The British Chambers of Commerce (BCC) has backed the government’s Enterprise Zones, saying the initiative will be ‘critical’ to boosting regional growth.
The British Chambers of Commerce (BCC) has backed the government’s Enterprise Zones, saying the initiative will be ‘critical’ to boosting regional growth.
The Boots campus in Nottingham, Liverpool Waters, Manchester Airport and the Royal Docks in London have been identified as the first four locations for new Enterprise Zones, which were announced in the Budget yesterday by Chancellor George Osborne.
The government aims to create 21 zones that will offer simplified planning rules, super-fast broadband and tax breaks for businesses. The zones will be established in local enterprise partnerships already in operation across England.
Eleven regions have already been identified. In addition to those announced today, they are Birmingham and Solihull, Sheffield, Leeds, the Bristol area, the Black Country, Teesside and the North East. A further ten locations will be announced in July following a competition to find suitable sites.
BCC director general David Frost comments, ‘The role of Local Enterprise Partnerships in designating and running Enterprise Zones will ensure that local business leaders are at the heart of the new policy. Beyond upfront incentives, the reinvestment of business rates locally is critical to boosting regional growth.’
Business secretary Vince Cable says, ‘We will work closely with local enterprise partnerships to identify new ways we can support them on developing the Zones, especially on issues like enhanced capital allowances and securing inward investment.’
Nigel Barker, private client services partner at Deloitte says zones clearly help the businesses that invest in them because of the entitlement to business rate discounts and the scope for enhanced capital allowances. He adds, ‘Enterprise Zones have in the past also been seen as tax efficient investments for high net worth individuals, so it will be interesting to see how all this interacts.’
Partner and head of tax at law firm Howard Kennedy, Stuart Long, observes that previous Zones have not all performed equally well. He points to two former sites, Canary Wharf, which is seen as a success, and Hartlepool, which has been described as a challenge.
He continues, ‘With some mixed success in the past, it is to be hoped that capital allowance breaks will encourage businesses to accelerate their capital spending programmes and create jobs, as the government will need to watch that jobs don’t simply move from one part of the UK to another, with no job creation.’
