It is a pleasure to serve under your chairmanship for the first time, Mr Dobbin. I am also delighted to welcome the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), who is doing an excellent job in his ministerial capacity. I am somewhat surprised, as I was expecting the enterprise Minister, the hon. Member for Hertford and Stortford (Mr Prisk), but my right hon. Friend is a more than adequate substitute. This is my opportunity to showcase the city of Peterborough’s positive and innovative growth agenda, particularly our aspiration to be the home of the UK environment capital, and to put on record our belief that we have a good case for being the future home of the new green investment bank.
From time to time, I have disagreed with Peterborough city council about the quantity of housing development in the city. I have also expressed concerns, as have many Members over the years, about the correlation between residential development and infrastructure. However, I believe that we are resolving those issues. Peterborough city council, the urban regeneration company Opportunity Peterborough, neighbouring Members of Parliament and I share ambitious plans for the future of Peterborough, which I will elucidate.
Peterborough’s population of 170,000 is set to grow to well over 200,000 by 2021, and there are plans to deliver more than 25,000 homes and 24,000 jobs by 2026. A McKinsey report published this year predicted that by 2025, Peterborough would have the highest growth in GDP of any English city. Private sector job growth is vital to the city’s economic prosperity and growth. Peterborough’s location—just 46 minutes from London by train, with direct links to the north of England, Birmingham, Cambridge and Stansted airport—makes it a nationally and internationally well-connected city that attracts and retains businesses.
The city’s economic growth is based on strong sectoral foundations. I will mention its environmental and financial businesses in a moment. Peterborough’s manufacturing companies have outperformed many competitors and include global giants such as Caterpillar Perkins, Dresser-Rand and Applied Energy. In printing and media, Peterborough boasts Bauer Media, Europe’s largest privately owned publisher, and Ideal World, digital broadcaster to more than 22 million homes in the UK. In food and drink, the full spectrum from processing and packaging to innovation and cutting-edge technology is covered by companies such as Coca-Cola, New Covent Garden Food Co., Masterfoods, British Sugar and AB Agri.
Although nowhere has been wholly unaffected by the recession, Peterborough has performed relatively well, creating over 3,000 private sector jobs in the past year. Investment has continued to head to the city. New high-profile operators such as TK Maxx, Nando’s, Patisserie Valerie, Van Hage, Andronicas, Pandora and Superdry have all set up in Peterborough recently, and imminent arrivals such as Kelway IT services and Stobart Group are due to deliver more than 700 jobs.
Given its accessibility, Peterborough’s economic growth is available to a wide geographic area. The city has taken a lead role in the development of the Greater Cambridge and Greater Peterborough local enterprise partnership and is assisting in the delivery of the enterprise zone at Alconbury in Huntingdon, ensuring that the zone’s benefits are more widely exploited. I must put on record my disappointment that the local enterprise partnership did not push for the Peterborough railway corridor, which would have had greater resonance as a catalyst for change, built on our regeneration, and had a bigger social and economic impact. However, that was the LEP’s decision. While I am making minor complaints to my ministerial colleagues, I must say that Peterborough’s exclusion from the national insurance contributions holiday will have had a slight impact on people minded to set up businesses in Peterborough, at the border between the east midlands and the east of England, rather than in the east midlands, Lincolnshire or Northamptonshire. However, those are my only gripes.
As we know, the east of England contributes significantly to the national economy, to the tune of £30 billion a year. As a powerhouse for growth in the area, Peterborough could have a positive impact on the UK economy, and its environmental credentials could make it an exemplar city for sustainable growth.
Peterborough was designated as an environment city in 1993 and became the home of the environment capital in 2010. The city’s environment capital is a collection of assets including, among many other things, a unique cluster of environmental businesses, innovative approaches to understanding environmental performance, development of the UK’s largest zero-carbon homes project, one of the highest amounts of green space per capita in the UK and a drive for sustainability at the core of all its activities. More than 380 organisations and businesses constitute the environment cluster, including Government and voluntary organisations such as Natural England, the Environment Agency, the Wildlife Trust and Froglife and international consultancies such as Halcrow, Royal Haskoning and the Rolton Group. It also includes major businesses such as Dresser-Rand, which is developing energy from wave technologies, Caterpillar Perkins, formerly Perkins Engines, which is reducing engine CO2 emissions, and Anglian Water, which is delivering leading-edge innovation in water management.
Peterborough Environment City Trust is delivering nationally unique environmental programmes, attracting funds for major retrofit projects, developing community skills through its Greeniversity programme and the Green Apple resource kit and awards for local schools and involving more than 400 local businesses in environmental management improvements through its Investors in the Environment scheme. With 295 code 6 homes on the south bank of the River Nene, Peterborough will be the country’s biggest carbon challenge city. The city is also developing innovative utility provision to support housing and economic growth through a council-led energy services company installing photovoltaic and other energy solutions for council property.
As one of three Department for Transport sustainable transport demonstration towns—an initiative branded as Travelchoice—the city has achieved a significant shift towards more sustainable travel modes, including a 35% increase in the number of bus passengers between 2004 and 2009, a 14% increase in walking and a 12% increase in cycle journeys. The recent award of a £5 million Department for Transport grant to Travelchoice reflects the transformations already achieved and will enable the city to develop them further.
The 2008 Government-commended integrated growth study produced by Arup on behalf of the city council demonstrated how the city could meet its ambitious growth targets while achieving environmental, economic and social sustainability. Data sets from the study underpin the pioneering Peterborough model, a web-based visualisation of city-wide environmental performance developed through a public-private collaboration. The model has received interest from as far afield as New York, Cape Cod and Bordeaux, as well as closer to home from Her Majesty’s Treasury, to support the green infrastructure plan.
Skills development is key to the city’s future. The city council has recently partnered with Cranfield university to establish the Centre for Renewable Energy and Bio-Fuels and is supporting the commercial research and development of algae biofuel energy. That brings me to the bid for the green investment bank. The pioneering work of the coalition Government in establishing the green investment bank requires relevant expertise in the host city and a similarly innovative attitude. As the home of the environment capital, Peterborough has unrivalled expertise in environmental sustainability, with its 380 businesses and organisations, its innovation networks, which reach across the globe, and its innovative mapping of environmental performance through the Peterborough model.
Peterborough also has more than 27,000 people working in the financial sector, proportionally more than the east of England and the United Kingdom. Major companies with main offices in Peterborough include the insurance operators the BGL Group—famous for the meerkat adverts—Royal Sun Alliance and Diligenta, which is part of the giant Tata Consultancy Services conglomerate. Other financial operators include BNP Paribas, Handelsbanken, the Lloyds Group, Aldermore, Travelex and Clydesdale Bank. Many of these companies have announced significant growth and expansion, even during the recession.
Innovation is key to the financial as well as environmental performance of the city. Local companies such as PinPlus, for financial security, iGo4, for insurance, and indeed the city council, through its mortgage partnership with Lloyds TSB, are all leaders in creative approaches to finance. In these difficult times for first-time buyers, I commend in particular the collaboration between the city council and Lloyds TSB in providing much-needed finance for first-time buyers. I certainly commend it to other local authorities.
In Peterborough, the green investment bank would have access to unparalleled levels of financial and environmental expertise and innovation, as is already demonstrated by the Treasury’s interest in using the Peterborough model to support the green infrastructure plan.
In conclusion, Peterborough is ambitious and growing, with a work force to match. The city is actively exploring pioneering public-private partnerships to remove the burden from the taxpayer without slowing progress in the city. Innovation in all areas of environmental, financial, economic and social capital is matched by understanding infrastructure needs and opportunities.
I will finish with a quote from Diligenta, which is a subsidiary of the huge Tata group, is a leading player in UK life and pensions business process outsourcing, and has a headquarters in the city. It says:
“Peterborough…has great infrastructure that supports a vibrant economy and a financial sector presence. We strongly recommend it as an excellent location for any business looking to invest.”
Peterborough is moving forward and grabbing the opportunities of the Government’s growth agenda. I look forward to hearing the Minister’s response.
It is a pleasure to serve under your chairmanship for the first time, Mr Dobbin, and to be able to respond to the debate initiated by my hon. Friend the Member for Peterborough (Mr Jackson). He has referred to the Peterborough model, and I think that he is the Peterborough model of a Member of Parliament who is absolutely passionate about his constituency and who represents it with the vigour for which that city is itself famous.
As my hon. Friend has said, Peterborough is a growing city. Even during the recession, it has performed well with 3,000 new jobs announced last year. It has great strength in sectors such as the environment, manufacturing, finance and investment. It is a city with innovation at its heart, with its Eco-Innovation Centre and Water Innovation Network. Cranfield university is not far away and Peterborough is working with it to establish a commercial research and development base in algae biofuel technology.
As my hon. Friend has indicated, Peterborough’s leading role in the Greater Cambridge and Greater Peterborough local enterprise partnership, which was announced in October, is a major positive force for the economy. There are great hopes for that local enterprise partnership, being, as it is, such a concentration of some of our most promising businesses and industries.
My hon. Friend has mentioned the new enterprise zone in Alconbury. It is outside his constituency, and I acknowledge his point about the Peterborough railway corridor. I say to him that that was the choice of the local enterprise partnership, and I know that his constituents will benefit from the general uplift that it will give to the whole area. Moreover, many of the powers in a local enterprise zone are in the gift of local authorities to bestow on other areas to create, as it were, enterprise areas. On simplified planning, for example, a new discretion will be available in the Localism Bill to give business rate discounts to particular types of businesses for start-ups. The proposed reforms to the local government finance system will allow authorities to retain the benefit of the uplift in business rates. I hope that, when he returns to Peterborough, my hon. Friend will encourage both the local enterprise partnership and the city council to think about how some of the benefits of the local enterprise zone in Alconbury might be conferred on the area in Peterborough that he has mentioned.
The unique model of the Peterborough skills vision of brokering direct links between local business and schools and colleges is another area that other cities are looking to replicate. Peterborough has so much more to offer besides, such as a spectacular cathedral and excellent rail links, which my hon. Friend has mentioned, as well as being the home of the Posh and of one of my great heroes, Peter Boizot.
The green economy is important to the whole country and I am aware that that applies nowhere more than in Peterborough—350 eco-businesses are located there and it has 29 conservation areas and an amazing commitment from its people to improve the city’s environment, as they have done over time. Peterborough’s long-standing association with the environment is clear. It was designated an environment city 15 years ago—one of only four at the time—and it recently celebrated its 20th green festival. In addition, I was pleased to hear about Peterborough’s recent environmental business successes with a Queen’s award for enterprise and the international interest generated by the Peterborough model, which my hon. Friend has mentioned and which brings the city’s environmental performance data to life through an online visualisation.
Peterborough is right to be so committed to the green economy. The green economy in the UK was worth more than £116 billion in 2009-10. By 2015, the sector is expected to employ more than 1 million people. We are taking action now to put the whole economy on a low-carbon, resource-efficient path. UK expertise and innovative low-carbon businesses can lead the way in refocusing our economy to capture the global opportunities that were worth £3.2 trillion in the past year alone and are forecast to grow by about 4% a year over the next five years.
A greener, low-carbon economy is one of the key areas that we have focused on in our plan for growth. The Government recently published plans that map out the Government’s action to enable the transition to a green economy, including areas such as climate change, resource efficiency, waste prevention and carbon capture and storage. These plans will form the basis for continuing dialogue between Government, business, universities and communities.
We understand that business needs to invest substantial resources, but it needs to be confident that this is at the heart of the Government’s agenda. I hope that it can see that it clearly is. We are putting in place the policies that will establish the long-term framework in which investment decisions can be made with confidence. Providing that consistency creates an attractive environment for investment, which, by its very nature, will pay dividends over a long period.
We are committed to substantial reductions in carbon emissions. We have launched the world’s first incentive scheme for renewable heat, which should increase investment in green heat technologies, and we are launching the green deal, under which householders, businesses and landlords will be able to improve the energy efficiency of their homes and buildings at no up-front cost. We are also introducing a carbon price floor, proposals on electricity market reform and a range of initiatives to encourage the roll-out of green vehicles.
High-quality economic infrastructure is important for any competitive, growing economy. The transition to a green economy will require unprecedented investment in green infrastructure in key areas. Hundreds of billions of pounds, mostly from the private sector, will be required in the energy sector alone. In the long term, the benefits to be gained from that action will be much greater than the costs of taking it. To ensure that a lack of sufficient finance is not a barrier to the scale and pace of the transition, we need to go beyond existing policies.
To that end, we have announced our intentions for the green investment bank, which is the first of its kind in the world and one of the Government’s top priorities. The green investment bank will be dedicated to providing financial solutions to accelerate and increase private sector investment. A new institution rather than a series of Government interventions is required, and the green investment bank will build the necessary deep expertise in financial markets and green investments. It will be an institution that complements our existing green policies and addresses the areas of under-investment that persist in spite of the other measures I have mentioned.
Our green objectives are ambitious, and to achieve them we need tailored and targeted financial intervention to overcome under-investment in those key areas. The green investment bank will work towards a double bottom line of achieving a significant green impact and making financial returns. There has been a great deal of interest in the green investment bank and I know that my hon. Friend is keen to understand where we are with setting it up and to ensure that Peterborough is well represented in those considerations.
We are at the early stages of establishing the green investment bank, and there is much to be done. Our proposals need to be approved by the European Commission before we can establish the bank as a fully independent financial institution. However, we know that there is a need for early action, so my Department will start to make direct state-aid-compliant investments in green infrastructure projects from April 2012. The advisory group, which was recently appointed and which met for the first time last week, will provide us with advice on the establishment of the green investment bank, including what its strategic priorities should be. Those priorities will then be decided by the Secretary of State and will be regularly reviewed by Ministers and the institution’s corporate board.
We will also need to decide on the bank’s location. Although it will not be a large institution, we know that people already see it as a valuable organisation and an asset to wherever it will be located. We are currently defining a process to decide the location that will build on the criteria we published in our May update on the green investment bank. We will, of course, make an announcement in due course about the process and ensure that all those who have already expressed an interest are kept informed.
We believe that a green economy is a growing economy and welcome Peterborough’s commitment to green growth. Through our green policies, our work with businesses and the green investment bank, we believe that we are firmly on our way to achieving that vision of a green economy. We will continue our work to establish the green investment bank, including the design of a process to decide the location, and we hope to make an announcement on progress as soon as it is sensible to do so.
I pay tribute to my hon. Friend for the consistent interest that he has taken in the green powerhouse that is the city of Peterborough’s potential in this area. No one in his city should doubt the fact that they could not wish for an advocate who has a stronger or more respected voice in this House. It has been a privilege to respond to his debate and to serve under your chairmanship, Mr Dobbin.
Question put and agreed to.