The chancellor will apparently announce in the forthcoming budget that new enterprise zones (EZ’s) will be established in ‘areas of England that have been hit hard by the economic downturn’ – mainly in parts of the Midlands and the North – The East Midlands benefited from a number of EZ’s after the demise of the mining industry in the last round – will we benefit again?
The idea behind enterprise zones is simple: cut taxes and strip back planning rules in small areas to attract new businesses and create new jobs. Thirty eight zones were established between 1981 and 1996 – the most famous was the Isle of Dogs in London’s docklands – now Canary Wharf. However locally we had a number, Sherwood Park probably being the best known.
The zones undoubtably did help – certain areas would just not have developed due to market forces alone – for example some of the zones in Mansfield, such as Crown Farm. And Sherwood Park is now a fantastic and highly successful office and industrial development.
There has over the years been some ‘think tank’ work done on Enterprise Zones which has suggested otherwise – but this centred on the South and the Docklands area and does not therefore in my opinion have much relevance to the Midlands and North (like much research by the Government).
The reduced business rates, simplified planning rules and less regulation is likely to cost the Treasury around £100m over the next four years – in the overall scheme of things not a great deal – lets just hope it is enough and that the East Midlands benefits again.