Premier and deputy focus on enterprise zone hopes

Leaders from the three Yorkshire partnerships, which the Government hopes will be a cheaper and more effective way of creating jobs than soon-to-abolished development agency Yorkshire Forward, will attend a summit in the Midlands as the Cabinet heads out of London for the day.

The event is a sign of the Government’s efforts to turn the focus away from cuts and onto growing the economy and will be seen as an attempt to draw a line under criticism that the establishment of the partnerships has been somewhat chaotic. More detail of a £4m Capacity Fund – to help the cash-starved Local Enterprise Partnerships get up and running – is also expected to be revealed.

At the event Ministers are likely to be pressed for more detail of plans to set up 10 enterprise zones across the country which Chancellor George Osborne announced this weekend.

The zones, where firms are able to enjoy tax breaks and planning short-cuts in an attempt to stimulate struggling economies, were used under Margaret Thatcher and John Major but their effectiveness has been widely questioned.

In his speech at the Tory spring conference, Mr Osborne said: “In the Budget we will introduce new enterprise zones across parts of Britain that have missed out in the last 10 years.

“They will be centres for new businesses and new jobs where taxes will be even lower and more restrictions on growth removed.

“They will be in places in our land with great potential – but which need that extra push from government and local communities working together.”

Many of the zones are set to be in the North and the Midlands, where economies grew slower than in London and the South East in the boom years, but Labour attacked the announcement as a “plan for headlines” rather than a blueprint for growth.

Labour Shadow Business Secretary John Denham said: “George Osborne will have to show how his new enterprise zones will be more effective than those in the 1980s.

“Independent analysis of Enterprise Zones at home and abroad show they have limited impact and the cost of job creation is far higher than alternatives like the Future Jobs Fund.”

Board members for all three Local Enterprise Partnerships in the region – Leeds City Region, Sheffield City Region and York and North Yorkshire – are expected to attend today’s summit.

There is still no Local Enterprise Partnership in East Yorkshire, where there has been wrangling over whether to have a single Humber-wide body or separate north and south bank organisations. However Business Minister Mark Prisk told the Yorkshire Post he expects developments soon.