By Max Clarke
Chancellor George Osborne announced tghis morning plans for the reintroduction of the enterprise zones scheme pioneered by the Thatcher Government in order to boost the private sector recovery in economically depressed areas.
Commenting in favour of today's announcement are David Frost, Director General at the British Chambers of Commerce (BCC) and James Averdieck, the entrepreneur and founder of Gu desserts.
While the BCC and Mr. Averdieck have voiced support of the announcement, the proposals have also attracted significant criticism. Entrepreneur William Chase described them as a criminal waste of money', while the Work Foundation predicts few jobs will be created in depressed areas.
David Frost said: "The creation of Enterprise Zones marks a step in the right direction to boost private sector growth, but these zones must also create a stimulus for employment. We urge the Government to consider National Insurance rebates for firms creating new jobs in these areas.
"The BCC has pushed to revisit this concept for several years. While there are clear lessons to be learned from the first time round, the concept is still critical to reinventing the spirit of enterprise in many parts of the country. We must create areas where low planning and regulatory barriers, alongside well-targeted tax incentives or credits, will help boost growing firms and encourage inward investment.
“The Government should introduce these new Zones at the earliest possible opportunity and focus them in specific areas of the Midlands and the North with low levels of private-sector growth and entrepreneurial activity. We hope that this is the first stage in a more radical strategy to boost enterprise growth and job creation.
Also in favour is James Averdieck, the founder of Gü Desserts, and the first high-profile entrepreneur to support George Osborne’s plans:
“The headlines have been full of stories of spending cuts but it is essential that the Government supports business growth at the same time,” said Mr Averdieck, who has advised the treasury on the economy in the past.
“Companies will find it much easier to obtain planning permission within the enterprise zones which will mainly be in the Midlands and the North.”
“Continued growth in the economy is the only way Britain will emerge unscathed from the recession and I, for one, applaud the Chancellor’s initiative,” said Mr Averdieck.
"George Osborne was keen to emphasise that he had learnt from the less than successful employment of enterprise zones by the Thatcher Government. Under his proposals firms starting up in the new zones will benefit from reduced business rates as well as simpler planning rules. There will also be local incentives that are tailored to each individual location.