Recently, the two of us discussed the UK’s repeated failure to redress geographic inequality, despite numerous attempts by various governments. Our conversation could be summed up thus — why aren’t more places outside London like Cambridge?
A leader in advanced technology and life sciences, Cambridge has the largest centre of medical research and health science in Europe. It is a city driven by innovation, drawing in big science, technology and data firms. Cambridge’s patent applications per head are the highest in the UK, more than three times the second closest city, and this is translating directly into economic growth.
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.
Our proposal is to create a number of specialised “accelerator zones”. They would improve on the enterprise zone model and would be complementary to freeports. They would be areas that are outside of London, but which have a university within them. Accelerator zones would have four key benefits — no cap on visas, simplified planning laws, tax incentives and innovation networks.
One of the hallmarks of Cambridge’s success has been its ability to attract talent from around the world. So, if we want to replicate this, we must give businesses the freedom to hire highly skilled people with ease. Our proposed accelerator zones would allow highly qualified people to come and work in these designated areas of the country. We would do this by designating all skilled immigration coming into accelerator zones as under the newly launched “Global Talent” route, and their numbers would not be capped. We must make sure that this also creates more jobs locally, so there would need to be a clear plan to at least match the number of visas with additional jobs or apprenticeships in the local labour market.
The next step is to ensure investors have as much freedom as possible to build and renovate new premises and commercial property. The accelerator zone planning proposals would simplify planning, for example, through local development orders that grant automatic planning permission for certain types of development within specified areas.
In addition to freedoms on people and planning, we would add tax incentives. The tax incentive we have chosen is for investors to pay zero capital gains tax on their investments in accelerator zones after seven years. Much recent academic literature has centred on whether such investment into zones like these increases investment overall into the UK, or whether it simply displaces investment from one part of the UK to another part. Our argument is that the zero capital gains tax for longer-term investments is a significant benefit that is sufficiently large to attract international investment that otherwise would not have come to the UK, and help build long-term investment in the accelerator zone regions.
Lastly, we would add innovation networks. Recent academic literature, from figures such as Andrew Haldane, chief economist of the Bank of England, and others suggests that the diffusion of innovation, rather than just the innovation itself, is the largest long-term determinant of economic growth. This has been a hallmark of Cambridge’s success. So, in each accelerator zone we would set up a centre for science and policy, to help networks between academics, investors, and entrepreneurs. This will help facilitate and drive innovation.
Taken together we think that these proposals will help drive growth in our university cities, have minimal cost to the Exchequer, and help translate the brilliant research centres that we have into tangible jobs for local people.
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Written by Laura Trott, MP for Sevenoaks and Bim Afolami, MP for Hitchin and Harpenden
To view the article in full, please visit: https://www.thetimes.co.uk/article/cambridge-offers-a-model-for-boostin…
