13:18 21 new Enterprise Zones have been announced, with the first 10 in urban areas of highest need and potential. It will be important to review the detail but our understanding is that there will be one EZ per Local Enterprise Partnership and that local authorities in a LEP can retain business rates over 25 years. There will be investment in broadband, up to 100% relief on business rates and enhanced capital allowances in zones with a particular emphasis on manufacturing. The first ten are in Birmingham and Sollihull, Greater Manchester, Liverpool, Leeds, Tees Valley, Tyneside, Derbyshire, Nottinghamshire, Sheffield and London.
If these zones allow the quick introduction of Tax Increment Financing, then this is a good step as it will allow local authorities the ability to borrow to finance important investments for their economy, such as new transport infrastructure. It is also interesting that LEPs are being given teeth by focusing EZs on LEPs. The question will be whether these EZs have learned the lessons of the 1980s, where an emphasis on capital allowances did not generate the jobs that we are looking for in 2011 – see Centre for Cities’ recent report http://www.centreforcities.org/enterprisezones. A more detailed statement on this will follow shortly.
13:01 We welcome the changes to the planning regime that emphasise sustainable development, jobs and growth. Time limits on applications and the announcements on land use changes are welcome; it is also interesting to note that they will be piloting auction of land with planning permission.
In many cities, cumbersome planning regulations are identified as one of the barriers to firm growth and the creation of new jobs. However, as always the devil will be in the detail; will the changes be sufficient to overcome local concerns about development in some of the most buoyant areas in the country?
12:53 The Chancellor is emphasizing the importance of rebalancing growth in the UK, recognizing the importance of London but also the need for the rest of the country to grow its private sector economy. He flagged that the West Midlands lost private sector jobs in the boom years; Centre for Cities figures showed that Birmingham, for example, lost 60,000 private sector jobs between 1998 and 2008. Between 1998 and 2008 for every 1 net new private sector job created in the North and the Midlands, 10 were created in London and the South.
The Chancellor is right to recognise the importance of creating new private sector jobs in high value industries such as manufacturing, green industries, creative industries and life sciences – they will deliver productivity and some new jobs. But it will also be important to ensure that high growth firms in all sectors are supported across the country, as these firms created over half of all the new jobs between 2002 and 2008. High growth firms also performed strongly in the recession.