Cameron snubs Croydon again over Enterprise Zone

Been there, got the T-shirt: Does Boris really "love" Croydon? His expression suggests otherwise

So much for the “political pull” of Croydon’s two Conservative MPs, Gavin “As Seen on TV” Barwell and Cap’n Richard Ottaway, and their colleagues on the council and at City Hall.

Because for the second time in six months, Croydon has been snubbed when it comes to being granted Enterprise Zone status.

Local politicians of all party hues are in agreement that Croydon desperately needs the business stimulus which EZ status would offer, more so than ever after last week’s horrendous destruction in the riots.

But after London Mayor Boris Johnson dropped some teasing hints before the Budget in the spring, and the encouraging noises made by BoJo and his Old Etonian chum, Dave “Hug a Hoodie” Cameron when they visited the borough last week, Croydon is again left to its own devices.

The ConDem government named the first 11 zones in the spring, in cities including Manchester, Birmingham and Newcastle and this morning announced a further 11 dotted around England.

The plan is to create 30,000 jobs by 2015 in hi-tech industries in the Zones, which benefit from £150 million in tax breaks, high-speed internet links, lower levels of planning control and the potential to use enhanced capital allowances.

It is as yet unclear what the reasoning might be behind the choices – perhaps Croydon, and south London, is regarded as electorally safe by the government for local Conservatives ahead of future elections, including next May’s Mayoral vote? Being overlooked for a second time may also be an indicator of what chances the council’s ill-conceived, grandiose plans for “city” status really have.

What we do know is that Croydon is left to re-build its business sector on its own, trying to convince major businesses to move to the borough or, in the case of Nestle, not to leave it.

And everyone agrees that after last week’s riots, that is going to be more difficult than ever.

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7 Responses to Cameron snubs Croydon again over Enterprise Zone

  1. firegut says:

    Once again we’re let down! The arguments in favour of granting EZ status to Croydon are obvious and myriad. I just hope Boris shuts up now – what’s the point in harping on about how much you like Croydon when you haven’t got the minerals to back it up?

  2. James Naylor says:

    Well – what I would say is this: Look at what these specific EZs actually do, in the detail. There is rates relief (not even relevant for start-ups running from home), but its capped quite low (£275,000 over 5 years) and only applies to new businesses moving in. The rest of the conditions are close to worthless – some minor tax allowances and less restrictive planning; which is not something, we can probably all agree, which is a problem for Croydon.

    When you look at where most of these EZs are, you’ll see they are very small industrial sites devoted to highly specific industries. These are ‘austerity’ era EZ’s that are realistically going to have about as much impact as the 80s era EZs did. In a a bid to make sure they don’t simply encourage relocation, they’ve opted to make them under-powered instead.

    The £20 million Enterprise Fund (of which we may yet get the lion’s share vs Tottenham) on the other hand, is cash for improvements right now to make this a more attractive place for business to be.

    Now – a proper EZ: flexible employment laws, lower corporation tax, 0% rates, special incentives for foreign companies to move their HQs to the UK – Croydon would be the perfect place for it. But that’s not what we’ve missed out on here.

    • Fair points James.

      Think the issue here, though, is that something is better than nothing.

      Certainly, Chancellor Gideon and Bullingdon Boris both talked up the effectiveness of these EZ proposals, with the Mayor as good as promising the Croydon would get such status before the Budget.

      So what has changed?

  3. James Naylor says:

    Well – it is true that we didn’t get what we were promised.

    But as I understand it, these things are decided by committees were people like the Mayor can only exert the smallest of influence. Even the PM may not be able to steer them far; and particularly a PM like Cameron, who comes across at times as a weak character, not prepared to lead from the front and exert executive control.

    To be fair to Boris, he has negotiated a £20 million pound Enterprise Fund instead. It’s key that this ‘riot rebuilding’ fund is only being given to the two places Boris wanted an EZ in and didn’t get one: Tottenham and Croydon. Riots saw significant fire damage in Hackney and Woolwich, but these places are not seeing a special fund.

    Reading between the lines here, it looks to me like that this is a pay-off to Boris. Presumably because he wasn’t prepared to walk away from the EZ allocations with nothing to show for his two-front runners. This suggests, if anything ,that he is still on our side on this one: after all, plenty of places have missed out on EZs in the UK and they’re not seeing a penny to compensate them for failing to win one.

    • Is this the same BoJo that is “on our side” who cancelled the £77 million Local Enterprise Growth Initiative funding for Croydon? With friends like that…

      Croydon is down by at least £35 million on government funding since last May. Compared to other London boroughs, we clearly get a raw deal from City Hall and Westminster.

  4. James Naylor says:

    The LEGI was only available to two places in London anyway – us and Barking. And, from what I can tell, LEGI funding has been cut all over the UK: I don’t think its fair to suggest that this is Boris’ decision. I can’t find anything on the internet that suggests that he, or his office chose to pull the plug. If you can post a link to correct me however, I’d be most grateful.

    You are right that we are down overall – and we are down more proportionately than some other places in London. But isn’t that because of what Andrew Pelling described in his 8/8 article here? The cultural gap between local conservatives and central conservatives. Surely that is the problem – but its a problem that can only be fixed by having more people among local conservatives with better social networks in those circles?

    I can’t see any other option myself – certainly not a political option. I’m not filled with confidence in the Labour group at all – and their party is not likely to be in central government any time soon.

    • If Boris makes a promise (or two) that he does not keep, of course that’s the Bullingdon boy’s fault.

      And if Boris is unable to do something about LEGI funding for London, what does that say about his influence with government?

      Post-riots, Boris is making much noise about not cutting the police. An easy, populist line to take, especially if he realises that if the cuts continue to go through, he can pass the buck yet again after he has failed to deliver for London.

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