High-level plans for an Enhanced Investment Zone (EIZ), tailored to the economy of Northern Ireland, have been published today by the UK Government.
The Government recently announced it will support Northern Ireland to capitalise on its unique opportunities by providing £150 million to develop an Enhanced Investment Zone.
The EIZ prospectus, published today, provides more detail on this package and sets out that the funding will be able to be used flexibly across spending and tax levers.
Northern Ireland's EIZ has been presented to the Northern Ireland Executive as part of the £3.3bn financial package for restoration of devolved government and was announced in the Safeguarding the Union Command paper in January of this year and at Spring Budget.
The EIZ proposals were endorsed today at the first meeting of the new East-West Council established as part of the agreement earlier this year to restore devolved government in Northern Ireland.
Today's Council meeting took place in Dover House, London and was chaired by the Secretary of State for Levelling Up and Minister for Intergovernmental Relations (Michael Gove). The Secretary of State for Northern Ireland (Chris Heaton-Harris) and Minister of State for Northern Ireland and the Cabinet Office (Steve Baker), the Parliamentary Under Secretary of State for Levelling Up (Jacob Young), Northern Ireland's First Minister, Michelle O'Neill, deputy First Minister, Emma Little-Pengelly, the Minister for the Economy, Conor Murphy and Communities Minister, Gordon Lyons also attended.
The 2023 Spring Budget committed the UK Government to create at least one Investment Zone (IZ) in each of the Devolved Administrations. Since then, thirteen Investment Zones have been announced across the UK with the aim of promoting job creation and economic development around areas of innovative and sectoral strength.
Welcoming the publication of the EIZ prospectus for Northern Ireland, Michael Gove said:
"Investment Zones and Freeports have been at the heart of our Levelling Up plans for the United Kingdom. The restoration of devolved government in Northern Ireland means that we can now combine the benefits of these two initiatives in a specially tailored project designed for the economy of Northern Ireland. I look forward to working closely with Ministerial colleagues in the Northern Ireland Executive as we develop a proposal that will create jobs, trade and investment for Northern Ireland."
Conor Murphy MLA, Minister for the Economy said:
"The EIZ proposals represent an opportunity to harness existing innovation, research and industrial strengths across the north. We have a real opportunity to exploit the benefits of our talent and expertise here while also ensuring the unique dual market access enjoyed here is fully realised. I have outlined my preference that this initiative should support our green technologies and skills for a green economy. Done right, the transition to a greener and more sustainable economy can be a just transition that also generates prosperity for all. This sector will help drive forward my economic priorities of improved regional balance and productivity, good jobs and decarbonisation. I look forward to working with the British government and my Executive colleagues to develop an Investment Zone proposition that will use the available funding to deliver against these priorities."
As per the approach set out by UK Government for Investment Zones, the EIZ will focus on one of the Chancellor's five priority sectors - digital and technology; green industries; life sciences; advanced manufacturing; and creative industries. Last year a series of policy sprints were undertaken with the NI Civil Service on the potential sectoral focus, and this work identified clear opportunities with green industries.
The prospectus also makes clear that for initial policy development purposes, the entirety of Northern Ireland will be treated as the potential geographic scope for the Enhanced Investment Zone. The intention is to be guided by sector considerations first, then the place-based needs of the chosen sector, for example in terms of the availability of any tax incentives. This sector-led approach seeks to recognise governance structures in Northern Ireland. By choosing the sector first, it allows the Enhanced Investment Zone to be a tool of industrial policy - drawing on the capabilities and potential of a range of locations.
The IZ programme has been created on the principle of jointly developing proposals between a place and UKG. UKG and the Department for the Economy (DFE) - as the lead Department for EIZ development - will now work together to develop EIZ proposals based on the specific needs of Northern Ireland's economy, as above aligning with broader sectoral innovation and growth plans.
Notes
The £150m envelope will be able to be used flexibly between tax incentives and spend. All funding proposals, whether tax incentives or flexible spend, are subject to compliance with the relevant rules on subsidies and affordability, and recognising that Northern Ireland currently has a bespoke industrial derating relief that applies to all relevant businesses across Northern Ireland. The following tax reliefs could be available in any tax sites that are designated within the Enhanced Investment Zone. The tax reliefs are intended to help sectors and sites that have high potential but commercial viability issues.
Stamp Duty Land Tax
Enhanced Capital Allowance
Enhanced Structures and Buildings Allowance
Employer National Insurance Contributions relief
In addition to fiscal incentives, the flexible spend portion of the overall funding envelope could be used across a range of interventions, to attract investment and unlock barriers holding back the growth of the sector. Funding could be used for research and innovation, skills, local infrastructure, local enterprise and business support, and planning and development.
