A leading Sunday newspaper has reported that Michael Gove’s Levelling Up Department may be set to scrap or scale back the low-tax deregulatory investment zones including Sherford and Langage within the Plymouth and South Devon Freeport.

South Hams District Council had submitted an expression of interest for the scheme.

According to the Deputy Political Editor of the Sunday Times Harry Yorke, the zones could cost the Treasury up to £12bn in lost tax.

The policy was one by previous Prime Minister Liz Truss.

Several options have reportedly been presented to the Secretary of State including reducing the tax and regulatory perks in the zones or finding a way to incorporate them into the 20 regeneration zones set out in this year’s Levelling Up White Paper.

Speaking to Sophie Ridge on Sky News, Michael Gove confirmed investment zones are being reviewed but under no circumstances will environmental protections be weakened. He continued by saying all spending decisions will be considered in the round by the PM and Chancellor at the Autumn Statement on November 17.

South Hams District Council had submitted an expression of interest for the scheme.

A Spokesperson for the council said: “We can’t speak on behalf of the Secretary of State and his decisions. However, we are watching the future policy decisions with interest.”