§ 6. Mr. Greenwayasked the Secretary of State for the Environment if he will take steps to monitor the level of rents currently being charged in enterprise zones.
§ Mr. Giles ShawWe have commissioned consultants to monitor the effects on rents of enterprise zones. We are being kept informed of interim findings, but they will not be reporting fully on what has happened in all the zones until the autumn. This report will include information about rents being charged on comparable properties in the zones and in the surrounding areas.
§ Mr. GreenwayI welcome that aspect of comparability. Is my hon. Friend aware that a business that sets up in an enterprise zone is not charged rates for 10 years, whereas businesses that are striving to create new jobs in the surrounding local authority area have to pay rates? It is senseless that people should be encouraged to move out of one area into an enterprise zone, thereby causing the loss of jobs in one area and the creation of jobs in another. Is that not silly?
§ Mr. ShawThat inference cannot yet be drawn. We are monitoring the performance of the zones. The results will undoubtedly be varied, but to date the information is that many jobs and prospects have been created in zones and that they are of great benefit to the area as a whole.
§ Mr. EasthamHas any information been fed back to the Department to show that, as a result of the concessions given to enterprise zones, some of the owners of land in those zones are increasing rents considerably? If so, that means that we, as taxpayers, are subsidising those landowners.
§ Mr. SteenIs my hon. Friend aware that local authorities, which own much of the land in enterprise zones, are charging far higher rents than those dictated by market forces and that, in addition, they are claiming back money from the Treasury for rates that would have been paid if the companies had not been exempt from them? Will he ensure that that aspect is monitored?
§ Mr. ShawRating valuations and the rates charged outside zones are matters not for me but for my right hon. and learned Friend the Chancellor of the Exchequer. We have no evidence that rents have risen to a level that nullifies the benefit of the rate concession offered in the zones.
§ Mr. Ioan EvansMay we have an early report on the Department's monitoring of the zones? The original idea of the zones was to attract manufacturing industry, but are they not attracting retailers and wholesalers and gaining financial benefits that are denied to those outside the zones who are competing with them?
§ Mr. ShawWe shall consider the report carefully when it is available and take advice on whether to make it available to hon. Members. The way in which zones affect local industries and produce net additional jobs undoubtedly varies. However, the Government remain committed to the view that the experiment is catalytic in nature and, therefore, of great benefit.