Tax & admin · 29 July 2016

Northern enterprise zones create record job numbers, yet regional economic imbalance remains

Manchester is often considered the North of England capital

Enterprise zones in the North of England have created 8,000 new jobs in the past four years, according to government reports, suggesting that the Northern Powerhouse initiative to rebalance the UK economy and narrow the North-South divide, has gained traction.

New figures published by the Department for Communities and Local Government showed that as many as 1,220 roles were created in northern enterprise zones in the final three months of 2015 – an 18 per cent leap compared to the previous quarter.

Thirty major corporations chose to expand in the North over the period, spread throughout the region’s 14 enterprise zones. Northern Powerhouse minister Andrew Percy said that the statistics proved the initiative was working, and that growing businesses in the North were beginning to receive adequate support.

“The Northern Powerhouse is attracting some of the world’s leading businesses to locate here and offer skilled jobs,” said Percy.

“There is a real appetite to invest and do business in the North, thanks in no small part to high quality local support on offer to new and growing companies.”

As a central part of the government’s Northern Powerhouse plan, the enterprise zone programme offers support and a range of incentives to growing firms. Companies that set up in one of the North’s 14 zones are promised a business rate discount worth as much as £275,000 over five years, and generous tax relief on investments in plants and machinery.

Despite promising employment statistics, recent research found that growth in taxable economic activity in key towns and cities in the North of England has been sluggish.

The Centre for Cities recently discovered that places like Sheffield and Leeds currently generate less tax revenue than they did ten years ago, while Manchester – often considered the capital of the North – has seen increases in tax revenue of less than five per cent.

In a sign that the North-South divide is still a significant problem, smaller towns and cities in the South East of England, like Peterborough, Ipswich and Luton, have seen some of the biggest increases in tax revenue. Indeed, Cambridge has seen the biggest growth in taxable income of anywhere in the UK in recent years, with a 24 per cent rise.

Britain remains heavily reliant on London’s tax revenue too, despite expensive government initiatives like Northern Powerhouse that attempt to rebalance the economy. The capital generates more from business taxes than does the next 60 cities in national rankings.

Read on for news of the launch of the Pubs Code – giving greater rights and protection to tied pub tenants. 

Sign up to our newsletter to get the latest from Business Advice.



Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.