Enterprise Zones are the dusting down of a failed Thatcherite policy

Enterprise Zones, the dusting down of a failed Thatcherite policy, shows the government has no strategy for real growth, just ad hoc short termism.

Tony Burke is the Assistant General Secretary of Unite

With the economy running on empty and no Plan A or Plan B from Cameron, Osborne and Cable, the government have turned the clock back to the 1980s this week by announcing four Enterprise Zones in Birmingham, Bristol, Leeds and Sheffield which they say will benefit from “discounts on business rates, new superfast broadband, lower levels of planning control and the potential to use enhanced capital allowances”.

Communities secretary Eric Pickles must have been watching re-runs of ‘Minder’ on Freeview when he got in on the act, stating the zones will:

“Accelerate growth and create thousands of new jobs. Our low-tax, low-regulation Enterprise Zones will help make our country the best place in Europe to start and grow a business.”

But let us look at what really happened back in the early 1980s.

Enterprise Zones were seen by the then Thatcher administration as a short term, but quick solution just as the government are doing now with a claim they will help generate growth, create new jobs and re-generate communities.

However research (pdf) by Andrew Sissons for the Work Foundation shows Enterprise Zones did little in the long run to create jobs and growth, and were extremely costly.

They created a short boom lasting on average three years, eventually reverting to back long term decline. Between 1981 and 1996, 4,300 companies were set up in the 11 original Zones, with an estimated 63,300 jobs created – however, of these jobs, only 13,000 were estimated to be new jobs; 80% of jobs created by Enterprise Zones were displaced from other areas within the same locality.

They proved to be very expensive as well, with each job evaluated by the Government in 1987 as costing £23,000 to create, and across the 11 Zones an estimated £45,000 per job.

A survey of those companies suggested only 25% of new jobs were attributable to the setting up of the Enterprise Zone.

One of the comments (pdf) of the Work Foundation report is even more damming, saying:

“The UK’s economic growth and job creation is now primarily driven by the knowledge economy. The knowledge economy is characterised by major investment in intangible assets, such as R&D, software, design and branding.

“These intangible assets are key to driving UK innovation and sustaining the UK’s competitive advantage… Enterprise Zones do not promote the productive, knowledge-intensive growth that the UK depends on, but instead promote an outdated model of British enterprise.”

This dusting down of a failed Thatcherite policy shows the government has no strategy for real growth, just ad hoc short termism, that failed to work for Thatcher and won’t work for Cameron and Osborne either.

18 Responses to “Enterprise Zones are the dusting down of a failed Thatcherite policy”

  1. Susan Thorne

    Enterprise Zones are the dusting down of a failed Thatcherite policy: http://bit.ly/nG8eRw writes @UniteTheUnion’s @TonyBurke2010

  2. John Edginton

    Enterprise Zones are the dusting down of a failed Thatcherite policy: http://bit.ly/nG8eRw writes @UniteTheUnion’s @TonyBurke2010

  3. Mr W.H.

    Enterprise Zones are the dusting down of a failed Thatcherite policy: http://bit.ly/nG8eRw writes @UniteTheUnion’s @TonyBurke2010

  4. Tony Burke

    Enterprise Zones are the dusting down of a failed Thatcherite policy: http://bit.ly/nG8eRw writes @UniteTheUnion’s @TonyBurke2010

  5. pauline doyle

    RT @leftfootfwd: Enterprise Zones are the dusting down of a failed Thatcherite policy http://t.co/9gT8H1c

  6. Michael

    Enterprise Zones are the dusting down of a failed Thatcherite policy – http://tinyurl.com/3okfojs

  7. Len Arthur

    Enterprise Zones are the dusting down of a failed Thatcherite policy: http://bit.ly/nG8eRw writes @UniteTheUnion’s @TonyBurke2010

  8. Watching You

    Enterprise Zones are the dusting down of a failed Thatcherite policy – http://tinyurl.com/3okfojs

  9. The Work Foundation

    Enterprise Zones are the dusting down of a failed Thatcherite policy: http://bit.ly/nG8eRw writes @UniteTheUnion’s @TonyBurke2010

  10. Paul McGlynn

    When your own policies don't work.RT @leftfootfwd: Enterprise Zones are the dusting down of a failed Thatcherite policy http://t.co/I4Wtskg

  11. Robert

    If they work for three years and get employment down over those three years , Labour will not get back in will they, because the people will think the Tories have things right, short term means getting the Tories back into power, everything which will be done from now on will be about winning the election.

  12. Nigel Baldwin

    I can remember a programme called “Naked Video” at that time. One clip was of a car passing Liverpool city boundary, with a sign stating: “Welcome to Liverpool, a Job Free Zone”.

  13. Sheffield's Latest

    RailnewsEnterprise Zones are the dusting down of a failed Thatcherite policyLeft Foot ForwardWith the economy ru… http://bit.ly/pK4H1F

  14. Ferret Dave

    Enterprise Zones are the dusting down of a failed Thatcherite policy: http://bit.ly/nG8eRw writes @UniteTheUnion’s @TonyBurke2010

  15. Leon Wolfson

    @1 – Except displacing jobs is rarely popular, Robert, and that’s their main result.

  16. Kevin Richards

    "The nots so Magic Roundabout" RT @leftfootfwd: Enterprise Zones are the dusting down of a failed Thatcherite policy http://t.co/iShly7A

  17. Bob Widdowson

    RT @leftfootfwd: Enterprise Zones are the dusting down of a failed Thatcherite policy http://t.co/LxckMk2

  18. Thatcher’s corrosive legacy: The UK’s abandoned inner cities | Left Foot Forward

    […] the chancellor, George Osborne, will follow Michael Heseltine’s example and create enterprise zones to regenerate deprived […]

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