As we approach one year since Investment Zones were first announced by then-chancellor Kwasi Kwarteng in the Autumn ‘mini-budget’, mid-market business leaders in Wales are encouraged by the blueprint for what it could mean for the selected regions. 

Grant Thornton’s latest Business Outlook Tracker* survey revealed that Welsh businesses can see advantages to local areas from the introduction of Investment Zones. A significant number of respondents agreed that being located within one of the Zones would be beneficial to local businesses (70%) and support the local region with benefits such as job creation and skills development (64%).

Investment Zones provide several financial incentives to businesses in the area and a clear majority (62%) of Welsh business leaders believe these incentives, such as Stamp Duty Land Tax relief and 100% Business Rates relief, have been focused on the right areas to encourage investment.

In addition, 62% said that the introduction of Investment Zones will help towards the government’s Levelling Up agenda. More than three quarters (78%) also believe that being situated within an Investment Zone would encourage businesses to stay in the local area.

Currently, eight of the 12 proposed Investment Zones will be in England with at least one of the remaining four in each of Scotland, Wales and Northern Ireland. The survey revealed that business leaders in Wales believe that the twelve proposed locations are not completely adequate, with 72% believing that there should be more Investment Zones located in other areas in the UK.

Nearly three quarters of business leaders in Wales (72%) said that they understood what the Government’s Investment Zone policy was trying to achieve, higher than the 66% national average.

The high regard for Investment Zones within the Welsh business community aligns with the fact that businesses have growing optimism about their revenue (76%) as well as the UK economy (74%) over the next six months.

Alistair Wardell, partner at Grant Thornton UK LLP and head of its restructuring team in the South of England and Wales, said:

“From our latest tracker, it is clear that business leaders in Wales can envisage the benefits an Investment Zone will have for the region, which will hopefully help drive long term investment and economic growth while increasing opportunities for all who are located here. While the precise location of the Welsh Investment Zone is yet to be announced, there are many innovation hotspots that would be able to really capitalise on the advantages of being located within one.

“It seems that the current market landscape and announced support schemes are making businesses feel more optimistic about the future, with the survey finding high levels of optimism regarding business revenues and funding for the rest of 2023. This illustrates the dynamic, entrepreneurial outlook of Welsh businesses, who are eager to move forward following a period of economic and political uncertainty.”