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North-east £80m investment zone win hailed as ‘milestone’ for region

Business leaders reacted after we revealed Aberdeen-based bid had won backing with tax-breaks.

Levelling Up Secretary Michael Gove.
Michael Gove confirmed Aberdeen's success. Image: Duncan Bryceland/Shutterstock

A major investment package worth £80 million for the north-east over five years has been hailed as a significant boost and vote of confidence for the region.

UK Government minister Michael Gove confirmed the Aberdeen bid was a success two days after the Press & Journal revealed the city was on course for a win.

Glasgow was also awarded “investment zone” status while Dundee lost out.

Aberdeen businessman Sir Ian Wood said the city has to now capitalise on the benefits.

“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,” he said.

“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.”

First Minister Humza Yousaf with Sir Ian Wood at an earlier meeting in Aberdeen. Image: Kami Thomson/DC Thomson

What are investment zones?

Investment zones are part of the UK Government’s “levelling up” plan to target regions of the country for development and support in jobs and skills.

Tax incentives could include reduced Land and Buildings Transaction Tax, business rates relief, capital allowance and National Insurance contributions.

Investment zones were scored by governments but also discussed more generally by administrations before decisions were made.

They are not to be confused with Freeports, which offer wider customs and tax incentives.

READ MORE: Inside the doomed freeport bid

The north-east business community was furious when Aberdeen and Peterhead’s bid for freeport status was rejected in favour Cromarty and Forth ports last year.

Details will follow in discussions now the region’s have been selected.

‘Vote of confidence’

Aberdeen and Grampian Chamber of Commerce Chief Executive Russell Borthwick said: “This is a significant vote of confidence in the future of our region, signalling that the north-east is very much open for business, with an exciting future ahead.

“Aberdeen and Grampian has led the world in key sectors of strength such as energy and food and drink over many years.

“Today’s announcement allows us to drive inward investment, encourage new innovation and inject pace as we diversify and grow our regional economy further still.”

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Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce.

He hopes to replicate success in schemes such as the city-region deal.

“From £250 million, it has created £1 billion of investment to date, with several projects already realised and making a real different to our economy,” he added.

‘Historic milestone’

Confirming Aberdeen’s success, Mr Gove, who grew up in the city, said: “This is an historic milestone as we widen the opportunity and ambition of the investment zone programme to grow the economy across the whole of the United Kingdom.

“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.”

Scottish Government minister Neil Gray said: “A rigorous process has been followed in selecting Glasgow city region and the north-east and we look forward to working in partnership with them to create high quality jobs and ensure that fair work practices, including payment of the real Living Wage, are embedded in the Investment Zones from the outset.”