PARLIAMENTARY DEBATE
Investment Zones - 17 October 2022 (Commons/Commons Chamber)

Investment zones will turbocharge our plans for growth, spread opportunity and be transformational for towns and cities across the country. They will create new jobs and homes on targeted sites while maintaining strong environmental outcomes and keeping national green-belt protections in place. They will attract businesses and jobs through lower taxes and streamline planning rules to unlock commercial development. They will be created across the UK, including, we hope, in Wales.

I thank the Secretary of State for that answer. I hope he will look favourably at the bids from Derbyshire that were duly submitted last week. Can he confirm how investment zones will interact with freeports and whether sites could have both statuses to really supercharge growth on those sites?

I am a convinced believer in the merits of freeports. Clearly, the final Government approval for some of those will go into place this autumn, and many are already operational. We are already seeing investment in freeports that we want to see in investment zones. Investment zones have the chance, through a very simple streamlined expression of interest process, to upgrade to full tax freedoms.

The Government intend investment zones to be located UK wide, but, in my constituency and the rest of Wales, that requires the engagement of the Welsh Government. Will my right hon. Friend update the House as to progress on securing that engagement?

My hon. Friend and his colleagues from north Wales have already been absolutely passionate advocates of the potential of investment zones to benefit their region. He is quite right that we will need the co-operation of the Welsh Labour Government to unlock the full benefits of these zones. Discussions are ongoing with the Welsh Government, and I am delighted that I will have his support in making the case to their Minister for the Economy that Welsh Labour should embrace these zones.

Further to the last question, my right hon. Friend will know that north Wales is part of the same economic region as the north-west of England, and it is therefore essential that it should have the same economic advantages. Can he confirm that he will be engaging not only with the Welsh Government but with Welsh local authorities and with the North Wales Economic Ambition Board with a view to ensuring that north Wales gets investment zones at the earliest possible moment?

My right hon. Friend is exactly right: we need to avoid there being a hard border between England and Wales, and indeed between Scotland and England, on these questions. It is vital that we make sure that we listen to the voice of business and local government as well as to MPs—my hon. Friends the Members for Clwyd South (Simon Baynes), for Ynys Môn (Virginia Crosbie), for Vale of Clwyd (Dr Davies) and for Aberconwy (Robin Millar) have already met me about this issue—to make sure that we avoid the disaster for north Wales of England proceeding with these zones and Wales not choosing to do so.

I call the Chair of the Levelling Up, Housing and Communities Committee.

It seems that investment zones are one of the few bits of the mini-Budget that are still on the table. Can the Secretary of State clearly explain how investment zones will be financed? Will it be completely new money, and, given the pressure that local authorities have been under from austerity and now from inflation, will he give an assurance that the money for investment zones will not be found by transferring it from other parts of the local government budget and particularly from levelling-up funds?

Yes, this is new money. It is coming from the Treasury as part of the settlement. Clearly, my right hon. Friend the Chancellor will be setting out the medium-term fiscal plan on 31 October and that will be the moment of confirmation.

What guarantee can the Minister give that investment zones will not lead to any reduction in the desperately needed flood protection and flood mitigation measures? Will the Minister look again at the amendments that I have tabled to the levelling-up Bill to look at strengthening flood protection and mitigation?

The hon. Lady is right to advocate for flood protection, which is vital. I actually welcome her question, because it is an important chance to reaffirm that investment zones are not in any way about cutting away environmental protection. They are about streamlining planning and making sure that lower taxes are on offer in targeted sites. Overwhelmingly, they will benefit brownfield regeneration projects, which would otherwise take years to unlock. I really hope that reassures her, and we will look at her amendments in detail.

Although this is the current game in town, I will be clearly supporting Greater Manchester’s bid to Government, which includes proposals for the Ashton mosque area in my constituency. However, given that this is still part of the mini-Budget—the only bit that has not been shredded yet—can the Secretary of State outline what the tax advantages to an investment zone will be? Can he clarify to the House that expects there to be not displacement of employment across the city region, but genuine growth?

Obviously, genuine additionality is the litmus test that we set for this policy, although it is vital to note that I see no harm in ensuring that, in areas where there is real opportunity, we bring good opportunities. On tax advantages, there will be a range of powers available, including on business rates relief, enhanced structures and buildings allowances, enhanced capital allowances and, critically, action on employer national insurance contributions, designed to ensure that there are incentives for new jobs in the zones.

Worcester Shrub Hill station and the area around it offer a fantastic opportunity to deliver a brownfield development that can provide jobs and homes in an area of Worcester that is closely connected to some of the more deprived areas of the city. Does my right hon. Friend therefore agree that an investment zone around Shrub Hill in Worcester, as proposed by Worcester City Council, Worcestershire County Council and the Worcestershire local enterprise partnership, would be a great chance to put rocket boosters under the levelling up of Worcester?

My hon. Friend makes a compelling case for his project. It is clear that the level of interest across the House in investment zones is extraordinary; we have had hundreds of applications from local authorities for these zones, which is testament to the huge appetite for growth and investment opportunities across this country, driven by a low-tax Conservative Government.

The National Audit Office, the Public Accounts Committee and the Centre for Cities have criticised the number of jobs created by enterprise zones compared with the initial Treasury estimates. Why on earth does the Secretary of State think this new iteration in the form of investment zones—with attacks, whether he says it or not, on environmental standards, planning and workers’ rights—will be any more productive than the other failed zone proposals?

I am terribly fond of the hon. Gentleman, as I hope he knows, but I am afraid he is just wrong in that summary of investment zones. There is no diminution of workers’ rights or environmental rights; the zones are about lower taxes and streamlined planning to deliver jobs and growth, and we should all welcome that across the House.