Bringing Hong Kong to Belfast? The case of an enterprise zone? by Liam O’Dowd and Bill Rolston

At first glance, the intensity of the debate surrounding the enterprise zone (EZj experiment in the UK seems rather disproportionate, given its limited technical and economic effects to date.’ Many of the most incisive critics of the policy, however, have pointed out that the main objectives of the zones have been politi- cal and ideological - objectives which are at the heart of the debate over the economic strategy of the Thatcher government (Massey, 1982; Anderson, 1983). 130th proponents and critics of the zones have associated them with the policy of untrammelled free enterprise, with the encouragement of small businesses, with the attempt to implant ‘Hong Kong’ capitalism in urban areas in order to regenerate decaying localities and with the aim, however inconsistently expressed, of combatt- ing unemployment.

The origins, politics and ideology of EZs have been thoroughly discussed else- where (International Journal of Urban and Regional Research 6 , 3 , September 1982; Anderson 1983). One of the few concrete conclusions to be drawn about the zones is that they encompass a wide variety of localities. This has been hailed by government ministers as adding to the merit of the experiment in that it will test the concept in widely divergent contexts and under a variety of conditions. One result is to reduce comparability and to make it exceedingly difficult to evaluate the zones as a national policy. The official monitoring exercise of the first three years makes these problems plain (Tym and Partners, 1981-84). In these circum- stances, it seems useful to examine how national policy is translated into practice in one zone. Such an examination helps to put the general political and ideological debate into perspective, as well as to suggest some general implications for the technical implementation and redefinition of government policies. In this paper,

?We would like to acknowledge the help of several Belfast planners, EZ managers and business managers. This article is a much revised version of a paper presented to the Annual Conference of the Sociological Association of Ireland in 1983. From the outset the EZ policy has generated a considerable literature. For an early EZ biblio-

graphy of 41 entries, see Department of EnvironmentlDepartment of Transport (1981). Taylor (1981) and Butler (1982) discuss the British and American political and legislative background to the EZs. Rodrigues and Bruinvels (1982) provide a guide to the first 11 UK zones mainly for businessmen, while International Journal of Urban and Regional Research (1982) includes a debate between the original proposer of the EZs, Peter IIall, and a range of critics.

Liam O’Dowd and Bill Rolston 2 19

we consider the Belfast EZ, designated in October 1981 as one of the first batch of 11 zones. As no one zone can be taken as representative, the Belfast EZ is as appropriate as any other case study. Indeed, the special features of the Northern Ireland (NI) situation may throw into sharper relief the character and contradic- tions of the whole EZ initiative.

I Translating enterprise zones to Rorthern Ireland

In many respects, the implementation of EZ policy in NI was less controversial that it was in Great Britain. The rhetoric of local politics is far removed from that of left and right in Britain; thus perception of the EZ as an integral element of ‘lhatcherite economic policy was muted. Instead, the zones were seen as just one more set of industrial incentives to which NI was automatically entitled, in keeping with its now well established status as the most deprived region of the UK, on a whole host of socioeconomic indicators, including unemployment. Secondly, unlike British regions, NI comes under the direct administration of central govern- ment. Local authorities have little power. The Department of the Environment (Northern Ireland) - DOE (NI) - is the agency responsible locally for the manag- ing of the EZ rather than local authorities as in Britain. Thus, in NI EZs were not part of an overarching struggle between local authorities and the Tory government, as in Britain. Furthermore, traditional regional strategy in NI appeared to be in ruins. This had been based on the attraction of mobile international investment. But from the mid-1970s and particulalry since 1980, one multinational firm after another had withdrawn from the province.2 A series of dubious and occasionally catastrophic government initiatives, culminating in the De Lorean fiasco, had devalued the strategy of heavy state subsidization of multinationals. As a result, planners and politicians began to emphasize the merits of indigenous small busi- ness and self reliance (NI Government, 1981) in a way which was attuned to the EZ philosophy.

Most significantly, perhaps, NI was not just another declining region of the UK economy. For well over a decade the often violent conflict over the legitimacy of the state itself had placed distinct limits on regional economic strategy. Politicians, civil servants and economists began to refer increasingly to the rather monolithic term ‘the troubles’ as a major cause of economic decline (NI Government, 1976; Rowthorn, 1981; Ulster College Group, 1982). Over the last four years, however, th is argument has been modified in a highly significant way. ‘The troubles’ have been redefined as a problem of perception and business confidence. In particular, the ‘distorted media image’ of the province is attacked - ‘the quite unnecessary preoccupation with the secuirty situation’ (NIEC, 1980, 27), and the claim made that ‘our economy would be much stronger if, for example, television coverage of

’Multinationals which have withdrawn completely, or greatly contracted operations in NI include Courtaulds, ICI, Enkalon, Michelin, Goodyear and Grundig.

220 Bringing Hong Kong to Beljast? The case of an enterprise zone

industry portrayed the true situation’ (NIEC, 1982, 32-33). The NIEC made representations to the BBC on the subject and surveyed images of the province among potential investors. The findings of a MORI poll of international investors, commissioned by the Department of Economic Development, seemed to confirm the poor image of NI internationally.’ Meanwhile, the NI Chamber of Commerce undertook their own publicity campaign to demonstrate the normality of life in the province. The corollary of this approach was that the ‘troubles’ were simply a containable and localized security problem, a view which accorded closely with the predominant Unionist view of the conflict. To this British ministers added a some- what greater emphasis on getting a measure of agreement among local politicians on limited devolution of powers, as an aid to economic recovery (Prior, cited by NI Information Services - NIIS - 5 April, 1982).

The importance of ‘image’ had a number of implications for the EZ policy. Firstly, it confirmed the tendency to emphasize local small business activity as opposed to attracting new investment to NI. Secondly, the political decision to locate part of the Belfast EZ in west Belfast provided an opportunity to attack the problem of image at its very core. West Belfast had been identified by the world’s media as the cockpit of the conflict for nearly 15 years. As a result of over two decades of deindustrialization, unemployment in the area reached over 50% in some localities, compared to an average of 20% in the province as a whole4 If the EZ could be seen to be even moderately successful here, where the real impact of the ‘troubles’ was greatest, it would become possible to undermine ‘distorted media images’ and to attract outside investors to other far more peaceful localities in NI.

The role of EZs as a ‘small areas’ policy had some specific implications for NI. As Anderson (1983, 328) points out, in Britain the Tory government succeeded in generating intense competition among local authorities for EZ designation, thus defusing political and ideological opposition to the zones, To encourage similarly intense spatial competition in NI it ran the risk of maximising political opposition to government policy. The sharpness of sectarian segregation in urban areas meant that spatial competition is closely linked to the struggle over the legitimacy of the state itself. Thus, in designating both the Belfast, and later the Derry EZ, the government took great care to include both Protestant and Catholic areas.

Considered in financial terms, the EZ measures added relatively little to the battery of regional and industrial incentives already existing in NI, incentives which had been deemed the most attractive in Europe (Plant Location International, 1983) and which had been proclaimed locally as creating ‘a big EZ of the whole of

NI’ (NI Chairman of the Society of Chartered Accountants, cited in Berfast News- letter, 24 March 1983). The revised regional strategy, unveiled in March 1983, had

aThis MORI poll of international investors revealed considerable ignorance of facilities in the province. Moreover, foreign businessmen questioned showed an opposition to investing in NI and ranked NI nineteenth out of 20 countries in Europe as possible locations for investment. ‘The NI Census (1981) revealed that several predominantly Catholic wards in west Belfast had unemployment rates ranging from 30% to over 50%. Protestant wards in the area also had rates above the provincial average, reaching 33% in one case.

Limn 0 ’Dowd and Bill Rolston 22 1

derated industrial premises throughout NI and instituted a corporation tax relief grant of up to 80% for newly approved projects. The latter measure was to combat the Irish Republic’s attractive 10% Corporation tax on incoming firms. NI’s promo- tional agencies were restructured once again with the setting up of a new and more streamlined Industrial Development Board.’ The small industries agency, the Local Enterprise Development Unit (LEDU), had extended its operations to Belfast since 1979 and now included service as well as manufacturing firms within its remit. Urban Development Grants to encourage renewal were available throughout the older parts of Belfast and Derry. Specific EZ measures added few extra financial incentives. The most important was the 100% derating of commercial premises, which did not apply outside the zone. Manufacturing premises, already partially derated prior to 1983, were not fully derated throughout the province. The EZ Development Land Tax exemption meant that development value realized from the disposal of an interest in land, normally taxed at a rate of 6%, was now abolished. This favoured estate agents and developers, although it remained possible for firms outside the zone to avoid paying the tax anyway by clever accounting practices. The other main incentive, the 100% capital allowance (for income and corporation tax purposes) again offered only marginal advantages to EZ companies. Here the main advantage was to commercial firms as manufacturing premises in the rest of NI already had such allowances, ranging from 50% for large to 100% for small industrial workshops. In any case, it was the state, rather than private developers, which provided the bulk of industrial buildings in NL6

The apparent lack of tangible advantages for potential EZ businesses made the ‘intangible’ aspects of the zone all the more important as the EZ management team began to develop its coordinating and publicity functions directed at a specific urban area.

I1 Designation and management

When the DOE(N1) constituted an EZ management team to run the zone on a day- to-day basis, the latter was faced with the task of coordinating the activities of a

’The setting up of the IDB in 1983 at the height of the local economic crisis was welcomed by the local media, the local branch of the Confederation of British Industry and a variety of professional bodies as putting NI on a par with the Industrial Development Authority in the Irish Republic. The trade unions were critical and instead advocated a local version of Labour’s Alternative Economic Stragegy which would create 40 000 jobs quickly (Belfast Telegraph, 23 March 1983; Beljiasf Newsletter, 24 March 1983). More recently, the IDB has been heavily criticized in an NIEC report (1984) on its general job promotion strategy for setting targets too low and for emphasizing the search for internationally mobile capital rather than small indigen- ous business. In its first year of operation it only promoted 2858 jobs, far short of its 5000 target.

Other EZ incentives such as the simplification of planning procedures, freedom from industrial training levies and from demands for statistical information seemed to be of little or no import- ance in Belfast. Here OIU interview information confirmed the findings of Tym and Partners for the 11 EZs monitored.

222 BringingHong Kong to Belfast? The case of an enterprise zone

variety of government departments and promotional agencies within the EZ. Secondly it had to administer some relatively minor financial incentives, additional to NI regional incentives. The latter, however comprehensive, had proved spectacu- larly unsuccessful in attracting incoming capital, stemming closures or offsetting mass unemployment, Finally, the actual characteristics of the zone designated owed little to technocratic criteria. Instead, they were influenced by a number of local political and ideological priorities and a general concern to apply Thatcherism to NI’s economic problems.

When Secretary of State Prior cut a piece of red tape (‘the last piece of red tape in the Belfast EZ’; cited in NIIS, 21 October 1981) in November 1981, he declared open an area which encompassed over 500 acres. This was the culmination of seven months of a distinctly political process whereby the exact boundaries of the EZ were established. In February 1981, Prior had announced that the EZ was to com- prise 200 acres approximately in the inner city, running in a narrow ribbon through Protestant and Catholic areas and taking in ‘a series of run-down and under-utilised (textile) mill complexes’. The logic of this strategy, as in other EZs, was that designation would spur mill owners and developers into action to refurbish these properties. Unlike some areas in Britain, owners of unused but physically sound properties in Belfast were not subject to rates, nor were they threatened by an acquisitive state sector eager to acquire land for industrial use. In Belfast, the con- tinuous postwar decline of the local linen industry had left heavily built-up, but now largely vacant, mill complexes in the hands of people who were ‘waiting for something to turn up’. One of the main political considerations behind the EZ was that the government be seen to be ‘doing something’ about the declining inner city, a consideration that seemed to be paramount in the identification of the original site. If the NI Office (NIO) had seen employment creation as the prime aim of the zone, there were many reasons for avoiding west Belfast.

Political considerations of a different sort help to explain why the final EZ area was 300 acres larger than that initially mooted. Just outside the original boundary in west Belfast lay Mackies engineering plant. For long one of the main pillars of the predominantly Protestant engineering industry in Belfast, the firm had been contracting for some time. It now sought inclusion in the EZ and mobilized local Unionist politicians to lobby for its interests. Some of the latter sought to redress what they saw as an imbalance anyway, in that rather less than half of the original site could be termed ‘Protestant’ territory. Mackies was included, but not before the Catholic Westminster MP for the area had succeeded in scoring a counter- point by having a recently closed bakery complex, in a Catholic area, included also. The result was to make Mackies by far the largest firm within the zone, but, unlike the case of Vickers Defence Systems plant in Newcastle, the Belfast EZ was not interpreted as a means of restructuring or saving one large firm.

One important consequence of the initial redrawing of the boundaries in Belfast was that the NIO could not be accused of capitulating to ‘sectarian interests’, but instead was explicitly seen to be pursuing a non-sectarian balance. While this concern was not the major factor in the redesignation of the zone, it does highlight

Liam O’Dowd and Bill Rolston 223

the political, as opposed to the technocratic, criteria involved. The contribution of planners appears t o have been slight; indeed, in the view of one interviewed by us, planners were reduced to drawing up technical justifications after the event to legitimate solely ministerial decisions. One more addition was made to the original site, however, that is, the North Foreshore of Belfast Lough. Here the planners may have had more input. The site was part-owned by Belfast City Council and part by the Belfast Harbour Commissioners, and was on land recently reclaimed from the sea and almost toally unused. Here too it could be claimed that the site was ‘readily accessible to the workforces of both major communities in Belfast’, although it was some distance from any residential area (NI Minister for the Environment, cited in NIIS, 21 January 1981).

As finally constituted, therefore, the Belfast EZ had a number of notable charac- teristics. Firstly, it comprised in effect two very different sites, a fact recognized by the government’s monitoring team, which treated them both separately. The inner- city sector seemed to comply more with the urban renewal aims of overall EZ policy, while the North Foreshore was more akin to a typical greenfield site on which large firms might be located. Nearly 90% of the inner-city area was privately owned, whereas the Foreshore was in the hands of two public agencies. In this, the latter was not unlike Swansea and Clydebank EZs, but, unlike them, it had relatively little public investment prior to inclusion in the zone.

In some respects, however, the management of the Belfast EZ is unique. As we noted above, it is under the direct authority of the DOEfNI), and not the City Council. Councillors have been given some semblance of participation (along with professional bodies and business interests) through the Minister’s EZ Advisory Committee. As far as we have been able to ascertain, the role of this body is slight and real power lies with the DOE(N1). At the outset, the trade unions rejected an invitation to participate and condemned the whole EZ exercise as a sham (Belfasf Telegraph, 14 May 1981).

Again uniquely in the Belfast case, the DOE(N1) has contracted out the day-to day management of the zone to the private sector, to a team jointly comprised of planning consultants, who were concerned with planning Belfast since the 1960s. and to a firm concerned with job promotion and marketing. The planning con- sultants have now withdrawn as there is little further scope for planning schemes within the zone.

The specific history of designation and implementation reveals the considerable extent to which the role of the EZ management team was circumscribed from the outset. In line with EZ pplicy, it did emphasize its commitment to keep public investment as low as possible in relation to private investment (EZ Manager, cited in Belfast Telegraph, 6 July 1982) and its success in this respect has been high- lighted in statistics issued periodically on the progress of the zone. The importance of this policy is magnified in the Belfast case by the limited extent of public owner- ship in the zone and the lack of prior public investment in site preparation.

The EZ management is explicit that job creation is not its primary aim, at least as far as the inner-city sector is concerned. One of the planners centrally involved observed:

224 Bringing Hong Kong to Beljast? The case o jan enterprise zone

The f ist priority in West Belfast is not the attraction of new jobs; it is to arrest the present decline in jobs and to restore confidence to the area (cited inEstute Times, 18 March 1983).

Yet one of the management firms originally involved in management of the EZ was somewhat inappropriately named Job Creation Ltd. The firm’s personnel continue to be employed within the present management team as individuals, although their claim to be ‘resultants rather than consultants’ is slightly misleading; they do get a fee for each job created, but this is extra ‘profit’ beyond their basic consultancy fee.

Clearly, however, the location of the EZ within or near areas of high unemploy- ment does give the impression that the policy is meant to alleviate the problem, although no monitoring is undertaken to assess the extent to which EZ firms employ labour from its own immediate area. In many respects the employment potential of the EZ seemed limited from the outset anayway. The North Fore- shore seemed to be the most promising site for attracting large firms new to NI. Neither sector seemed attractive, however, to labour intensive firms such as hotels, retail outlets or offices, given the extent and location of provision in Belfast generally.

In the circumstances, the EZ management team has redefined and specified the rather ambiguous and generalized policy aims outlined by the government. The managers have emphasized two closely interrelated elements, the encourage- ment of small businesses and the development of an effective land use strategy within the zone. The latter appears to be the primary aim of the management team; the encouragement of small businesses is a means to that end. In addition, much cffort is cxpcndcd in markcting thc zonc, that is, ir, image building, as part of the strategy of restoring business confidence in Belfast. The managers suggest that developers, banks and estate agents had written off the inner city as an area for investment. Little had been accomplished either in rehabilitating or subdividing the mill complexes. Other pressures arising from the ‘troubles’, population migra- tion and redevelopment had forced small businesses to close or move out of the inner city altogether. The managers aimed at focusing the funds of private investors, and to a lesser extent state agencies, within the zone to stimulate physical regeneration.

111

Given the emphasis of EZ management on ‘aggressive coordination’ and public relations, it is scarcely surprising that the most visible aspect of the EZ is its high advertising profile. In some respects, the campaign to increase confidence is seer,, potentially at least, as a self-fulfilling prophecy. This makes evaluation rather difficult in practice. Nevertheless, EZ managers can claim some ‘success stories’.

The major success to date claimed by the managers is the Hillview Enterprise Park. Located in the inner-city segment, this consists of five hectares of previously

The impact of the zone

Liam 0 Dowd and Bill Rolston 225

residential land owned by the NI Housing Executive. This was transferred to the IDB and developed in conjunction with the DOE(N1) as a modern industrial estate, Owner occupiers have invested €2.4 m in building industrial units, while the state’s financial role has been limited to site assembly and preparation and to acting as a ground landlord. In many ways Hillview is a prototype of EZ operations as origin- ally envisaged by the government: state investment was limited; a coordinator was appointed to expedite the servicing of the site and it is being marketed as a show- piece project. Yet, the impact of the project is limited in a number of ways. It contains just eight firms providing 257 jobs. One firm employs 116, making it the largest employer among the EZ ‘client firms’. All of the firms in Hillview have relocated from elsewhere within the zone. The project was oversubscribed by small businesses wishing to take units and this had led to the initiation of two further small schemes modelled on Hillview. Given the small extent of public ownership, however, and the lack of plans for large-scale public acquisition of sites, the potential for this type of development is limited.

The other main development in the inner-city sector has been the accelerated refurbishment of the old textile mills. Here the EZ team has sought to encourage owners and developers to subdivide and rehabilitate the mills in order to attract small firms with no capital to invest in owner-occupied units. Some activity has been generated, despite the reluctance of banks to lend money on what they regard as non-saleable assets. Again EZ managers have sought to coordinate services including Urban Development Grants to developers. Again there are some ‘success stories’, notably one mill which was vacant in 198 1, was then bought by a developer, and by Spring 1983 the whole ground floor had been leased to 22 separate small firms. Even so, some mill managers complain of too many state agencies, too much bureaucracy and a lack of government commitment to invest money.

The North Foreshore has provided the bulk of jobs new to NI within the zone - 300 workers in 17 firms by early 1984. The main success has been the attraction to the area of a food distribution outlet committed to providing 100 new jobs. Units are being built by speculative developers but the demand has been mainly from commercial, that is, distributive users attracted by the 100% commercial derating. Even this is partially offset by higher commercial rents and high on- site building costs. These developments have provoked some objections within the EZ Advisory Committee about favouritism being shown to firms within the zone. Given the location of the site, beside harbour facilities and at the nub of the inter- nal motorway system, it appears most likely that it would have been developed anyway *

EZ managers consistently pointed out to us that they were less interested in employment creation or in subsidizing ailing big f m s than in encouraging large numbers of small firms. Echoing the general conclusion of Fothergill and Gudgin (1982) regarding the UK as a whole, they saw the lack of suitable premises as the main problem facing inner-city businesses. Service fums outnumber manufacturing f m s by two to one among EZ ‘clients’. Retailers, builders, car repairers, other local services and specialist manufacturers predominated (Tym and Partners, 1984,

226 Bringing ii-ong Kong to Belfast? The case of an enterprise zone

A65). Clearly, the image of the EZ as a miniature Silicon Valley bears no resemb- lance to the Belfast reality.'

There is evidence beyond that of demand for floorspace which suggests that there is some scope for the emphasis on small business within industrial policy generally. Small firms (that is, those with less than 50 employees) in NI account for a growing proportion of employment in the manufacturingservice sector as larger firms close or contract. They accounted for 43% of total employment in NI in 1981 compared to 35%in 1975 (Mackey, 1983, 13). Hart (1983) has argued that between 1971 and 1978 the number of manufacturing firms with less than 50 employees grew in NI by 16% but declined by 14% within the Belfast Employment Service Office area. This decline was mainly in the inner-city area which suggests that there is scope for a small business strategy there. It is also clear, however, that encouraging small firms will make little impression on the employment prob- lem. Examining state-sponsored industry in NI between 1945 and 1982, the NI Economic Council (NIEC, 1983, 29) notes that small manufacturing firms have accounted for only 5% of the total job years created in that period while account- ing for 31% of the total number of projects sponsored. Furthermore, while jobs in small firms cost less to promote, they are less durable. They have an average of six years duration, compared to nine years for projects over 1000 employees (NIEC, 1983, 30). Mackey (1983) has pointed out, however, the substantial employment growth in the number of small service firms in NI between 1975 and 1981; this is reflected in their predominance within the EZ.

Although employment creation is not ostensibly a top priority of the EZ, successes in this area are still publicized as an indication of the success of the EZ itself. In this respect, the record of Belfast is modest and shows a net loss to Feb- ruary 1984 of at least 100 jobs. This has been largely due to the laying off of over 700 employees by the large Mackies engineering plant within the zone. The EZ team estimated that in April 1984 3700 jobs existed within the confines of the EZ. EZ policy directly affected only 732 jobs, or 20% of the total jobs within the zone. By this date managers could claim that the EZ had generated 268 jobs new to NI and 594 which were new to the EZ itself. This meant that 326, or 55%, were relocations from outside the zone, overwhelmingly from within the Belfast urban area. A further 138 jobs were relocated within the zone, which meant that 63% of the 732 jobs affected by the EZ were relocations. Relocations did involve a 14% increase in employment on average. The scale of these successes can be measured against the 26000 unemployed in inner and west Belfast in January, 1984.' Furthermore, there is no proof that employers in the new firms draw their employees from nearby housing estates which have unemployment rates of over 50% in places. The degree of commitment to alleviating inner-city unemployment is perhaps adequately expressed by the NI industry minister at the outset of the

'As far as we could ascertain, high (that is, computer) technology was represented in the zone by one f m only, a computer services firm, employing one engineer and one secretary.

Unpublished Department of Economic Development statistics, based on Unemployment Office figures.

Limn O’Dowd and Bill Rolston 227

EZ: ‘it is not beyond the bounds of possibility that very real benefits will be felt by the communities in whose areas such (EZ) developments are taking place’ (cited in NIIS, 21 January 1981; emphasis ours).

I t is even more difficult to assess the impact of the other main element in EZ strategy: the emphasis on image building. Along with the recently designated free- port at Belfast International Airport, it is one of the two area-specific measures within NI taken to improve the image of the province. At this level, it is clearly a response of the recent tendency of policy makers and politicians to define the N1 economic crisis largely in terms of the ‘distored media image of the p r~v ince ’ ,~ and the need to present the most attractive package of incentives to prospective investors. There is a pervasive sense of the sharp competition not only between N1 and other development areas in Britain, but particularly between NI and the Irish Republic’s Industrial Development Authority (see NI Assembly, Economic Develop ment Committee, Minutes of Evidence, February-March 1983). The latter has succeeded in promoting five times as many jobs as NI since 1970 (NIEC, 1983, 54). In this context, the EZ tends to be defined as another weapon in the propa- ganda armoury of the state to offset the effects of the ‘troubles’. The specific contribution of the EZ to this task derives in the main from its location and its physical attributes. ‘Before and after’ pictures of the EZ site can scarcely fail to reveal success in transforming hitherto vacant or derelict sites to economic use. Thus the EZ provides an ‘alternative’ Belfast which can be shown to visiting in- dustrialists, t o counteract those parts regularly shown on television screens and to visitors anxious to see the effects of the ‘troubles’ at first hand. The close juxta- position of the zone to the most affected areas serves to show that ‘normality’ is gradually reasserting itself, even here. I t would appear, in line with the EZ mana- gers’ own view, that the public relations aspect of the EZ is by far the most significant in its NI context.

At a very crude level the EZ suggests a policy of even-handedness vis4-vis Protestants and Catholics. Belfast planners are well aware, however, of the limits of spatial determinism in bringing about integration. Although the EZ is located in both Protestant and Catholic areas, in the inner city at least, it also serves as a buffer.” There is no guarantee that workforces will be mixed, no government monitoring of commitment to offset higher rates of Catholic unemployment in Belfast.

At another level, the EZ may be seen as a physical strategy of urban develop- ment which seeks to reverse the policies of the 1960s. It is in line with general Tory policy of privatizing urban areas through the sale of housing sites and council

“The negative and often misrepresented image of the province which is portrayed abroad’ is ‘the single most serious deterrent to attracting new investment to NI’, according to hdustry Minister Adam Butler (Belfast TeZegruph 11 January 1984). lo Recent trends in urban planning in Belfast have indicated a willingness by planners to build permanent physical barriers to separate Protestant and Catholic communities. In addition, there is some evidence of direct security force involvement in housing and town planning in ar~ attempt to tailor the latter to military and social control requirements, especially in area8 like west Belfast (see Alcom, 1982).

228 Bringing Hong Kong to Belfart? The case o f an enterprise zone

housing. It recognizes the effects of government policy and the locational patterns of manufacturing industry in accelerating the decay of inner cities, but seeks to revitalize the inner city by meeting the perceived requirements of (mainly small) capital rather than by bureaucratic response to the demands of community groups and tenants associations on the basis of social needs. The other side of Tory inner- city policy in NI has been fewer housing starts, cutbacks in home helps, disband- ment of meals of wheels, attempts to close schools and the shifting of ‘certain of the tasks of urban renewal from the public to the private sector’ (Butler, NI Mini- ster of State, cited in Belfast Telegraph, 8 April 1981).

IV Conclusions

Both the legislative drafting of the EZ measures and the specific experience iri Belfast suggest that EZs have fallen far short of the notions of ‘experimentation’ and ‘laboratory’ initially intended (Butler, 1982, 109; Anderson, 1983, 316). EZs are an attempt by the Tory government to redefine the ‘needs of capital’ in terms of less state intervention, less ‘bureaucratic socialism’ and more freedom to make profits. Belfast provides no evidence that capital needs less state help. On the contrary, the impact of industrial policy generally, and the EZ in particular, would seem to be directly proportionate to the degree of state intervention. The Belfast EZ is an example of more state intervention, not less, in coordinating, planning and marketing the zone. In itself, however, it is a cheap policy and the reluctance to publicly acquire buildings and land has limited its impact. Small businesses do not express any desire for less planning or state involvement, rather they are heavily dependent on state agencies as providers of aid and as customers (see Middleton and McEldowney’s 1983 comparison of Belfast and Glasgow). The implication of Tory policy that unsubsidized capital will revitalize the NI economy, where sub- sidized capital has failed, is plainly ludicrous.

The emphasis on publicity is a distinctive characteristic of the whole EZ policy (Anderson, 1983, 342); zone authorities see it as a means of establishing business confidence in an area (Tym and Partners, 1984, 147). In Belfast, however, the emphasis on ‘image-building’ is particularly strong because of the marginal incen- tives which the EZ offers over and above the exceptional aid available to industry throughout NI. Furthermore, the prevalent view that ‘changing the province’s image’ is the first step in the reconstruction of the local economy throws EZ publicity into even sharper relief, although such public relations campaigns are inherently precarious and problematic in the political circumstances of NI.

One of the most important aspects of EZ policy is that it minimizes the validity of comparisons among zones, thereby making a thoroughgoing technocratic evalua- tion difficult, if not impossible. The story of how the Belfast site was selected and its exact boundaries fxed is one of centralized political decision making. Similarly, in Britain central government used no consistent set of criteria in the designation of the zones. In some zones, such as Clydebank, Swansea and Corby, there was

Limn 0 Dowd and Bill Xolston 229

massive public investment prior to designation; in others, such as Belfast inner city and Speke, there was little or none. Some zones contained quasi-greenfield sites in public ownership, others were heavily built-up and in private ownership. The goverment’s overall monitoring exercise, now terminated after three years, argued that the impact of EZ measures could not be separated from those of other policies and programmes applied to the sites (Tym and Partners, 1984, 144). The Third year report of the monitoring team illustrates this point most clearly with respect to Corby. This has been the most successful zone by most criteria. One of the few zones to attract firms from outside its immediate region, it appears to have stimu- lated economic activity and a relatively large number of jobs (over 1000). Yet its success must be considered in the light of massive public expenditure under a variety of national and EEC programmes. The monitoring reports have shown the difficulty of establishing the net effects of the EZs in their respective regions - a major problem, given the evidence, from Belfast and elsewhere, of the importance of short-distance relocations as opposed to new starts and interregional moves. The difficulties of evaluation and comparison, allied to the resistance of good public relations to ‘bad news’, suggests that there is ample scope for ‘success stories’ to be highlighted as bearing out EZ philosophy, while failures are attributed to particularistic factors such as lack of local enterprise.

Zone authorities are not simply public relations agencies, however. Their strategy involves extending the collaboration between public and private sectors in property development, via rates relief, the provision of serviced land and new planning schemes. In Belfast, the very fact of designation as an EZ has accelerated the release of funds from government agencies and helped coordinate and expedite the activi- ties of a variety of public agencies within the zone. This effect has been even more marked in some of the British zones. Nevertheless, the evidence from Belfast bears out general indications from the other zones that the practical impact of the policy is limited, and likely to remain so. There is little sign that major structural changes are occurring which would help recreate the spirit of Hong Kong or the golden age of nineteenthcentury British capitalism.

The Tory proponents of EZs have claimed that they are an experiment to test ‘two distinct philosophies’ on offer, that is, capitalist non-intervention versus state socialist intervention. There is little doubt that the EZs reflect a further tilting of state intervention in favour of capital although they d o not imply less intervention as such. As Anderson (1983,327) has shown, in more global terms, there is nothing inherently socialist about state intervention anyway. In any case, the Belfast experience shows how local managers side step the debate over political ideology. Their day-today practices highlight the forces which tend towards ideological convergence on the issue of the state’s relationship to capital.

V References

Alcorn, D. 1982: Who plans Belfast? Scope 52,4-6.

230 Bringing Hong Kong to Beljast? The case of an enterprise zone

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Butler, S.M. 1982: Enterprise zones: greenlining the cities. London: Heinemann. Department of the Environment/Department of Transport 198 1 : Enterprise zones:

a select bibliography based on material located in DOE/DT Library. Biblio- graphy No. 203, London: DOE/DT.

Fothergill, S. and Gudgin, G. 1982: Unequal growth: urban and regional change in the UK. London: Heinemann.

Hart, M. 1983: The small firm entrepreneur: an analysis of his role in the Belfast urban economy. Paper presented at the SSRC Urban and Regional Economics Seminar Group conference, 1983.

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Massey, D. 1982: Enterprise zones: a political issue. InternationalJournal of Urban and Regional Research 6,429-34.

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1981: Industrial development in Northern Ireland: a framework for action. Belfast: HMSO.

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Cet article examine la designation, la mise en oeuvre et l’impact de la Zone Enterprise de Belfast depuis son commencement. En particulier, l’article montre comment la politique et l’idkologie de la politique globale de la Zone Entreprise ont btb pragmatiquement red6finies en rbponse aux conditions locales. Les directeurs locaux ont dCfmi le but promordial de la zone: la stimulation du renouveau urbain par l’encouragement du petit commerce. Ici, son impact est limit&, surtout en termes de cdation d’emplois. En Irlande du Nord, la Zone Entre- prise a bt6 d6finie seulement comme une mesure supplkmentaire du gouvernement pour com- battre la crise de 1’Bconomie locale. Comme les hommes d’affaires locaux, les fonctionnaires, les 6conomistes et les ministres du fouvernement interprbtent de plus en plus la crise en termes de l’image dkformke donnCe par les media de la province, les relations publiques et tous les aspects qui concourent i la cr6ation d’une image de la zone ont bt6 accentuks. Les directeurs de la Zone Entreprise insistent sur le but de redonner confiance aux affaires, but qui rend l’bchec ou la rCussite de la zone trbs difficile Cvaluer. Cependant, il parait clair que loin de limiter l’implication de 1’Ctat avec le capital, il Mend dans de nouvelles directions. En fait, il va sans dire que la Zone Entreprise est un essai de deux philosophies Cconomiques distinctives. Les mesures de la zone ont, pour la gestion d’Ctat de 1Uconomie d’Irlande du Nord, des bQn6- fices idhologiques i court-terme; mais l’affmation que la libre entreprise sans entraves peut fonctionner la oh le capital hautement subventionnk a ChouC est en fin de compte peu con- vaincante dans une Cconomie pCriph6rique en dCclin.

Dieser Artikel untersucht die Bestimmung und Erfullung sowie den EinfluD der Belfaster Unternehmenszone seit ihrem Beginn. Er zeigt besonders, wie die politischen und ideologischen Ideen der gesamten Untemehmenszone auf pragmatische Weise neu defmiert wurden, als man die ortlichen Bedingungen in Betracht zog. Am Ort ansiissige Manager haben das Hauptziel der Zone als die Stimulierung der stadtischen Erneuerung defmiert, die durch die Ermutigung kleinerer Untemehmen erreicht werden SOU. Die Wirkung auf diesem Gebiet ist jedoch bes- chrinkt, da die Schaffung neuer Arbeitsplatze einen kritischen Punkt darstellt. Wiele sahen die Untemehmenszone als nur eine weitere RegierungsmaDnahme, um der Krise in der nordiris- chen Wirtschaft entgegen zu treten. Anassige Geschiiftsleute, Beamte, Wirtschaftswissen- schaftler und Regierungsminister bezeichnen die Krise zunehmend als eine von den Medien verzerrte Darstellung der Lage in der Provinz, und daher wird der Zone eine grol3e Bedeutung auf dem Gebiet der Public Relations und des Immagebaus zugewiesen. Manager der Zone heben das Ziel, das Vertrauen in die Unternehmen wieder herzustelten hervor, ein Ziel, das es schwer macht, Versagen oder Erfolg zu beurteilen. Eins scheint jedoch klar, man ist weit davon ent- femt, die Kapitalverwicklungen der Regierung zu beschrbken, man leitet sie ganz einfach in neue Bahnen. Dies macht den Anspruch, die Zone sei ein Testgebiet fur zwei unterschied- liche wirtschaftliche Philosophien hinfdlig. Die MaDnahmen der Zone haben kurzzeitige ideo- logische Vorteile fb das Staatsmanagement der nordirischen Wirtschaft, aber der Anspurch, dai3 ungehinderte freie Marktwirtschaft funktionieren kann, wo hochsubventioniertes Kapital versagt hat, ist, in einer sich zuriick entwickelnden Randwirtschaft, letztendlich nicht uber- zeugend.

Este articulo examina la designacidn, implementacidn e impacto de la zona industrial de Belfast, desde su inicio. En particular, muestra c6mo la politica y la ideologia generales del concept0 de zonas industriales ha sido definida nuevamente en la prdctica, como consecuencia de las condiciones locales. Los gerentes locales han especificado el objectivo principal de la zona es el estimular la renovacidn urbana mediante el foment0 de 10s negocios pequeiibs. En esto su impacto ha sido limitado, especialmente en lo que respecta a la creacidn de nuevo empleo. En

232 Bringing Hong Kong to Belfast? The case of an entelprise zone

el Norte de Irlanda la zona industrial ha sido defmida como una mi& de las diversas medidas gubernamentales para luchar contra la crisis de la economia local. Conforme 10s comerciantes locales, 10s funcionarios del gobierno, 10s economistas y 10s ministros del gobierno interpretan de nuevo esta crisis en t6rminos de la imagen torcida que 10s medios publicitarios presentan de la provincia, 10s aspectos de relaciones pdblicas y de formacihn de una imagen de la zona han sido recalcados. Los gerentes de la zona industrial acenNan el objetivo de restaurar la con- fianza comercial, un objectivo que hacen que la evaluacidn del 6xito o fracas0 de la zona sea cxtremadamente dificil. Parece evidente, sin embargo, que en vez de limitar la participacidn del cstado con el capital, la aumenta en nuevas direcciones. De hecho, esto hace superflua la de- claracidn de que la zona industrial es una prueba de dos filosofias econdmicas dietintas. Las medidas de la zona si que tienen beneficios ideoldgicos a corto plazo para la administracidn estatal de la economia de Irlanda del Norte, per0 la afiiacidn de que la empresa libre sin trabas puede tener &xito, donde el capital con grandes subvenciones ha fracasado, no llega a convencer en una economia perifhrica en decadencia.