Aberdeen is closing in on new “investment zone” status with tax breaks which could kick-start significant investment for the city.
The P&J understands the formal awards are likely to be announced this week, with Aberdeen the front-runner.
It would be seen by backers as a major win after the disappointment of losing out on special tax benefits through new freeport areas, which went to ports on the Cromarty and Forth instead.
The separate investment zone title is part of a UK Government policy to support global growth in digital, life sciences, creative and green industries, and advanced manufacturing.
Aberdeen and Grampian Chamber of Commerce said success would unlock £80 million of support over five years, based on the policies underway already in eight English regions.
Discussions on the finer points in Scotland are being held between governments at Holyrood and Westminster.
Two investment zones for Scotland
A source close to the discussion said talks had been constructive between the two administrations, revealing Aberdeen is likely to be successful.
Another source said Scotland will get two of the four zones being shared with Wales and Northern Ireland. Glasgow has been talked up as the second potential winner.
It’s understood discussions moved forward between governments who were present in Jersey for the regular British-Irish Council meetings.
UK “levelling up” minister Michael Gove, who grew up in Aberdeen, meanwhile held talks with Scottish deputy first minister Shona Robison on the policies recently.
Aberdeen lost out to the freeport announcements, exclusively revealed by the P&J last November.
Freeports come with tax and customs benefits, often spanning harbour and airport areas.
Liz Truss, when she was briefly prime minister, had come up with a second “investment zone” proposal on top of freeports.
The plan was refined under Rishi Sunak when he became prime minister.
Tax relief
Eight investment zones have already been created in England.
They give tax reliefs for stamp duty, which could mean breaks for the similar Land and Buildings Transaction Tax in Aberdeen.
Newly occupied business premises in the English zones get 100% business rates relief.
There are also benefits for capital allowance, taxable profits and National Insurance contributions.
Russell Borthwick, from Aberdeen and Grampian Chambers of Commerce, said: “We would warmly welcome any announcement that the Aberdeen region is to be given the opportunity to co-create, with UK and Scottish Governments, an investment zone.”
He added: “A key characteristic of investment zones is to form knowledge-intensive growth clusters with universities at their core. So Aberdeen is well placed to build on the success of our highly successful, innovation based City Region Deal which is viewed as an exemplar of its type in the UK.”
