Government must learn lessons from past investment zones

New Investment Zones and Freeports in West Midlands, East Midlands and Greater Manchester

The announced investment zones and Freeports in the Autumn Statement 2023 are good on paper and could promote positive investment to ‘level-up’ neglected areas of Britain, but clearer guidance is needed for how SMEs can enter these zones.

The news surrounding investment zones should certainly be seen as a positive. If successful, they may act as an incentive to stimulate business towards less affluent areas of the country. This would open up opportunities for skilled workers who are currently denied opportunities as they fall outside of a geographical area.

Combined with Freeports, these new investment zones will allow businesses to locate their trade within key, tax efficient areas, significantly expanding their reach. In the current economic climate, any scheme which drives employment and local opportunities can only be seen as positive step towards stimulating the economy and levelling-up Britain’s neglected regions.

What are the risks with Investment Zones?

However, there are risks that must be considered. Previous experience has shown that the cost to enter these zones, combined with the complexity and lack of awareness to the rules, has been a barrier to small and medium enterprises (SMEs).

The requirement to relocate entire workforces into a condensed area, where property developers have been quick to see opportunity, has repelled many local businesses. They very much see these zones as a ‘perk’ to the larger blue-chip organisations who have the resources to research and exploit these schemes to their fullest. The least the government can do now is to give SMEs clear guidance into the best way to enter these zones and gain the benefits they offer.