Thames Valley, Berkshire
Debate between Fiona Mactaggart and Lord Sharma
Alok Sharma (Reading West) (Con)
Thames Valley, Berkshire is a geographic area that covers all eight parliamentary constituencies in the county of Berkshire, and also the region covered by our local enterprise partnership. I am delighted that my hon. Friend the Member for Bracknell (Dr Lee) and the hon. Member for Slough (Fiona Mactaggart) are in their places to participate in the debate. Others, such as my hon. Friend the Member for Newbury (Richard Benyon) who is a huge supporter of local business and enterprise, would have liked to have attended this debate but cannot do so owing to other commitments.
Outside London, Thames Valley, Berkshire is the economic powerhouse of the British economy. It is home to 42,000 businesses, including the European and global headquarters of more than 200 Fortune 500 companies such as Microsoft, Oracle, Vodafone, Telefonica, Fujitsu, Mars, Johnson & Johnson and Honda, to name a few. We also have companies from some of the world’s fastest-growing economies investing heavily in the region. Chinese telecoms company Huawei moved its European headquarters to Green Park in my constituency last year, bringing hundreds of jobs and many hundreds of millions of pounds worth of inward investment.
Fiona Mactaggart (Slough) (Lab)
Does the hon. Gentleman agree that critical to inward investment in the Thames valley is our connectedness to Heathrow? Does he agree that we should support the airport and improve its connectivity from the west to reap all the benefits that Heathrow brings for inward investment into the Thames valley?
Alok Sharma
I thank the hon. Lady for making that point. I agree with her and I am on the record as supporting Heathrow. We will see what the Airports Commission comes up with. The one thing that would be absolutely detrimental to the local area is any decision by the Airports Commission that in any way downgrades Heathrow. That would be bad for business and bad for Thames Valley, Berkshire.
The area has the highest share of inward foreign direct investment projects across all LEP areas except London. Foreign-owned firms account for 40% of the sub-region’s total turnover, and approximately one fifth of employment is in foreign-owned businesses. On that metric, the share of Thames Valley, Berkshire’s employment by foreign-owned businesses is about 10% higher than the LEP average across the country. In the most recent UK competitiveness index, Thames Valley, Berkshire came out as the most competitive LEP area in England.
Thames Valley, Berkshire also leads the way in exporting, something I know the Minister’s Department, and the Government as a whole, have had a real focus on. A survey, carried out a couple of years ago, of UK businesses with 10 or more employees, found that more than 36% of such businesses based in Thames Valley, Berkshire are exporters. This is a real achievement, and one we are all building on.
I want to put on record my thanks to the Thames Valley, Berkshire local enterprise partnership, UK Trade & Investment and others for sponsoring and supporting the export seminars that my hon. Friend the Member for Newbury and I have run for small and medium-sized businesses in Berkshire. These have been incredibly well received by the companies that have attended.
We also have a balanced economy in our sub-region. We are not over-dependent on any one sector. Although the Thames valley is best known for its technology focus, which underpins Britain’s contribution in software, telecoms and pharmaceuticals, we also have significant employment created by financial services, distribution and retail sectors. As a sub-region, Thames Valley, Berkshire works hard, attracts overseas investment, drives exports, creates jobs and generates significant tax revenues for the Exchequer. I do not think I am being immodest on behalf of Thames Valley, Berkshire when I say that if every other region of Britain could match our area’s growth and innovation, the Bank of England would be forecasting significantly higher growth this year for the British economy than the current 3.4%.
As part of rebalancing the whole of the British economy, both by geography and by sector, the Government have been absolutely right to focus on major growth initiatives, such as the regional growth fund and enterprise zones, in areas of the country that need support. Clearly, the Government’s policies are working. We have seen that in the growth figures for the previous quarter that have just come out.
I do not want to give the Minister the impression that we in the Thames valley have not benefited from Government investment—on the contrary. As the Prime Minister saw for himself a few days ago, the £895 million Reading station and related rail upgrade work is proceeding at pace and under budget.
Alok Sharma
Having lobbied for Crossrail to come to Reading, I was delighted when that announcement was made a few weeks ago. I agree with my hon. Friend. We want to ensure that we have a strong Heathrow. It is the hub airport in the country and I would like it to continue that way. He raised the issue of whether there should be an extra runway, or an extra two runways. Those are matters for the Airports Commission to ponder and debate internally, but, as I said earlier, I want to ensure that no downgrading of Heathrow results from future decisions, and I am sure that my hon. Friend agrees with me.
My hon. Friend also mentioned access to Heathrow. The western rail access to Heathrow link, rail electrification, the M4 smart motorway scheme and the Theale station upgrade are all examples of Government infrastructure projects that will benefit my constituents, and constituents throughout Thames Valley, Berkshire. I am sure that other Members can give examples of successful investment projects in their constituencies. The key to the continued success of Thames Valley, Berkshire will be the delivery of all those major projects on time, and—as is currently the position in the case of the Reading station project—under budget.
My main purpose in initiating the debate at this time—apart, of course, from my wish to draw attention to the obvious merits of Thames Valley, Berkshire as a successful business area in which to invest—was to raise the issue of the allocation of moneys from the 2015-16 local growth fund. As the Minister knows, Thames Valley Berkshire local enterprise partnership has submitted its strategic economic plan to his Department, giving details of key projects that require support from the fund. The total ask is really quite modest, certainly in comparison with what I understand is being requested by other LEP areas. We are talking about approximately £30 million on top of the £14.5 million that has already been committed.
The LEP’s estimate, which it tells me is conservative—I have not looked at the model myself—is a return of £11 for every pound that is invested, on a net present value basis. The LEP estimates that support from the fund will help it to deliver 10,700 new homes and more than 21,000 new jobs in the area. I know that the Minister, and the Government in general, will welcome that information. The LEP also tells me that the fund’s support will lead to the leveraging of £120 million of private sector investment. For all those reasons, its submission is strongly supported by local authorities, local Members of Parliament and—most important, in my view—local business.
The vast majority of the LEP bid and pre-committed capital is money for high-priority transport-related projects such as the proposed Green Park railway station in my constituency. The station would be constructed on the Reading-Basingstoke line, at the heart of the Green Park business park, and would provide a major boost for businesses and workers in the area. Other high-priority projects include the South Reading mass transport scheme, the A332 Slough junction improvements, the Kings road link scheme in Newbury, and mass rapid transport schemes in Wokingham and Bracknell.
There is also a project to establish a one-stop-shop growth hub which would serve as an information and connection gateway for businesses in Thames Valley, Berkshire, and a project led by further education colleges throughout area to refurbish existing buildings in order to create a hub that can be used by students and the corporates for early-stage prototyping. That will lead to an improvement in science, technology, engineering and maths skills, which I know the Government are championing.
I believe that Thames Valley Berkshire LEP has submitted a very credible proposal, so let me end my speech by asking the Minister four questions. First, what is the timetable for decision-making on the allocation of the local growth fund? Secondly, when will LEPs be informed about fund allocations? Thirdly, will the decision on allocations be made primarily on a value-for-money metric? As I said earlier, Thames Valley Berkshire LEP has estimated an 11-times return on investment, and we hope that that will be taken into account in the measurement of its bid against those submitted by other LEPs. Finally, will LEPs be required to provide further supporting information before any final decisions are made about an allocation, or have the Department and the Minister sufficient information to be able to complete their analysis?
Thames Valley, Berkshire is an economic powerhouse, and the Minister can rest assured that any funds allocated to us will be used effectively. I look forward to his response.