§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Arbuthnot.]
2.38 pm§ Sir Roger Moate (Faversham)I thank my right hon. Friend the Minister for Industry for his continuing and helpful interest in our area. He is, I know, coming to Sheppey in a few weeks' time to open a new factory. He was in Thanet and Dover only a few months ago. He also arranged recently for a full, helpful and lengthy meeting with north and east Kent Members to discuss the east Kent initiative. We found that meeting most encouraging and I hope that we were right to do so. Not least, my right hon. Friend is responding to the debate today. I should apologise to him and to his constituents for keeping him here this afternoon if it were not to debate a matter of such significance to north Kent in general and to the Isle of Sheppey in particular.
The debate is about the economic situation of the Isle of Sheppey and assisted area status. I have deliberately specified the Isle of Sheppey for reasons that I shall give in a moment. An application for assisted area status has been lodged in respect of the east Kent coastal strip, which includes the travel-to-work areas of Sittingbourne and Sheerness, Thanet, Dover and Deal, Folkestone and the coastal towns of the Canterbury travel-to-work area, which have all been brought together under the east Kent initiative.
Many of my hon. Friends asked whether they could take part in the debate. I told them that the debate was about the Isle of Sheppey—not even about the whole of my borough of Swale or the whole of the area covered by the east Kent initiative. That is because the Isle of Sheppey has specific problems that I wish to place on record. At the same time, however, let me place on record my admiration for the highly professional way in which the easy. Kent initiative application has been presented and processed and for the co-operation of all the local authorities and other organisations and individuals concerned with the initiative. As I said, several of my hon. Friends from north Kent wanted to be here, but, although our combined efforts are, I think, fundamental to the application, this is, none the less, a debate about Sheppey.
It is estimated that by the year 2000 the area as a whole could have a jobs shortfall of more than 40,000. Some serious structural changes are taking place in north and east Kent, which is why the application that we have lodged is so important. The Kent impact study predicts a bleak future for east Kent if nothing radical is done.
My hon. Friend the Member for Dover (Mr. Shaw) constantly reminds us how many jobs will be lost in Dover alone as a result of the completion of the tunnel and of the single market. In passing, let me thank my hon. Friend and our Member of the European Parliament, Christopher Jackson, for their work in pressing successfully for a special fund to help customs clearance agents and freight forwarders who will become redundant as a result of the changes. Three years ago, it was estimated that well over 2,000—perhaps nearly 3,000—people were employed by such companies. As a result of their lobbying, substantial sums will be available this summer, in particular to help with retraining.
I shall paint a gloomy picture, although I stress that there is another side to the coin. Sheppey is one of the 1276 strongest manufacturing areas in the south-east of England. It is a leading producer of steel, pharmaceuticals, electrical goods, ceramics and other products. It has Britain's fifth-largest port by tonnage and a ferry company with the best ships on the channel—they are second to none. It is a newly designated environmentally sensitive area. The people of Sheppey are proud of their island and rightly so. In strategic terms, it is superbly located and there is great local determination to use the advantages to create economic growth and local prosperity.
The present position was summed up rather gloomily in the Financial Times of 8 August 1992, in an article entitled "Tackling Blight in the Garden of England, Depressed East Kent is Perceived as Part of the Prosperous South East". That perception is our problem. The article states that Sheppey is the worst blackspot of all, with regeneration hampered by the bottleneck of a narrow access road and a lifting bridge over the River Swale. It refers to the 22,000 vehicles a day crossing that bridge—the figure is actually 24,100—and mentions the big blow that was dealt to the hopes of the area when the Government recently rejected a £500 million development plan for Sheppey, which included a new road and a new Swale crossing.
Unemployment in Sheppey was then running at more than 16 per cent. Regrettably, it is now estimated to be 18 per cent. and it could be 20 per cent. by the end of February as a result of a sad dispute over contracts at Sheerness docks. In November, the Sittingbourne and Sheerness travel-to-work area, which includes Sheppey, was the 13th worst-hit in England and the 17th worst-hit in the United Kingdom. Even more serious, its long-term unemployment is the highest in Kent.
We have been hit hardest by the recession—particularly by the rundown in the construction industry and by the very severe recession in London, which has had a heavy fallout in north Kent. East Kent has a fragile economy which is about to undergo severe structural changes. Sheppey is worst hit of all because of our poor road and rail links.
As we have been hit hardest by the recession, the steps that we can and should take now would allow Sheppey and north Kent to help lead the south-east out of recession. Let me tell my right hon. Friend the Minister for Industry what I would like him to do—if he can—to help us, quite apart from the question of assisted area status. I should like him to use his good offices to spur other Departments to make rapid progress with projects that are in the pipeline, but which always take a long time to conclude.
There is the all-important question of the second Swale crossing. I have already referred to the daily traffic movements of 24,100 over the single carriageway lifting bridge. The volume is higher than that of the M20 east of Maidstone.
I shall not refer in detail to the Lionhope scheme, which is sometimes referred to as the Swale project. As I have said, that project was turned down by my right hon. and learned Friend the Secretary of State for the Environment. However, anything that my right hon. Friend the Minister for Industry can do in that respect would be greatly appreciated.
The Secretaries of State for Environment and for Transport, their staff, local councils, planning authorities and many other organisations have been working very hard, and have impressed me enormously with their commitment, to produce a package to replace the 1277 Lionhope scheme or what we might call the Swale project phase 2. They have been working hard to produce a package that is environmentally acceptable and legally and financially viable and one which would use private sector finance to speed up construction of the second bridge to allow the development of the docks at Sheerness and the creation of new business parks.
However, time is of the essence. I have a real fear that the legal complexities will cause delays that will discourage private sector involvement. If we are to make a reality of private sector involvement in public sector projects, as we are so anxious to do, and if we are to make a reality of the east Thames corridor concept, it is vital to get that type of project off the ground, cut red tape wherever it impedes us and galvanise economic growth.
I wish once again to balance the picture. It was magnificent news last week when the Government approved the £47 million dualling of the road from the M2 as far as the Kingsferry bridge. That is a stimulus to economic confidence and new investment. I record again my appreciation that that very important decision has now been taken and that construction will soon be under way. Nothing can exaggerate the importance of that to our area. It is a lifeline for jobs and I am grateful that it is under way. However, we must press on with the second crossing and the road link that is supposed to link Sittingbourne to the new road.
I urge my right hon. Friend the Minister to talk to the Minister for Energy—I am sure he does regularly. The Sheerness steelworks is one of the best in Europe. It is one of the leading steel producers in the United Kingdom. However, it is also a large, intensive energy user. Its outrageous electricity costs are a serious threat. We have made many representations, but so far with little result. My right hon. Friend the Minister will understand that there is little use in pouring new investment and infrastructure into the area if, at the same time, we are seriously undermining existing employers. I do not suggest that the problem is easy to solve. However, companies such as Sheerness Steel face unbearably high energy costs.
Although it may not be the direct responsibility of my right hon. Friend the Minister, anything that he can to do co-ordinate efforts in Whitehall in respect of our new community hospital would help. It is estimated that that project would cost £11 million. The signs are encouraging, but the project must be started. That would be another stimulus for economic confidence and further investment on the island.
Economic growth in north Kent was built on the back of the railway links to London. Our rolling stock is ancient and overcrowded. We have been promised new trains and, in effect, that would virtually mean a new railway. Some of the money was allocated in the autumn statement, but there is a frustrating delay and we need some serious political pressure to deliver the new investment. At the same time, we seek improved rail services—that means passenger and freight services—to the Isle of Sheppey.
We know that assisted area status would be a great boost to the area. It would help us in all the arguments that we continually make for better infrastructure, whether we are arguing with Ministers, Whitehall generally or, indeed, Brussels. It would certainly encourage existing companies and new companies with a very useful range of grants.
1278 For example, I refer to one project—it is confidential at the moment and I should like to discuss it with my right hon. Friend—about which I have just learnt. It is certainly not yet on the record. A very large number of jobs could be safeguarded and new jobs generated by the grant that would come from assisted area status. There was a suggestion that we could create about £130 million of new investment. That is a considerable understatement, because I know of additional projects that would increase that figure substantially.
In a recession, it is very hard, even for large companies, to justify major investments when the companies concerned are not turning in adequate profits. Often a modest Government grant could be the key to opening up a parent company further away to make a significant investment, sometimes in new technology or sometimes to defend present employment. I am aware of circumstances in which a Government grant could be the factor that tilts the balance in favour of an investment decision.
I pay tribute to Swale borough council, which is not a Conservative-dominated body—three parties share the running of the council—for its highly professional work in promoting economic development in the area. I pay tribute also to the new professional chamber of commerce, which was established jointly by the local authority and local commerce, the Kent training and enterprise council, the east Kent initiative and the Sheppey Industries Association for all the work that has been done. Their work demonstrates their awareness—our awareness—that, ultimately, self-help wins through. We know that assisted area status is not a panacea by any means, but it would provide the framework in which those determined local organisations have a chance to succeed. We very much look forward to my right hon. Friend's visit. In particular, we hope that he will shortly be able to give some good news for the Isle of Sheppey.
§ The Minister for Industry (Mr. Tim Sainsbury)I thank my hon. Friend the Member for Faversham (Sir R. Moate) for his kind remarks. I very much look forward to my visit. I congratulate him on choosing this well-targeted subject for debate—as he said, not the whole of the borough of Swale but the Isle of Sheppey.
My hon. Friend has understandably referred to the granting of assistend area status. I am sure that he will understand that I cannot give any indication of whether the Isle of Sheppey, east Kent, or anywhere else for that matter, is likely to obtain assisted area status. I appreciate that there is great interest in the outcome. We shall announce the results of the review of the whole map as soon as we can. In doing so, we shall take account of the results of the coal review. We have also to obtain the necessary clearance by the European Commission. I know that my hon. Friend will understand why I cannot anticipate those decisions.
I can assure my hon. Friend that all the submissions made to us, including what he has said, will receive the same careful consideration. That is as true of the case made for Sheppey as it is for any other submissions. Our decisions will be based on the relative merits of the individual cases. My colleagues and I will be taking into account the up-to-date statistics in reaching our conclusions. I am, of course, aware of the problems that have affected parts of east Kent, to which my hon. Friend 1279 referred. They are forcefully set out in the submissions that I have received. My hon. Friend paid tribute to the work of the east Kent initiative and that of other bodies, and I am happy to recognise that, but, as my hon. Friend knows, I have also had the benefit of visiting the area. I have been shown at first hand both the difficulties and the potential of the area.
The Isle of Sheppey has to be seen in the context of the changes that are affecting the whole of east Kent. Great changes are taking place. The single European market and the channel tunnel are probably affecting east Kent more than any other area because of its position as the gateway to Europe. The changes are bringing problems—changes often do—and, as my hon. Friend has so eloquently said, the Isle of Sheppey has shared in those problems.
While not minimising the problems in any way, we must not lose sight of the fact that east Kent also has many advantages. I was pleased to hear what my hon. Friend said on that point. East Kent has a unique position between London and Europe. It has two large and attractive markets for business, with the channel tunnel making access to both even easier. It has excellent ports, including Sheerness. Road communications into the area are good. It is served by the A2/M2 and the M20, although I recognise that there are difficulties affecting access to the Isle of Sheppey itself. Its strengths make it well placed to benefit from the recovery as it comes through.
One possible approach to overcoming some of the specific problems was the original Sheppey—or should I call it Swale—project package of development proposals. The project was refused planning permission by my right hon. and learned Friend the Secretary of State for the Environment in July 1992 after a public inquiry. The main reason for the decision was that the proposals would cause damage to sites of national and international importance to nature conservation. There were also highways and countryside objections and significant conflicts with development plan policies. My hon. Friend is well aware that the area around the Swale is especially important to nature conservation in not simply national but international terms.
My hon. Friend referred to the announcement made by my right hon. Friend the Secretary of Transport on 5 February which was extremely important to the area. I thank my hon. Friend the Member for Faversham for the welcome that he gave to that announcement on the funding that will be provided for the improvements to the A249 between the M2 and slightly north of Iwade.
Proposals for a second Swale crossing are being examined in the context of further improvements to the A249 between Queensborough and the Iwade bypass. My right hon. Friend the Secretary of State fully appreciates the need for that road and I know that every effort is being made to progress the scheme as quickly as possible.
There is land available in Sheppey for development, some of which is situated at the eastern end of the east Thames corridor. It is one of the major development opportunities of the future. The change may well bring problems. Equally, it can bring opportunities, as my hon. Friend recognised. East Kent and Sheppey are well placed to take advantage of those opportunities.
I have referred to the strength of the area, because there is an important point that must be recognised. In the past six months, I have received an enormous amount of correspondence urging on me the case for assisted area status to be granted to some parts of the country. I should 1280 make the point that assisted area status, by itself, is not a panacea, dispelling at a single stroke all the ills that are perceived as affecting an area. As its name implies, it is a mechanism for providing assistance of a specific sort. It can be used for creating and safeguarding jobs. In practice, it goes primarily to industry.
The major form of assistance that comes with assisted area status is regional selective assistance. As its name makes clear, the scheme is operated selectively to bring the maximum benefit to the areas in which it operates. It is not operated wholesale and it cannot, and nor should it, be a replacement or substitute for the efforts of all those concerned in an area to improve their position.
As my hon. Friend recognises, there is great potential in east Kent, but there is much work to be done to convert that potential into success. Work needs to be done, irrespective of assisted area status. Many potential investors are not primarily concerned about their ability to secure grants. For many of them at least, it is important to have the knowledge that they can identify suitable premises and staff, and that the local authority and others will work with business to help them succeed. I am sure that, as my hon. Friend said, that is not lost on the local authorities, the training and enterprise council or any other bodies in Kent.
Clearly, good-quality inward investment benefits the area in which it takes place and can directly and indirectly create much-needed jobs. Local authorities should organise themselves to provide speedy, detailed and high-quality responses to inquiries from potential inward investors. My Department's Invest in Britain Bureau is energetically pursuing inward investment into the United Kingdom. However, the bureau depends on individual local authorities for the detailed descriptions of available land that can attract investors' interests.
I am aware of the need to encourage investment in the Sheppey area. I am pleased to say that the Secretaries of State for the Environment and for Transport are liaising closely with the local highways and planning authorities, with a view to enabling appropriate investment and infrastructure to be provided. Their Departments are involved in continuing discussions with a number of interested parties about future developments on and near Sheppey.
That brings me to a theme of particular importance in creating a climate locally that will encourage businesses to establish in an area and grow. It is essential that all local interests work together. The TEC, local chambers of commerce, business-support organisations and local authorities must work closely with each other in the service of the community—training the work force, assisting businesses and providing a climate in which businesses will invest.
I know that in Kent there is an effective and active training and enterprise council to which my hon. Friend referred. The TEC has received considerable support from the county council. My Department is currently discussing with the TEC the support that we shall be making available, through it, to assist small firms in the area. While those negotiations are not yet complete, it is our aim that there should be a soundly based structure of support for small businesses, particularly those operating in Sheppey and in other parts of Kent.
In many parts of the country and, I have to say, especially in Kent, the advice and support for small firms comes from many different sources. In Kent, there are 1281 many chambers of commerce, local enterprise agencies and other support bodies. My right hon. Friend the President of the Board of Trade has invited bids from those concerned with the provision of support for the establishment of one-stop shops. The aim of the one-stop shop will be to create more effective organisations providing help and support for smaller businesses and to reduce the confusion surrounding the provision of support for small firms.
I am glad to say that there has been a strong response to the invitation, with 57 one-stop shop bids received from all parts of the country, including one from Kent. We are reviewing the bids with a view to drawing up a shortlist. There will be up to 15 winners from among those who have bid. Whether or not the Kent bid is successful, it is important that we continue to make progress towards the establishment of a fully effective support structure for small firms in all parts of Kent. I am sure that that is one of the ways in which we can best help to address the problems to which my hon. Friend has drawn attention. My Department stands ready to assist in that process.
I know that my hon. Friend's constituents recognise the need for such work themselves. Indeed, much has already been put in hand. The east Kent initiative has done a splendid job of bringing together local interests in pursuit of the common goal. It is important that that work should continue, ensuring that local authorities and others are working together to identify the strengths of the area and, where weaknesses exist, what can be done to remedy them. I am sure, however, that my hon. Friend is well aware of the necessary limits on public expenditure. That makes it all the more important that, in areas such as those that we are discussing, the priorities for expenditure should be identified. That is one of the valuable functions that the east Kent initiative can perform.
1282 My hon. Friend drew attention to several matters that affect Departments other than mine. I take note of his comments about the new community hospital, and I shall bring them to the attention of my right hon. Friend the Secretary of State for Health.
My hon. Friend referred to the important subject of electricity prices and their effect on industrial users. In fact, the average electricity price paid by industrial customers overall has fallen by 6 per cent. in real terms over the three years since privatisation. I accept, however, that some very large industrial companies have seen significant price increases. My Department is in discussion with large users about the working of the market, and electricity prices paid by large users are being considered in the coal review. I cannot, for reasons which I am sure my hon. Friend will understand, of course, anticipate the conclusions of that review.
I note my hon. Friend's comments about Networker express trains on coastal services. I understand that my right hon. Friend the Secretary of State for Transport is pursuing with British Rail its plans for rolling stock. I will draw to his attention my hon. Friend's concerns about the rolling stock used on the services to his constituency—perhaps at the same time that I draw to the attention of my right hon. Friend the Secretary of State the rolling stock in use when I journey to my constituency.
This has been a most helpful debate, and I congratulate my hon. Friend on the manner in which he approaches the challenges and opportunities of the Isle of Sheppey. I hope that my hon. Friend and, through him, his constituents accept that the Government recognise the problems that confront them and that the Government are willing to play their part in overcoming them. The enterprise and energy that can be brought together locally is of the greatest importance in addressing problems and taking advantage of the opportunities that my hon. Friend and I realise exist.
§ Question put and agreed to.
§ Adjourned accordingly at five minutes past Three o'clock.