I would like to inform the House that the Chancellor is not with us today because he is at the G7 in Japan.
The refocused investment zones programme will grow the UK economy and bring investment to areas that have traditionally underperformed economically. The programme will catalyse 12 high-potential, knowledge-intensive growth clusters across the UK, including four across Scotland, Wales and Northern Ireland, in our key future sectors.
I warmly welcome the Government’s announcement that the Tees valley will be the location of one of their new investment zones, and this £80 million investment will unlock new opportunities for my region. Does my right hon. Friend agree that this is further evidence of levelling up for Darlington and the Tees valley? Can he outline a timescale for when we will see things start to happen?
The Tees Valley investment zone will boost productivity and drive sectoral growth while providing benefits for the local communities that my hon. Friend represents. The Government want to make rapid progress on delivering investment zones. We are engaging with partners to ensure that we can support those with the ambition to move at speed, and we intend to have all proposals agreed by the end of the financial year, and sooner if at all possible.
Business investment and wealth creation will clearly be central if we are to rebalance the economy and close the gap between less successful and more prosperous areas. Would the Minister therefore agree that prioritising investment zones in areas that need a helping hand is the right course of action? And does he envisage an investment zone in the borderlands area in the near future?
My hon. Friend is tireless in his advocacy for his constituents. The areas of England that are eligible to host an investment zone were identified through a rigorous analytical assessment that reviewed every place in England and shortlisted based on their strengths in innovation, productivity, potential and levelling up need, as well as the strength of local leadership, knowledge assets and sectoral strengths.
The borderlands area is already benefiting from the £452 million borderlands growth deal, which was signed just two years ago and aims to create 5,500 jobs. My hon. Friend is also familiar with the recent £134 million investment signed off through the housing infrastructure fund, leading to 10,325 homes in St Cuthbert’s garden village.
The Minister mentioned the four investment zones, including one for Northern Ireland, in his opening answer. Of course I make a plea for my constituency, as everyone will. What discussions has he had with the Department of Finance back home about a potential investment zone in Strangford, to ensure that people in my constituency can have the same opportunities as people across the United Kingdom?
I think the whole House will agree that the hon. Gentleman must be the most effective advocate for his constituents. We will see what happens. There will be a rigorous process, including wide consultation, and we expect to have an outcome that benefits his constituents and people across Northern Ireland.
The incentives offered by investment zones include 100% business rates relief and enhanced capital allowances. With the exception of reduced national insurance contributions, it is hard to see the difference between an investment zone and an enterprise zone. What additional fiscal support are the Government providing to differentiate these investment zones from enterprise zones?
The key distinction is that we have identified areas that have clusters, often relating to a university, and that have potential in a key sector. The investment zones will be worth £80 million over five years, and we are obviously working very closely with partners. It is difficult to be precise about the numbers, because there will be bespoke collaborations depending on which sectors are involved.
I thank the Minister for his answer but, of course, enterprise zones and, indeed, their near cousin, the freeport, also spoke about clusters in the same kind of language. What steps are the Government taking to ensure that investment zones do not suffer from the same problem as enterprise zones and freeports, which was a woeful failure to deliver the number of permanent, good-quality jobs that was initially promised?
That is a legitimate concern to raise and it is why we have followed the analytical approach to which I referred. We will be working closely with the Department for Levelling Up, Housing and Communities to look at each proposal by the end of the year. We will be having that certainty on the tax incentives over those five years and making local authorities an accountable body for the delivery of this. The right hon. Gentleman’s whole political doctrine is about the distinctions that exist in different communities around the United Kingdom, and that is why we have a variety of interventions designed to make an effective impact in different places across the UK.