ENTERPRISE Zones announced by the Chancellor will lead to the creation of what the Government says will be a new era for Tyneside.
Two enterprise zones will be created in the North East, one in Teesside and one in Tyneside, amid fears a lack of incentives is seeing major manufacturers head to Scotland and Europe instead.
Speaking after the Budget announcement, Energy Secretary Chris Huhne told The Journal he believed the measures announced yesterday would help secure thousands of jobs in the region.
He said two firms, GE and Spanish group Gamesa, were actively weighing up major investment on Tyneside.
Today council leaders in the North East local enterprise partnership, covering the seven councils from Durham to Northumberland, will meet for the first time with new chair Paul Walker.
The former Sage boss will be tasked with getting agreement on where in the region the enterprise zone should be.
Although George Osborne listed Tyneside as the location, it is up to the partnership to recommend where the zone goes.
North Tyneside Conservative mayor Linda Arkley has pushed for Wallsend’s North Bank of the Tyne project to be made an enterprise zone, given its position as a centre for offshore wind firms.
But land is available in Sunderland around the Nissan site, and council leader Paul Watson is unlikely to allow Newcastle to draw investment away from his city without some gains elsewhere.
The zones will allow councils to offer a 100% business rate discount for five years. All seven councils will get a share of the increase business rates eventually generated over 25 years.
The Government will also allow simplified planning regulations, help for super-fast broadband and enhanced capital allowances.
Iain Malcolm, South Tyneside council leader, said: “Clearly we have a decision to make, and we have until May until we need to advise the Department for Business on where we want this, but it is a welcome situation.”
But Tynemouth MP Alan Campbell last night warned any gains could be offset by the damaging side effects of a rise in tax for North Sea oil and gas firms.
A fuel duty cut is to be funded by a £2bn tax on North Sea oil producers.
Mr Campbell said: “I’m very concerned that if these firms who are trying to reach very hard to get at reserves are taxed too hard they will have less money to spend on the many companies based in Tyneside.
“The jobs we gain in enterprise zones we could lose in the growth downturn for our oil and gas companies.”
Last month, Mrs Arkley wrote to Dr Vince Cable, Secretary of State for Business and Innovation, to press for a new round of enterprise zones.
She said: “I am overjoyed that the Government has listened to our request and is offering an Enterprise Zone for Tyneside. I believe the North Bank of the Tyne is the ideal location. It could transform the area into one of the most attractive locations in Europe for offshore manufacturing and renewables development.
“Major global offshore wind turbine manufacturers have already told us that Enterprise Zone status for the sites along the River Tyne would be a huge incentive.
“The spin-offs are enormous in terms of jobs and economic growth, not just for North Tyneside, but the whole region.”
Alastair Balls, chairman at Newcastle’s International Centre for Life, said: “In the 80s and 90s Enterprise Zones were transformational for business and regeneration in Tyne and Wear. It is also important to sort out now who controls the land and its development, otherwise much of the value of the allowances will pass into the hands of the landowners.”
New technical colleges planned
CHANCELLOR George Osborne announced plans yesterday to expand the university technical colleges programme to establish at least 24 new colleges by 2014.
The colleges, known as UTCs, will provide technical training opportunities to 11 to 19-year-olds and will be funded through partnerships between universities, colleges and businesses.
But the expansion was greeted with concern by the University and College Union, which fears the UTCs would divert money from further education colleges and create a two-tier system in further education.
The National Union of Teachers also attacked the creation of UTCs as an “extremely divisive” policy.
Under the plans set out by the Government, sponsors of UTCs will help set the curriculum to match the needs of the local economy and of their sectors, provide high-quality work placements, and allow the colleges to use their specialist facilities. UCU general secretary Sally Hunt, whose members are due to strike today over pay and pensions, criticised the Government for cutting corporation tax while presiding over cuts to public services.
She said the Government “has clearly set out where its priorities lie” adding: “As big business looks forward to tax cuts, the rest of the country has to try and cope with punishing cuts to vital services and their pensions.”
NUT general secretary Christine Blower said a Budget for growth would have included reversing the abolition of the Education Maintenance Allowance.
“The Government’s cuts are damaging growth and strangling economic recovery,” she said.
“Cutting taxes for big business, while axing public sector budgets, is a far cry from ’we are all in this together’.”