Relaxed visa rules and tax incentives should be used to turn cities and towns with leading universities into “Accelerator Zones”, a new report says today.
The proposal is put forward by Conservative MPs Bim Afolami and Laura Trott in a briefing paper published by the Social Market Foundation – a cross-party think-tank. (See Note 1)
It says that UK university towns and cities need more support to attract investment, jobs and talent and help diffuse knowledge and innovation.
Afolami and Trott suggest the Government look to Cambridge – a world-leader in advanced technology and life sciences – as a model for economic growth.
Zones would be designated under a bidding process – similar to the Government’s Freeport policy – with MPs and local areas able to apply. All bids would be required to demonstrate how they would build a coalition of universities, business and local authorities.
The report says Accelerator Zones could be established by mid-2022 and would see:
- No cap on the number of skilled migrants coming into Accelerator Zones under the new “Global Talent” visa;
- Simplified planning laws to allow for new real estate and businesses;
- 0% Capital Gains Tax on investments in a Zone held for no less than seven years;
- A new Centre for Science and Policy in every Zone to help develop networks between academics, entrepreneurs, investors, and local Government – which can facilitate innovation.
Accelerator Zones would build on the Government’s Enterprise Zone Model and City Deals, Afolami and Trott say, but would be cheaper for the taxpayer and lead to a rapid increase in jobs and private investment.
Chosen areas would be able to draw in capital and investment through tax incentives, the paper says, with investors set to pay no capital gains tax after seven years in an Accelerator Zone. This would mean minimal impact on HM Treasury receipts in the short-medium term.
The proposals also call for a new Centre for Science and Policy to be established in every Zone, tasked with facilitating the exchange of ideas and knowledge between universities, businesses and local government. Academic research has frequently pointed to innovation diffusion as a key reason for Britain’s poor productivity growth in recent years.
All Accelerator Zones would be required to produce an independent report tracking progress and economic and employment growth – funded by HM Treasury at a cost of roughly £1 million.
Visa rules would also be relaxed in all Accelerator Zones with areas working with the Government’s new Office for Talent to attract skilled migrants into the Zone. Numbers would not be capped in the Zone under the new “Global Talent” route.
Business looking to take advantage of the new immigration rules would need to show how they are investing in local people and skills and that “a significant number” of additional jobs/apprenticeships are created relative to the number of visas requested.
Bim Afolami MP and Laura Trott MP, authors of the report, said:
“The worldwide success of Cambridge should provide the model for encouraging growth in university cities in the rest of the UK. By studying the key components of success in Cambridge, we have established a blueprint for how to do that. Accelerator Zones will allow for the right people, networks, funding and infrastructure to make that crucial link between world class research and economic growth.”
- The report, Accelerator Zones: how to turbocharge economic opportunity across the UK, is published by the Social Market Foundation, a non-partisan think-tank and charity. The views expressed are those of the authors and not necessarily those of the SMF.
- The paper will be formally launched as part of a virtual event hosted by the SMF on Monday 22 February at 17:00. Further details are available here.
- For an embargoed copy of the report please contact SMF Impact Officer, Linus Pardoe – 07402 576995, email@example.com