Peter Edwards: Maybe George’s enterprise zones aren’t such a capital idea

Surprisingly, this approach doesn’t always work in the worlds of politics and business, so the other options for decision-makers are to give an idea a grand title and preferably capital letters. These have imbued ideas as varied and as small as John Major’s Citizens’ Charter, Tony Blair’s Big Conversation and David Cameron’s Big Society with a significance they do not deserve. They are also an easy way for ministers to show the unwashed masses that an idea is Very Important, even if it is also doomed to failure.

Which brings me to enterprise zones – capitals optional. George Osborne said business taxes are to be cut and planning laws eased in ten areas of the country in a scaled-down revival of Margaret Thatcher’s flagship urban renewal scheme. He declared: “They will be the places in our land with great potential – but which need that extra push from government and local communities working together.”

The £100m package has been drawn up to boost jobs and investment across the Midlands and northern Britain over the next four years. If, however, it is part of a credible plan to stimulate growth amid massive spending cuts, why was it not announced at the time of the abolition of regional development agencies and the introduction of local enterprise partnerships (LEPs)? The obvious answer is because it didn’t yet exist.

Instead, enterprise zones appear to have been conceived as a hurried afterthought for rather cynical reasons – a shrinking economy has left us on the brink of a double-dip recession; mid-sized northern towns are being laid waste as the public sector, the biggest employer, cuts jobs, and because the Conservatives need something pro-business to announce at their get-together in Cardiff this week. As anyone who has read Andrew Rawnsley’s scathing account of Labour’s final years in office knows, however, the frenzied run-up to a party conference is the worst time to devise serious policy.

So the dangers of enterprise zones become immediately apparent. They could duplicate some of the work of the fledgling LEPs – Leeds, Sheffield, York and North Yorkshire have agreed partnerships while the wrangling in the East Riding continues – without tackling the main problems facing start-ups. Yorkshire has around 300,000 SMEs and this newspaper writes about a handful of them each Thursday. It is clear that the obstacles they encounter will not be removed by enterprise zones. Small businesses are most worried about the lack of skilled staff, the cost of renting prime property and – yes, still – the difficulty of getting credit lines from the major banks but the latest Treasury wheeze will do nothing about these challenges.

In order to return UK plc to growth, the coalition would be better off using some of the vast savings achieved from public sector cuts, which so far include more than £1bn in Yorkshire with 14,500 jobs cut, increasing funding for the stalled Green Investment Bank, improving the nation’s skills in science and engineering and making it easier to hire staff. What the Treasury appears to be doing, however, is pinning its hopes for growth on an eighties revival. Yet a report from the Centre for Cities, published last week and provocatively titled What Would Maggie Do?, found the original enterprise zones did not create enough jobs and were too costly to be effective 30 years on.

It said the long-term impact of the zones was mainly in the physical regeneration of the urban environment rather than in growing the number of private sector jobs, which the coalition hopes will sweeten the bitter pill of austerity.

The Work Foundation was similarly downbeat, saying the jobs brought by the zones were simply taken from elsewhere and created only short-term prosperity. If you don’t have time to read what ‘Maggie’ would have done, however, you can just ask anyone in South Yorkshire towns like Barnsley about the 1980s. Or someone in the Toxteth area of Liverpool. Or in the Gorbals in Glasgow. They would give a huge post-industrial cough at the idea of ‘urban renewal’ because the concept never made it that far north under Mrs Thatcher.

So enterprise zones, which were expensive, of modest success and which excluded great swathes of the country first time around, are to be brought to ten of the areas which they originally neglected.

They will be forgotten in the long term, however, despite the bold claims made for them. They are a title without a plan and a headline without a story. If you don’t believe me, then ask yourself, where did I put my copy of the Citizens’ Charter?