Osborne: we've got a plan for growth as well as cuts

By Andrew Grice
Saturday 05 March 2011 01:00

At least 10 "enterprise zones" will be set up by the Government as it seeks to reassure people and business leaders that it has a "growth strategy" as well as a "cuts strategy".

The £100m job-creation drive, to be confirmed in the Budget on 23 March, will be trailed by George Osborne, the Chancellor, in his speech to the Conservative Party's spring conference in Cardiff today.

Firms starting up in the zones will benefit from simpler planning rules and reduced business rates, with incentives tailored to the needs of each local economy.

The Chancellor will say that lessons will be learnt from the Thatcher government's experiment with enterprise zones during the 1980s recession. The new ones will be in areas of high growth potential, not just physical decline. "We won't try to create something out of nothing, and we won't offer a one-size-fits-all set of incentives," one government source said.

Mr Osborne will say that under the previous government, growth was concentrated in one region and one industry, financial services in the South-east. Local authorities will be able to use all the business rates they raise in the new zones.

The proposal will be among measures in a "growth review" alongside the Budget. It is expected to include streamlined planning after lobbying by business. The move could make it much easier for firms to obtain planning permission for new projects. The idea provoked a heated debate in government because of a potential clash with its "localism" agenda.

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