Tax benefits

Investment Zone status for Glasgow and Aberdeen

Sir Ian Wood on Question Time
Sir Ian Wood: significant boost

Glasgow City Region and North East of Scotland will each receive £80 million in tax incentives and other support after being chosen as Scotland’s Investment Zones.

Focused around research institutions such as universities, they will focus on driving growth in priority sectors including technology, the creative industries, life sciences, advanced manufacturing and the green sector.

The two Scottish regions are the first Investment Zones outside England and Levelling Up Secretary Michael Gove remarked on the “constructive approach” the First Minister and Deputy First Minister of Scotland had shown in the meetings with him in recent weeks.

However, the designation of the two areas will be seen as compensation for losing out to Cromarty Firth and Forth when the two green freeports were announced. The decision caused particular anger in the north east amid moves to wind down the oil and gas industry.

Mr Gove said: “We all have a shared ambition to work together to see all parts of Scotland thrive and today’s agreement builds on our successful rollout of Green Freeports in Scotland earlier this year.

“Both Aberdeen and Glasgow, and their surrounding areas, have been at the very heart of the UK’s economic success for generations. Shipbuilding on the Clyde. Oil and gas exploration in the North Sea and a leader in the renewable sector.

“Both responsible for exporting some of the world’s finest food and drink around the globe. Both playing home to some of the biggest financial service companies we have. We want to build on this proud present and past so that Aberdeen and Glasgow continue to make a massive contribution to the UK economy.”

Each zone will each benefit from an overall funding envelope of £80 million over a five-year period, while making the most of both reserved and devolved policies as is the case with Green Freeports.

The locations of Glasgow City Region and North East of Scotland have been selected jointly by the UK Government and Scottish Government based on their research strengths, an assessment of economic need and potential, and a consideration of geographic spread.

Regional leaders, businesses and universities will take the lead in shaping regional plans, to ensure Investment Zones draw on the entrepreneurial spirit and wealth of research talent that exists across Scotland.  Discussions will now begin with both regions to develop detailed proposals.

Scottish Secretary Alister Jack said: “This is exciting news for Glasgow and Aberdeen – the establishment of two Investment Zones in these areas will enhance their existing strengths, helping to attract investment, grow our economy and create jobs in priority sectors. This will build upon the great progress already being seen with the Freeports we announced earlier this year in Inverness and Cromarty Firth and the Firth of Forth.

Alister Jack at SAC hearing
Alister Jack: governments working together

“We have worked closely with the Scottish Government throughout, which shows again what can be achieved when Scotland’s two governments work together to promote a fair spread of opportunities across Scotland. The UK Government is focussed on levelling-up throughout the UK which includes investing more than £2.2 billion in projects in Scotland.”

The delivery of investment zones will build on the joint UK and Scottish government agreement for two Green Freeports in Inverness and Cromarty Firth and Firth of Forth, to create jobs, drive growth and level up the country.

Backed by up to £52 million in UK Government funding, the freeports are expected to bring forward an estimated £10.8 billion of private and public investment and create over 75,000 new, high-skilled jobs.

Liz Cameron, director & chief executive at Scottish Chambers of Commerce, said: “This is excellent news for Scotland and a substantial investment for the North-East and Glasgow regions.

Liz Cameron
Liz Cameron: galvanising key sectors (pic: Terry Murden)

“Both regions – with Chambers at the heart of delivery – are well geared up to deliver significant business and economic benefits through this joint investment by the UK and Scottish Government.

“These investment zones will help galvanise the key sectors in these regions to innovate, attract investment and create high-quality jobs.”

Oil industry veteran Sir Ian Wood said: “The awarding of an investment zone to the North East of Scotland is a significant boost to our region and we are grateful to both the Scottish and UK Governments for recognising the need to support us as we continue to transform our Regional economy. 

“Through the City-Region Deal we have a proven track record of working in partnership with government, local authorities and our world-class Universities to deliver transformational projects that aligns with our clear economic strengths to accelerate the diversification of key sectors across energy, food and drink, life sciences, digital and tourism. 

“It is important to move forward at pace so we have established an Investment Zone Steering Group, aligned with our recognised Regional Economic Partnership, to build on this work and identify the sectors and locations that will benefit from the incentives allowing us to secure sustainable economic growth and job creation whilst supporting a managed and just transition.

“Our reputation as an innovative and productive region is both hard won and well deserved, and today’s announcement will help secure our position as one of most attractive locations anywhere in the UK, and indeed Europe, for investment in low carbon technologies across different sectors.”

Glasgow Chamber of Commerce chief executive, Stuart Patrick, said: “Today’s announcement brings welcome investment that will secure growth opportunities for blossoming businesses in Glasgow.

“The city is the third-top tech destination outside London and this decision not only recognises this well-deserved accolade, but equally backs the potential of our three innovation districts in engineering, life sciences and advanced manufacturing.

“These are some of the brightest spots on the horizon for the city’s economy, alongside the research commercialisation work of our universities and colleges.

“After the disappointment of the freeports decision, we have been actively lobbying for support to help the city’s economy recover so we are extremely pleased to see fresh money and targeted tax incentives to help further cement Glasgow’s status as an emerging tech hub.”

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