Motion made, and Question proposed, That this House do now adjourn.—(Angela Watkinson.)
I am delighted to have secured this debate on one of the Government’s flagship commitments: the establishment of the green investment bank. I shall focus in particular on the Leeds city region bid to host the bank’s headquarters.
As you are in the Chair, Mr Deputy Speaker, it would be remiss of me not to point out that this coming Saturday the Leeds city region’s Elland Road ground will host the final of the four nations rugby league tournament, following the sensational performance by the England team against New Zealand in Hull in Yorkshire and the Humber, and I want to put it on the record that the Leeds Rhino players made a wonderful contribution to that victory.
The Leeds city region has an extremely strong case to be the home of the GIB. It is being established to provide an infrastructure for a green economy with sustainable long-term growth. That will involve unprecedented investment in green economics. Operating at arm’s length from the Government, it will bring together cross-sector financial, economic and environmental expertise with private capital and investment. The GIB is one of the most exciting policy ideas in the coalition agreement, but it must deliver on the bold vision laid out for it, including the task to innovate and to challenge—to do things differently.
The GIB is a big opportunity for the Leeds city region, and for Yorkshire and the Humber as a whole. It presents an opportunity to showcase the unique mix of expertise, infrastructure and communication links in the region. It is also an opportunity for the Government to show they are serious about innovating, regenerating and doing things differently.
The Deputy Prime Minister has said:
“For years, our prosperity has been pinned on financial wizardry in London’s square mile, with other sectors and other regions left behind. That imbalance left us hugely exposed when the banking crisis hit...It’s time to correct that imbalance. We need to spread growth across the whole country, and across all sectors.”
If that does not suggest that the GIB should be located not only outside London, but in a region where there is real power to harness, innovate and regenerate, I do not know what does.
I congratulate my hon. Friend on securing the debate, and am delighted that he is talking about Yorkshire as a whole, rather than just Leeds, because there are many examples of community-led energy projects in my constituency, and throughout our region we have a phenomenal track record of delivering on green projects and investment.
I thank my hon. Friend for his comments, and I also thank the other Members representing constituencies in the region who are present. I shall be very happy to take interventions from any of them, in order to show that there is cross-party support on this issue, but I should also make it clear that I will only take interventions in support of the Leeds city region bid. Those supporting other regions and bids can get their own debate, just as I have this evening.
As a London MP, I am very clear that the GIB should be located not in London, but in one of the other parts of the country. I hope my hon. Friend regards that as a helpful comment, although he must realise that I cannot be explicit as there are also other bids. It is definitely right that the GIB should not be located in London, however.
That is very helpful, and I thank my right hon. Friend very warmly for his intervention. Whether it is as popular with his constituents as it will be with mine, I do not know, but I thank him for it and agree with his sentiment.
The vision for the green investment bank is admirable and exciting, and the case for its location in Leeds is similarly exciting and innovative. They seem to be an excellent match. The Leeds city region already has a mission to become a world-class, low-carbon economy, and at the same time, as we know, the Government have said that they want to be the greenest Government ever.
As my hon. Friend the Member for Skipton and Ripon (Julian Smith) said, the Leeds city region is wide and diverse, covering the whole of west Yorkshire, parts of neighbouring north and south Yorkshire and the 10 local authority districts of Barnsley, Bradford, Calderdale, Craven, Harrogate, Kirklees, Leeds, Selby, Wakefield, and York. With close to 3 million people, a diverse resident work force of 1.5 million, 106,000 businesses and an economy worth £53 billion per year, it is a region to be taken seriously.
I, too, congratulate my hon. Friend on securing this very important debate. He mentions Kirklees, my local council, and I shall add some more statistics from our part of the world. David Brown engineering in Lockwood, Huddersfield, has just received money from the regional growth fund for its offshore wind turbine gear technology; the transition town movement in the valleys of my constituency, Holmfirth, Slaithwaite and Marsden, is up and running; and on a more regional basis, in west Yorkshire and beyond, there is also co2sense Yorkshire, an organisation leading the charge in Yorkshire for carbon capture and storage technology. Does he agree that it all adds up to a fantastic case for Yorkshire to secure the green investment bank?
My hon. Friend lays out a key part of my speech: so much of what the green investment bank is determined to do is already happening in the Leeds city region. He also demonstrates powerfully that the bid is supported by the public sector, including those 10 local authorities, the private sector, the third sector and, indeed, by MPs from all over the city and Yorkshire and Humber regions.
I congratulate my hon. Friend and constituency neighbour on securing this debate. Does he accept and acknowledge that, under the control of all parties, Leeds city council has played a crucial role in pioneering environmental schemes over many years? Does he acknowledge also the efforts of a former Member, Paul Truswell, who was the first chair of the council’s environmental committee and undertook pioneering work way back in the 1980s? Leeds has a very good record, and it is one of the reasons why the bank should be situated there.
I thank the hon. Gentleman, my constituency neighbour, for that contribution. He correctly notes that wonderful and groundbreaking work has taken place at Leeds city council, and, as he knows, I am the green champion on Team Leeds, with which Leeds MPs specifically are involved. It is an initiative of the Leeds, North Yorkshire and York chamber of commerce, and I am happy to carry on that work and to do what I can to voice it on behalf of Leeds and all those other areas.
The Leeds city region has three fundamentally important things to offer as the location for the green investment bank: first, its location; secondly, its incredible talent in finance, business and the green economy; and, thirdly, its excellent value in allowing for the bank’s affordable establishment as quickly as possible.
I thank the hon. Gentleman for giving way and congratulate him on securing the debate. I wanted to add a fourth and a fifth point. Fourthly, Leeds is an established financial services centre; and, fifthly, our region, the Yorkshire region, is ahead of many others when it comes to environmental technologies and industries. Does he accept that even in south Yorkshire we recognise the case for Leeds to be the centre for the green investment bank? It has—unusually, from south Yorkshire—our full support for that move.
I thank the right hon. Gentleman very warmly for that contribution. When the Leeds city region team established its bid, one crucial thing was to see whether Sheffield and south Yorkshire would come on board in support. That support is very important, and I hope that the Minister listened to the right hon. Gentleman’s contribution. Of course, having the green investment bank based in Leeds would, indeed, be a bonus for south Yorkshire, as it would for the whole region.
We have excellent transport links in the Leeds city region to the north-west, to Scotland, to the north-east and, of course, to London. However, one thing that people perhaps do not understand is that the Leeds city region is the largest manufacturing centre in the United Kingdom. I do not know whether the Minister is aware of that. Crucially, locating the green investment bank in the Leeds city region would place it closest to some of the UK’s most exciting low-carbon sustainable investment opportunities.
We already have a track record of such projects, including electric transport infrastructure, offshore energy, carbon capture and storage, biomass and renewable energy production. As has already been said, there is also a real commitment to green ideals in the Leeds city region. That comes from the public sector, but it also comes from the private and the third sectors. In April this year, the Leeds city region published a business survey which showed that, in respect of environmental innovation, 47% of businesses in the region reported that they had already taken significant action to reduce carbon dioxide emissions. That demonstrates that we are at the forefront of the transition to a low-carbon economy.
As I said to the hon. Member for Colne Valley (Jason McCartney), so much that the green investment bank wants to do and wants to invest in is already happening in the Leeds city region. We have to accept that decarbonising the industrial and manufacturing sectors will be one of the green investment bank’s biggest challenges. Our industrial past has left us with a huge challenge. Yorkshire and Humber as a whole is home to the UK’s largest cluster of industrial CO2 emissions, equivalent to half the domestic emissions of the UK. Our three coal-fired power stations generate 17% of the UK’s energy alone. Drax power station in the region is already co-firing with biomass in a bid to achieve its aim to generate 12.5% of its electricity in that way. That makes it the largest project of its kind in the world. It has plans for three new dedicated biomass-fired plants, which would together add a further 900 MW to the UK’s energy generation.
The Leeds city region is also at the forefront of the development of carbon capture and storage. The project under construction at Ferrybridge will provide the technical evidence needed to underpin large-scale demonstration plants across Europe. The Leeds city region is also leading the way on the delivery of domestic retrofit. Since the feed-in tariff subsidy began, Leeds has had the second biggest take-up of microgeneration technologies in the UK. It is second only—this will certainly please the right hon. Member for Wentworth and Dearne (John Healey)—to another of Yorkshire’s economic powerhouses: Sheffield.
My hon. Friend the Member for Colne Valley mentioned Kirklees. The Kirklees warm zone scheme is viewed as national best practice in funding and delivering domestic retrofit, and it has reduced fuel poverty in some of the most deprived wards in the country. Building on that experience, the Leeds city region is now establishing a city-wide retrofit programme and is advising the Department of Energy and Climate Change on the deployment of the green deal. And that is just in the Leeds City Region.
I join others in congratulating the hon. Gentleman on securing the debate. He is making a very powerful case for the Leeds city region bid. As he is talking about homes, does he agree that it is important to have innovation in housing if we are to tackle the CO2 challenge? For example, the pioneering greenhouse project in Beeston in my constituency has taken a derelict building and turned it into flats. At the last count, that project had won 27 or 28 awards and is producing heat from ground source heat pumps and recycling water. It is a living, breathing example of what can be done and a good illustration of the kind of innovation that can be found in the region. That is precisely why the bid from the Leeds city region should be successful.
I thank the right hon. Gentleman, my other neighbour, for his support in this campaign. That is a strikingly innovative project. While we have the Minister here, we should suggest that he visit projects of that nature; the only thing is that he and his team will probably need about a week to see many of the wonderful things that are going on in the Leeds city region.
A little further afield, in East Yorkshire, we have offshore wind on the Humber—a project that has been developed with significant expertise from the Leeds city region across the financial, legal, manufacturing and engineering sectors. The region’s traditional sectors, such as manufacturing, will develop the low-carbon technologies of tomorrow, as in the case of David Brown, a company mentioned by the hon. Member for Colne Valley.
That leads to the second reason why Leeds city region should get the green investment bank: the incredible talent that we have. As the right hon. Member for Wentworth and Dearne has already said—he rather stole my thunder, but it needs to be repeated again and again, so I am happy that he has done so—Leeds is the leading UK centre for financial services outside London, with 120,000 people working in the sector and over 30 national and international banks based in the city. I do not know whether the Minister is aware of this, but Leeds city region has the biggest financial sector outside London—bigger than any of the competitors currently bidding for the location of the green investment bank.
As a Bradford MP, it pains me somewhat to say too much in favour of Leeds, but I hope that the Minister is catching the drift of this debate. We are aware of the rebalancing strategy from the south to the north regarding finance and manufacturing, but it is crucial to rebalance within regions too. The fact that so many MPs are here from so many parts of the region is testament to our belief that such a move would be good for the whole of the region, not just good for Leeds.
I thank my hon. Friend. This debate does show the strength of support for the bid from all round the Leeds city region and, indeed, the Yorkshire and Humber region.
Let me say this one more time, because I have heard doubts cast on it: Leeds is the second biggest financial centre in the country—not Bristol and not Edinburgh. I will give some figures. Financial advisers in the Leeds city region were responsible for almost 200 deals in 2010, worth £10 billion to the economy. If that is not music to Ministers’ ears, I do not know what is.
I praise my hon. Friend for the positivity of his arguments. He is laying out a compelling case for the bank’s coming to Yorkshire. Does he agree that another big element is the certainty, unlike in some other potential locations, that there will not be a referendum on independence in Yorkshire—no matter how much I would like one, as a born Yorkshireman? We do not want to be negative about anywhere else, but Yorkshire does not have that uncertainty about potential referendums on independence.
My hon. Friend makes a very important point. The show of unified support for this bid from all political parties is vital, and I am afraid that the political situation is different for some of the bids to which he refers.
In 2009, there was a 32% rise in the value of deals in the financial district in Leeds, despite the value of deals in the UK falling by 16% in the same period. Three banks and four building societies have already chosen to locate their headquarters in the Leeds city region, including the headquarters of the UK’s largest financial insurance provider and its investment function, responsible for £75 billion-worth of assets, as well as 10 private equity firms, including the UK’s leading mid-market equity house. We do not just have a big financial sector; we also have the right skills set to support the green investment bank’s products. The sector has direct and recent experience in establishing new financial institutions, with the financial service sector in the Leeds city region having been involved in the delivery of 19 of the past 21 building society mergers.
I, too, congratulate my hon. Friend on securing this Adjournment debate. Does he have any idea of the number of jobs that would be created in Yorkshire and in Leeds in particular if the green investment bank was won by the Leeds bid?
Of course, the point of the green investment bank is not to deliver jobs itself—although a few hundred people will work in and around it—but to bring in investment through projects and the knock-on effects. Those projects will be not only in Yorkshire and the Humber, but all around the country. The Minister might be able to give some idea of the Government’s vision for delivering growth for the economy and employment all around the UK, delivered, crucially, from the Leeds city region.
I refer back to the hon. Gentleman’s comments on the type of financial services that Leeds possesses. It is the home of mutual organisations and of a different kind of financial services than is seen in the City of London. That character, which he painted so eloquently, has to be part of the pitch for Leeds.
That is an important point and it is right of the hon. Gentleman to reiterate it. We must all keep doing so again and again to Ministers. I apologise to the Minister for taking so many interventions. It is rather nice to have so many positive ones. It will, however, take me a little longer to make my contribution than I had originally thought because of that.
As well as the financial expertise and talent in the region, we have the professional and business services that would be integral to the success of any new banking institution. Five of the UK’s largest law firms and 150 accounting firms, including nine of the 10 largest UK practices, are based in the Leeds city region. Crucially, the professional and business services sector in the region has a strong record in supporting the delivery of low-carbon schemes. It is in demand for doing so across the UK, with a number of projects having been advised and structured by businesses from the Leeds city region. One example—and we will provide more to the Minister—which is from the other side of the Pennines, is the UK’s largest wind farm on Scout moor in Manchester. Top legal teams based in Leeds, such as Addleshaw Goddard, regularly advise on international green projects, such as the latest power project in Saudi Arabia and a solar project in South Korea. This expertise and talent is already delivering what the green investment bank wants to do not just in the UK, but around the world.
Finally on talent, the region also has the necessary environmental expertise. The region’s carbon capture and storage programme has been led by co2sense. That is one of a number of Leeds-based expert organisations that drive innovation-led low-carbon projects in the Leeds city region and that would support the bank in its activities. It has been delivering the objectives of the green investment bank in the region for the past four years. It has invested in low-carbon infrastructure projects across the region.
We also have the Centre for Low Carbon Futures, which is a partnership of universities that has a track record in providing expert advice to the Department of Energy and Climate Change. It includes the centre for climate change economics and policy at the university of Leeds. We also have Science City York, which is a partnership company of academics and the private and public sectors that has expertise in bio-renewables. It has directly helped to establish more than 100 new technology companies.
Given all that the hon. Gentleman has said, it is no surprise that one of the most innovative low-carbon, recycled fuel power stations was opened on the border between our two constituencies at Buslingthorpe Green just a month ago. I had the privilege to open it with the lord mayor of Leeds. It generates 2 MWe and is run on recycled cooking oil. I hope the hon. Gentleman would agree that that is exactly the kind of project that the green investment bank could encourage throughout the country. Leeds has shown that it has the expertise to have the bank right in the heart of the city and the region. Does he agree that that is the sort of project that needs support?
Absolutely, and if the hon. Gentleman invites me there as part of “Team Leeds”, I will be delighted to get my hard hat on and come and see it for myself.
Projects up and down the country are already being advised and structured by companies from the Leeds city region. The only biomethane project in the United Kingdom to be completed, in Didcot, was assisted by advice and structuring from the region. As the Minister has heard clearly—I hope the message has got out—the Leeds city region is involved in developing economically sustainable businesses in the green and low-carbon sectors not just in the region, or in the United Kingdom, but around the world.
The third and final key reason why the green investment bank should be based in the Leeds city region is one that I know is music to any Minister’s ears in the current economic climate. The region offers outstanding value for money, through available and affordable office space and competitive staffing, recruitment and location costs. It has a portfolio of high-quality, low-carbon buildings that could house the bank at excellent commercial value. Leeds has offered the best value for money office space among the major European business cities for the past three years, according to Cushman and Wakefield’s annual rankings, offering more competitive value than Bristol, Edinburgh and Manchester, the other cities bidding for the bank. The region also has more buildings that are rated excellent by the Building Research Establishment environmental assessment method—the world’s leading design and assessment method for sustainable buildings—than any of the other cities bidding.
Through existing organisations, the Leeds city region also already has the skill sets required to assess opportunities, make funding recommendations, save time and money on set-up costs and get the bank up and running as quickly as possible.
I want this to be a positive speech, but I have to put it on record that I, and other Members from the region, find it very frustrating that doubts have somehow been cast on some of those incredibly strong credentials of the Leeds city region. There are some strange misunderstandings, considering the very clear facts and the hugely strong case for the region. Some of us may feel that it is another example of something of a blind spot in parts of Westminster and Whitehall when it comes to our region. Perhaps we need to shout a little louder, and we shall. I hope that today, I have put the case forward and left little doubt in the minds of Ministers and others about the incredibly strong case for the region.
The Leeds city region and its surroundings have the specialist knowledge, skills, location and professional supply chain needed to support the green investment bank and its customers. As the House has heard, the potential for green investment in the Yorkshire and Humber region is huge, and the opportunity for the green investment bank in the Leeds city region is enormous.
The Minister knows that the green investment bank is hugely important for the UK, as a global leader on the environment, and the Leeds city region has the formula to make the bank deliver. As I said at the outset, the bank is an exciting and innovative vision, which I support, as I am sure do all right hon. and hon. Members who are in their places. We believe that it is an excellent fit with the innovation, expertise and infrastructure that already exist in the Leeds city region.
I know that the Government are serious about the green investment bank and the vision of what it can deliver towards a sustainable, greener economy. The message that I want to leave with the Minister, and with the team who will award a city the green investment bank, is that we in the Leeds city region are just as serious. We are serious not just about the bank being in Leeds, but about its succeeding, excelling and helping the UK to that more sustainable, greener economy.
I begin by adding my congratulations to my hon. Friend the Member for Leeds North West (Greg Mulholland) on not only securing the debate but leading a remarkable song of harmony. He talked about music to my ears, and I must say—I say it with due care, as you are a professional Lancastrian, Mr Deputy Speaker—that I have not seen quite so many Yorkshiremen together and singing in such harmony, not just from west and north but from the south part of Yorkshire as well. It is very nice to see and hear. I hope that that same harmony can be maintained as proposals are put forward.
If I may say, my hon. Friend put his case very effectively. I might also congratulate him on his genius of having 57 different points as to why we should have the green investment bank in Leeds but under only three headings. That was a masterful performance.
Let me say from the start as someone who regularly goes to Leeds that I totally share the view that it is a first-class city with many advantages and a strong commitment to going green in our economy. I thank, for example, the local enterprise partnership and its partners for the comprehensive business case they have submitted for locating the green investment bank in the city. I was lucky enough to be in Leeds just a few weeks ago at the unveiling of the Yorkshire Post business club, when I heard first hand just how much support there is for this institution to be located in the city.
The green investment bank is a key component of this Government’s commitment to a transition to a sustainable low-carbon economy, which will complement other green policies, which I will touch on briefly later, to drive forward growth in the sector, which by 2009-10 was already worth some £116 billion.
As we have heard from several hon. Members, Leeds has a long and illustrious industrial history, often at the forefront of innovation. It is one of the UK’s largest manufacturing bases. We have heard that it is home to many international businesses. Leeds has also been able to make that difficult transition from industrial powerhouse to a thriving hub for financial services. It is true that outside the City of London, it is the largest financial centre in the UK.
As several hon. Members have pointed out, Leeds has a number of other important emerging strengths, including environmental sciences, bioscience, and even digital and creative industries. Even in these challenging times, growth can clearly be seen in the increase in exports not just from Leeds, but from the Yorkshire and Humber region, which grew to £3.8 billion in the first quarter of this year compared with last year. When I go to the city, I see a sense of confidence and optimism when I look, for example, at the investment of £350 million in the Trinity retail and leisure development, or at the £60 million investment in Leeds arena.
As several hon. Members have said, the green economy has become increasingly important, and the Leeds city region demonstrates its focus on a sustainable economy in several ways. I had the pleasure of attending the official launch of the Aire valley enterprise zone. Its focus is on low-carbon industries and it expects to create up to 9,500 new jobs by 2025, and to add something in the region of £550 million of economic output to the city region. As my hon. Friend the hon. Member for Leeds North West mentioned, the enterprise zone in the nearby Humber region should generate nearly 5,000 jobs by 2015, particularly through its focus on offshore wind manufacturing.
When I went to the city, I was also struck—several right hon. and hon. Members mentioned this—that there is a genuine local commitment to going green in local initiatives, such as the better business environment forum or the Leeds climate change charter. Leeds is one of only four cities in the UK that is designated as an environment city. Local people recently celebrated the European year of volunteering environmental theme with projects including river cleaning, action mornings to maintain the Gledhow valley woods—I am getting a generous nod so I trust my pronunciation was correct—and a comprehensive scheme of planting bulbs and flowers in public places. That happens in other parts of the world regularly, but it is nevertheless part of that voluntary wish to recognise the value of a genuine sustainable community and economy.
I appreciate that there is a genuine commitment to a green, low-carbon future right across Leeds. Nationally, the Government are taking real action to try to put the whole economy on that path. Over the summer, the Department for Business, Innovation and Skills, the Department for Environment, Food and Rural Affairs and the Department of Energy and Climate Change published plans that map out the Government’s approach to building the green economy and show what that means in practice for business. The plans set out the range of policies we are using to support the transition to a green economy and the opportunities that we have created, but also the implications for some of those traditional businesses, which, as various right hon. and hon. Members have mentioned, will need to change how they operate to develop in future.
We understand that to invest the substantial resources required in this area, business needs to be certain that the low-carbon sector is not a passing fad, as some sceptics might believe. That is why we are seeking to provide certainty and why, for example, we are committed by law to providing a 50% reduction in carbon emissions by 2025. We have launched the world’s first incentive scheme for renewable heat, which should increase investment in green-heat technologies by £7.5 billion by 2020. We have also announced 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 have also introduced a carbon price floor, proposals on electricity market reform and a range of initiatives to encourage the roll-out of low-carbon vehicles.
To that end, good progress is being made on the green investment bank. It will be the first of its kind in the world, which is why it is one of this Government’s first priorities. Capitalised with £3 billion, the green investment bank will complement other green policies to help accelerate the leveraging in of additional private capital. The key is that the green investment bank must be a new but enduring institution, rather than a series of Government interventions, and an institution that addresses the areas of under-investment that have persisted in spite of the other measures that 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 the double bottom line of both achieving significant green impact and making financial returns.
As we have seen from this and other debates in the House, there is a real interest in the operation of the green investment bank and how it will be established, so let me turn to that. To assist us, we have appointed an advisory group, led by Sir Adrian Montague, to advise on a range of issues, including not just the institution’s strategic priorities, but the conditions and the market in which it will operate. The priorities will be decided by the Secretary of State and reviewed regularly by Ministers and the institution’s corporate board.
The question at the heart of this debate is the bank’s location. The location is critical to the bank’s success, and although it will not be a large institution, it is clear that people already see it as a valuable organisation—an asset, as I think one hon. Member described it—to wherever it is located. I can tell the House that we have received applications from 20 cities and towns, including Leeds. They have indicated that they would like to be considered as the location of the green investment bank. We intend to set out the details of the criteria and the process for determining the location of the green investment bank before Christmas, in just a few weeks, with a view to making the final decision in 2012. Our proposals for the green investment bank will need to be approved by the European Commission before we can establish it as a fully independent financial institution. We expect approval by mid-2013. In the interim, to accelerate our transition to a green economy, the Government will begin making early investments in green infrastructure from April 2012.
We are committed to taking action now to enable the transition to a green and growing economy, and we welcome Leeds’ active, positive and energetic contribution to this debate. We will continue to build on the progress that we have made, which is why we welcome the support from all the main political parties for the principle of an enduring and independent institution that will help to set the UK firmly on its course towards a green and growing economy.
To summarise briefly, I congratulate my hon. Friend the Member for Leeds North West on raising this important issue and emphasise that no decisions have yet been made—if that is an assurance to him—on the location of the bank. We will ensure a fair and transparent process when we decide on the location. All interested parties will be given an equal opportunity to submit an expression of interest, so that due consideration can be given to all submissions to ensure a full and equitable process.
Question put and agreed to.