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Economic Growth (Waveney)

Volume 536: debated on Friday 25 November 2011

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

I am very pleased to have secured this debate. Its timing is particularly appropriate, coming as it does just before the Chancellor’s autumn statement on Tuesday.

The Waveney constituency is in north-east Suffolk and its main town, Lowestoft, is the most easterly point in Britain. Lowestoft has a proud history, and much of its heritage is based on fishing. Some 40 years ago it could be viewed as the model of how the economy in a coastal town should operate, with a diverse and prosperous economic base underpinned by fishing and its allied industries, the Richards and Brooke shipyards, the emerging oil and gas sector, food processing factories such as Birds Eye and Beechams, the Eastern Coach Works, the Co-op canning factory, the Boulton and Paul timber yard and the Pye television factory, as well as a flourishing tourism sector.

Gradually, over the years, those businesses have gone, though Birds Eye remains. Some people feel forgotten and neglected by the Government, but new businesses are arriving, many in the emerging energy sector, and there is a real desire across the whole of the Waveney district for them to succeed and for the area to play a full role in the economic recovery, creating jobs and helping rebalance the economy away from its over-reliance on financial services and London and the south-east. In many respects, Waveney is now at a crossroads. We can take the low road of limited aspirations and just trundle along or we can take the high road and be ambitious and a key player in working with the Government to deliver the growth strategy, creating jobs and helping Britain emerge from the most savage economic downturn for a generation.

Over the past 18 months, the coalition Government have laid the foundations on which the Waveney economy can grow. The deficit reduction strategy means that interest rates remain low, and although there is no such place as a safe harbour in today’s global economy, the Chancellor has steered Britain out of the eye of the storm. We should not forget that, last May, Britain was viewed by many as in the same category as Greece, Italy and Spain.

The New Anglia local economic partnership, formed at the beginning of the year and covering Norfolk and Suffolk, can play a key role in creating jobs across the two counties. The LEP has hit the ground running and is approaching its job in a targeted, pinpointed and coherent way, focusing on three areas: food production and processing; tourism; and, most importantly for Waveney, the energy sector, building on the opportunities along the coast from the gas terminal at Bacton, the oil and gas sector, the nuclear industry at Sizewell and offshore renewables. Lowestoft is at the centre of the world’s largest market for offshore wind energy, and the UK’s most dense area for offshore development is between the Humber, the Wash and the Thames estuary.

The LEP and the four councils—Waveney district council, Great Yarmouth borough council and Suffolk and Norfolk county councils—are to be congratulated on their successful enterprise zone bid for Lowestoft and Great Yarmouth, which is aimed at the energy sector. That can also play a crucial role in creating jobs. Also welcome is the creation of the Green investment bank, which will play an important role in leveraging in the large amount of private sector investment needed to transform our energy sector.

The Government’s ambition to provide superfast broadband across the UK by 2015 is also good news, with the granting of funding from Broadband Delivery UK to Suffolk county council to reach the “not spots”, many of which are in Waveney, whether on the south Lowestoft industrial estate or in the rural area around Bungay and Beccles where the market will not deliver on its own.

The Government’s emphasis on apprenticeships and skills is important, as there is a need to provide people in Waveney with the skills that energy businesses and those in their supply chains are looking for. Much has been done in the past 18 months, but with the problems in the eurozone, now is not the time to be resting on our laurels. We need to redouble our efforts and work overtime to ensure we do everything possible to create economic growth in Waveney.

My hon. Friend and neighbour is making a very eloquent case for his constituents—there is no greater champion of Waveney than he. I share Waveney district council with him and our area is known for tourism, with Southwold. Will he pay tribute to the students and particularly to the teachers and supporting schools who help the North Suffolk skills centre in Halesworth, which does a lot to help people with vocational careers, especially in engineering?

I am very happy to do that. The North Suffolk skills centre, which serves the northern end of my hon. Friend’s constituency and much of mine, plays a vital role in giving people vocational training in engineering and other such skills.

As I was saying, the endgame is not the announcement of a policy—that is only the beginning. We need to be driving policies through and ensuring that they deliver what they are intended to achieve. There may be times when we need to take stock of a particular initiative and ask whether it is working and whether we need to be tackling the problem in a different way.

In the time remaining, I shall outline the areas in which I believe we need to redouble our efforts. As I have said, the Government are to be commended for their focus on skills and apprenticeships. In Waveney, that focus has already had positive results, with a provisional 810 apprenticeships having been delivered in the 2010-11 academic year—an increase of 48% on 2009-10. However, more needs to be done not only to provide businesses with the support they need but to work with business, Lowestoft college and the high schools, all of which are very much up for the challenge. The creation of guilds that concentrate on a particular industry such as energy could well be a way forward. We also need to tackle deep-rooted worklessness: in some places, there are three generations of families who have never worked.

If Waveney’s contribution to Britain’s economy is to be successful in the long term, our poor infrastructure links must be improved. In making small talk, the British talk about the weather, but East Anglians talk about roads and railways either because we do not have any or because those we do have are substandard. There are reasonable prospects for upgrading the railways to Waveney with the provision of funding for the Beccles loop, which will enable an hourly service to operate on the east Suffolk line. Longer franchises will provide opportunities for further improvements to the railways and I am working with Network Rail to ensure that everything is done to upgrade Lowestoft and Beccles stations, which are both in a shocking condition.

The road network provides a greater challenge. It is vital that regional links across East Anglia are improved and that the roads in Waveney are upgraded. The dualling of the A11 at Elvedon is good news and work needs to be done at the A14 bottleneck between Cambridge and Huntingdon. Locally, the Beccles southern relief road will open up further employment opportunities at Ellough and it is vital that the road system in Lowestoft is improved. I am working with Suffolk county council and Waveney district council to come up with a blueprint of the roads we need, which will include a new crossing of Lake Lothing, which divides the town. The enterprise zone challenge fund provides a means of promoting and building new roads. I issue a challenge to the Government: if we can demonstrate that jobs will flow if new roads are built, will they provide the money to do the work?

Let me address the issue of the 21st-century highway—broadband. As became apparent at the Suffolk broadband conference that I hosted in April, broadband is a huge enabler of economic growth. It will help the retention and growth of small businesses and will provide access to a global market. It will also help to raise and modernise skills and achievement levels. Broadband Delivery UK has made it clear that community engagement is the key to the roll-out of superfast broadband, very much in line with the big society and localism agendas.

The reference to the big society provides me with the opportunity for a short commercial break to congratulate the Beccles Lido on winning the Prime Minister’s big society award. In 2010, Beccles Lido bought the swimming pool from the local council, and has since raised over £300,000, carried out significant improvements and this year attracted nearly 30,000 visitors, up from 8,500 in 2008, turning a £60,000 loss into a profit. I congratulate the organisation on its great work and I wish it all the best with its new project, the public hall.

As I said before the interlude, community engagement with broadband is the right approach, as it is only local people who know what their communities need and the challenges they face. It appears that small local providers may be having difficulties in their attempts to provide services as part of local broadband plans. This is due to a combination of the sheer cost of procurement and other factors, such as European state aid rules and network security. I urge the Government to do all they can to resolve these issues so that we can ensure that the remote rural parts of the country, and Waveney in particular, from my viewpoint, have every opportunity possible of receiving next generation broadband.

Turning to the energy sector, there are encouraging signs. Orbis Energy in Lowestoft is a global centre of excellence for drawing together innovation and technology, supporting supply chain development and acting as a catalyst for development in the offshore renewables sector. SSE’s operations and maintenance base for the Greater Gabbard wind farm is already in Lowestoft port, and last month Scottish Power Renewables and Vattenfall signed a memorandum of understanding with both ABP Lowestoft and East Port in Great Yarmouth for the development of the East Anglia Array wind farm.

On Monday, SSE submitted its development consent order to the Infrastructure Planning Commission for the Galloper wind farm. It is vital that the planning process operates in a smooth and timely fashion, and also that the Government provide a clear, consistent and stable framework in which investors can operate, making long-term financial commitments in the offshore renewables sector. This means that there should be no sudden change in the fiscal regime, and electricity market reform must be addressed at an early stage in the next Session. It is important that the Government liaise with the industry now on this issue.

A particular feature of the East Anglian and Waveney economies is the large number of small businesses and SMEs, as well as a spirit of enterprise, which needs to be properly harnessed. In 2009, Lowestoft won the award for being the most enterprising place in Britain. More needs to be done to help small businesses set up and then flourish. That means, first, reducing red tape. I am conscious that the Government have already done much work in this area, though from what local businesses tell me they have yet to see the full benefits of that on the ground. Red tape is like Japanese knotweed—once it is there, it takes a superhuman effort to get rid of it.

Secondly, more work should be done with banks to ensure that they work with and support small businesses. The bid made by NWES and others, along with Barclays bank, to the regional growth fund for funding a national start-up programme, which will also operate in Waveney, will help to address that. Thirdly, it is important that in promoting business, Ministers do not just hold press conferences and stage PR announcements at high-profile showcase companies. It is important that they also visit smaller start-up and early-stage businesses so as to encourage entrepreneurship. So many people will be able to relate to and identify with such businesses and take inspiration from them.

I am fully aware of the impact of high fuel prices on small businesses and those travelling long distances to work. Waveney is out on a limb and, although the public transport network is gradually being improved, many have no choice but to use private transport. People in Waveney spend on average £68.09 a month on fuel, while those in the City of London, who have far higher incomes, spend on average only £26.93. I urge the Minister to reinforce the message to the Chancellor to cancel the fuel duty rise due in January.

In conclusion, in the summer of 2010, the CBI for the east of England launched its blueprint for growth. It highlighted a variety of factors: East Anglia is a world leader in many emerging sectors, including renewable energy; the east of England is forecast to create 400,000 new jobs by 2031; the area produces more entrepreneurs per head than the UK average, and the businesses they create survive longer; and £1 for every £5 of venture capital investment in the UK flows to east of England businesses.

My message to the Government is that if they work with us and invest alongside us, Waveney and East Anglia can play a pivotal role in promoting sustainable growth and creating new jobs. A good start has been made. We now need to deliver and to take that high road so that Lowestoft is again the model economy for a coastal town.

I congratulate my hon. Friend the Member for Waveney (Peter Aldous) on securing the debate and on a commanding speech that offered a comprehensive survey of all the key challenges facing his local economy. I am also delighted to see our hon. Friend the Member for Suffolk Coastal (Dr Coffey) in her place.

My hon. Friend the Member for Waveney said that everyone should work overtime to promote growth. It was clear from his speech that no Member of the House works harder, more persistently or more effectively to promote their local economy than he does. Indeed, it is worth reflecting on the contributions he has made during his short time in the House. He has had debates and questions on the fishing industry, which I know is close to his heart; the offshore renewables sector; local transport; strategic transport, whether rail or road; the local enterprise partnership and enterprise zones; planning; and economic development. In a short period he has become a persistent and eloquent advocate for all the needs of his area. His constituents in Waveney and residents in the local area should be proud of the service he gives them, in alliance with our hon. Friend the Member for Suffolk Coastal. They are very well represented in these matters. He also takes matters to the top, having questioned the Prime Minister, the Chancellor of the Exchequer and the Business Secretary.

My hon. Friend the Member for Waveney will know that many of the issues he has raised today will be responded to in the weeks ahead. We are all looking forward to the Chancellor’s autumn statement next week. There will be statements in the weeks ahead on some of the transport matters he referred to and many of the decisions that will be taken by the local enterprise partnership will be made in the coming weeks. He is absolutely right that we have put the groundwork in, and some of the decisions in the weeks and months ahead, which will increasingly be taken locally, will determine and shape the future success of the local economy. I know that his leadership, and that of our hon. Friend the Member for Suffolk Coastal, will mean that those opportunities will be taken keenly.

Let me say something about the context. Although Waveney is the eastern-most point of England and geographically distant from our motorway network—my hon. Friend the Member for Waveney has told me before that the nearest motorway to Lowestoft is in Holland—it is very much connected with the wider global and European economy. The overall context of the economy, of course, affects Suffolk as it affects everywhere else in the country, but the most essential building block of our economic future is fiscal discipline, which he acknowledged.

We inherited a situation in which our deficit was set to overtake that of Greece. We had a lack of fiscal responsibility which needed to be sorted out urgently, so the fundamental basis of our economic reforms is to secure the fiscal discipline that we need in this country. My hon. Friend knows that businesses in Suffolk and throughout the country regard that as essential to our economic credibility.

I spent some time this week at the CBI conference, where there was not a single business representative who did not think that it was absolutely in our interest to cleave to the record of fiscal discipline that we have established in recent months—and absolutely essential to send to the rest of the world a signal that we are resolute in that. The situation affects us all.

I was struck by the comments this week of one of our leading businessmen, the managing director of the John Lewis Partnership, one of our most successful businesses, who, speaking in his capacity as the chairman of the Birmingham and Solihull local enterprise partnership, said that the Government get the idea that they must stick decisively to the deficit reduction strategy, which, in his personal view, he endorses.

That is typical of comments that the business sector generally has made, and the reason is that the strategy has an impact on interest rates, which are crucial to the investment decisions that need to be made over the months and years ahead. Despite the deficit that we inherited being of Greek-style proportions, interest rates in this country are more comparable to those enjoyed by Germany, and that is in very large part due to international investors’ confidence in the seriousness of our intentions.

Of all the contributions that the Government can make to the economy, and to making setting up and expanding businesses easier than it might be, the interest rate is crucial, because any investments are likely to involve borrowing and capital investment. It is important that we do not take for granted our environment of low interest rates; it is an important feature of our economic policy, and it is important that all our constituents and my hon. Friend’s local businesses understand that it follows from our fiscal demeanour.

There is an additional aspect, however. If we secure our fiscal discipline and have low interest rates, there is a major role for local leadership, which my hon. Friend exemplifies, because local economies, like local councils and local businesses, can be well run or badly run, and one thing that has been most impressive in Suffolk and, indeed, East Anglia over recent months is the flying start that the local enterprise partnership has made.

That LEP is particularly impressive, and it reflects the close work of some of the best businesses and the local authority leaders in the area. I know that my hon. Friends the Members for Waveney and for Suffolk Coastal and others throughout the region worked hard to bring together business leaders and councillors to ensure that the partnership was in place.

The LEP has also been particularly innovative in establishing an enterprise zone that crosses boundaries between not just districts, but counties, and the fact that the case was made so persuasively for such an unusual arrangement, linking into the great potential of that part of the world to secure investment in offshore renewables, underlines the progress that the partnership has made. I, through him, congratulate all members of the LEP on their work in recent months.

The benefits will begin to accrue very quickly. There is already the potential for investment to be made on the basis of the exemption from business rates that will be available in the area. It is estimated that by 2015, 2,000 jobs will have been created in the enterprise zone. Many of the features that will be enjoyed by the local enterprise partnership can be made available elsewhere in his district. The Localism Act 2011, which received Royal Assent only last week, allows, for the first time, business rate discounts to be allocated by local authorities in a way that they consider to be in the best interests of their businesses. For example, they may be provided for new business start-ups, for businesses in a particular sector, or for businesses that are outside the enterprise zone but in an area that needs to be regenerated. I hope that there will be great flexibility and, as my hon. Friend the Member for Waveney said, great encouragement to take up some of the new powers and freedoms that are available.

This also applies to planning powers. Of course, planning powers are vested in local authorities. Another feature of the Localism Act is to have swept away the regional spatial strategies, as well as the regional development agencies. Those strategies imposed on local people a form of administration that many had recognised as bureaucratic and did not reflect sufficient local knowledge and local interest. My hon. Friend made a comparison with Japanese knotweed regarding some of the regulation, bureaucracy and red tape that has emerged, and said that it should be uprooted. I would go further. We need to ensure that the bodies that promoted and created this red tape are finished once and for all—to cut the head off the snake to ensure that this cannot happen again. We have done that with the regional strategies and with many of the regional bodies.

The Government’s reforms make more powers available so that areas can benefit from economic growth locally. It has always struck me as ridiculous and counter-productive that if an area is led successfully by a local authority and encourages the location of businesses in that area, it shares scarcely at all in the economic benefits, which have all been spirited away to the Treasury. The reform of business rates that we are consulting on and intend to introduce very soon will provide a clear incentive and a sense of justice in that if an authority such as Waveney benefits from having success in attracting businesses, it should be able to keep some of the upside. That becomes a virtuous circle whereby knowing that some of the business rates can be retained allows investments to be made in anticipation of the economic effects, and that unlocks some of the infrastructure investment that my hon. Friend mentioned. If one adds to business rates reform the community infrastructure levy and the new homes bonus, one sees that there is a new ability for local authorities to invest proactively in, especially, infrastructure in their area.

My hon. Friend is right to say that there are challenges in the local area. One of the impressive features of the local enterprise partnership bid was that those challenges were very well addressed. He spoke eloquently about skills. His part of the world has underperformed, compared with some other parts of the country, in terms of skills at national vocational qualification level. It is absolutely right that he puts down a challenge to us in Government to ensure that his local enterprise partnership and his local authorities are given every assistance with raising the skills level in East Anglia, particularly in Lowestoft and Waveney. The new industries to which he refers are important in their demand for engineering skills. The commitment we can make to him is that they can invest for the long term.

Waveney may be the most easterly point of the United Kingdom, but this, far from being a disadvantage, can be a positive advantage given that a lot of opportunities will be available in the North sea and on the continent. We need to capitalise on those opportunities. With the very well-led local enterprise partnership and the representation of exceptional Members of Parliament, I am greatly encouraged by the prospects for Lowestoft. I know that my hon. Friend will continue to do what he has done over his first 18 months in the House—keep us constantly up to date and on our mettle to ensure that we do everything we can for a very important part of the country.

Question put and agreed to.

House adjourned.