts and previous policy promises haven’t always been delivered, so real progress must finally be made – nowhere more so than in the East Midlands, where we receive the lowest public investment per head in areas like transport and are eagerly awaiting to see schemes like HS2 East and Midland Main Line electrification move forward.

“The announcement of investment zones will be intriguing for bu