'Game changing' plan to turn Hartlepool into tax-friendly investment zone is ditched by the Government

Expressions of interest were only recently submitted by Mayor Ben Houchen’s Tees Valley Combined Authority to site the proposed zones in both Hartlepool and Middlesbrough as part of new mayoral development corporations.

But in some of the detail which followed Chancellor Jeremy Hunt’s autumn statement, the Government said it would “refocus” and would not be taking expressions of interest forward.

It said instead “highest potential knowledge intensive growth clusters” were being considered – likely to mean tie-ups with local universities – with no mention of potential tax-cutting incentives intended to lure in business.

The investment zones, announced by ex-Chancellor Kwasi Kwarteng during Liz Truss’s ill-fated spell as Prime Minister, promised to divert half of all business rates paid that currently go to the Government and retain them locally to reinvest in economic-boosting projects.

Businesses would also be able to claim 100% rates relief on newly occupied and expanded premises, full stamp duty land tax relief on land bought for commercial or residential development and a zero rate for employer National Insurance contributions on new employee earnings up to £50,270 per year.

Mr Houchen had previously described the zones as “game changers for Teesside” and bringing “jobs, jobs jobs”.

The Department for Levelling Up, Housing and Communities said it would work closely with mayors, devolved administrations, local councils, businesses and other partners to consider how best to identify and support the growth clusters.

Meanwhile, the Conservative metro mayor made no mention of the shelved plans in a statement, but promised “lots of regeneration and investment” thanks to the new mayoral development corporations that are being set up.

He said: “I’ll continue to bang the drum for our region and work with central Government to get the further powers and funding that our region needs and deserves.”

Otherwise, Mr Houchen said the Chancellor’s statement was a “mixed bag” and described the significant cuts in spending laid out as the Government trying to get spending under control and restore some financial credibility.