Chancellor Jeremy Hunt says Liverpool will become one of 12 new investment zones and will get backing worth £80m. Tony McDonough reports
Liverpool is to become one of 12 new investment zones with each one backed to the tune of £80m.
In his Spring Statement to the House of Commons, Chancellor Jeremy Hunt said he wanted to “drive business investment and level up the country”. Each location must identify a suitable location for the zone.
Mr Hunt told MPs: “Liverpool docks and Canary Wharf transformed the lives of thousands of people and the 12 new investment zones aim to be 12 new Canary Wharfs.”
It is likely the Liverpool investment zone will focus on the city’s knowledge quarter and the emerging Paddington Village, which is already a growing hub for life sciences and digital innovation.
This announcement has been welcomed by Colin Sinclair, chief executive of Knowledge Quarter Liverpool. He said: “We very much hope that the new investment zones will be pivotal to raising aspirations, accelerating R&D and driving inclusive growth, creating skilled jobs for the people of the city, the region and beyond.
“In KQ Liverpool, and at nearby Daresbury, Liverpool city region has world-leading clusters in health and life sciences, (including infection prevention and treatment, civic data and mental health), materials chemistry and advanced manufacturing technologies.
“The funding and powers that investment zones could bring would give the opportunity to better leverage these existing strengths to supercharge economic growth across the city region.”
And Dr Natalie Kenny, chief executive of Liverpool-based laboratory firm BioGrad. She told LBN: “Life sciences, tech and manufacturing are three sectors that hold the key to the UK’s economic recovery and growth.
“Using the infrastructure and the expertise of our universities, I have no doubt that £1bn of Government funding, £80m of which is for our city region, will help us ‘level up’ further, as we continue to work towards turning Liverpool into a science superpower.”
In the Spring Statement Mr Hunt also said he wanted to create “the most pro-business, pro-enterprise tax regime anywhere”. However, he added the planned increase in corporation tax – from 19% to 25% – will still go ahead in April.
He also announced a new policy of “full capital expensing”. In place for at least the next three years, this £9bn policy will allow businesses to write off all investment against their tax bills.
The Office for Budget Responsibility (OBR) estimates this will boost business tax revenues by 3% a year.
Sean Keyes, managing director of Liverpool civil engineering firm Sutcliffe, added: “To see the Liverpool city region benefit from extra funding, through the new tech hubs that will be formed at universities’, will not only create jobs and up-skill, but also boost engineering, manufacturing, life sciences and creative industries.”
There will also be a new enhanced credit for research-intensive businesses. This will be worth £27 for every £100 a company invests.
A new ‘Returnerships’ apprenticeship targeted at the over 50s will refine existing skills programmes to make them more accessible to older workers.
And Mr Hunt is offering “draught relief” for pubs. It means the duty paid in pubs will be lower than elsewhere. There is also a £1m a year prize on offer for the next 10 years for the most innovative research in AI.
The OBR expects the Chancellor will meet his fiscal rule of keeping public sector net borrowing below 3% of GDP, with £39.2bn to spare, by the end of the forecast.
Public sector net debt was previously expected to peak at 97.6% of GDP in 2025-26, falling to 97.3% two years later. It is now expected to hit a lower peak of 97.3%, falling to 94.6% by 2027-28.
Liverpool City Region Metro Mayor Steve Rotheram said the statement lacked “fresh thinking” and was “largely a rehashing of ideas we’ve already heard before”.
He posted on Twitter: “While the trailblazer devolution deals are undeniably a step in the right direction – I want guarantees that our region will be next in line to receive these additional powers and unlock more growth for our economy.
“It’s important to recognise that none of these funding pots would be available to areas like ours before devolution – and we’ll continue to work hard to wrestle more money and powers from central government to allow us to continue to chart our own path.
“The Chancellor’s plans to launch another round of the Levelling Up Fund should be welcome news for areas across the North. Yet, if the last round is any indication of what’s to come, it simply cannot be allowed to become another beauty contest.
“If Jeremy Hunt is as committed as he claims to be about solving the country’s productivity challenge, I’d suggest he starts by ending the begging bowl culture that means LAs across the country are forced to waste time and staff resources bidding for these funding pots.”
Paul Cherpeau, chief executive of Liverpool Chamber, said: “Businesses wanted to see a Budget that would deliver greater clarity and a more stable economic environment to help them move ahead with their future plans and boost long-term growth.
“Elements of today’s announcement will be most welcome, but unfortunately it leaves many concerns unresolved.
“Positive forecasts around the reduced likelihood of a recession and a significant drop in inflation are clearly welcome. However, to maintain that position, businesses must have the capacity to find fresh opportunities to create sustainable growth.
“A new investment zone could have a significant impact on the local economy and allow Liverpool to expand its status as a science and technology powerhouse, boosted further by improved investment credits for creative and life sciences firms.”
Andy Delaney, director and head of the Liverpool office of property regeneration consultants AspinallVerdi, said: “We welcome the £500m-plus investment announced for regeneration and levelling up projects.
“The potential of 12 Investment Zones funded by £80m each over the next five years including those for Liverpool and Greater Manchester and focused on key industries and universities is a proven formula for success.
“We’ve worked on multiple investments from both the private and public sector throughout the North West. As always the devil is in the detail, but it is imperative that the government now starts delivering on-the-ground.”
Bill Addy, chief executive of Liverpool BID Company welcomed the news about the investment zone but added that “we have yet to see the small print”.
“We have questions to ask that will help ensure it positively impacts on the city and its economy,” he said. “Investment needs to be place led, not sector led and it must build on the strengths of the city centre economy.
“Bold and imaginative partnerships need to include businesses who develop and deliver on so many of our economic objectives.
“It is critical that we do not pit sector against sector but instead look at an investment strategy that benefits the whole ecosystem, not simply a corner of it.
“We need to ensure real benefits are felt by those who are already investing in the area, business taxes, rates retention as well as skills and regeneration should all be ingredients in any local plan.”