Two Whitehall officials said the leveling secretary, Michael Gove, had pushed hard to remove the zones in favor of a renewed urban regeneration policy. Although no final decisions have been made and the zones could alternatively be dramatically reduced by Hunt, government officials said the chancellor was expected to kill what had been a pet Truss plan. The former prime minister wanted up to 200 investment zones as part of her promise to boost growth by incentivizing companies to set up operations in low-tax areas. The proposed zones will include tax relief, including holidays for business rates and employers’ national insurance contributions for young workers earning less than £50,000 a year. During Truss’s premiership, the Treasury estimated that the zones could cost “up to £12 billion” in lost tax revenue each year – unless a hard cap is put in place – because they would subsidize economic activity that would it was happening anyway. The zones will also include streamlined planning consents and reduced environmental controls, which have sparked strong opposition from conservation groups. As chancellor, Rishi Sunak had pursued a program of low-tax ‘freeports’ to help ‘lift’ areas left behind and narrow regional disparities, and these bore similarities to the Truss investment zones. Officials said Hunt put the investment zone program under review ahead of the November 17 autumn statement. Local authorities last month made initial bids to host the zones after deadlines were set at short notice. “Everyone is so screwed,” said a consultant who advises local authorities bidding to flatten the government’s funds. “They were led up the hill into something they didn’t want to do and didn’t believe.” Gove, the long-time architect of Boris Johnson’s flattening agenda who was brought back into government by the current prime minister, told the BBC last month that the Truss investment zones had “caused some concern”. “It’s one thing that we’re going to look at them, we’re going to look at them, but there’s no way we’re going to undermine the protection of our environment,” he said. Whitehall insiders said Gove had told Downing Street that the Trust’s investment zones would have to be “blocked” and that officials in the flattening department had “down-tooled” on the policy. They added that in place of the belts, Gove promoted plans for a series of “transformational” housing-based urban regeneration projects across the country. A government insider of Gove’s thinking said he favored an interventionist approach – whereby housing agency Homes England would have a “more activist” role to kick-start the regeneration by buying and clearing land for development. Such a move can be combined with mayoral development companies acting as regeneration agencies in certain areas. Recommended The Treasury declined to comment. The leveling department said: “All spending decisions will be considered in the autumn statement round.” Andrew Carter, head of the Center for Cities think tank, said he expected the Treasury to look to rebalance investment zones away from tax incentives and towards planning relaxations. “The Ministry of Finance is willing to design the reform as a means to achieve growth, but not remotely for tax credits,” he added.
