Low-tax investment zones that could be set up in the North East must lead to “genuine growth” and not damage workers’ rights, the North of Tyne mayor has warned.
Chancellor Kwasi Kwarteng announced on Friday that the Government was in talks with almost 40 authorities in England about creating zones where businesses could be given tax cuts and relaxed planning rules, as part of a huge raft of measures in his mini-budget. Both Sunderland and the North of Tyne Combined Authority, which covers Newcastle, North Tyneside, and Northumberland, were listed among the 38 locations “keen to be involved now”.
But the North of Tyne’s elected mayor, Jamie Driscoll, told the Local Democracy Reporting Service that he feared the zones could simply displace jobs from one area to another. The Labour metro mayor said: “This can’t bring in anything about reducing workers’ rights or environmental legislation. I would hope that nobody wants to see that.
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“It has also got to be about making sure there is more net investment coming in, not just moving jobs around from one place to another and setting up competition between different parts of the UK. There has to be genuine growth for existing companies and new investment, if you can do that then it will work.”
Mr Driscoll said the North of Tyne had not expressed a formal interest in becoming an investment zone, but had simply been asked if the authority would be interested in holding talks – as the mayor did on Friday afternoon with levelling up secretary Simon Clarke. Businesses based within investment zones would receive relief on stamp duty and business rates, and would be subject to “liberalised” planning regulations to “remove a significant barrier to economic growth”.
Newcastle Lib Dem councillor Greg Stone said he was “urgently seeking clarity” about the investment zone plan and claimed leaders could be “dipping a toe into what may be shark-infested waters” by joining up to the scheme. He added: “There may be a legitimate role for accelerated development zones such as Newcastle Helix, but I am very wary about the implications of using investment zones to allow ideologues to reintroduce wilder Government ideas such as Charter Cities or Freeports which would involve massive erosion of employment rights and environmental protections by profiteers.”
It had been reported in the i that the Government was poised to announce a ‘green super port’ for the North East, an idea that is known to be part of a £3bn devolution deal proposal for the region, though that was not mentioned by the Chancellor.
Teesside Airport, Middlesbrough and Hartlepool are also in line for investment zone status, which Tory Tees Valley mayor Ben Houchen claimed would be “gamechangers for Teesside, creating high-wage jobs, securing millions of pounds of investment, and rejuvenating town centres”.
The mini-budget also names a number of transport infrastructure projects that will be “accelerated as fast as possible” – including the refurbishment of the Tyne Bridge and Central Motorway, the long-awaited dualling of the A1 between Morpeth and Ellingham, the reopening of the Northumberland Line railway and upgrading the A66. The Growth Plan document states that such projects could be sped up via planning reforms and other consent processes, though it is unclear what measures would be taken with regard to the North East projects.
Construction work to restore passenger trains to the Northumberland Line is already under way and the services are due to begin in December 2023, while £40m of long-awaited funding for the Tyne Bridge was announced earlier this summer. Northumberland County Council leader Glen Sanderson welcomed the news, however, saying: “We are already in a great place with the Northumberland Line. Work has begun and this acceleration will mean we can push forward; providing new and improved transport links for local people and businesses and opening up new opportunities for education and travel.”
He added: “The A1 has been, for too long, a dangerous road in this area, claiming too many lives and causing injury to many, so I am pleased the spotlight has come back on improving it.”
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