Labour MSP Claire Baker and Buckhaven, Methil and the Wemyss villages Councillor Jim Young have expressed concern that jobs and investment will be sucked away from the area after the SNP Government awarded enterprise zone status to Dundee and Edinburgh.
Four enterprise areas have been confirmed across Scotland, including a low carbon and renewables area in the east for the ports of Dundee and Leith.
There’s a strong body of evidence that suggests enterprise zones encourage business away from neighbouring areas.
Claire Baker, Labour MSP for Mid Scotland and Fife , said:
“All the evidence suggests that up to 80% of the jobs created by enterprise zones are taken from elsewhere, so I’m concerned that opportunities will be sucked away from Fife at a time when we desperately need more jobs and investment.
“As Scotland’s economy continues to grow more slowly and unemployment increases more quickly, we cannot afford to have a national strategy that simply robs Peter to pay Paul.”
“The decision to overlook Fife when designating enterprise zone status also calls into question the SNP Government’s commitment to Fife Energy Park at Methil docks.
“There are now real concerns that it will become more difficult to attract large scale inward investment to Fife now that we are sandwiched between two enterprise zones.”
Jim Young, Labour Councillor for Buckhaven, Methil and the Wemyss villages said:
“Only last week we learned that parts of my ward are among the most impoverished in Fife, with 40 per cent of families with young children living below the bread line.
“I want the SNP Government to do everything in its power to invest in Buckhaven, Methil and the Wemyss villages to end the scourge of deprivation.
“However, the fear now is the SNP Government’s enterprise zones will suck jobs and investment away from where they’re needed most.”
ENDS
NOTES
Evidence on enterprise zones displacing business
The Work Foundation’s ‘Do Enterprise Zones work?’ report published February 2011, found that:
- Enterprise Zones suggest that up to 80% of the jobs they create are taken from other places.
- Enterprise Zones do very little to promote lasting economic prosperity. Most Enterprise Zones create a short-term boom, followed by a long-term reversal back into depression.
- Enterprise Zones are hugely expensive. Evidence from the 1980s suggests that Enterprise Zones cost at least £23,000 per new job they create – equivalent to £50,000 in today’s money.
http://www.theworkfoundation.com/assets/docs/publications/283_Enterprise%20Zones_24%20Feb_FINAL.PDF
The Centre for Cities ‘What Would Maggie Do?’ report found that:
- Enterprise Zones of the 1980s did not create enough jobs and were too costly for the public purse to be effective for the 2010s.
- The incentives used to encourage business growth and relocation – business rate relief or capital-based spending and allowances – also weighed heavily on public finances.
- The cost per additional job created in the Zones was £17,000 per job over a ten year period. This is equivalent to £26,000 in today’s market.
http://www.centreforcities.org/assets/files/2011%20Research/11-02-25%20Enterprise%20Zones.pdf
The Institute for Public Policy Research in March 2011 concluded:
“Enterprise Zones have been tried in the past and found wanting – they’re more successful at encouraging businesses from neighbouring areas to relocate than they are at creating new jobs.” IPPR press release, 23 March 2011
The Institute for Fiscal Studies in its presentation on ‘Business Taxes and the Plan for Growth’ published in March 2011 warned:
“Similar policy in place in the 1980s – in general this resulted in an increase in number of firms and employment but mostly these represented relocation from neighbouring areas.”
http://www.ifs.org.uk/budgets/budget2011/budget2011_hm.pdf
Chief Executive of the clothing chain Next, Lord Wolfson, who is in favour of Enterprise Zones admitted:
“The one criticism of them – and I would accept it – is that all they do is move jobs from one part of the country to another.”
http://www.ft.com/cms/s/0/e11088c0-3229-11e0-a820-00144feabdc0.html#axzz1HQwD0PiR
