During the Conservative Party’s spring conference last weekend, George Osborne said the government planned to reintroduce Enterprise Zones.
Whilst the creation of tax incentives and the relaxation of arduous planning regulations may encourage growth, many people have remarked that these zones had a patchy record in the 1980s.
Tom Hadley from the REC said this latest government initiative has a retro feel. The real test will be whether the latest generation of Enterprise Zones are more successful than their predecessors, and whether those seeking employment, such as umbrella company contractors, benefit.
If specific action is taken in regions where economic growth is lagging, it may enhance recruitment activity in those areas. However, for the project to be a success the government needs to learn from past experiences. It will also be necessary to monitor what happens to employers and recruiters in areas adjoining Enterprise Zones so make sure they are not suffering as a result.
Entrepreneurs and SMEs will welcome any initiatives, such as reducing the rates bill for businesses, if they help boost job creation. However Hadley points out that the business community is now impatient to see action instead of mere words from the government.
Meanwhile, entrepreneur William Chase has slammed the Enterprise Zone plan as a criminal waste of money. He was quick to point out that huge amounts of money were wasted on these Zones in Margaret Thatcher’s government and he sees no reason why they would work now when they failed to work then.
The Work Foundation seems to share Chase’s view. They have published a report claiming that 80% of jobs in an enterprise zone are displaced from elsewhere. The zones may bring prosperity to one area but it is always at the expense of another.
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