A recent report by Make UK and Barclays Corporate Banking highlights the potential benefits of Investment Zones for Britain’s manufacturing sector. The report indicates strong support from manufacturers for the Chancellor’s decision to extend the fiscal benefits of Investment Zones from five to ten years, making the scheme more attractive for UK companies.
Key findings from the report include:
Awareness and Definition: Only two-thirds of businesses are currently aware of the policy and tax benefits of Investment Zones, while a quarter of businesses are unclear whether they meet the definition of advanced manufacturing, a key focus sector for the zones.
Promotion and Targeting: Policymakers are urged to promote the incentives of Investment Zones more widely, especially in areas focused on levelling up. Green and technology companies, in particular, may benefit from increased awareness of the scheme.
Size and Awareness: Smaller businesses show lower awareness of Investment Zones compared to medium and large firms, highlighting the need for targeted awareness campaigns to reach a broader range of businesses.
Benefits and Incentives: Investment Zones offer various benefits, including Stamp Duty Land Tax relief, Business Rates relief, Enhanced Capital Allowances, and grants for Research and Innovation. Seven out of ten manufacturers would invest more in plant and machinery if they received business rates relief.
Extension and Relocation: The extension of Investment Zones to ten years is seen as a more attractive proposition by two-thirds of companies. Half of the sector believes that relocation funding would increase participation in the scheme.
Preferred Sectors: Beyond advanced manufacturing, digital and green industries are considered the most appropriate sectors for Investment Zones, with 68% suggesting digital and 59% indicating green companies.
Stephen Phipson, CEO of Make UK, emphasizes the need for Investment Zones to be part of a long-term Industrial Strategy to ensure maximum benefit for the sector. Lee Collinson, head of manufacturing at Barclays Corporate Banking, stresses the importance of raising awareness and ensuring that manufacturers understand the key benefits of Investment Zones.
The report underscores the potential of Investment Zones to support growth in economic output and employment across the manufacturing sector, highlighting the role of policymakers and industry collaboration in maximizing these benefits.