EZs could save HS2-affected businesses, says expert

BUSINESSES in the Midlands whose premises are compulsorily purchased to make way  the the HS2 rail line could find a safe have in the region’s new Enterprise Zones, says a Birmingham property expert.

Compulsory purchase expert Andrew Cook, director of valuation in the Birmingham office of Lambert Smith Hampton said EZs could offer a lifeline for small and medium-sized businesses along the route of HS2 who are forced to move.

The favourable business advantages of Enterprise Zones, assuming they are still in place when HS2 acquisitions are carried out, could mean that businesses who are forced to move by compulsory purchase could be financially better off if they are prepared to move into one of the new zones, he said.

Enterprise Zone status means companies can enjoy tax breaks and reduced planning restrictions. Incoming employers will be exempt from business rates for five years, and the local authority can keep extra business tax revenue to re-invest in encouraging enterprise and jobs. The LEP board has submitted Birmingham city centre as an Enterprise Zone, and is also planning an “Enterprise Belt” stretching from Staffordshire and North Worcestershire along the M42 growth belt. Other zones are planned in Staffordshire, Worcestershire, the East Midlands and the Black Country.

Mr Cook said: “While we are in full support of HS2 and the economic benefits it will bring to the region, the terms of the compulsory purchase legislation under which the HS2 promoters will have to proceed mean that small and medium businesses will be offered the value of their property plus an additional sum of up to 10 per cent to compensate for inconvenience.  

“Compensation for business disruption and relocation costs will also apply. They may be getting what their property is worth, but a small business in particular is worth much more than that to the people who built that business up. In addition, they may also lose out financially if they have to relocate into more expensive premises. For a small or medium-sized business that eats straight into the bottom line.

“However, it could be that if they are  close to an Enterprise Zone or areas where other business incentives are in place, this could be an opportunity for them to relocate and benefit from a considerable reduction in overheads. As such, HS2 could be the spur for a new start to the business or an opportunity to upgrade their premises.”