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I am grateful for the opportunity to present the case for assisted area status for north Kent—the conurbations of Dartford, Gravesham, Medway towns, Sittingbourne and the Isle of Sheppey, which are the Kent component of the Thames gateway initiative. I am pleased to be joined in the Chamber by my hon. Friends who represent those areas and I know that a couple of them hope to catch your eye, Mr. Deputy Speaker, despite limited time being available.
The attendance of my hon. Friends encapsulates the collaborative spirit and practical commonsense partnerships which are the hallmark of our approach in north Kent and, indeed, one of the many strengths of our case. We are grateful to my hon. Friend the Minister for receiving our delegation to discuss the issue. I regret that I was not present to take part, but colleagues in the House and from our representative councils were pleased to present our case. They were pleased to do so because we are confident that north Kent has a powerful case, as a single entity and as individual areas. I shall give a general overview of why north Kent has a good case, but most of my examples will be from my own patch of Medway.
I make it clear from the outset that we will not be presenting a desperate doom and gloom picture. Paradoxically, council areas are at pains to promote themselves and attract inward investment, but my experience is that, when they are looking for Government or European funding, they all too often think that the worse the picture they present of themselves, the better their chance of success. It is almost as if they have employed the grim reaper as their spin doctor.
There is need in north Kent and there is deprivation, but there is opportunity as well and we have a proud record of success. That success, however, is yet to be fully realised and I invite my hon. Friend the Minister to unlock the potential. If he does so, he will have to stand back because there will be an explosion of prosperity and investment, which will have regional, national and international benefits for our country's economy.
Let us look at need. North Kent is characterised by traditional industries—heavy industries that have been in decline. For a long time, particularly during the two recessions under the Tory Government, we suffered greatly, and nowhere more so than in my own patch. In 1984, the closure of the royal dockyard in Chatham wiped out 3,000 jobs in a day. The dockyard had served the Royal Navy for hundreds of years.
It is estimated that about 20,000 jobs were lost overall during those dark days in Medway. Unemployment rose to nearly 20 per cent., which is not the situation that people associate with the garden of England. Those levels of unemployment existed throughout north Kent during the 1980s and early 1990s, and people who took the advice that they should get on their bikes and find employment would not have stopped too long in north Kent.
Prosperity has returned to north Kent, although concentrated pockets of deprivation remain throughout the area and 61 wards, some of which have unemployment rates as high as 9 per cent., form an important focus for our bid. Those wards, whose gross domestic product and GDP growth are well below average, represent 335,000 people. However, there are opportunities waiting to happen throughout the north Kent area. We have an excellent track record of making assistance and Government grants work.
Swale, for example, has regenerated £40 million of investment from the £4 million that it has been given in grants from its current intermediate assisted area status, which it achieved in 1993. In Medway, the City estate had enterprise status until a few years ago and 4,000 people work on the site, which is nearly full. The same is the case at Gillingham business park, where there are 2,000 jobs. There are 2,000 high-skill, high-tech jobs at Chatham Maritime, the site of the former dockyard. Such firms are relocating to our area.
We have a proud record of assisting small firms, and the local partners for growth initiative in Medway is giving grants and loans and working with banks and business leaders. That has saved or created 1,000 jobs. The Hopewell business centre, which is providing support for new small businesses, has been a huge success since it was opened a few years ago by the deputy leader of the Labour party, who is now the Deputy Prime Minister.
Despite that achievement, nearly 50 per cent. of the population in Medway travel out of the area to work, and the figure is 43 per cent. across north Kent. Providing employment opportunities locally would alleviate some of the congestion, particularly in Kent and on the main transport links to London, and promote the type of sustainable development that we all want.
The economic structure of north Kent, particularly that of Swale, remains fragile. Without question, there is a case for a second Swale crossing, for which my hon. Friend the Member for Sittingbourne and Sheppey (Mr. Wyatt) has worked so hard. We all salute him for his tireless efforts and await with anticipation the outcome of the public inquiry, which starts in September.
Public-private partnerships are well established. North Kent Success, which is a highly regarded, private-sector-led body, has been instrumental in forging the sort of practical, commonsense partnerships to which I have referred. Such examples should give my hon. Friend the Minister confidence that we will deliver—assisted area status for north Kent would be a sound investment for the Government and the country.
There is massive development potential for 50,000 jobs in Dartford and Gravesham and 10,000 jobs on the Isle of Grain, which is the largest brown-field site in the south-east of England. Within the Isle of Grain there is a deep-water port and a railhead. Adjacent to it is Thames port, the third largest container port in the United Kingdom. However, I emphasise that assisted area status is required so that we can tap into that potential and properly realise it, encourage development and enable such sites, and many others throughout the area, to become far more attractive to investors.
We have to unlock that potential, and we are doing much of the work ourselves, but we need Government assistance if the Thames gateway is to achieve its objective to relieve west London from development and be the engine of growth for the south-east. There is deprivation in north Kent, and many parts of the economy remain fragile, but we have the skills and determination to exploit our assets. Jobs and wealth can be delivered, because our track record is second to none. Choose north Kent, I say to my hon. Friend the Minister, because, without doubt, that will be one of the finest decisions he takes as a Minister.
I thank my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) and congratulate him on winning the chance to initiate this brief debate. We should reflect on the necklace of poverty in the north and east Kent area. Although it has been greatly helped by assisted area status, we need a bit more help to tip us into success for ever.
Five years ago, the Shell research centre—that global company's centre of excellence—upped and went, leaving my constituency and the community. An immaculate 200 acre site, complete with Olympic swimming pools, lay empty, but it is now nearly full. Dencora, a wonderful company from Beccles in Suffolk, has taken it over and made it into a thriving science and venture capital area. We can achieve such things.
As a newcomer to north Kent and to the House, I find that there is a lack of confidence in my area about winning things. The people have been bashed for 30 years and they are used to getting nothing, being on the dole and having to fight for a living. Things are turning for the better, and Sittingbourne is going well, but there are problems in the Isle of Sheppey, which is on the edge of the gateway and contains Sheerness, our fifth-largest port. I hope that we get our bridge—the public inquiry starts on 7 September—because the wards of Sheerness, west and Sheerness contain some of the greatest poverty in Britain.
Although it is not well known, a ward in Folkestone is the second poorest in the country and Sheerness contains the fifth and sixth poorest wards. We do not hear such things about Kent and it is rarely pointed out in the House that some of the poverty registers on the national scale. We need help on the island. Our industries are old, even though the port is recovered and booming, and 160 people working in the steel industry are about to be made redundant. We need a little help and I ask my hon. Friend the Minister to get the cheque out and sign it as soon as he can.
I, too, congratulate my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) on securing this important debate.
Other colleagues will no doubt make the case for the bids that have been submitted, all of which are for the Thames gateway area, which is a Government priority for regeneration. The Thames gateway has the ability to deliver the opportunities, priorities and policies that the Government want because it has an abundance of brown-field sites. With sustainable development, we can consider spatial planning concepts and take a lead in the urban renaissance that is so desperately needed. We can also help to resolve the congestion issues, which are compounded by the fact that, as my hon. Friend said, 50 per cent. of people from the Medway travel outside the area to work, principally to London or the county town of Maidstone.
Our request for assisted area status is not only about creating opportunities; it is about deliverability. We have drawn attention to success stories such as Crossways, Bluewater, Chatham Maritime, and Gillingham business park. While those are all important, we need a strong catalyst to tap the potential in the three areas that seek assisted area status. We have the public and private partnerships that will allow us to deliver. Local authorities, and voluntary and training organisations, have a good record on that, and the catalyst is assisted area status, which will enable us to deliver on Government policies and priorities, and for present and future constituents.
I add my congratulations to my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) on winning this important debate and stress that, as he said, we are not talking about doom and gloom in north Kent, although all our constituencies have areas of real deprivation. Last night, I was at one of the most deprived areas in my constituency, Denton, where Conservative-controlled Kent county council proposes to close a school. That would have a significant effect on the regeneration of that area.
I also wish to underline a point made by my hon. Friend the Member for Gillingham (Mr. Clark) about the role of commuting in north Kent. Hon. Members will be aware that the unemployment figures by constituency were published recently. They show that unemployment in my constituency of Gravesham has fallen by 30 per cent. in just two years and by 15 per cent. in the past year alone. What is puzzling is that the official figures from the Office for National Statistics, which are only just being published for May for the first time, show that, on analysis—I am grateful to the House of Commons Library for providing me with that analysis—unemployment in my constituency would be a fifth higher were it not for commuting. Some 20,000 people a year commute out of Gravesham to work, but only a third of that number come into Gravesham for that purpose.
Will the Minister consider the need to ensure that those jobs can be provided in north Kent so that people do not need to commute out of the area? I realise that the Government are committed to reducing commuting and road traffic, and that is one way in which it could be effectively achieved.
I, too, congratulate my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) on securing this debate.
My constituency of Dartford has enormous potential and has already shown how it can work with other areas, particularly other parts of the Thames gateway, to produce significant results. However, it has many post-industrial brown-field sites that need regeneration. The Bluewater Park complex, which has already been mentioned, has created up to 9,000 jobs and the Channel tunnel rail link will pass through the constituency. I look forward to the second phase of that link being constructed on time and delivering the much-needed Ebbsfleet station and the associated development and jobs.
The key to development of the area is transport infrastructure. North Kent cannot be opened up to proper industrial and housing development without the right transport links—without it, there will be traffic chaos.
I look forward to hearing how the Government will play their part in ensuring that projects such as Fast Tracks, a public transport scheme that will link the centre of Gravesham with the centre of Dartford, can be developed using Government help so that the public transport infrastructure is opened up and the area develops to its full potential. That will bring the jobs and housing that we so desperately need.
May I associate myself with the paean to my neighbour and hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) for obtaining this important debate?
I simply wish to draw the Minister's attention to two factors that are peculiar to the inner city of Kent, which is represented by the Medway towns: first, its geographical proximity to the immense wealth of London and the south-east; and, secondly, the juxtaposition of our difficulties, which are normally associated with areas outside the south-east.
The Medway towns form the largest conurbation in Europe that does not have its own university. We have fine further education facilities but no dedicated university. That leads to a deficit in education, but also in identity. When the dockyards were closed at Chatham and all the industries that were immediate adjuncts to them disappeared, we lost not only employment, but identity.
The Isle of Grain represents an enormous opportunity. It is the largest inward investment site in the south-east of England—indeed, probably in the whole of England. It consists of 1,000 acres of brown-field land, which is now empty, and it is close to the second-biggest container port in the UK. It is a massive untapped facility, not just for north Kent but for this part of Europe.
It is with great joy that I take part in this debate in order to emphasise again the existence of those opportunities, which are so close to London and simply waiting to be tapped.
I do not wish to gild the lily, but I should like to add my congratulations to my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) on securing this debate. I know how assiduously he works for his constituents, as do his colleagues who have also spoken this afternoon.
This important subject is a matter of concern not only in Kent; I have seen more than 50 colleagues about it in the past few months. Financial assistance is an important factor—although not the only one—in stimulating investment by industry. It can therefore be crucial in safeguarding and creating jobs in areas where they are desperately needed.
My hon. Friend and his colleagues put the case eloquently for north Kent today, and described both the problems and the opportunities of the area. They underlined many of the points that we discussed when I met delegations from Kent and the Thames gateway parliamentary group in March on this subject. Those points were also clearly made in the Kent authorities' response to the public consultation.
I assure all my hon. Friends who have spoken today that careful attention is being paid to the needs of the north Kent area, as it is for all areas of Great Britain, under the review of the assisted areas. I understand how concerned they are about the outcome. I therefore hope that it will be helpful if I set out briefly where we now stand in the process of constructing that map.
As my hon. Friends know, the review follows publication last year of new European Commission guidelines on regional aid, which require all member states to propose new assisted areas to operate from 1 January 2000. The Commission's guidelines are part of an effort to control the overall level of state aids in Europe. The United Kingdom, and the European Union as a whole, faces a reduction in the population coverage of its map. The figure for the UK is about three quarters of our current coverage, which inevitably means that we face some hard choices in designating areas. The Government have been considering carefully the proposals that we shall make for the new assisted areas, and we shall put those to the Commission as soon as possible.
Let me refer briefly to the wider picture. The UK has traditionally been one of the lowest providers of state aids in Europe. Removing distortions to competition by reducing overall levels of state aid should help British firms, both inside and outside the assisted areas. The lower aid limits that the guidelines will introduce are expected to bear down particularly on other European Union states. Although we shall face difficult choices in drawing up the map, there is some good news for British firms, not just those in the assisted areas.
The Commission asked for proposals to be submitted by 31 March. That was always an ambitious deadline, and we were not by any means the only member state not to be able to comply with it. We are working to complete the map as soon as possible, and the Commission is aware of that; but our priority must be to achieve the best possible outcome for Great Britain. We shall make our proposals known as soon as we are ready to do so, and I expect that to be shortly.
We are also reviewing areas for support from the European structural funds. A consultation period closed on 25 May. Along with the Department of the Environment, Transport and the Regions and other Departments, we are now considering criteria and areas for funding based on local and regional representations in order to help draw up the United Kingdom list of proposed areas. The list will be submitted to the Commission in July.
The structural funds and assisted areas maps have different purposes, and will not be identical. However, we want to ensure that they represent a coherent approach to regional development. We have tried to identify areas of need where there are opportunities for employment creation, investment and regeneration—areas where financial assistance to industry will be an effective method of tackling need. We do not have a completely free hand. Under the Commission's guidelines, some areas will qualify automatically for assisted area status. Under the European system of units for regional statistics, they are NUTS2 areas—areas whose gross domestic product per head is below 75 per cent. of the European Union average according to the latest statistics. NUTS stands for "nomenclature of units of territorial statistics".
We can then propose other areas up to our overall population ceiling; but we must use up to five social or economic indicators and one common unit of geography for the whole country. Areas must also have a population of more than 100,000—or a population that counts as 100,000 against our population total, even if they are smaller.
We are considering the indicators that we shall use for the map, but we expect that, in line with the results of the public consultation, measures of labour-market weakness will be an important factor. Complications are involved in the choice of geographical unit. We have examined a range of options, but, as I am sure that my hon. Friends will recognise, aligning the choice with the various criteria has been a complex operation. We received more than 350 responses to the public consultation, and, as I said, I have met more than 50 Members of Parliament to discuss the review and how it affects the areas that they represent. We have engaged in complex discussions, which I think will soon come to fruition.
In England, the new regional development agencies will play an important role. They are the lead bodies at regional level for co-ordinating inward investment, improving skills and improving the competitiveness of business and regeneration. A primary aim of the South East of England development agency, which started its work in April, is to promote economic development and regeneration in the region. It is currently preparing a strategy, of which both the opportunities offered by north Kent and the needs of the area will no doubt be an important part.
There are other instruments to address the needs mentioned by my hon. Friends. For example, the South East of England development agency administers the single regeneration budget. A number of SRB-funded activities are taking place in Kent. Some £3.6 million is being spent on supporting projects to deal with poverty in the north Kent Thames gateway area, which should enable the area to benefit from opportunities arising from the Thames gateway development. SRB funds have also played a part in the development of Chatham Maritime by establishing a business innovation centre that provides managed work space for high-technology businesses.
As Minister with responsibility for small firms, I am particularly concerned about the role of such firms. They have a crucial part to play in economic growth and prosperity, and in economic regeneration. As the economy becomes increasingly global and new information and communications technologies have a massive impact, small firms will be particularly important in generating growth and regenerating areas. They are flexible and adaptable enough to respond rapidly to changing markets.
There has been an explosive growth in the internet, and in its transformation of businesses. I understand that a web year is now three months rather than a normal calendar year. Small businesses are able to respond especially quickly in the new economy. Moreover, because they are flexible and often mobile, and are not constrained as traditional businesses are, they are often able to offer particular prospects for regeneration, possibly even in north Kent. They are a crucial part of the vision statement set out in the competitiveness White Paper, which was published in December. We are now looking across the board at new measures to support the growth of smaller businesses in selected areas that have particular needs, and that may well benefit north Kent.
We are already taking a number of steps to support and encourage the development of small businesses. We are setting up a Small Business Service—on which we shall consult shortly—to streamline the support services that we offer small businesses, and to make them more coherent. We are setting up an enterprise fund, worth some £180 million over three years, which will give special help to small and medium-sized enterprises by giving them access to loans and, in particular, small packages of venture capital on a regional basis. We know that there has been an equity gap in the past, and we think that the enterprise fund will help to give small businesses new momentum. Again, I hope that that will benefit the people of north Kent. We are still working with the regional development agencies to develop new measures to push the agenda forward.
The Government are well aware of the needs of north Kent. We recognise the force of the arguments advanced by my hon. Friends today and, indeed, at our earlier meeting. As I have said, the Government have not yet finalised their proposals for the new map, and I am afraid that I cannot predict the outcome today; but I assure my hon. Friends that the case for the area is being considered carefully, and that we shall continue to move as quickly as we can towards finalising our proposals.