British Chambers of Commerce annual conference

Transcript of the speech as delivered. What makes a local area prosper? What makes it tick? Is it central government? Is it local government…

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Lord Pickles

Transcript of the speech as delivered.

What makes a local area prosper?

What makes it tick?

Is it central government? Is it local government?

Of course in our hearts we would like to think so, but we know more often than not government is a hindrance.

What makes an area prosper is business and commerce.

Governments can print money.

Regional Development Agencies are really dandy at moving it around.

But only business and commerce makes money.

The British Chambers of Commerce are the heart and soul of British enterprise, champions of place and locality.

So I’m delighted to be given this opportunity to talk to you today about localism and growth.

I don’t have any doubt at all that without your support we would not have got many of our new local enterprise partnerships off the ground.

As it is, 91 per cent of businesses, 21 million employees are now covered by local enterprise partnerships. This is a huge achievement in [three] months.

An indication that there was ambition and ideas that have been out there for such a long time - waiting to be heard.

This Government was clear of one thing when it came to fixing the economy. That it is better to work with the market than against it.

With these partnerships we’re putting you and local leaders in the driving seat. Giving you the space and the freedom to come up with different ideas to meet the needs of your own areas.

We agreed it was crucial that local enterprise partnerships weren’t council dominated. You said that the chair should be a business person and we’ve delivered; you said that business representation was crucial and we’ve made it a requirement that all boards must be at least 50 per cent business-led.

You told us that business doesn’t think in terms of administrative areas. So we asked you to come together on the basis of real economic geography.

No artificially imposed regions - I believe that regional structures didn’t properly reflect the shape of local economies.

It’s you that decide the focus, the priorities for every area.

And we’ve kept things simple. No mountains of guidance on how to set up your local enterprise partnership. So these partnerships can be nimble and unfettered by the chains of bureaucracy.

Taking this forward I want you to be bold; I want you to be radical; I want you to be ambitious and you can tell us what should be done.

I’m seeing pace and momentum. The private sector is getting engaged - and I’m glad to see notable business leaders like Sir Terry Leahy and Sandy Anderson on the Boards of the Liverpool and Tees Valley partnerships. I’m also very pleased at today’s announcement that Andy Street, Managing Director of John Lewis, will chair the Birmingham and Solihull local enterprise partnership.

Turning back to Tees Valley - they have already pooled their budgets for their partnership to allow them to work towards a diversified and higher value low carbon economy.

Stoke and Staffordshire brought over 200 key partners to their inaugural meeting - a very visible way of bringing together partnership work at this early stage.

And Coventry and Warwickshire are getting all the local banks together to make it easier for small businesses to access the finance they need to continue to thrive.

Today I want to challenge you to move faster and Zero-in on barriers to growth.

I am - of course - delighted that the British Chambers of Commerce are going to lead a new national network of local enterprise partnerships.

I’m particularly pleased that David [Frost] has agreed to chair. And we’re putting some resources into this - £300,000 to get this network off the ground. I am also pleased that the British Chambers of Commerce will be supporting foreign direct investment, as part of the new contract with UK Trade and Industry and PA Consulting, and with their strong links to the local enterprise partnerships on the ground and through the new Network, British Chambers of Commerce has a really powerful role in helping to drive this country’s growth.

I did think it was immensely important that the national network was not run by central government - as some proposed - or by local government, or by a quango but directly by commerce. I always felt you had the capacity but more than that it was psychologically important to have business in the lead.

And once up and running this network will give partnerships the opportunity to learn from one another and provide support amongst peers and competitors.

It’s particularly important for partnerships that are moving slower or have less capacity. Helping them buck up their ideas. And catch up with the very best.

I know there have been calls for more guidance from us on local enterprise partnerships. Both from the public sector, which I expected, and more amazingly the private sector.

The irony that some of those who were demanding to be set free are now yearning for the certainty of the tick box and central dictat is not lost on me.

We have no intention of telling you what local enterprise partnerships have to be.

Me trying to second guess the business priorities for a local area would be the worst thing that could happen. We’d go straight back to the days of Whitehall choking off local initiative with its reams of guidance and heavy handed targets.

It’s vital that partnerships are hitting the ground running, working things out for themselves.

The same goes for Enterprise Zones.

The core idea is that they stimulate growth and reduce the barriers to enterprise. And ideas need to come from the ground up.

Local enterprise partnerships will decide where the Enterprise Zone should be. And what they want to include in their Enterprise Zone package.

There’s a pretty attractive menu of options already.

  • a business rate discount of up to 100 per cent for five years
  • all business rate growth generated by the Zone to be kept by the area for at least 25 years
  • Local Development Orders will be available to local authorities to establish a very simplified planning regime
  • the Government’s support to ensure that super-fast broadband is rolled out throughout the Zones
  • government will also enable the use of Tax Increment Finance, borrowing against future business rates, to support the long term viability of the area
  • UK Trade and Industry will promote inward investment of trade opportunities for the Zones

I think of these Zones as being a little bit like a clothes horse - you can choose what you hang on them. As long as it’s high on ambition and low on bureaucracy then it will work.

There will be common themes and goals across all the Zones, but it will be the differences between them that make them great.

I’m delighted by how quickly local enterprise partnerships have responded to the call for action on Enterprise Zones. Some named sites already and there are more to come.

They were chosen on the basis of ideas and innovation and the work is already going forward.

Greater Manchester’s Enterprise Zone will create up to 7,000 jobs at Airport City. The development will expand the world freight terminal and create new business space to attract global businesses.

In Liverpool, the Enterprise Zone will straddle both sides of the River Mersey and accelerate two major regeneration projects on either side - Wirral Waters and Liverpool Waters.

In London, the Mayor will use the Enterprise Zone to regenerate the historic Royal Docks area into a new district to live, work and invest in - creating thousands of new jobs in the process.

And of course the Boots campus in Nottingham aims to generate up to 10,000 jobs across a wide variety of sectors including raising their profile as a ‘Science City’.

This is the moment for local areas to decide what their economic future looks like. I hope you don’t need me to tell you to simply seize it.

There’s a challenge for us in government as well.

We need to ensure that local enterprise partnerships and Enterprise Zones have teeth. That we encourage you to be radical.

Business has been wrapped up in red tape and regulation for too long. It’s time to give you room to breathe.

I’m proud of my department’s record on deregulating. Over the course of ten months:

  • we’ve scrapped Home Information Packs;
  • abolished Whitehall rules which pressured councils to hike parking charges, and
  • deleted the two-tier code which has pushed up the cost of providing local services;
  • and we’ve cut taxes - from delivering a council tax freeze
  • to stopping plans for new bin taxes,
  • reversing the unfair ports tax
  • and introducing a two year business rate holiday for many small firms.

Practical help we’ve delivered, despite the need to pay off the nation’s budget deficit.

That deficit reduction will ensure economic stability and keep long-term interest rates down.

We will continue to set in train a number of reforms that will provide the right incentives and conditions for economic growth.

The New Homes Bonus will reward councils for building new homes and for getting empty homes back into use.

Tax Increment Funding will help finance new local infrastructure.

A reformed Community Infrastructure Levy - providing certainty for developers and support for new development.

Local retention of business rates - not a hike. But to give councils a direct interest in supporting local firms.

As well as far reaching reforms of the planning system - including involving local businesses in new neighbourhood plans to shape the growth of the local community.

There is no doubt in my mind that when I became Secretary of State, the single biggest drag anchor on growth was the planning system - it’s expensive, bureaucratic and it doesn’t work. But we’ve recently launched the planning guarantee, ensuring that the journey from application to decision takes less than a year. We’re also working to reduce the over 7,000 pages of planning guidance down to 70 - and we’ll be consulting on that. I intend that you should be able to work out planning issues without needing to seek advice from leading Counsel. This is good news for communities; good news for growth but likely to be bad news for the legal profession. If your planning silk has to think twice about that third week in Tuscany or whether to buy the Lamborghini after all, that’s certainly a price I’m prepared to pay.

So it’s about incentivising communities to promote economic growth.

Localism and economic growth go hand in hand.

Through localism we are handing power, responsibility and accountability - and proper accountability - back in the hands of people who know what they are doing.

It’s local leaders and local firms together. People who know their area and understand its strengths and its weaknesses. And who have a stake in - and care about - its future.

It’s you that can deliver real results. Your enthusiasm and the momentum to rebuild the economy.

So carry on being bold; carry on being ambitious. Tell us how to unlock the barriers to growth. And with business and local areas in the driving seat. I believe that you and I can get the economy moving.

Published 7 April 2011