Insider Media Limited

The concept of enterprise zones (EZs) during the Thatcher years was to take sizeable areas of derelict land that were otherwise unlikely to be redeveloped and by designating them as EZs create an environment which would re-generate those areas.

EZs, once designated, lasted for ten years and the benefits which they enjoyed were a more relaxed planning regime, relief from business rates and tax benefits in the form of a 100 per cent write off of the cost of new buildings in the zones.

In an era when there was no tax relief at all on the cost of commercial buildings and only 4 per cent per annum on the cost of industrial buildings, an immediate write off of 100 per cent of the cost of all new buildings in EZs was a major attraction.

It has to be acknowledged that some EZs have been more successful than others. Canary Wharf is one successful EZ that will be well known up and down the country. There is, however, a very successful EZ in our own “backyard”, namely the Merry Hill Shopping Centre and The Waterfront at Brierley Hill.

It is precisely because of the success of Merry Hill that I was amazed and surprised to see Merry Hill described in Insider earlier this week as a mistake that government should not repeat in their current plans to designate new EZs.

The Merry Hill EZ produced an amazing and successful development project that at its height created 10,000 jobs in the area and many more elsewhere and attracted 25 million visitors in one year to spend money in the area. It has generated £370m in business rates in the years since the EZ ended.

This doesn’t take account of the income tax and corporation tax paid on the profits generated in the EZ, or the tax and national insurance paid on the salaries of those working there.

Earlier this week it was suggested by Stephen Hollowood of GVA that Merry Hill was a mistake because it caused Dudley to go into terminal decline. The fact is that Dudley was already in decline with shops closing and business reducing. I know because I was born and raised in the Black Country near to Dudley and the majority of my family lived there during the redevelopment of the former Round Oaks Steel Works into the Merry Hill Centre and the Waterfront. My family welcomed the new jobs that were created in a badly run down area.

The most remarkable thing about Merry Hill was that its developers were forward thinking and prepared to take the risk of building the first ‘indoor’ shopping centre on brownfield land. We take such shopping centres for granted these days now that the concept has been replicated up and down the country but the project was truly visionary back in the 1980’s.

In his Budget speech on Wednesday the Chancellor announced the creation of 21 new EZs in England and mentioned Birmingham and Solihull and the Black Country as locations for designated sites.

If the new EZs attract developers with the same vision and creativity that was brought to bear at Merry Hill then the West Midlands will have more EZ successes and more jobs in an area which it is acknowledged has one of the highest unemployment rates in the UK.

Of course it is sad when any town goes into ‘terminal decline’ but is that any reason to veto schemes that address the needs of the majority of the local population? I for one, would welcome several more ‘mistakes’ like Merry Hill in the West Midlands.

Carol Barrie is head of property and construction - Midlands at accountancy firm RSM Tenon