Kidderminster Enterprise Zone

Greg Clark Excerpts

Wednesday 15th June 2011 Commons Chamber

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

How can I resist such an invitation when my hon. Friend the Member for Wyre Forest (Mark Garnier) has extolled the virtues of Kidderminster, and indeed Worcestershire, in such lyrical terms that I am surprised that every Member present is not changing their holiday plans to spend the summer there?

I sincerely congratulate my hon. Friend on securing this debate on enterprise zones in general, and Kidderminster in particular. I was enormously impressed by the chorus of approval that greeted him when he got to his feet, not only from Members from Worcestershire, welcome though their support is, but from all over the country—Staffordshire, Dudley, Brighton, Yorkshire and Oxfordshire. If he is so skilled in putting together such a supportive chorus for the Kidderminster bid, I think it will fare well.

I have to be careful in what I say; my hon. Friend places me in a difficult position. He will understand that the application process is still open—it closes later this month—and that it would be invidious of me to favour the claims of Kidderminster above those from other parts of the country. However, he has put the merits of Kidderminster forcefully on the record and into my mind.

[Ian Austin]

I am delighted to hear the Minister accept the invitation to visit Kidderminster. When he does that, would he prepared to make a short detour—just 12 miles or so up the road—to visit Dudley to examine the case for Government support for measures that will bring enterprise, new industries and new jobs to my constituency so that we can see growth right across not only Worcestershire but the black country?

[Greg Clark]

I would be very happy to extend my trip to include the black country as well as Worcestershire.

Let me take the opportunity to set out some of the background to the process that has resulted in such an enthusiastic bid from Kidderminster. Like my hon. Friend, I pay tribute to and recognise the breadth of support that he has been given. The fact that Mr Woodman and his colleagues from Worcestershire have come to the House today shows the depth of support for the case that my hon. Friend mentions.

The coalition agreement, which was published a year ago, sets out two overriding aims for the Government’s term of office. The first was to get the economy back on track. The second was to achieve an historic shift in power and influence from central Government to local communities. What we are discussing encapsulates both aims. It is about living up to economic potential and realising that by giving communities their head and the ability to drive growth themselves.

This policy addresses the situation that we had before the election. My hon. Friend referred to the artificial constraints that divided some areas of the country and forced others into an uncomfortable relationship. The previous approach of regional development agencies being imposed from the top down clearly went against the grain of our historical geography and of how people live their lives locally. To that extent, it suppressed rather than enhanced the ability of different parts of the country to establish their economic identity in the same way that they have always had different characters. Part of the purpose of this degree of decentralisation is to empower different parts of the country to prosper economically.

[Andrew Bridgen (North West Leicestershire) (Con)]

Has the Minister given any consideration to allowing a local enterprise partnership to have more than one enterprise zone at the same time if they are of a small size? Such an approach would suit an enterprise zone in the town of Coalville in Leicestershire in my constituency.

[Greg Clark]

My hon. Friend makes a powerful point. I did not include Leicestershire in my list of places that are represented. One characteristic of local enterprise partnerships is that they are of different sizes. We have made it clear in the guidance that we expect an LEP to make one nomination, but I hear what he says and other parts of the country, especially areas that have larger LEPs, have made a similar point. I will certainly reflect on that.

The purpose of LEPs is not just to reflect, though they do, the economic geography of the areas that they cover. In contrast to the previous approach, whereby areas had to conform to regions that were administratively determined in Whitehall rather than locally, when my colleagues and I considered how we could establish LEPs nine months ago, we gave careful thought to what areas they should cover and came to the decision that we should give people the chance to nominate the most appropriate areas and to specify the natural connections. I feel justified in giving people that possibility, because LEPs have been formed that frankly would not have been invented in the Government. They represent a reality on the ground that does not conform to the uniformity that tends to come from the central Government approach.

My hon. Friend the Member for Wyre Forest is vigorous in his promotion of the Worcestershire local enterprise partnership. I think also of north-east England, where the Tees valley—my home town of Middlesbrough and the surrounding towns—has asserted its unique characteristics. It wants to have a strong voice and to take advantage of the opportunities that have been presented, which in many cases were submerged in the old region of the north-east, important though the connections are across that wider area. Other LEPs recognise the natural economic connections between parts of the country, even though they may be in different counties. For example, the Coast to Capital LEP covers the area from Croydon down to Brighton. The area has a lot in common and businesses see it as important.

Recognising the appropriate areas was the first step, but the second was to ensure that local enterprise partnerships were genuine partnerships—combinations of business, local communities, the voluntary sector and social enterprises. All the bids that we approved represented strong partnerships, with a degree of enthusiasm that has been striking. There is greater enthusiasm than can be obtained from a body that is a creature of government. The fact that the bid my hon. Friend described enjoys such strong business support is testament to how energy can be tapped if business and communities get the chance to work together.

The approach that we are taking in encouraging local enterprise partnerships to make decisions locally in the best interests of their population is reflected in other parts of our policy. In planning, we are introducing reforms inspired by the work that my hon. Friend the Member for Henley (John Howell) performed for the party in opposition, which will give local communities the opportunity to influence and shape their area. That is not just about housing, important though that is. Communities everywhere in the country want to have regard to their future economic prosperity, and it is important to give them the chance to promote a local plan and neighbourhood plan that reflect their best traditions and their potential, rather than make them conform to a high-level regional strategy that does not represent and reflect the different localities within it. My hon. Friend the Member for Wyre Forest said that his local council has its core strategy in place, which puts it in a strong position to take advantage of the new planning powers, including neighbourhood plans. In some areas, business will want to take a leading role in those plans along with residents, and I dare say that may be the case in Kidderminster.

Through the new homes bonus and reforms to the community infrastructure levy, we want to ensure that some of the benefits of growth stay within the community, so that they can be used to reinforce that growth and ensure that it is genuinely sustainable. People who live in an area must have a genuine reason to say yes to growth.

Up and down the country, the local enterprise partnerships that we have established are already setting a vision for the future. They are driving growth, planning for new infrastructure and seeking to attract jobs and investment. I know that the Worcestershire LEP, in particular, is in the vanguard of the movement nationally.

Let me say a word about enterprise zones themselves. As my hon. Friend knows, they were announced in this year’s Budget, and we want to see 21 of them across England. We want them to be hothouses for growth and places in which we create the conditions for the public and private sectors to work closely together to create new jobs, set up new firms and attract new investment. They are there to help places with strong potential to grow to do so quickly, and he has made a strong case for Kidderminster having that potential. There is to be no hanging about, and we will make the decisions during the summer. It is important that the enterprise zones are up and running with good speed, so that the opportunities for the areas in question and for the country are maximised. I know that if it is successful, the enterprise zone bid that his LEP has made will bring with it an enthusiasm to get on with it.

On what an enterprise zone comprises, first, as my hon. Friend knows, it will involve a 100% relief from business rates, worth up to £275,000 over a five-year period. All the business rate growth generated by the zone for a period of at least 25 years will be kept by the LEP for reinvestment in the wider area. Greatly simplified planning zones will be in place through local development orders, making applications quicker and more certain for developers, and the Government will ensure that superfast broadband is rolled out across the zones.

That is the set menu, the standard elements that will be common to all local enterprise zones. However, the fact that they will be driven and promoted by the LEPs means that those elements can be adapted and supplemented to reflect the particular needs and priorities of the area. There will be an opportunity to consider the use of tax increment financing to support the long-term viability of a zone. Some aspects of local government funding are being reviewed in the local government resource review that is taking place.

We are determined that the local enterprise partnership should nominate an enterprise zone for consideration. That is the right approach, rather than Ministers centrally deciding where a zone will be. That should be a local decision.

Some enterprise zones were nominated in the first wave, but my hon. Friend makes a case for the second wave. Let me say something on the timetable for that. He will know that formal bids are due by 30 June. We hope to announce the successful LEPs during the summer. He will know that it would be inappropriate for me to go any further and to anticipate the outcome of that process, but it is obvious, from what he said and from the support that he has had from colleagues on both sides of the House, just how much support his proposal attracts. That is encouraging.

My officials are already working closely with the Worcestershire LEP and Kidderminster representatives on plans for the area. One thing that we have been particularly impressed by is the strong sense of local partnership between elected members, including councillors, businesses and the voluntary sector. The bid is therefore a strong one, but we are expecting other strong bids from other areas of the country—this is a competitive process. Whatever happens, the enthusiasm and volition to encourage growth by doing things differently locally does not rest entirely on the bid. The LEP has many powers available to it—for example, to create a simplified planning zone, or to promote discounts in business rates for certain types of businesses in particular areas. It can go ahead with such initiatives even in anticipation of an enterprise zone, and take other opportunities whether or not its bid is successful.

My hon. Friend has put a very strong case firmly on the record, and he does not have too much longer to wait before he hears the result of his passionate advocacy in the House today.

Question put and agreed to.