Sunday, September 18, 2011
IS THE DELAY ON ENTERPRISE ZONES GOING TO BE COSTLY FOR THE WELSH ECONOMY?
As we enter the middle of September, it would seem that Wales is still waiting for a decision on whether it will create enterprise zones, which have been developed to boost prosperity through cheaper business rates, access to capital, superfast broadband and lower levels of planning control.
This is six months after the Chancellor formally announced the creation of such zones, although the new UK Coalition Government had already discussed their development in previous policy announcements.
Whilst there is prevarication in Cardiff Bay over their policy on this matter, our competitors across the border are already developing their plans to attract and develop new business, with twenty-one new enterprise zones already created across England. These include a number of areas on the border with Wales, including Hereford, Bristol and Merseyside.
And whilst critics could have argued that this is an England-only policy that has no relevance to devolved nations, this premise was blown out the water by the Scottish Government announcement, earlier this week, that it would be creating four new enterprise zones with a focus on low carbon manufacturing.
Should Wales be worried by such developments?
Let’s take the case of Scotland first.
The SNP has indicated that a focus on green technology will be at the heart of its economic strategy. The fact that it may use enterprise zones as a way of attracting focused inward investment in this sector should be of concern to other regions, especially those such as Wales which have also targeted low carbon technology as one of the key sectors it wishes to develop.
In England, there are even more worrying developments.
When Jaguar Land Rover announced that it would be considering a major multi-million pound investment in a new engine plant, it was hoped that Wales would be one of the sites to be considered with the West Midlands as the only other serious alternative.
Yet, there are rumours in the car industry that a site called i54, near Wolverhampton, is expected to win the race. Is it a coincidence that the same site was recently selected as one of the UK’s first enterprise zones?
Whilst Cardiff Airport struggles to develop its impact on the region and the so-called aerospace park next to it has achieved little since its inception, the new enterprise zone near Manchester Airport is set to attract more than 350 new businesses and create 21,000 jobs. In Cornwall, the Newquay enterprise zone will be targeting companies from abroad to build a centre of excellence of aerospace companies.
I could go on and mention the high technology enterprise zone at Daresbury Science Park, the renewable energy super cluster in Humberside and the Science Vale in Oxfordshire, which will focus on high performance engineering, biotechnology and medical instruments, but I think you get the picture.
The real question, though, is why Wales is taking its time to enter a race that has seen other competitor regions well ahead of us.
You won’t be surprised that it seems that bureaucracy is the main issue, with civil servants in Wales allegedly refusing to do anything because they need further clarity on issues such as capital allowances.
Considering that capital allowances are not even devolved, why should this be an issue? It clearly wasn’t important to the 21 enterprise zones in England that have already been awarded enterprise zone status.
Back in June, this column suggested that the Welsh Government could consider six enterprise and innovation zones for Wales based on the six sectors favoured by the Welsh Government. For example, Swansea could be made the life sciences enterprise zone for Wales whilst Cardiff could lay claim to either the creative industries or financial services.
In the North, Flintshire or Wrexham would both have a strong case for the advanced manufacturing and materials enterprise zone whilst the whole island of Anglesey, the poorest county in the whole of the UK, could become the energy enterprise zone for Wales. Over time, other enterprise zones could be added to these six areas that focus on developing the potential of this vital industry.
Yet nothing has happened in the intervening period, seemingly because of innate policy snobbery within the Welsh Government Business Department that, despite all evidence to the contrary, is more interested in finding reasons why it shouldn’t do something positive with the opportunities presented by enterprise zones.
Yes, enterprise zones are not the be-all and end-all for government policy but that argument misses the bigger picture, namely that they are about more than the funding being made available.
They are a means and a symbol by which local areas are getting together to develop a public-private sector partnership and a coherent plan for the creation of employment and prosperity.
And at a time when we have a Welsh Government seemingly with no economic strategy and little idea on how to take the economy forward, having any sort of plan would be a good place to start from.