There will now be 21 new enterprise zones across England that will offer the opportunity to stimulate selected areas via the allowed tax breaks and reduced planning restrictions.
The first enterprise zones to be set will be based in Liverpool, Sheffield,Greater Manchester, Leeds, West of England, North-east, Tees Valley, Nottinghamshire, the Black Country and Derbyshire.
London Set To Benefit
The mayor of London,Boris Johnson, said
I have been asked to select a suitable area in the capital and had chosen 125 hectares of land in the historic Royal Docks, in the borough of Newham. Local authorities have been invited to tender for the remaining zones.
The new enterprise zones will give a business discount rate equating to £275,000 over five years for companies which move into the area over the course of this parliament.
The government is looking to “radically simplify” the planning processes, and also pledged to ensure that superfast broadband is part of the deal.
Capital Allowances Enhanced
George Osborne is considering enhancing the capital allowances for plant and machinery in the enterprise zones. He is seeking to keep all business rates growth within the zones with the local authorities to support their economy for at least 25 years.
Enterprise Investment Scheme Changes
Related to enterprise zones are Enterprise Investment Schemes (EIS). These schemes encourage investors to put money into unquoted start up companies by offering tax reliefs. EIS changes allow higher income tax relief which will now be 30% from April 2011, and, from April 2012, double the annual investment limit to £1m per person. An increase to the size of eligible companies from 50 to 250 staff and the gross asset size of eligible companies from £7m to £15m was also added.
The chancellor said, “The lack of start-up capital has been a longstanding problem in the British economy, “Too often we have the great ideas in Britain, but it’s the other countries that exploit them.”