![]() ![]() ![]() With typical hyperbole, Trump claimed they had created $100bn (£76bn) in extra investment, and while fact-checkers dialled that down to more like $10bn it was still a lot of money. Donald Trump’s presidency had very mixed results, to put it mildly, but his “opportunity zones” were a major success, revitalising run-down urban areas, and drawing investment into cities and regions that had been allowed to go to ruin. Investment zones have proved hugely successful in other places. Instead, they have been turned into just another venue for state-led subsidies. They were meant to be about giving entrepreneurs a chance to prove themselves, and allowing new ideas to flourish, without battling with taxes and red tape. It is a long way from what investment zones are meant to be. True, a few big companies might be hustled into putting some money into the zones, especially if they depend on big government contracts, and might need to call in some favours one day.īut most of that will simply be investment that is shifted from one part of the country to another, and even more will be completely wasted, either because it was never really viable in the first place, or because it was never meant to last beyond the press release. What do the zones actually get? It turns out that there is £80m of subsidies on offer, and perhaps a visit from the Levelling Up Secretary, Michael Gove, if you ask nicely and offer some free sandwiches. But one or two of them would have been good. It might have been too ambitious to expect the zones to include all of those tax and regulatory breaks, although it certainly would have been exciting. Tariffs could be reduced for imported components, and, perhaps most radically of all, regulations could be eased so that robotics, artificial intelligence or genetic engineering could be tried out without the restrictions that are placed on them in the rest of the world. Planning rules could be suspended so that new buildings could be put up for research or manufacturing without being held up in planning applications and judicial reviews for year after year. Employee National Insurance charges could be slashed, so that workers could be hired without having to pay huge taxes for each job created. Investment zones, a key part of the short-lived Truss government’s attempt to reboot the British economy, were meant to be low-tax, deregulated laboratories in ambitious entrepreneurship.Ĭapital gains taxes could be dramatically lower, for example, so that new businesses could be tried out. Take a look at the details, however, and the deal on offer is completely hopeless. To read some of the more excitable Treasury press releases, parts of the North, Wales and and Scotland are about to be turned into a cross between San Francisco and Singapore. Over the next few months, the Government plans to unveil a whole series of similar zones, each one specialising in a different sector or technology. It’s already secured more than £80m of private investment, including backing from Boeing, and will help support more than 8,000 jobs by 2030”.īoeing has already agreed to put some extra money into the zone, and it is planned that lots of high-tech manufacturing companies will follow. On Friday morning, Hunt announced that South Yorkshire had been chosen as the first of a planned series of investment zones.Īccording to the Chancellor “our first Investment Zone is a shining example of how we will drive growth across the country. In reality, if the zones are this lame, it would be better not to even bother – and to leave them for a genuinely radical government to try one day. But most of it will be wasted, or never even spent, while everyone else will quickly forget about it.Īnd an idea that has proved itself very successful in other countries will be completely wasted. Sure, perhaps a few big companies will be hustled into the zone with the promise of some free money. However, Chancellor Jeremy Hunt’s watered-down, tepid version of the concept is worse than useless. When South Yorkshire was chosen on Friday as the first of the Government’s new investment zones it should have been a big deal, the start of the exciting new chapter in British economic policy, with low taxes and deregulation transforming one of the most run-down parts of the UK. And the fireworks should have been ordered for the opening ceremony. The Prime Minister should have been putting on a hi-vis jacket for a photoshoot digging the ground for the first buildings. ![]() King Charles should have been clearing out his diary for the official launch.
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