Enterprise Zones: Waveney

Wednesday 8th December 2021 Westminster Hall

00:04

[Peter Dowd (in the Chair)]

Before we begin, I remind Members that they are expected to wear a face covering when not speaking in the debate, in line with current Government guidance and that of the House of Commons Commission. I also remind Members that they are asked by the House to have a covid lateral flow test twice a week if coming on to the parliamentary estate, which can be taken at the testing centre in the House or at home. Please also give each other and members of staff space when seated, and when entering and leaving the Chamber.

I will call the hon. Member for Waveney (Peter Aldous) to move the motion and then the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.

10:59

[Peter Aldous (Waveney) (Con)]

I beg to move,

That this House has considered the future of enterprise zones in Waveney.

It is a pleasure to serve under your chairmanship, Mr Dowd, and I welcome my hon. Friend the Minister. The purpose of this debate is to highlight the success of the enterprise zones in the Waveney area, and to make the case for amending the arrangements through which they operate in order to unleash further economic growth and job creation. If that is done, we would be very well placed in the Waveney area and better able to level up, build back better, and deliver clean and green growth.

Enterprise zones in their present form were established by the coalition Government. The original proposals were set out in the 2011 Budget and its accompanying plan for growth. Twenty-four enterprise zones were created during the 2010 to 2015 Parliament, including the Great Yarmouth and Waveney enterprise zone, which has been run by the New Anglia local enterprise partnership in conjunction with East Suffolk Council—formerly Waveney District Council—and Great Yarmouth Borough Council.

In setting up the enterprise zones, the Government asked the LEPs to nominate enterprise zone sites, taking into account economic potential, with an emphasis on stimulating additional growth, new businesses and new jobs. Vacant sites with little or no business occupancy were favoured. In the Waveney area, there are now six enterprise zone sites across four locations: Mobbs Way in Oulton, South Lowestoft industrial estate, Riverside, adjoining the port, and Ellough, near Beccles. Those enterprise zones have provided various incentives to promote the development of new business units. They include business rates discounts, a simplified planning process through local development orders, and access to super-fast broadband.

In the Waveney area, other than on two small extension sites, the business rates relief has now expired, although all business rates growth for 25 years from April 2013 is retained by the LEP and reinvested in the area. That is an important and welcome source of funds that is invested in infrastructure improvements. The Great Yarmouth and Lowestoft New Anglia enterprise zone partnership was awarded enterprise zone status in 2011, and the site came into operation on 1 April 2012. To date, across the Waveney and Great Yarmouth areas, the enterprise zones have attracted a total of £44 million in private and public sector investment, created 916 jobs, and facilitated the development of 17.9 hectares, or 44 acres, of new employment space. In short, they have been very successful.

The enterprise zones in Lowestoft got off to a very good start with the construction of 27 units in Mobbs Way in Oulton by MS Oakes Ltd, the majority of which are occupied. The availability of the incentives I have outlined was the catalyst for Mark Oakes building the units and thereby meeting a latent demand for business accommodation in the area. It is a great example of the public and private sectors working together to deliver significant benefits for the local business community, and is being continued on the adjoining Wolsey business park, where 12 units are now fully occupied. Businesses there are from a diverse range of sectors, including energy, construction, warehousing, media, IT, and the manufacture of clay pigeon traps.

While this debate focuses on the future of enterprise zones in the Waveney area, it is also appropriate to point out that they have been a great success in the constituency of my right hon. Friend the Member for Great Yarmouth (Brandon Lewis). Beacon Park has been exclusively developed for offshore port and energy logistics uses, while South Denes has seen significant investment and is the home of Seajacks, which is involved in offshore wind projects around the world.

With the expiry of the business rates relief and the extension of superfast broadband across the enterprise zone sites, there is now a need to reinvigorate the enterprise zone project in Waveney. With this in mind, in 2018, the New Anglia enterprise partnership—made up of East Suffolk Council, Suffolk County Council, Norfolk County Council, Great Yarmouth Borough Council and the New Anglia local enterprise partnership—commissioned a study to provide a new development and investment strategy for the enterprise zones. The report included a review of current development, identified barriers to that development, and proposed interventions across all sites. It highlighted the fact that little new development has been undertaken recently. The position is similar to that in many locations around the UK and can be explained by relatively low property values set against rising construction costs, which makes new development difficult to justify. Moreover, covid has exacerbated that trend.

The report also identified low demand for new business units on the South Lowestoft industrial estate enterprise zone, where there is a large amount of undeveloped land and where rental values have traditionally been low. Development there is further constrained because, since 2013, the site owner has been reluctant to bring forward land for development. That means that approximately 15.97 hectares allocated as an enterprise zone site are highly unlikely to come forward for development over the life of the project. At the same time, demand for units, particularly in the clean energy sector, has shifted to vacant sites around the port of Lowestoft. It should be pointed out that since the enterprise zones were allocated, large parts of the port have been cleared, and are thus vacant and thus well suited to allocation as an enterprise zone.

Associated British Ports, which runs the port, is pursuing a proactive approach to development, although it is constrained by the high cost of improving port infrastructure. Taking those considerations into account, East Suffolk Council now wishes to reallocate the existing footprint of the enterprise zone by reducing the enterprise zone on the South Lowestoft industrial estate by 7.8 hectares, leaving 8.8 hectares for future development. The 7.8 hectares would be reallocated to the vacant areas around the port, and would be available for clean energy and fishing-related developments.

This is a proposal for the reallocation of sites, not for a larger enterprise zone. Thus, the Minister will be pleased to learn, it would be cost-neutral. It would meet the current demand for units, and it would enable the enterprise zone partnership to invest enterprise zone funds in the relocated sites, making development more financially viable and the sites more attractive to occupiers. It is anticipated that the reallocation would create more than 300 jobs and more than 40 new businesses, and would generate between £1 million and £3 million of retained rates to be invested in the enterprise zone scheme during the project.

The business rates relief has been a great catalyst for promoting activity on the enterprise zone sites, incentivising developers to build units and encouraging occupiers to buy or rent them. Now that the relief has expired, other than on the two small extension sites, that means of stimulating economic activity is no longer there. It needs to be put back in place, and if that is done, it will help to promote development around the port and on the other enterprise zone sites, particularly at Mobbs Way and at Ellough. I therefore ask the Minister to give full consideration to extending the rates relief incentive for a further five years.

Since the enterprise zones came into operation in Waveney in 2012, there has been a sea change in the focus of regeneration activity towards the centre of Lowestoft, where the port lies adjacent to the main shopping area, which, like so many other high streets, has faced enormous challenges in the past two to three years. The proposal to reallocate the enterprise zone sites is in accordance with, and complements well, the Lowestoft town investment plan, which earlier this year helped to secure a town deal of £24.9 million. Exciting new opportunities are emerging, and it is important that we do all that we can to realise their full potential. LEEF, REAF and Eastern Energy Hub, on the power park, are three such initiatives taking place in the area.

LEEF—the Lowestoft Eastern Energy Facility—has been brought forward by Associated British Ports and, in the first instance, is a five-year plan involving an initial £25 million in port infrastructure to support the offshore energy industry. Three new deep-water berths will be provided, spanning more than 360 metres and with additional crew transfer vessel berthing capacity, along with 8 acres of supporting land.

REAF—the Renaissance of the East Anglian Fisheries —is a community-led project that has come forward with a long-term strategy to regenerate the East Anglian fishing industry, with Lowestoft as its hub. It is made up of representatives of the local fishing industry, East Suffolk Council, Suffolk County Council, Norfolk County Council, the New Anglia LEP and Seafish. I currently chair its steering group.

The strategy has been reviewed following the signing of the trade and co-operation agreement with the EU this time last year, and funding has recently been received from the Blue Marine Foundation to start work on implementing the 11-point plan. I will not go through them all in detail, but I will highlight three: first, to promote sustainable fishing practices and the reduction of carbon dioxide emissions—it is very much about clean and green growth—secondly, to invest in port infrastructure; and thirdly, similarly to enhance processing and marketing facilities. The reallocation of the enterprise zone will support those proposals, which will create jobs not just on fishing boats, but right along the supply chain, from the net to the plate.

The Eastern Energy Hub proposals involve the refurbishment of Gulliver, the existing wind turbine, and pairing it with electrolysers to produce hydrogen. That could then be used by municipal buses and refuse fleets in east Suffolk, with a nearby depot from which hydrogen-fuelled buses could run. In due course, one could move on to promote a hydrogen heating scheme in Lowestoft. As you can see, Mr Dowd, an awful lot is happening in the local area, and we need to use all the tools we can to stimulate and invigorate it.

In conclusion, I have two requests for the Minister. First, the 7.8 hectares of the South Lowestoft industrial estate enterprise zone should be reallocated to the port area adjacent to the town centre. That will meet the current demand from businesses and will generate funds that can be reinvested in infrastructure, creating a virtuous circle of economic regeneration, which, as I have said, will cost the Government nothing. Secondly, the rates relief incentive should be reintroduced for a further five years to incentivise developers to build units and encourage occupiers to buy or lease them to take up the numerous opportunities that I have briefly outlined.

Enterprise zones in Waveney are not an experiment. There is no need for a pilot, as they have a proven track record of success. The two changes that I am seeking to the way that they operate will create jobs in a coastal community that has deep pockets of deprivation. They would unleash a wave of development across a range of sustainable low-carbon sectors and deliver that trinity of levelling up, building back better and creating clean and green growth.

11:14

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Neil O’Brien)]

It is a pleasure to serve under your chairmanship, Mr Dowd, and I thank my hon. Friend the Member for Waveney (Peter Aldous) for securing this important debate. He has always been—I knew this even before I was an MP —an incredible community champion. He always has multiple projects that he is promoting, and he is normally very successful in making them happen, so I was interested and excited by all the different things that he set out he is trying to achieve.

Let me start with enterprise zones. Since their relaunch in 2012, enterprise zones have established themselves as a real driving force for local economies by unlocking development through infrastructure, attracting businesses and creating jobs. Enterprise zones are about delivering long-term, sustainable growth by harnessing cutting-edge technology and enterprise, and their purpose is to encourage local economic growth and support businesses. To that end, they have been a huge success, as my hon. Friend said.

I have listened to my hon. Friend’s proposal with interest, and I thank him for his thoughts on the subject. As he has pointed out, the enterprise zones in Great Yarmouth and Lowestoft are a testament to the success of those interventions, having created around 1,900 jobs, attracted over 70 businesses and brought forward somewhere in the region of £51 million-worth of private sector investment—an incredible record. They are helping to sow the seeds for our transition to a green economy, too. As my hon. Friend mentioned, Lowestoft is the base of operation for Galloper and Greater Gabbard wind farms, which together will produce over 850 MW of electricity. That is enough to power 800,000 homes across the UK—a really incredible amount. Lowestoft is also home to OrbisEnergy, a worldwide centre of excellence that drives innovation and investment in renewable power technologies.

We have said from the outset that the Government-backed business rate discount will last up to five years and the enhanced capital allowances, where they exist, will be provided for eight years. Business rates retention will last for 25 years, giving councils a long-term source of revenue that can be borrowed against to fund infrastructure, or pooled to spend on other barriers to investment. Local authorities can continue to offer business rate discounts, should they choose to do so, and many continue to use the brand of enterprise zones to attract investment.

I am afraid that we have no plans to extend any enterprise zones, and my hon. Friend’s proposition to change the boundaries of enterprise zones would signal a precedent that we are wary of setting. Such a change would take up significant resource, and we are now focused on delivering the freeports programme, which is influenced heavily by what we have learned from enterprise zones. However, there may be other ways to achieve many of the things that my hon. Friend seeks.

As our consultation on freeports in 2020 showed, key aspects of the model include business rates retention, business rates relief, commercial spots for councils and local development orders, plus the provision of seed capital. All those things were taken from what we have learned from enterprise zones and built into the freeports model. The freeports will be national hubs for trade, innovation and commerce, regenerating communities across the UK, attracting new businesses and spreading jobs, investment and opportunities to towns and cities up and down the country.

In March, we announced that Felixstowe and Harwich were successful in their bid for a freeport, and officials are now working with them to develop the proposal. The freeport will provide jobs to the area surrounding Felixstowe and Harwich and further afield, where specialist skills will be required. It will also draw the attention of international investors to the opportunities in the wider East Anglia area, including the enterprise zones in Great Yarmouth and Lowestoft.

I turn to the particular question of levelling up Waveney. As my hon. Friend will know, levelling up is the absolute heart of the Government’s agenda, and the enterprise zone programme and freeports are just some of the tools at our disposal to help level up our communities. Some £290 million has already been invested in local growth projects in and around Waveney through the New Anglia LEP, which I have had the pleasure of discussing offline with my hon. Friend. That will boost jobs, build houses, leverage private investment and increase skills, and the funding has been used for a variety of local interventions, including £10 million from the local growth fund for improved flood defences in Lowestoft harbour. The money was put towards the tidal gate for the inner harbour, which will not only safeguard over 400 households from flooding, but support 22,400 jobs. Some £73 million has been provided to build the Gull Wing bridge—an iconic and much-needed third crossing, which I remember my hon. Friend campaigning hard for. The bridge will reduce congestion, regenerate the area and attract new investment for the local economy.

I turn now to the towns fund process. The Government recognise that towns such as Lowestoft must be at the absolute forefront of our levelling-up agenda, which is why we launched town deals for areas across the country, to unlock their full economic potential. As one of the 101 areas selected to agree a town deal, Lowestoft received £24.9 million in March to support ambitious local projects, transform disused buildings and public spaces, deliver new green transport and create opportunities for people to develop new skills. That includes £14 million to develop a new cultural quarter in the town, providing a new leisure and cultural venue and enhancements to the Marina theatre. Over £2.8 million will go towards the development of Station Square, a meeting place and gateway point for the seafront and town centre, and £2.6 million will be used to improve the port area, which supports the growth in the clean energy centre about which my hon. Friend spoke, and to enhance the public realm. I thank my hon. Friend for his work on that town investment plan, which will see that initial public sector seed funding, catalytic funding, unlock a minimum of £354 million of private sector investment in the area—an incredible sum. He and his colleagues involved in the town deal process can be really proud of what they are achieving.

My hon. Friend talked about REAF, a brilliant local initiative. I welcome the way in which local industry and local government in East Anglia have come together to consider how to create a more sustainable fishing industry, and I thank my hon. Friend for his work as the chair of the steering group. The REAF report contains some interesting ideas that the Government will certainly consider as part of our ongoing work on inshore fisheries management. The Government welcome the work to review the REAF recommendations in the light of the EU-UK trade and co-operation agreement and to develop a new delivery framework. I know that officials from the Department for Environment, Food and Rural Affairs and the Marine Management Organisation have been discussing the framework with the REAF project team and are very encouraged by its focus on more effective fish marketing in the region and on using local opportunities and networks.

I know that my hon. Friend is passionate about the role that East Anglia could play in the emerging green economy, about which he talked in his speech. I share his enthusiasm for developing our emerging industrial strengths in areas such as offshore wind, the use of nuclear and hydrogen fuels, and carbon capture technology. The transition to net zero presents a real opportunity to support communities that may be impacted by climate change and flooding, and also to drive levelling up across the country. The Government are working closely with local partners to ensure that we maximise the economic growth opportunities that emerge from the transition to a low-carbon economy, as well as support communities around the country to adapt to the impact of climate change. I know that there are several examples in my hon. Friend’s constituency of communities taking advantage of those opportunities: for example, the ambition to create a self-sustaining hub at power park in Lowestoft, or Associated British Ports’ £25 million investment in the Lowestoft Eastern Energy Facility to create more quayside space, create deeper water, and provide officers and additional facilities for crew transfer vehicles. All that drives local economic growth.

We are proud to lead the world by ending our own contribution to climate change—not just because it is the right thing to do but because we are determined to seize this unprecedented opportunity to boost local economies. We want to build back better from the pandemic by building back greener and levelling up our country with high-skilled, high-wage, sustainable new jobs in every part of the UK. As part of that, “The ten point plan for a green industrial revolution” will mobilise £12 billion of Government investment, and potentially three times that from the private sector, to create and support up to 250,000 British jobs in clean energy, clean transport, nature recovery and innovative new technologies. Taken together, those programmes are helping to maximise the economic potential of my hon. Friend’s constituency.

We can and will do more. As my hon. Friend knows, the Government will shortly publish a White Paper that builds on existing action being taken across Government, and sets out a new policy regime that will drive change for years to come. Some of the challenges that my hon. Friend talked about, such as those pockets of stubborn deprivation in his constituency, will not be solved overnight, but we are determined to solve them. We want to restore pride in places across the country and we want people in those places once again to have the confidence that the Government are delivering their economic and social priorities, boosting long-term living standards and improving public services.

I thank my hon. Friend once again for securing this important debate. The Government are unwavering in our commitment to work with Members from across the House to spur long-term recovery from the pandemic.

[Peter Aldous]

I am most grateful to the Minister for highlighting the part that must be played in the transition to a low-carbon economy by Lowestoft, Suffolk and East Anglia and how that can create enormous opportunities for our area. It is not just a question of levelling up—we can be a global exemplar. I heard what he said on the simple, cost-neutral change of reallocating enterprise zone sites. He indicated that he did not want to go down that route because of concerns about the precedent that it would create. May I ask that, in correspondence between me, East Suffolk Council and him, we can continue to explore that a little further?

[Neil O’Brien]

I am grateful to my hon. Friend and am happy to correspond and continue to meet and discuss with him and local councillors all the opportunities in the area, which he has done a brilliant job of highlighting. There are many opportunities, including the UK shared prosperity fund, which is coming shortly, and the potential for devolution to drive a multitude of improvements in the area. He is right to make that point and I am happy to continue the conversation after the debate.

My hon. Friend is right to pick me up about not just tackling problems of deprivation but going from good to great. When I have been out in East Anglia, I have been struck by the sense that it is on the edge of something really exciting in many different ways. My hon. Friend’s ideas are central to the Government’s levelling-up agenda, building a recovery that sees all parts of the UK recover strongly from the pandemic and building a new and better economy and public services.

Question put and agreed to.

11:26

Sitting suspended.