Thatcher’s Enterprise Zones to Make a Comeback?
Enterprise zones, introduced by Margaret Thatcher’s Conservative Government back in 1979, could be making a comeback if reports of their revival are true.
According to the London Evening Standard Chancellor George Osborne and Business Secretary Vince Cable are discussing the merits of bringing back Thatcher-style enterprise zones in order to boost the economy.
Firms that work in enterprise zones to create jobs could be incentivised by tax breaks, making business more appealling in areas where there is the greatest need. In the past areas such as Corby in the East Midlands and Tyneside have benefited greatly from the influx of job creation opportunities from firms encouraged to establish factories and offices. (For a full rundown see the HMC’s List of enterprise zones.)
London Docklands’ Isle of Dogs is a prime example of how business has flourished under the scheme, when in 1982 the setting up of an enterprise zone meant businesses were exempt from property taxes and complied with much simplified planning rules and capital allowances. The then mostly derelict area of East London, particularly Canary Wharf, grew into an internationally important "financial powerhouse".
The idea for revival comes as The Chancellor of the Exchequor plans his "Budget for Growth" in March this year, hoping to boost growth in startup businesses and incentivise the private sector to invest in expansion. The Prime Minister, David Cameron, has echoed these thoughts with a bullish address at the Davos World Economic Forum Annual Meeting 2011, saying that small businesses are the "engines of job creation" and should be given "an exemption from big new regulations". He was speaking of SMEs in Europe as a whole but this is particularly significat to UK small businesses.
After the week’s "shock" figures that the UK’s growth fell into negative figures in Q4 of last year, there needs to be a positive outlook on the home economic front, particularly as budgets are cut and the public sector is reduced. If there can be an economic stumulus and a boost to startupos and small businesses then roll on the enterprise zones.