Kwarteng to announce planning deregulation initiative on Friday

Kwasi Kwarteng is expected to announce plans on Friday for the creation of low-tax investment zones in which planning rules and other regulations would be eased to boost development.

The new Chancellor of the Exchequer is widely reported to be preparing to include plans for the new zones as part of a tax-cutting “mini-budget”.

According to The Guardian, planning regulations will be relaxed in up to 12 places earmarked investment zone status. The West Midlands, the Thames estuary, the Tees Valley, West Yorkshire and Norfolk are among the areas where the zones may be sited.

The Sunday Times reported that the areas awarded the new status will benefit from “a reduction in planning restrictions and environmental regulations”.

During her successful Conservative Party leadership campaign, Liz Truss pledged to “identify sites ripe for transformation across the country through lower taxes, reduced planning restrictions and red tape”. She said the move would create “new hubs for innovation and enterprise” in the spirit of Victorian model villages such as Bournville in Birmingham and Saltaire, in West Yorkshire.

According to reports at the time, the zones would have areas focused on commercial, residential or industrial development and a streamlined residential planning process on the periphery.

It is not clear what form the reduced planning regulation will take. The Levelling Up and Regeneration Bill is currently going through parliament, so the government could amend that rather than table fresh legislation to change planning law.

The Johnson government’s original plan to simplify the planning system, including areas which would benefit from automatic permission in principle, was watered down after concerns over a perceived lack of local input in decision-making was blamed for the Chesham & Amersham by-election loss in June 2021.

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The Treasury has been approached for comment.