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The Midlands will be the base for three of the new 21 enterprise zones announced by Chancellor George Osborne in today’s Budget speech.

The zones will be based on local enterprise partnership (LEP) areas “to encourage new investment in areas with untapped growth potential”. Zones in Birmingham and the Black Country and one covering Nottinghamshire/Derbyshire will be led by the local LEPs. The exact location for the zones will be announced tomorrow.

Ian Hyde, Birmingham-based property tax partner at law firm Pinsent Masons, said: “Like the original EZ regime, the key drivers for growth will be enhanced capital allowances on new buildings, relaxations in the planning regime and business rate relief of up to £275,000 over five years.

"Local authorities will also be able to keep rates generated by the new zones. Interestingly, the government has not listened to criticism of the original regime and moved to income tax and national insurance reliefs rather than 100 per cent capital allowances on new buildings.

"However, it appears the government will be treating these reliefs as a menu and the actual reliefs available in each Zone may be different. Most importantly the capital allowance relief will be limited to areas where there is a strong focus on high value manufacturing.”

James Watkins, executive director of lobby group Business Voice West Midlands, said: “We need extra help to ensure that the Midlands is motoring again. Enterprise zones can do that.

“However, the devil is in the detail. Enterprise zones need to be linked to the supply chain needs of sectors such as aerospace and automotive, which covers a wide geographical area. If the Chancellor can pull that off then he will be remembered for many years in the Midlands for the best of reasons.”

Osborne’s Budget announced a number of other key measures that will have a direct impact on Midlands businesses. These included the bringing forward of the establishment of a ‘green’ investment bank with £3bn in funds and a moratorium on new regulations for small businesses.

A 2 per cent cut in corporation tax by 2014 will also be welcomed by businesses whilst the property industry and inward investment chiefs will be pleased that the Chancellor has said that planning bodies should prioritise jobs and growth and that there should be an end to “cumbersome” planning laws.

Osborne also announced the extension of a rates relief holiday for small businesses. Eligible businesses occupying properties with rateable values of up to £6,000 will pay no business rates for one year from 1 October and those with rateable values of up to £12,000 will receive reductions.

Manufacturers will welcome the news that an additional 40,000 apprenticeships are to be created. Funding will also be made available for an additional 80,000 new work experience places for unemployed young people, ensuring that up to 100,000 places will be available over the next two years. An estimated 11,200 young people in the West Midlands could 7,100 in the East Midlands could benefit, the government suggests.

Meanwhile, new university technical colleges (UTC) will be opened in the Black Country in September 2011 and Aston in Birmingham a year later. UTCs will provide leading edge technical training opportunities for 14-19 year olds.

The Budget was generally well received by the Midlands business community.

Russell Orme, office managing partner of law firm DLA Piper in Birmingham said: "The Chancellor has shown much imagination in his budget for growth.”

And John Rider, West Midlands chairman of the Institute of Directors, said: “This is potentially a good Budget for business and I am cautiously optimistic. I welcome the scrapping of red tape and regulation. I welcome the incentives to grow business. The Budget introduces a huge amount of change and we need to get on with it.”