SOUTHAMPTON has been named the potential home of a low-tax “investment zone” under the chancellor’s massive package of tax cuts and higher borrowing.

The government has also pledged to accelerate the replacement of the city’s Northam Rail Bridge in a bid to boost growth.

Southampton City Council was named as one of 38 authorities that are in discussions with the government about setting up investment zones, where businesses would face lower taxes and looser planning rules to encourage rapid development.

The Labour-controlled authority says it has been approached and is keen to understand how it could benefit.

Chancellor Kwasi Kwarteng, delivering his "mini-budget", told the House of Commons: “The time it takes to get consent for nationally significant projects is getting slower, not quicker, while our international competitors forge ahead. We have to end this.”

He added: “To support growth right across the country, we need to go further, with targeted action in local areas.”

The zones are designed to build on the freeports programme, which has already seen the Solent Freeport launched to offer lower taxes and less red tape to businesses based in its sites.

Investment zones would offer full business rates relief to firms in newly occupied and expanded premises. Councils would keep all the business rates growth above an agreed baseline for 25 years.

There would be full stamp duty land tax relief on land bought for commercial or residential development, along with zero employer National Insurance contributions on new employee earnings up to £50,270 a year.

The initiative came in a budget which cut taxes for earners and business, while controversially adding many billions to the UK’s deficit.

Cllr Sarah Bogle, Southampton City Council’s cabinet member for economic development, said: “We have been approached by the Department for Levelling Up, Housing & Communities (DLUHC) about investment zones, and have confirmed that we are keen to better understand how the city can benefit from the new initiative.

“Driving economic growth and securing employment opportunities for the people of Southampton is central to our aim of creating a city of opportunity, and we look forward to having more detailed discussions with DLUHC about how an investment zone can unlock the potential of our city.”

Peter Taylor, president of Hampshire Chamber, said: “We welcome the proposed designation of Southampton as an investment zone.

“It’s vital for businesses and local authority partners to work together on this to seize the opportunity that will come from the tax relief measures and the more liberal planning rules that will come into place.”

The government also announced 16 accelerated infrastructure projects in the south east, which it says will drive economic growth.

They include Northam Rail bridge, which is in line for a replacement that could be a dual carriageway link costing £60million-£70m.