Enterprise zones can provide a boost where it’s needed most

As I write this, we are two days from the Budget – with most politicians and commentators discussing two key elements to it – jobs and growth. In last month’s column, I talked about how localising business rates can help growth – and indeed the coalition has since launched a review into local government finance reform.

However, we must look at further mechanisms to enhancing growth and jobs at the local level, such as local enterprise zones. The chancellor has confirmed that the government is planning to introduce ten of these across the UK – with the specific places still to be determined. I have been pushing for one of these development zones to be introduced in the Black Country.

Many readers will of course remember the enterprise zones introduced during the 1980s which led to the successful regeneration of parts of the country, although the extent of these is sometimes contested. Indeed, Halesowen-based businessman Rob Weaver wrote on this website recently about some of the difficulties which resulted from the previous development zone around Dudley.

The next wave of development zones will benefit from expected measures such as simplified planning rules and lower levels of corporation tax. Councils are also likely to be able to keep high proportions of the business rates they raise in the zones.

The key issue is how these measures impact upon the neighbouring areas. Indeed, in respect to the previous development zone in Dudley, Mr Weaver notes the displacement of businesses from the surrounding area to the newly created Merry Hill Shopping Centre. Lessons can and have been learnt from examples such as this, and perhaps displacement presents the most compelling argument for larger development zones, for instance for the entire Black Country.

However, if the areas chosen to become development zones have high growth potential, then the opportunities which they present are substantial. Indeed, Canary Wharf was previously made a zone in 1982, and this played a key role in the substantial increase in the jobs in what is now one of the world’s foremost financial centres.

The Black Country presents a major opportunity for a successful enterprise zone, due to a number of features. Firstly, its proximity to Birmingham and its relatively strong transport links, which some attribute to the potential success for an enterprise zone. Secondly, the availability of developable land and premises – with estimates suggesting there are around 100 hectares suitable for transformation in Dudley alone. Finally, it is an area with a substantial number of SMEs, to which the coalition places a great importance on giving contracts to, allowing us to move away from an unbalanced economy.

Other places around the UK will of course exist with comparable attributes and they should also be provided with similar opportunities. Jobs and growth are rightly at the top of the agenda and enterprise zones can play a part in boosting the economies of areas of the country such as the Black Country.