Finance Minister Sammy Wilson has dismissed Westminster’s calls for a business-friendly enterprise zone to be set up in Northern Ireland.
Mr Wilson said a Northern Ireland-wide zone, championed by Secretary of State Owen Paterson, would be a “nonsense”.
Instead, he called for the Treasury to provide some of the extra tax relief being offered to the zones in England to be granted in Northern Ireland.
Coalition ministers yesterday declared 24 ‘enterprise zones’ around the country to be open for business, aimed at creating tens of thousands of new jobs.
There will be rate discounts, tax breaks and relaxed planning laws for new businesses.
Mr Paterson has previously spoken of turning the whole of Northern Ireland into an enterprise zone and earlier this month he urged the province to follow England, Scotland and Wales in setting them up, telling the BBC: “We've seen there's been much more rapid progress in England, Scotland and Wales on enterprise zones and I think some of these ideas could apply to Northern Ireland and I think we should try to use every tool in the box.”
In his budget speech last month, Chancellor George Osborne said the UK could “look forward to the first Enterprise Zone in Northern Ireland”.
This caused confusion among business circles, with no firm proposals for Northern Ireland on the table.
Yesterday, Finance Minister Sammy Wilson appeared to pour cold water on his claim, saying a Northern Ireland-wide zone would be “a nonsense” because of
the changes to planning rules.
He said: “You can’t apply relaxed planning laws across the whole of Northern Ireland. You would have factories up against a residential area. What we have said is that we would like some of the powers of an enterprise zone to apply across Northern Ireland.”
This would centre on capital allowances, by which companies can set business expenditure against their tax bills. Lower business rates, another key plank of enterprise zones, can already be applied in Northern Ireland.
The Northern Ireland Chamber of Commerce has been pushing for an enterprise zone to be established across the province, saying a proposed cut in Corporation Tax is not a “silver bullet”.
But Glyn Roberts, of the Northern Ireland Retail Trade Association, said it was not possible to “cut and paste” the model used elsewhere in the UK.
The enterprise zone concept dates back to the Thatcher Government, when derelict sites, often in northern England but also across the UK including Northern Ireland, were set aside for redevelopment.
They have been reborn under the coalition, with a number of sweeteners offered to businesses. These include discounts worth up to £275,000 over five years that could grant automatic planning permission for new industrial buildings within the boundary.
A woolly concept sparks rift across the Irish Sea
Owen Paterson wants to see an enterprise zone, or zones, in Northern Ireland.
George Osborne says he’s “looking forward” to seeing one.
But Sammy Wilson doesn’t fancy the idea.
A single zone would “not be practical”, he says, while a number of smaller ones would not create any new jobs.
On the face of it, Westminster and Stormont are poles apart.
Part of the apparent rift comes from the question: what exactly is an enterprise zone?
If it means simply creating business-friendly conditions, no politician or businessman would be against that.
But when it means targeted support for areas of need ahead of other parts, the concept becomes more controversial.
There are plenty who think it would work in Northern Ireland, but it’s a model that stirs opposition, with critics claiming the zones simply displace existing businesses to the detriment of other areas.
It is also hard to see how the system in England, which is focused on small, specific sites, could be replicated across the whole of Northern Ireland — not least, as Sammy Wilson points out, because it would create chaos in the planning system.
It’s unlikely that the Secretary of State had this in mind when he spoke of the need for Northern Ireland to keep pace with what’s happening in England, Scotland and Wales. He recently said “some of these ideas” could apply to Northern Ireland.
Crucially, any bid from Northern Ireland would need Treasury approval — and as we’ve seen with the long-running move towards a corporation tax reduction, those purse-strings aren’t easily loosened.