BUDGET 2011: Peel and MAG awarded enterprise zones

Communities Secretary Eric Pickles confirmed at midday on Thursday that Peel's Liverpool Waters and Manchester Airport will become enterprise zones with tax breaks for inward investors and "simplified planning rules".

Pickles said the "focus of the vanguard Enterprise Zones is on cities and those areas that have missed out in the last ten years." The first four areas out of 11 named in the Budget able to confirm the exact location of their new zones are Liverpool Waters, Manchester Airport, Boots campus in Nottingham and London's Royal Docks.

The first 11 enterprise zones are Birmingham and Solihull, Sheffield, Leeds, Liverpool, London, Manchester, the Bristol area, the Black Country, Derby and Nottingham, Teesside and the North East.

The special status will exempt companies moving into the areas from paying business rates for five years up to a limit of £275,000. There would also be investment in super-fast broadband and simplified planning regimes. Local authorities will receive all business rates growth within the zone for a period of at least 25 years.

However, the £100m allocated to the 21 enterprise zones – 11 named yesterday will be followed by 10 in the summer – breaks down to around £5m for each zone. Earlier incarnations in the 1980s and 1990s failed to produce the predicted levels of job creation and resulted in firms moving locally across zone borders rather than notable inward investment.

Manchester Airports Group Developments, the property division of the airport operator which accounts for 25% of group profit, plans a 2m sq ft office-led expansion on 60 acres to be named Airport City.

Charlie Cornish, chief executive of Manchester Airports Group, said: "Manchester Airport is the principal international gateway to the region and is primed for an investment of this scale, amassing over sixty acres.

"Our development programme will expand the world freight terminal, create new business space, attract global businesses and provide health related uses. It will build upon the proximity of Wythenshawe Hospital as an international centre of excellence, science, research and advanced manufacturing. Phase one of Airport City will start early next year and we will be publishing our planning framework for consultation shortly."

Peel Group has planning consent for Wirral Waters and is awaiting a decision on Liverpool Waters. Together the two mega-schemes would total 32m sq ft of mixed-use development if built and could take decades to deliver. Wirral Waters is centred on the left bank of the river at the Birkenhead Docks and Liverpool Waters is focused towards the north of Liverpool city centre into the derelict dock areas adjacent to Princes Dock.

Peel will develop the Mersey Waters Enterprise Zone through a new development vehicle called Peel Waters. Lindsey Ashworth, development director of Peel, said: "The Peel Waters projects are opportunities for the Liverpool region to compete better with the likes of London and the South East as well as cities overseas. Enterprise Zone status will genuinely help us to do that."

Rod Holmes, chairman of the Mersey Partnership and member of the LEP board, added: "It is now generally recognised, in the Liverpool city region and beyond that the Mersey and Liverpool Port are grossly under-utilised UK assets, with the potential to help resolve national infrastructure issues and also to contribute to the ongoing revival of the city region economy.

"Land on both sides of the mouth of the Estuary is available, with ownership and planning in hand for comprehensive redevelopment. The designation of this enterprise zone will accelerate delivery of these developments and make a great contribution to the Liverpool superport and wider economic growth in the North."

Cllr Jeff Green, leader of Wirral Council, said: "Wirral Waters is already an attractive investment opportunity but its designation as an enterprise zone will allow us to offer tax incentives in the first years of occupancy which will give businesses locating on the site a great head start. This is particularly important for SMEs who have the potential to grow, help to rebalance our economy and deliver jobs for local people.

"The joint Waters sites were seen as the Liverpool City Region LEP's best area of 'maximum opportunity' and the simplified planning regulations that go with it will act as a catalyst for investment both sides of the river. This announcement is another significant step in our efforts to put Wirral and the Liverpool City Region on the map as an area of significant opportunity and enterprise."

Meanwhile, Lancashire is without a local enterprise partnership – the government is using LEPs to nominate and oversee enterprise zones – and, as it stands, has little or no chance of winning an enterprise zone in the summer round. Cheshire & Warrington and Cumbria do have LEPs in place and will now consider whether to reapply for zones in the competition before this summer's announcements.