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Osborne Budget 'unashamedly pro-growth' Osborne plans enterprise zones to boost growth
(about 1 hour later)
The Budget later this month will be "unashamedly pro-growth", Chancellor George Osborne will tell his party's spring conference later. Chancellor George Osborne is to announce 10 new enterprise zones in England as he vows to get Britain's stuttering economy growing again.
He will tell Conservatives in Cardiff it will break down the barriers that stop Britain getting back on its feet. The chancellor will tell his party's spring conference his 23 March budget will be "unashamedly pro-growth".
Mr Osborne will announce that 10 new enterprise zones will be set up in England in his Budget on 23 March. He also played down a warning by Bank of England Governor Mervyn King that the UK risked another banking crisis.
But Labour says government plans to eliminate the budget deficit by 2015 will damage growth. Labour said enterprise zones failed in the 1980s and Mr Osborne "needed a plan for growth, not headlines".
Mr Osborne will tell his party's conference that the Budget, the coalition government's second, will confront the forces of stagnation. It comes as 7,000 trade unionists marched through Cardiff to protest against government cuts.
The chancellor will tell party members that new enterprise zones will be established in areas of England that have been hit hard by the economic downturn - mainly in parts of the Midlands and the North. Members of 50 unions are gathering - with Mark Sewotka of the PCS union and Len McCluskey of Unite leading the group.
Business rates Public sector
Firms will be offered reduced business rates, simplified planning rules and less regulation at a total cost to the Treasury of £100m over the next four years. A small number of protesters blocked the road outside the Angel Hotel, where the Lib Dems are holding their Welsh conference. The large group is on it way to the Swalec Stadium - where the Tories are meeting.
Earlier enterprise zones set up by the governments of Margaret Thatcher and John Major have been criticised by two reports this week for creating too few jobs at too high a cost, and for providing only a short-term boost. The idea behind enterprise zones is simple: cut taxes and strip back planning rules in small areas to attract new businesses and create new jobs.
Margaret Thatcher and John Major had similar ideas. Thirty eight zones were established between 1981 and 1996.
The most famous was the Isle of Dogs in London's docklands - now Canary Wharf.
The gleaming towers and thousands of highly paid workers there seem to make the case for the zones.
But a report from the Work Foundation think tank says that is misleading.
When the Docklands enterprise zone expired there were just 7,000 people working in Canary Wharf, it says, compared to 90,000 today.
The zone may have helped but the think tank says the success of the area is down to investment in regeneration and infrastructure like the Docklands Light Railway, not the government scheme.
The government argues this time things will be different.
Mr Osborne is under pressure to come up with a strategy to get Britain's economy moving to replace jobs cut from the public sector - and after last month's surprise GDP figures suggested the economy could be tipping back into recession.
The enterprise zone plan - which will cost £100m over four years - is a scaled down version of one of Margaret Thatcher's most high profile policies from the 1980s.
They will be established in areas of England that have been hit hard by the economic downturn - mainly in parts of the Midlands and the North.
Firms will be offered reduced business rates, simplified planning rules and less regulation.
'Longer-term'
Earlier enterprise zones set up by the Thatcher and Major governments have been criticised by two reports this week for creating too few jobs at too high a cost, and for providing only a short-term boost.
But ministers claim to have learned lessons from the past, and say they will work in areas with high potential for growth, while working closely with local councils to tailor specific incentives to local needs.But ministers claim to have learned lessons from the past, and say they will work in areas with high potential for growth, while working closely with local councils to tailor specific incentives to local needs.
Treasury minister Justine Greening said the Coaltion plan would ensure "longer term" growth, adding that "pumping money" into areas - which she said the previous government had done - was not enough. Treasury minister Justine Greening said the coaltion plan would ensure "longer term" growth, adding that "pumping money" into areas - which she said the previous government had done - was not enough.
While there had been growth in the past decade, she said it had been in "one sector - financial services - and in one region - the South East".While there had been growth in the past decade, she said it had been in "one sector - financial services - and in one region - the South East".
"I think there's a statistic that very clearly shows that for every one job that was created between 1998 and 2008 in the North and the Midlands, there were ten created in the South East - so we clearly have an imbalance. Shadow business secretary John Denham, for Labour, said Mr Osborne had to show the new enterprise zones would work better than they did in the 1980s - and the Labour schemes he had axed.
"That's one of the reasons why we're bringing forward one of our proposals that we'll have around stimulating growth - enterprises." "The Tory-led government has wrecked Regional Development Agencies and ignored Labour pleas to give Local Enterprise Partnerships real powers over skills and resources.
The first enterprise zones were launched in 1981 by Michael Heseltine, offering tax breaks to firms to create jobs and prosperity. "Britain needs a plan for growth, not a plan for headlines."
They were pioneered in areas such as London's Docklands, Corby and Tyneside. It comes as Bank of England Governor Mervyn King, who will shortly take over bank regulation, warned that failure to reform the sector could result in another financial crisis.
'Reverse gear' But Mr Osborne said the government was already changing the way the financial system was regulated to "make sure that never again is a bank too big to fail".
The coalition government's autumn Spending Review outlined plans to cut about £80bn by 2015. Labour has criticised the government for going "too far, too fast" in attempting to bring down the deficit, arguing it should be halved in four years, not eliminated.
Labour has criticised ministers for going "too far, too fast" in attempting to bring down the deficit, arguing it should be halved in four years, not eliminated. Shadow chancellor Ed Balls has said the coalition government is endangering the UK's future by "putting the economy into reverse gear".
Shadow Chancellor Ed Balls has said the coalition government is endangering the UK's future by "putting the economy into reverse gear".
But the government says the spending cuts are needed because of the financial "mess" left behind by the last Labour government and are vital to getting the economy moving.But the government says the spending cuts are needed because of the financial "mess" left behind by the last Labour government and are vital to getting the economy moving.
People in the UK can watch Mr Osborne's speech live on the BBC News Channel or on the news website at 1400 GMTPeople in the UK can watch Mr Osborne's speech live on the BBC News Channel or on the news website at 1400 GMT