Dan Jarvis (Barnsley Central) (Lab)
It gives me great pleasure to secure today’s debate on an issue that is extremely important for Barnsley and for the whole country.
The cuts and changes to welfare pursued by this Government are hitting the most vulnerable parts of the country the hardest, and Barnsley is on the front line. More than 25% of our jobs are in the public sector, one of the highest rates in the country. The loss of many of these jobs will take tens of millions of pounds out of the local economy just as benefit changes start to bite. We have taken huge strides to overcome the stagnation and decline that hit us the last time the Conservatives were in power, but these cuts have the potential to push us back years.
The legitimacy of the Government’s programme depends on its fairness. Before they go further down the road they have embarked on, they have a duty—an obligation—to stop and think about the effect it will have on places such as Barnsley. That does not mean that we reject reform to our public finances or to our public services, but the deficit needs to be tackled in a way that corresponds to sensible economic policy, not to the demands of ideology. Welfare needs to be reformed in a way that does not kick the genuinely vulnerable in the teeth. The question is how far and how fast the cuts and changes are made and what is done to make the process a transition, rather than a reckless abandonment of our communities and a gamble with our economic future.
First and foremost, places like Barnsley need targeted support to help drive development and employment—a coherent, responsible regional development strategy that has the resources to succeed. That does not mean giving unsustainable handouts. What is holding Barnsley back is not the fundamentals—we have the location, the work force and the will to thrive—what we need is the investment to overcome the entirely man-made barriers to our progress.
Michael Dugher (Barnsley East) (Lab)
I thank my hon. Friend for giving way and for securing this important debate. Does he agree that there is proof that the area still has something very significant to offer in ASOS’s announcement last year of 1,100 new jobs for Barnsley, specifically in Grimethorpe in my constituency? Is it not the case that those jobs and that investment came about because of decisions made by previous Governments to ensure that we had in place infrastructure such as the facilities, warehouses and roads to attract such firms, and that we need a real partnership with government?
Dan Jarvis
I thank my hon. Friend for that constructive and useful intervention. I believe that the ASOS model provides a useful example of how the Barnsley development agency, working with the metropolitan borough council, can aggressively seek to target other industries and businesses. The ASOS model is a useful one that we need to learn lessons from and employ in future.
As I have said, what we need is the investment to overcome the entirely man-made barriers to our progress. Without that, as my colleague the shadow Business Secretary recently said,
“the government’s belief that the retreat of the state is automatically matched by the expansion of the private sectors is going to be tested to destruction.”
The Government have dispensed with the strategic investment fund, with grants for business investment and with regional development agencies. The new regional growth fund has only a third of the money that was available under RDAs. I accept that RDAs were not without their failings, but the local enterprise partnerships that have replaced them are short on funding and short on power.
Bob Stewart (Beckenham) (Con)
Does the hon. Gentleman honestly think that any Government Member or anyone in this country wants to cut jobs just for the sake of it for some reason of politics? The fact is that jobs have had to go because we just cannot afford them any longer and we cannot just plough money into the public sector all the time.
Dan Jarvis
I thank the hon. Gentleman for his intervention. I do not believe that Government Members think of these issues in such ways but this is a matter of policy. Barnsley is the kind of place that will go into a recession first and come out of it last and I believe that when the Government are making significant cuts to public services that will have an impact on jobs and livelihoods across Barnsley, they have a duty and an obligation to pause and consider the effect that those cuts will have on the people in Barnsley.
Where public sector cuts are made and jobs in the public service are lost, I do not believe that it is a given that the private sector will come in and fill the void. That should not be a natural assumption. In order to promote the kinds of conditions that allow the private sector to invest in places such as Barnsley, there needs to be a targeted programme of investment and development. I do not believe that the policies that the Government are putting in place will do that, but I thank the hon. Gentleman, as ever, for his useful intervention.
The LEPs, which have replaced RDAs, are short on funding and short on power. They are not even guaranteed the money for their own start-up costs, never mind for investment to support business. They will have to apply to the regional growth fund, whose first round of funding is already 10 times oversubscribed, and they have been denied access to cash from the European regional development fund, which is being centralised at the desk of a Whitehall bureaucrat. Perhaps the Minister can explain how that fits with the Government’s supposed localism agenda.
I believe that we can and must do better than that. First, we can strengthen the LEPs and make them much better able to co-ordinate and lead a strategic approach to regional development. Among other things, that means giving them access to the ERDF and allowing them to join together to secure investment for cross-regional projects. It means giving them a stronger, more formal role in the development of local economic growth plans. It means removing or reducing the £1 million threshold for RGF bids so that smaller companies can apply and LEPs can work with them to bring in the investment projects needed to spur growth. Will the Minister consider these changes?
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I am pleased to say that small businesses can participate in the RGF. The £1 million programme for the second phase will allow small and medium-sized enterprises to participate, and in the first phase we saw that they were able to participate in Merseyside and Plymouth, so I am happy to give the hon. Gentleman that assurance.
Dan Jarvis
I am grateful to the Minister for that assurance.
One area where LEPs have real influence is the creation of enterprise zones. I commend the Government on the proposal being put forward by my local LEP, but I hope that the Government will not penalise proposals from several LEPs, including my own, for enterprise zones that are spread across several sites. The Government must be ready to listen to LEPs where there is a clear rationale based on the complexity of the local economy and the real needs of businesses. The uncertainty on this question reflects the over-simplistic and unclear nature of the criteria for enterprise zone site selection. Will the Minister ensure that those problems are rectified as a matter of urgency so that the work of LEPs such as mine is not inhibited by a lack of flexibility?
In any case, enterprise zones are a limited tool. They can offer reduced business rates, fast planning and fast internet, but a far greater concern of entrepreneurs in Barnsley is the lack of skilled workers. I will talk about the shortcomings of the Government’s skills policy in a moment, but given that the skills problem is one of the biggest barriers to private sector growth, would it not make sense to mandate the LEPs to oversee a locally adapted skills strategy, in partnership with businesses and local authorities? At the very least, we should take up the suggestion made by the Centre for Cities that enterprise zones should include special support for training and skills development.
For Barnsley, another vital issue, of which I know the Minister is aware, is the Government’s position on transferring the assets of the regional development agencies to LEPs or to local authorities. Those assets were built up by the RDAs with the specific aim of supporting local development, and in many cases they are critical to projects for transforming our local economies. That is the case in Barnsley, where the keystone Barnsley Markets project has been premised on the use of land belonging to the RDA. That is not some bureaucratic black hole; it is the future of Barnsley as a town—a project that is ready and waiting to move forward, and exactly the practical purpose for which the asset was originally acquired.
In total, the future of some £500 million in RDA land and property assets throughout the country is in doubt. I firmly believe that local authorities or LEPs should be given the first say on the use of those assets, and that is not just a Labour view; it is one echoed throughout the House. I am greatly concerned that the Government may be contemplating a fire sale at reduced prices, which would bolster central coffers at the expense of regional development and be deeply short-sighted. Will the Minister reassure the House that this will not happen, and will he allow LEPs to use the assets as they were meant to be used?
An active LEP is important, but it is not enough on its own, and the recent figures on bank lending bear out what I hear in person from businesses in my constituency. The problem is especially severe for small and medium-sized enterprises, exactly the sort of businesses that are most important for driving job growth. Research shows that South Yorkshire has one of the highest concentrations of SMEs with high growth potential anywhere in the UK. Keep that in mind, Madam Deputy Speaker, if anyone ever tells you that Barnsley does not have untapped potential.
There is, however, a steady stream of reports that SMEs are being held back by the lack of credit, even when the business case is sound. I was glad to hear that the Business Secretary did not rule out more action down the line if targets continue to be missed; I was not so glad when he told me that banks miss their targets more by choice than by chance. That is not acceptable for businesses in Barnsley or anywhere else in the country.
What plans do the Government have to ensure that banks meet their small-business lending targets? At what point do the Government take firmer action on the two state-owned banks? Would they accept the banks meeting their lending targets but failing to meet their small-business lending targets? What will Ministers do if the banks continue to claim that the demand is not there? It is a claim that many small businesses contest. Is the Minister going to wait to the end of the year to do more than lecture the banks if they are at fault? And what will happen next year if the Project Merlin agreement has not delivered? The Government have admitted that the lack of lending still threatens the entire recovery, but that problem needs to be resolved now.
The market is the foundation of our economy, but the Government have to play a role in helping it develop in a way that matches our strengths and builds the society that we want. If Barnsley is to thrive, it must be at the cutting edge of high-tech, high-value manufacturing and of the new digital and green economies. Instead, the Government are axing the zero-carbon homes initiative, which was helping to develop the next generation of British manufacturing. What are they going to do to support the development of the new economy that we need?
Dan Jarvis
I am grateful to the Minister for that confirmation.
Part of the effort is developing the infrastructure that is needed to bring growth anywhere outside the south-east—especially high-speed rail. The plan that Labour put together in office will bring Leeds within 80 minutes of London, and that could have a major positive impact in Barnsley. However, it is not yet clear that the Government are serious about bringing high-speed rail to the areas that most need it. If they were, why has the Secretary of State for Transport so far declined to include the northern branches of the planned Y-shaped network in the transport Bill? Will the Minister reassure the House that that will change, and will the Government reconsider the scale of their cuts to rail transport generally, which threaten a repeat of the under-investment of the previous Conservative Government and fare rises that threaten to put rail travel out of reach for the less well off?
Better transport will particularly help another sector with great potential in Barnsley—tourism. Indeed, that sector has been a key driver of job creation across the country. As the Government say, in the current economic climate those performances make the tourism sector a particularly important part of the UK economy. Barnsley is a great town with a proud history. When I look around the metropolitan borough at places such as the Elsecar Heritage Centre in the constituency of my hon. Friend the Member for Barnsley East (Michael Dugher), Cannon Hall and Wentworth castle in the constituency of my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), and the new town hall museum project in the heart of my constituency, I see enormous potential for tourism in Barnsley.
I am glad that the Government’s tourism strategy acknowledges the need for some Government help when market failures mean that tourism is not properly promoted. But they should also consider providing some support for places that have a clear tourism potential but are not yet established destinations. I am thinking especially of areas particularly in need of growth, such as Barnsley. Will the Minister outline how the Government plan to help us achieve our tourism goals?
I believe that the most fundamental barrier to aspiration and economic development in Barnsley is a lack of skills. I recently spoke to a major employer and asked him the three most important factors to consider when relocating or setting up a business. His reply was simple: “Skills, skills and skills.”
Michael Dugher
I am grateful to my hon. Friend for giving way again; he is typically generous. He rightly identified the issue of skills and he is right that we need to lift the level of skills in Barnsley if we are going to attract the jobs of the future. Does he agree that certain Government policies such as the scrapping of the education maintenance allowance and the trebling of tuition fees will make that harder, not easier?
Dan Jarvis
I am grateful to my hon. Friend for those useful points. The Government’s decision to abandon EMA, treble tuition fees and remove the Barnsley-inspired future jobs fund provide a triple whammy for the hard-working people of Barnsley seeking to secure employment. I ask the Government to consider the impact of those decisions on places such as Barnsley.
The Government’s strategy on skills leaves a lot to be desired. I am glad that they plan to build on Labour’s investment in apprenticeships, but despite the urgent problem of youth unemployment, 16 to 18-year-olds will not be able to access a single one of the extra places that they are funding.
Angela Smith (Penistone and Stocksbridge) (Lab)
With your forbearance, Madam Deputy Speaker, I should like to place on the record the delight of the House in the MBE awarded to my hon. Friend in the Queen’s birthday honours last week.
Is it not the case that significant numbers of young people want to leave school at age 16 and do not want to engage in full-time education, but would benefit from a mix of work and training that is typically represented by a good, solid apprenticeship? Is it not a fundamental mistake to deny young people that opportunity, especially given that it develops the work habit from the very earliest point of entry into adult life?
Dan Jarvis
I am very grateful to my hon. Friend for her kind remarks and for the useful and constructive contribution she has made to this debate. I completely agree about apprenticeships. They are a vital pathway for young people, bridging the gap between the classroom and the world of work. I am proud of the work that the Labour Government did in increasing the number of apprenticeship places. I hope to work constructively with Members across the House to persuade businesses across the country, not only in Barnsley and South Yorkshire, to take on more apprenticeships. An apprenticeship is a valuable opportunity for young people that gives them vital experience of the world of work.
The Government have axed Train to Gain, which provided work-based training to 575,000 people in 2009-10. They have also scrapped fees remission for people over 25 who are doing level 2 and level 3 courses. That is partly why the Minister for Further Education, Skills and Lifelong Learning has had to admit that adult apprentices may have to borrow up to £9,000 to fund their training.
Nigel Adams (Selby and Ainsty) (Con)
The hon. Gentleman is making a great case for Barnsley, which is a very proud town. I appreciate that he has not been in the House for all that long since his magnificent victory a few months ago, but it probably has not escaped his notice that the Labour Government were in power for 13 years. If there is a big skills shortage in Barnsley, does he not therefore accept that his own party has to take some of the responsibility for that?
Dan Jarvis
I am incredibly grateful to the hon. Gentleman for that intervention, which gives me the opportunity to remind the House—although there will be no need to remind people in Barnsley—of the impact of the policies of the Conservative Governments led by Margaret Thatcher in the 1980s. People in Barnsley will recall the damage that the Conservative Governments who were in power until 1997 did to such places. I will be very happy to walk through Barnsley with the hon. Gentleman, who is always welcome to come and visit—it is not terribly far from his constituency. I will be delighted to show him the real, long-lasting structural improvements that were made in Barnsley as a result of 13 years of Labour government. In effect, the cuts made by the Conservative Governments of the 1980s and 1990s created structural, long-lasting, generational decay in Barnsley, and that takes a significant period to overcome. I believe that the Labour Government made considerable progress during the 13 years when they were in office, and that is clear to people when they walk through the streets of Barnsley. The Building Schools for the Future programme is a classic example; it has provided state-of-the-art infrastructure for kids who go to school in Barnsley. We can be proud of that record. I am grateful to the hon. Gentleman for the opportunity to make that point.
As I said, the Government have axed Train to Gain, which was a valuable scheme that provided a significant amount of work-based training to hundreds of thousands of people. They have also scrapped fees remission for people over 25 who are doing level 2 and level 3 courses, and the Minister has had to admit that adult apprentices may have to borrow £9,000 to fund their training. As Labour Members will be well aware, the Government have also cancelled the Barnsley-inspired future jobs fund, pioneered by Councillor Steve Houghton, the leader of Barnsley metropolitan borough council. I remind the House that the FJF provided jobs for 100,000 18 to 24-year-olds, with a valuable training element. Overall, I believe that those decisions represent a reckless underinvestment in the skills needed for economic regeneration and are a body blow to the aspirations of young people not just in Barnsley, but across the country.
Barnsley stands to be particularly affected by the changes in benefits made by this Government. I fully agree that welfare needs to be reformed, but I do not believe that we are going about it in the right way. Above all, the changes do nothing directly to support new jobs. Across the country, there are five times as many claimants as there are open positions. We risk the injustice of penalising people for failing to get jobs that simply do not exist.
There are several ways in which the reforms undermine job creation and stop people getting off benefits. The assumption that the unemployed are earning the minimum wage in the calculation for universal credit will make it virtually impossible for many people to set up a business. The new enterprise allowance cuts out anyone who has not been on jobseeker’s allowance for six months. People coming off disability allowance and people who have just been made redundant who want to set themselves up in business are being told that they have to waste six months uselessly claiming jobseeker’s allowance before they will be eligible for the new enterprise allowance. That costs taxpayers more for people who want only to stand on their own two feet. Will the Government look again at their welfare reform programme as it clearly needs improvement?
The problems facing Barnsley are indicative of those facing towns across the country. The message seems self-evident: we can either sacrifice everything to balancing the books in a way that undermines the economic stability of the country or we can tackle these problems head-on. This is not a request for unlimited spending or an end to reform; it is just a request for the Government to do their bit so that we in Barnsley can fulfil our potential. For now, the Government’s approach is ensuring that places such as Barnsley bear a disproportionate burden. If this Government are to live up to their promises, if they are to make a claim to the basic principles of fairness, and if their cuts and reforms are to have any legitimacy with the British people, that must change.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on securing this debate. I do not know whether this is his first Adjournment debate, given that he is a relatively new Member of the House—the second most recent if my calculations are right—but some of the language was a little flowery, and there was a strong desire to have a go at the Conservative Government. There seemed to be a moment of frozen time between 1997 and last year, but we will pass that by.
I agree with the hon. Gentleman that Barnsley should share in the sustainable, long-term growth that is the overriding priority of this Government for the whole country. We want to forge a new model of growth based on rebalancing the economy both geographically and in terms of sectors. We want to promote and encourage innovation and boost exports, which is a real key to enabling small and medium-sized enterprises to prosper, and not just rely on consumption fuelled by public debt.
The hon. Gentleman rightly highlighted the proud industrial heritage of Barnsley. He was right that it is working hard to continue its transition from the traditional coal mining and glass making industries to new industries such as the low-carbon, creative and digital industries. As he rightly highlighted, Barnsley’s potential has been shown by the decision of ASOS to move parts of its operation to Grimethorpe. I believe that it already employs some 500 people and is set to increase that to 1,000, making it Barnsley’s biggest employer. I am happy to put it on the record that that investment is evidence of the council, the business community and the economic development partners working together locally to make the best use of the area’s assets to bring in the long-term jobs that are important for the people of Barnsley.
As you will know, Madam Deputy Speaker, Barnsley is well positioned to benefit from the growth potential of both the Leeds and Sheffield city regions. That is why we agreed that, sitting where it does, and considering the travel-to-work market areas in which it sits, it should be a full member of both local enterprise partnerships. That underscores the principle behind the partnerships. We have introduced them so that they are founded on real, functional economic areas that actually reflect where businesses trade and people work. Through LEPs, we are encouraging business and civic leaders to come together to provide strong leadership at local level. After all, it will be those local leaders who really understand the barriers that are holding back growth in their area. Our policy is deliberately designed to empower them to set the agenda and work together to both drive sustainable growth and create private sector jobs.
In the past few months I have visited 18 local enterprise partnerships, including both the Sheffield and Leeds ones. I have to say, I have been immensely impressed by the ambition and capability of the boards and their members.
Angela Smith
Barnsley is responsible for the production of more than 90% of clay pipes in this country, which, as the Minister knows, is an energy-intensive industry. The Government have a role to play in ensuring that we keep those jobs in the UK and in Barnsley, and create more of them in that really important, environmentally friendly industry. Will the Minister acknowledge that he and his Department have a role to play in ensuring that such industries can stay in the UK and are not made uncompetitive by Government policy on carbon floor pricing?
Mr Prisk
I am not just pleased to acknowledge that, I am actively playing that role now. The Prime Minister is on record as saying that we do not want, as an unintended consequence of our policies to reduce carbon emissions, to somehow export jobs in such industries only to see the net effect on the climate worsened. The hon. Lady is absolutely right about that, and that is why, working with the energy-intensive industries, we have set in train an approach to develop a proper mitigation strategy. In that way we can help the generators of energy who need a carbon floor price without, as an unintended consequence, destroying the industry to which she refers and the brick, ceramic and steel industries. That is one challenge that we need to meet. It is a tricky balance, because some sectors wish to see a new regulatory framework and others do not. We are trying to ensure that we secure one group without destroying the other.
I mentioned that Barnsley is part of both the Sheffield and Leeds city LEPs. Sheffield city region is focusing on advanced manufacturing and technology, and I am sure that the hon. Member for Barnsley Central will be aware that the advanced manufacturing research centre, based at the university of Sheffield, was recently announced as one of the seven partners in the Government’s first technology and innovation centre. That will focus on high-value manufacturing, and it includes some world-leading businesses such as Rolls-Royce and Boeing. Sheffield city region’s LEP is looking to exploit the potential of the industries to which he referred—creative, digital and low carbon—in which there are real emerging opportunities. For instance, there are the emerging plans for the Dearne valley eco-vision.
Let us not forget that both Leeds and Sheffield LEPs have been charged with overseeing the launch of enterprise zones, as announced by the Chancellor. I worked in enterprise zones in the 1980s, and I do not share the hon. Gentleman’s natural scepticism of them. I see the benefit of them. I am not unaware of the danger that if we do not handle them right there can be an unnecessary displacement effect, but we have reformed them to allow the local business and civic leadership to tell us, through the LEP, including the Barnsley team, where they feel the zones should be. That is a critical difference from what we saw in the 1980s, which is so clearly emblazoned on his memory. Then, the zones were imposed from the centre. We are not doing that. We are asking the partnerships, “Where will the zones have the best effect?”
The enterprise zones will have an important effect. We will notice improvement through the business rates tax breaks, the business-friendly planning rules and the application of superfast broadband, which will kick-start private enterprise locally. The extra business rates that are collected as a result will then be retained and made available to work across the whole local enterprise area. I suspect that one or two businesses will begin to realise that Barnsley, sitting in the middle of two LEPs, is in quite an advantageous position in that context. I also suspect that the hon. Gentleman will fight to ensure that Barnsley remains in that position.
The Government are working with LEPs and enterprise zones on some potential additional incentives to suit local circumstances. This is particularly relevant in south Yorkshire, because those incentives include consideration of enhanced capital allowances for plant and machinery where there is a strong focus on manufacturing. We are also considering tax increment financing to boost the long-term viability of such areas, and ensuring that we provide specific and tailored support for inward investment through UK Trade & Investment. I shall say more about inward investment in a moment, because the hon. Gentleman referred to it a moment ago.
On Yorkshire Forward assets, and particularly the Barnsley markets project, I fully accept that the forthcoming closure of Yorkshire Forward has left the future of the project open. I also appreciate that the project is key to Barnsley’s ambitions to be, as the hon. Gentleman has said, a 21st-century market town. That is why I discussed the future of the markets with a delegation from Barnsley council a few months ago. I said then—and I am happy to say it again now—that we have never, and we will not, plan a fire sale of RDA assets in Barnsley or anywhere else.
The project is a victim of the economic downturn in recent years, but I understand that there is now a prospect of getting it going again, which is excellent news. The Government want a resolution that enables the project to be completed. We must have one eye on protecting the taxpayer, but local completion for the local economic benefit is firmly in our sights. I must be careful because discussions are ongoing, but let me put on the record that I welcome the positive discussions that the council is having on the future of the markets. My Department is working closely with local partners to see whether we can get that sorted out.
The hon. Gentleman asked about the regional growth fund. He is right. The first round was incredibly popular, which means that it was, to a degree, oversubscribed. However, I am pleased to tell the House that some 7,628 direct jobs will benefit from that first round, plus a further 2,716 indirect jobs. Most obviously—this is perhaps the most high profile initiative in some media circles—there was £6.4 million funding for the Haribo manufacturing plant in Normanton, and a £2 million R and D project under the new David Brown brand, Windserve. Perhaps most relevant to Barnsley is the £18 million programme for the Sheffield city gateway. That will significantly benefit the whole city region, including Barnsley metropolitan borough.
We are coming to the close of the second round stage—it closes on 1 July—the funding for which is twice that of the first round. Again, there has been a high level of interest. Lord Heseltine gave a briefing this morning for Members of Parliament. I do not know whether the hon. Gentleman had the chance to attend, but if not, he is very welcome to talk to my Parliamentary Private Secretary or to me to ensure that he is fully up to date.
May I clarify two points that the hon. Gentleman raised? First, LEPs can, and indeed are, bidding as part of that round. Secondly, small and medium-sized enterprises can bid, as I mentioned, through the various project schemes. This is one area in which they are getting together to put together sensible programmes that allow that. The House will understand that it is quite difficult to administer sensibly a £1 billion competitive fund down to sums of hundreds or small thousands of pounds. However, the £1 million limit has been adjusted to allow for projects and programmes, which has meant that a number of encouraging small and medium-sized bids are involved.
The hon. Gentleman referred to the importance of skills, and he is right. Skills are vital if we are to equip people for the new opportunities that lie ahead. That is why we are doubling to 24 the number of university technology colleges by 2014—to enable more young people to gain the technical skills they need from an early age; it is why we are funding up to 100,000 work experience placements for young people; and it is why we are investing £250 million in a substantial expansion of apprenticeships, which the hon. Gentleman acknowledged, by 75,000 places over the next four years. To help SMEs, a £75 million programme was announced in the plan for growth—support targeted deliberately to help SMEs that want to access advance-level and higher apprenticeships.
The hon. Gentleman asked whether LEPs should be mandated to drive skills locally. We do not need to mandate that because they are doing it already. One of the great things about the shift from regional development agencies to LEPs is that they allow that local initiative. I was immensely encouraged, certainly in my conversations with the Sheffield city region LEP, that they intend already to bring together their higher and further education college partners and their business partners. They can act as the co-ordinating point, and the nice thing is that we do not have to tell anybody to do that; they are going to do it of their volition.
The hon. Gentleman talked about the role of SMEs, and I entirely agree with him. They are crucial, whether in the economy of South Yorkshire or across the UK as a whole. As someone who started his business at the bottom of the last recession, I have been determined to ensure that the Government, with the remarkable support from everybody from the Prime Minister downwards, set out a path that will help SMEs start, grow and prosper. That is why we are cutting the corporation tax rates for businesses in Barnsley to 20p; simplifying the tax regime; and reducing the overall corporation tax headline rates, which will put an additional £1 billion in the coffers of business for it to reinvest. That is good for jobs. It is also why we are ensuring that new firms in Barnsley are exempted from national insurance contributions on the first 10 employees and extending the small business rate relief holiday—those rates so penalised smaller businesses trying to survive—for a further year from October; and why we took the decision substantially to expand the threshold for the entrepreneur capital gains tax relief from £2 million under the previous Government to £10 million under this Government. That will send the message that we want not only to cut tax rates to help SMEs start up, but to reward business owners as they develop their businesses. That is a crucial message, and one that was well received by businesses around the country.
Those measures are allied to a change in the way we deliver business support in Yorkshire and elsewhere. One of the key changes will be to strengthen how the manufacturing advisory service operates by putting together a £50 million package over the next three years. That outreach service helps SMEs in Barnsley and South Yorkshire, as well as the rest of the country, to improve their productivity, capability and strengths. That is an important shift.
The hon. Gentleman mentioned trade and the need to ensure not only that people can invest in the area, but that SMEs can expand. I believe that Barnsley’s businesses need more help in this field, which is why we have overhauled the former strategy and focused UK Trade & Investment on the future of SMEs and on strengthening their ability to reach new markets; and why we have asked the export credits guarantee department to improve substantially the financial support for exports. That will enable south Yorkshire businesses to apply for the new export enterprise finance guarantee, which will underpin their ability to borrow money to reach new markets. It is also why we have tried to establish simpler trade credit insurance schemes, which are an important way of ensuring that businesses have the confidence to start that process.
The Government share the hon. Gentleman’s desire to see Barnsley flourish, along with the rest of the country. That is why we are going all out to create a business environment that will give companies the confidence to start, invest and grow, and it is why local communities are being freed from central control and mandates. It will enable them to determine their own future, most obviously through their LEP. This, in a way, is the key to achieving long-lasting economic regeneration and sustainable growth in Barnsley and elsewhere. I can assure him and the House that this will continue to have our relentless focus now and in the months and years ahead.
Question put and agreed to.