Speech by the Chief Secretary to the Treasury.
Good morning, it’s a pleasure to be here today, and speak with so many businesses that are vital to the Hull and Humber region.
And it’s a pleasure to be speak alongside Lord Haskins and members of the Humber Local Enterprise Partnership.
The Partnership has a vitally important role to play in supporting an economic recovery across the Humber Region
Bringing local authorities and businesses together to build an environment for investment, enterprise and sustainable private sector growth.
But it won’t be an easy task.
As you’re all aware, we face a substantial challenge to heal the underlying damage to our economy and return the UK to prosperity.
This Government’s number one priority is tackling the record peacetime deficit that we inherited.
It is the vital precondition to return the UK to fiscal sustainability and secure our economic stability.
It’s because of our decisive action to tackle the deficit that we have secured low and stable interest rates that help families pay mortgages, and businesses refinance loans.
It’s because of that decisive action that we have provided business the certainty and stability they need to invest in the UK and secure a private sector recovery across all sectors of the economy, and across all regions of the country.
And here in the Humber we have great manufacturing and industrial strengths to capitalise on.
As you already know, the Humber region has long been a critical trade artery for the UK. It’s the busiest trading estuary in the UK, and the 4th largest in Europe.
Humber’s ports already employ almost 50,000 people, and provide a natural hub for trade and industry across the region.
And we’re committed to supporting the success of the region.
It’s why we committed in our National Infrastructure Plan to invest in the transport network…electrifying the Transpennine Express, dualling almost 2Km of the White Rose Way, improving the capacity of the Humber Bridge, and writing off outstanding debt on the Bridge to halve the car toll.
And it’s why we are also supporting the Humber LEP through the Growing Places Fund, providing almost £6m to unlock stalled and priority capital schemes through investment in enabling infrastructure.
Furthermore, through the Regional Growth Fund, we have provided £1.4bn pounds to stimulate private sector investment across the UK by supporting projects that offer long term economic growth, and create sustainable private sector jobs.
It’s because of investment that we are directly supporting over 10,000 new jobs, and over 15,000 indirect jobs across the Yorkshire and Humber region.
And at Autumn Statement we announced a further £1bn for the Fund.
The Humber’s success, is critical to our ambition to rebalance our economy away from one sector and one region, and restore prosperity across the UK.
And as I look forward to seeing first hand through the course my visit, the Humber also has the potential to establish itself as a world class renewable energy hub.
It’s why the Humber is only one of five areas to be designated a Centre for Offshore Renewable Engineering in our National Infrastructure Plan, working to unlock barriers to investment.
Capitalising on the pivotal role that the Humber already plays in the UK energy sector as a home to giants such as Centrica, ConocoPhillips, Total and BP.
It is that energy infrastructure and expertise that provides the Humber with the capacity to excel as a home for thriving renewables industries.
Humber and renewables
And it’s an opportunity that has already been seized by businesses across the region.
There are already over 20 onshore and offshore wind energy projects in the Humber area, including two of the largest offshore wind farms in the UK currently under development.
Siemens have publicly proposed to build a new wind turbine manufacturing plant at APG port in Hull, with the potential to directly create 700 jobs, with even more in the supply chain.
But we want to go even further. We want the UK to be the world leader in offshore wind industry, and I fully believe that the Humber region can lead that ambition.
The Humber Renewable Energy Super Cluster, along with the second Enterprise Zone covering the Humber Green Port Corridor have a vital role to play in that task.
Together, these zones provide the Humber the opportunity to develop as a national and international centre for renewable energy.
Helping to attract top tier manufacturing companies in the renewable energy sector to Humber.
Companies that can benefit from simplified planning processes, superfast broadband, and tax breaks funded by the Treasury including discounted business rates, andenhanced capital allowances on plant and machinery.
As some of you may already know, the Humber Renewable Energy Super Cluster Enterprise Zone is one of only six in the country able to offer companies enhanced capital allowances on plant and machinery.
And these ECAs can be worth as much as £100m for new companies locating in the area. And for businesses not receiving the ECAs, business rate discounts for 5 years can amount to as much as £55,000 per year.
I can confirm today that we will also extend the ECAs to the Paull site within the second Enterprise Zone
Another huge incentive for new business to set up and locate in Humber, and a potential catalyst for even greater renewable industries in the region.
Renewable energy in the UK
It’s yet another sign of this Government’s ambition to secure a green recovery across the UK.
It’s that commitment that has facilitated around £4bn of investment and helped create 13,000 new jobs since April last year.
And earlier this year I spoke at Renewables UK to celebrate the fact that total installed capacity of wind powered electricity generation in the UK had now surpassed 6GW…keeping us on track to meet our long term carbon reduction and energy security goals.
We are committed to building on that success, investing in our renewable future, and ensuring that renewable energy plays a greater role in the UK’s energy mix.
We believe that up to 18 GW of offshore wind could be installed and generating by 2020, with a high potential for deployment of over 40GW by 2030.
But to realise that potential, we need substantially more investment in low carbon energy generation than is the case today, and we need to drive down the costs of renewable technologies.
It’s why we are providing £3bn as initial capitalisation for the Green Investment Bank…
…investing £200m in the development of low carbon technologies…
…and why we established an industry-led Task Force to develop an action plan with the aim of bringing down the costs of offshore wind to £100 per mega-watt-hour by 2020.
Innovation and skills
Of course, our ability to seize the opportunities on offer also rests on our ability to innovate.
It’s why the Technology Strategy Board will be opening the Offshore Renewable Technology and Innovation Centre this summer, working with the High Value Manufacturing TIC to support transfer of technologies between sectors.
And of course, the Humber is in a strong position to lead innovation in the UK.
The Engineering Innovation Institute at the University of Hull is a Centre for Excellence - working with pioneering technologies and companies such as Neptune Renewable Energy and Pulse Tidal
The Yorkshire and Humber area provides a ready and ambitious base of skilled graduates - over 11,000 engineering graduates and postgraduates each year, around 12% of the UK total.
And later today I’ll be visiting the HOTA training facility to meet with the apprentices that are being given the opportunity to become the CEOs of tomorrow.
It’s for all these reasons that I fully believe the Humber, the Local Enterprise Partnership, and the Enterprise Zones have the potential to be at the vanguard of our economic recovery, and the vanguard of our renewable ambition.
It will of course be a challenge, and it will be up to the businesses and LEP to seize the initiative, and lead from the front.
But this Government is committed to the Humber’s success. Today’s announcement to extend ECAs to the Paull site demonstrates again our commitment to a private sector led recovery in the region.
Bringing investment, innovation and job creation to the Humber region, and returning our country to prosperity.
And of course, Local Enterprise Partnerships such as here in the Humber, have a huge role to play.
Business led LEPs represent the best means to achieving high value growth across our regional economies, guiding the success of Enterprise Zones across the country.
LEPs such as here in the Humber are a significant move away from centrally determined growth policies, and towards locally based independent decisions, and we are committed to supporting you.
I look forward to working with you all in the years to come to secure continued economic success in the Humber.
And I am eager to work with you all, and the LEP Forum to ensure that we realise that ambition.