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Kidderminster Enterprise Zone

Volume 529: debated on Wednesday 15 June 2011

Motion made, and Question proposed, That this House do now adjourn.—(Angela Watkinson.)

I thank the Minister for his time this evening to hear the case for the Kidderminster enterprise zone bid. I am pleased to be able to hold this debate because I am passionate about the future of the local economy, not just in Kidderminster or even in Wyre Forest but in the whole of Worcestershire.

What we are debating this evening is more than just Kidderminster’s enterprise zone bid. It is about how the Worcestershire local enterprise partnership has come together with enthusiasm and considered the many submissions from across the county, and how the business community has worked through the options and come up with what it believes is the best possible enterprise zone bid for the whole county. I am delighted to see so many Members present, and members of the business community in Worcestershire have come down this evening to show their support for this incredibly important bid.

Before I speak more specifically about Kidderminster, I want to speak about Worcestershire as a whole. I do this because it is important to remember that it is the Worcestershire LEP that has looked carefully at the county and decided that the best option for the county—not just for Wyre Forest—is the Kidderminster business enterprise zone. It is important that it becomes an enterprise zone because it is a strong and early bidder for a county-wide enterprise partnership that will bring together business, civic and third sector leaders as an effective advocate for the whole county.

Worcestershire has around 560,000 residents, and across the county there are a number of strong but localised industrial specialisms. We have agriculture and food processing in Wychavon and the Malvern hills, research and development in Malvern and automotive-related industries in Bromsgrove and Redditch.

Does my hon. Friend agree that although the bid from Kidderminster is great, we must all work together with the Worcestershire LEP to ensure that in future years other areas have successful bids, including my constituency?

My hon. Friend makes a good point; this is about the whole of Worcestershire and it is incredibly important that we work together for this important opportunity.

I thank my hon. Friend and neighbour for securing this extremely useful debate. Does he agree that developing the Kidderminster enterprise zone would be extremely beneficial, particularly for those in the north of my constituency, because it would be so easy for them to travel to Kidderminster for work?

My hon. Friend makes a very good point. The whole point about an enterprise zone is that it will not only help people in the immediate vicinity, but attract many people and a lot of economic activity from a fairly wide area—a point I will develop later in my speech. The economy of the south of the county looks to the rural and research-based drivers in her constituency, and the north of the county looks to the black country as its engine for growth. It is for this reason that strengthening the advanced manufacturing base in the north of the county will draw down the manufacturing prosperity of the black country into Worcestershire.

The issues Worcestershire faces are important and the LEP has already got to grips with the major economic priorities and challenges that the county will face in the coming years. Crucially, private sector employment shrunk over the past decade by 1%. This trend was more marked in the north of the county, with Kidderminster seeing an 8% reduction in private sector employment and Redditch seeing a 14% reduction. That said, Redditch has a greater proportion of manufacturing jobs in the region, which is encouraging.

Moreover, work by the West Midlands Regional Observatory shows that Kidderminster and, to a lesser extent, Redditch suffer from problems relating to longer-term restructuring and job losses from the contraction of their industrial base, lower employment rates and higher claimant levels, especially among young people, and a higher proportion of the working-age population having no qualifications at all. To deal with those issues, the LEP sees restructuring the local economy away from public sector jobs, supporting and growing the tourism industry, and building on the industrial assets in the north as the key priorities. It was with this in mind that the Worcestershire LEP identified Kidderminster as the unanimous option for the Worcestershire bid for an enterprise zone.

The town of Kidderminster was once the hub of the world’s carpet industry, with some 20,000 people employed in that key industry as recently as the ’70s and ’80s. Carpets declined as the preferred floor covering, although I am pleased to say that that trend is now in reverse.

I am listening carefully to what my hon. Friend is saying. It is a great relief to me, as I represent a Staffordshire constituency, that we are no longer under a regional development agency, as what works in one place in the west midlands does not necessarily work in Staffordshire, so I am delighted that we now have the Staffordshire and Stoke-on-Trent LEP. However, I have to stand up for Minton floor tiles and say that, although carpets in Kidderminster are important, floor tiles are equally so.

They certainly are, but I must say that one cannot get a better carpet than those made in Kidderminster. My hon. Friend makes a good point about Advantage West Midlands, which is now disappearing. The LEPs are incredibly strong because they bring together enterprise and business to try to structure what they need economically, and the way in which some enterprise zones in the west midlands have come together to take advantage of that opportunity and build on it is very encouraging.

I am pleased to see my friend and co-chair of the all-party group on the economy of the west midlands, the hon. Member for Dudley North (Ian Austin), in the Chamber in support, because it is incredibly important that we work together across the whole of the west midlands to ensure that we have a strong local economy.

The carpet industry in Kidderminster, as I said, employed 20,000 people, but now we have fewer than 2,000 working locally in that once-great sector. Having said that, I must note that Kidderminster produces some of the finest carpets on the planet, and that is very encouraging. Kidderminster and the wider Wyre Forest now find themselves a post-industrial area, with a handful of significant employers but 5,000-plus small and micro-businesses. Local unemployment in Wyre Forest stands at 4.6% overall, but the figure I find most upsetting is that of the 18 to 24-year-olds not in education, employment or training, the so-called NEETs, who number 9.1% against an equally tragic but lower 7.2% for the wider county.

The Kidderminster and wider Wyre Forest area is made of stern stuff, and the local district council is keen to promote growth. In 2009, Wyre Forest district council created a private-led regeneration project known as the ReWyre initiative, which is helping to drive forward the economic growth of local businesses in Wyre Forest and, combined with the new LEP private enterprise, taking a firm lead in driving forward economic regeneration.

Owing to that already strong local drive and the early establishment of the Worcestershire LEP, the opportunity for a Kidderminster enterprise zone was seized unanimously. The proposal is to establish an enterprise zone, the South Kidderminster business park, in an area broadly defined by two main arterial roads through the district, the Stourport road and Worcester road business corridors. There is already significant economic activity in those areas, and, although some 3 hectares of previously speculatively developed site is available for immediate occupation, a further 44.5 hectares of brownfield site is available for redevelopment and the specific needs of new and relocating businesses to the enterprise zone.

It is anticipated that that redevelopment alone will bring some 4,000 new jobs to Kidderminster and Wyre Forest, and importantly not just the people of Kidderminster but the wider county of Worcestershire will benefit from those jobs. It is anticipated also that the enterprise zone’s local stimulus will benefit many existing businesses and create new jobs in the wider area, particularly in the towns of Stourport-on-Severn, Bewdley and Redditch.

I congratulate the hon. Gentleman on securing this debate and commend him for his valuable work for and great contribution to the all-party group that we have established for the regional economy. Does he agree that it is not just the towns of Stourport, Bewdley and Kidderminster that will benefit from the establishment of the enterprise zone, but the black country towns of Dudley, Sandwell, Walsall and Wolverhampton? If greater enterprise, more jobs and prosperity can be brought to areas such as Kidderminster, that will only benefit the constituents I represent just a few miles away in the black country, and that is why I assure the hon. Gentleman that the bid will receive my support and, no doubt, that of other black country MPs.

I am incredibly grateful to the hon. Gentleman for that intervention. It shows the cross-party support for the local economy in the black country and the west midlands, and that we are all coming together to try to support the local economy, to move things forward and to deal with the issues that face us. They include slightly stagnant economic growth, but we will deal with that through local enterprise partnerships and business expansion zones.

The development’s knock-on effect will be incredibly important. The Stourport road corridor runs through one of the most deprived wards in England and Wales, Oldington and Foley Park, where almost 8% of residents are on jobseeker’s allowance and almost 30% of 18 to 24-year-olds are NEETs. There will be not only an immediate impact on local unemployment, but a long-term change of prospects for the large numbers of families who have been hit by the long-term decline of the carpet industry—families whose unemployment can be measured not in weeks, months or years but, in far too many cases, in generations.

Specifically, it is anticipated that growth in the Kidderminster business park will come from a mix of new businesses moving to the area, the expansion of existing businesses benefiting from the local economic stimulus and, importantly, the creation of new businesses, all of which will take advantage of the local mix of good and available skills, existing supply-chain businesses, the availability of land and existing property for immediate use and, of course, the incentives available through the enterprise zone.

The existing and well established ReWyre initiative and the Worcestershire LEP, working together in partnership, will manage and implement the enterprise zone. Not only will they draw up a flexible and sustainable investment plan for the zone, but crucially they will create a single, strong marketing identity, developing a vision for the zone and the district for the next one or two decades. South Kidderminster business park already benefits from an up-to-date local development framework, with the Wyre Forest core strategy having been adopted in December last year. The core strategy already identifies the fact that South Kidderminster business park will offer attractive, accessible and high-quality employment locations. The area also provides a strong and clear basis for the designation of local development orders, simplifying planning requirements and thus accelerating development opportunities.

What is important about the Kidderminster business zone bid is that there are qualified, work-ready people willing to take on work immediately. I recently spoke to a local employer who was advertising for new staff and who told me that he was inundated with good-quality candidates, all of whom he could have taken on. That is as good an indicator as any of a willing and ready work force available to meet the needs of new businesses in Kidderminster.

The Wyre Forest and Kidderminster area is an incredibly wonderful place to live. At that all-important final meeting when the managing director of a company seeking to relocate to a town such as Kidderminster has to discuss moving home with his or her family, I am sure that the family members will relish the opportunity of living in an area with outstanding natural beauty, fascinating towns, excellent nearby shopping, good schools, and a wide range of activities to keep any family healthy and happy. [Interruption.] And good carpets, yes.

I am here to urge the Minister to do everything he can to help Kidderminster’s bid to pass successfully through the selection process. The ingredients for success are already there. We have an available and willing work force ready for immediate employment. We have available space for new businesses to take up immediately. We have a local development plan already in place supporting South Kidderminster business park. We have a local business organisation—the ReWyre initiative—already in place to drive the Kidderminster enterprise zone forward. We have the unanimous support of the local enterprise partnership behind Kidderminster. We have the will to rebalance the local economy towards private sector employment.

Crucially, an enterprise zone in Kidderminster will help to enable our third sector partners who work in more challenging areas to prepare the long-term unemployed for long-term employment. It will raise aspirations, drive economic regeneration and give breadth to the wider Worcestershire economy. I invite the Minister to visit, because I am sure that he will agree that there is no better candidate for a business expansion zone than Kidderminster.

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.

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?

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.

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.

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.

House adjourned.