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Enterprise Zones

Volume 981: debated on Wednesday 26 March 1980

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Finally, I come to an idea—I knew that it would be widely welcomed—which is intended to pioneer a new, and more adventurous, approach to the whole question of industrial and commercial renewal. There are some parts of our economy, most notably in the older urban areas, where more and more public authority involvement seems to have led to less and less fruitful activity. The planning process has all too often allowed, even caused, whole areas at the heart of some of our most populous cities to be laid to waste for years, even decades.

Even when plans are finally made the public purse is often unable to provide the funds, or the enterprise, to match the planners' aspirations. And when private initiative might have been ready to stir, it has generally been stifled by rules and regulations and by a tax system which pays no regard to these special problems.

Some hon. Members may recall that in a speech made on the Isle of Dogs a little less than two years ago I put forward a proposal for trying to bring new life back to these areas of urban dereliction. The idea was not politically partisan, for my thinking had taken place in parallel with that of the distinguished Fabian, Professor Peter Hall. Quite independently, we had concluded that there was much to be said for the establishment in these man-made wilderness of what I have called enterprise zones. I am, therefore, pleased to announce today action by the Government which will transform into reality the idea which I then put forward.

We are proposing to establish, in the first instance, about half a dozen enterprise zones, with the intention that each of them should be developed with as much freedom as possible for those who work there to make profits and to create jobs. Each will cover perhaps 500 acres. Within these zones two major tax incentives will be available—first, 100 per cent. capital allowances for both industrial and commercial buildings; and secondly, complete relief from development land tax.

But fiscal concessions are only part of what is needed. These zones will, therefore, enjoy the following additional benefits—100 per cent. derating of industrial and commercial property; a drastically simplified planning scheme; exemption from the scope of industrial training boards—with consequent exemption from industrial training levies; accelerated handling of applications for warehousing free of Customs duty; minimal requests from Government for statistical information and abolition of the remaining industrial development certificate procedures.

I hope and believe that an imaginative experiment along these lines may succeed where conventional policies have proved inadequate. No one can doubt the need for change from present arrangements. In far too many of our towns and cities today, and for far too many businesses particularly small and new ones, the gap between a productive idea and a foreseeable profit has widened into a chasm of red tape. That red tape all too often stands between a young school leaver and the prospect of a job.

Even before this proposal had any official status there was no lack of interest in the idea. The Government will consult local authorities and other interests before decisions on individual areas are made. Fuller details will be found in the policy document which is being issued this evening. There could not be a better time for making a fresh start of this kind.