Midland ‘Canary Wharf’ in pipeline?
THE West Midlands could get its own Canary Wharf, the chancellor said in plans designed to “super charge growth” in the region.
Jeremy Hunt confirmed twelve UK investment zones near universities will get £80 million each, over five years, if their applications are successful.
The low tax plans, first introduced by Liz Truss and Kwasi Kwarteng in their now infamous autumn “minibudget”, have been “scaled back” by Mr Hunt.
Eight zones will be in England, focused around universities and within combined authority regions, with four zones across Scotland, Wales and Northern Ireland.
Now running for five years, rather than Kwarteng’s proposed ten, the zones will provide a range of incentives like tax breaks, business rates retention, and investment in infrastructure and skills.
Mr Hunt explained: “To be chosen, each area must identify a location where they can offer a full and imaginative partnership between local governments and the university or research institutes in a way that catalyses new innovation clusters.”
Professor of Business Economics at the University of Birmingham, David Bailey, said he was not a fan of investment zones in general, but stressed there is not much detail to go on yet.
He said: “The evidence suggests that it tends to shift activity from one place to another. Where they can work is when you have a much more kind of holistic approach to putting that alongside infrastructure locally, skills, innovation support.
“Having it close to a university might be a better way to go, nevertheless I remain sceptical as to whether there could be long term benefits from it.”
On the Canary Wharf reference, he said: “The comparison isn’t very good anyway, Canary Wharf isn’t a university innovation investment zone. Canary Wharf was about developing parts of London and attracting the City to go there creating a concentration of financial services which didn’t necessarily benefit the neighbourhood right next to it.”
Chris Crean, of Friends of the Earth West Midlands, fears the zone would infringe further on precious green belt land.
He said: “HS2 is already trashing the Meriden Gap, a mostly rural area between Solihull and Coventry where the Arden Cross Interchange Station is under construction.
“If Arden Cross gets further support it will be a massive traffic generator in the green belt, hiding under the cover of the so called “interchange station” which is really a huge car park.”
He speculated as to whether tax relief and planning relaxation rules will just pull investment away from other areas.
Finally, he wanted to know if the companies which invest will be running low carbon businesses as part of a modern, green approach or not.
“Will people just chase the planning reforms and therefore abandon other places, so you’re just moving deck chairs around the Titanic? There’s some serious problems here and really, it’s just driven by a low tax agenda.”