Scottish Enterprise Areas: Tax-break plan to attract foreign firms

By Dominic Jeff
Published on 11/04/2012 00:00

BUSINESSES in key sectors such as life sciences and renewables are being offered a £275,000 tax break if they set up shop in one of Scotland’s new enterprise areas – but the latest initiative drew criticism from indigenous firms concerned about being left out in favour of incomers.

Incentives aimed at bringing foreign investment to Scotland announced yesterday by finance secretary John Swinney drew a mixed reaction from business leaders, with some claiming that the measures would put companies based outside of the qualifying hubs at a disadvantage to foreign-owned competitors.

Questions were also raised as to why the streamlined planning procedures and fast broadband being promised for the enterprise areas cannot be rolled out across Scotland.

Unveiling details of how the four sectoral enterprise areas will work, Swinney said the move would support jobs and secure investment. The assistance will target four sectors of industry at 14 sites across Scotland. As well as up to five years of 100 per cent rate relief, businesses in qualifying sectors will benefit from a streamlined planning process that has been agreed with local authorities and assistance from Skills Development Scotland to find and train staff.

The geographical hubs will receive fast broadband as a matter of priority and the incentives package will be marketed internationally by Scottish Development International. But John Robertson, managing director of Fife-based manufacturing firm Bifab, said he was “disappointed” that substantial rates relief was being offered to companies coming to Scotland when firms such as his were struggling to finance their expansion.

Bifab builds “jackets” for offshore wind turbines – essential components that protect the foundations of the structure – and has been trying to raise money to build two new factories in order to boost output.

Robertson said: “This can only mean that they are interested in attracting competition from abroad. At a time when there is already a lot of competition in the market, I would have thought they should be supporting home-grown success stories like Bifab.”

Colin Borland, the Federation of Small Businesses’ head of external affairs in Scotland, said that while he wished the enterprise areas luck, businesses situated outside the zones would be left “bemused”.

“They might justifiably ask why should their planning applications be processed any less slowly or their broadband connection be less quick than those businesses within the zones,” he said.

• Read full details of the Scottish Government’s private investment proposals

ENTERPRISE AREAS

Although the four Scottish enterprise areas are based on sectors rather than actual zones, firms will also have to be within a designated hub to qualify for incentives on offer.

• The Life Sciences Enterprise Area includes a 132-hectare site at Irvine in Ayrshire, encompassing the i3 Irvine Innovation and Industry Park and adjacent industrial hubs. It also includes the BioQuarter in Edinburgh, Biocampus in Midlothian, Forres in Moray and Inverness Campus in the Highlands.

• The Low Carbon/Renewables North Enterprise Area brings together Hatston and Lyness on Orkney, Arnish in the Western Isles and Nigg and Scrabster in Highland.

• The Low Carbon/Renewables East Enterprise Area is made up of Dundee Port – already a key renewables site – and Edinburgh’s Port of Leith, which at 60 hectares is the largest potential development area across all Scottish east coast ports.

• The General Manufacturing and Growth Sectors Enterprise Area is focused on the Creative Clyde site in Glasgow based at Pacific Quay and Prestwick International Aerospace Park in South Ayrshire.