Economy

1. Brexit

Asks

We ask that Government supports us to ensure that we make most of the opportunities which arise from Brexit whilst mitigating as far as possible the specific risks that arise from the lack of certainty about our future relationship with the European Union. In particular we ask that Government:-

Trade and Export

• Recognises our vulnerability in relation to Northern Ireland potentially enjoying privileged access to the EU and acknowledges the impact this may have on any future Marine Sector deal.
• Considers piloting new customs and border control arrangements at Millbay to enable a realistic assessment of the likely impact when applied at larger ports such as Dover.

Higher Education and Research

• Ensures that international students are taken out of the net migration figures and that change to immigration rules and visa requirements do not limit the ability of universities to attract and recruit world-leading researchers and teachers.
• Offers EU nationals continued access to UK research facilities and launches a matched funding scheme to support international collaborative research.

Funding

• Provides greater clarity on what the UK Shared Prosperity Fund might look like and where possible negotiate close relations with existing structures such as Framework Programme 9 (which will replace Horizon 2020), including maximum possible influence over approach, strategy and priorities.

Fishing

• Clarifies its intentions around the future management of UK fish stocks once we exit the Common Fisheries Policy.

Context

Following the December summit, Brexit negotiations will now begin to consider the UK’s future trading relationship with the EU.

Northern Ireland

There is a potential for Northern Ireland to be guaranteed long-term access to the internal market and customs union. Northern Ireland has similar aspirations to our own around Marine technology and we could find it more difficult to compete for inward investment, both foreign and domestic if we do not have a level playing field.

Customs Union

The Government is clear that any new customs system should encourage growth in trade with the EU and the rest of the world, and mitigate against any additional administrative burdens or delays. The Government believes that there are two broad approaches the UK could adopt to meet these objectives:-

• A highly streamlined customs arrangement between the UK and the EU, streamlining and simplifying requirements.
• A new customs partnership with the EU, aligning our approach to the customs border in a way that removes the need for a UK-EU customs border.

A Treasury white paper published in October envisages introducing a Customs Bill in the autumn which will give the Government the ability to operate a standalone customs regime if the UK were to leave the EU without a negotiated settlement. The white paper identifies risks associated with roll on roll off ferries, particularly those who are currently mainly serving the EU market.

The Millbay ferry terminal handles 164,000 vehicles annually, in 2016 this was made up of 84,000 outward going and 80,000 incoming, 3,000 of these in each direction were lorries with the remainder being passenger vehicles. The port serves as the gateway in and out of the UK for around half a million passengers every year, supports over 900 jobs and contributes £64 million a year to the City’s economy.

Brittany Ferries operate a fleet of three roll on roll off ferries that they have now firmly committed to replace. Brittany Ferries are currently in negotiations with the port operator for Millbay, to undertake infrastructure works to accommodate more vehicles as part of their ongoing commitment to operate the service. Any increase in our cruise offer will also see an increase in demand for these infrastructure works.

Higher Education and Research

The success and vibrancy of our Higher Education institutions contribute hugely to the city’s economy with student spend estimated to be worth over £120m to our local GVA and supporting almost 5,000 jobs. Plymouth University alone generates more than £460m of output for the city and attracts over 2,000 international and European Union students to study in Plymouth each year. The loss of this contribution to the city’s economy would be a severe blow and affect businesses that support the student population. Furthermore the city’s international profile is a vital element to achieving our ambitions. The city highly values working together to ensure Plymouth is welcoming and that we promote and celebrate diversity. Restrictions on the number of international students will have a hugely detrimental impact on our efforts to promote the city’s global profile. 

EU research funding and collaborations are crucial to much of the world leading research that is done at the University of Plymouth in tackling global challenges. EU funding constitutes nearly 30% of the University’s research income.

Funding

The current framework programme, Horizon 2020, is the largest to date, with nearly €80 billion of funding available over seven years (2014 to 2020). Its successor will be Framework Programme 9 (FP9). A number of non-EU countries currently participate in Horizon 2020 either with associated country status or with automatic third country status, and all third countries without formal associate status can participate in specific parts of the programme, with some restrictions, usually by funding their own participation.

The terms of potential UK participation in future framework programmes, including FP9 beginning in 2021, would need to be negotiated with the EU and its Member States, recognising the mutual benefits from past collaboration.

Mobility of researchers is also a crucial component of overall UK research success – delivery per £ spent is the best in the world. Presently the sector is highly collaborative in supporting enhanced impact and excellence, with many active UK and European researchers fostering collaborations over decades - underpinned by EU funding sources thanks to the current single framework for collaboration across all 28 member states.  The current ease of movement of European researchers makes the building of long-term collaborations with institutions and organisations very easy and enhances skills development. 

A key requirement in the Brexit negotiations will be for the UK to negotiate a bespoke ‘deal’ in which the country retains access to EU research funding and most importantly networks despite limiting freedom of movement. 

Fishing

Sutton Harbour is of national significance for landing and exporting fish. Plymouth is the administration port with the largest number of fishermen in the UK. The fishing industry brings over £12m in Gross Value Added (GVA) to Plymouth and lands 13.2% of England’s total fish catch each year putting Plymouth in the top 3 fishing ports in England. Despite its growing importance nationally, and as a hub for marketing fish from across the south west peninsula, the last major investment in the city’s fishing port facilities was 1992 and a major upgrade is required to improve productivity, regulatory compliance and to remain competitive. The fish quay is in a central location in historic Sutton Harbour and regeneration of the facilities would have wider regional benefits.

There is debate surrounding how leaving the Common Fisheries Policy (CFP) will affect Plymouth, however, recent research suggests that leaving the CFP could afford the UK economic net gains and allow the country to manage fisheries more responsively and effectively. Brexit could lead to a better balance for UK vessels between catch composition and the landing obligation. Coastal communities like Plymouth may stand to benefit from strengthening the economic link between granting access to UK waters and contributing to local and regional economies. Post-Brexit the UK will be in a position to manage fisheries more responsively and effectively in line with UK, regional and local needs and the UK will be better placed to ensure that its investment in fisheries science aligns with UK interests. However, the negotiations of distributing stocks in line with zonal attachment will be a complex process and will need require consultation throughout.

Proposals

• Support Plymouth’s fishing industry and consider the potential for it to serve as an administrative centre working in partnership with Newlyn and Brixham Harbours.
• Support the University of Plymouth to continue its work with a consortium of education providers working across Devon, Somerset, Plymouth and Torbay. This work is supported by a grant from the European Social Fund (ESF) of more than £3.2 million (towards a total project fund of £5.8 million), and will improve collaboration between further and higher education and business in the region.
• Growing numbers of students want to study a degree outside their home country and according to Universities UK, the UK is currently the second most popular destination for international students after the United States. To maintain this position it is vital that universities remain able to recruit international students and world-leading academics and researchers.
• Pilot the new Customs Data System and border control arrangements at Millbay in a relatively low risk environment to assess the likely impact at larger ports such as Dover.

Offers

• Whilst uncertainty remains about our future customs relationship with the European Union there is likely to be a need to implement new border control arrangements. The Customs White paper sets out the potential for significant disruption, in particular at roll on roll off ports. This could generate huge backlogs at busy ports such as Dover. We would be happy to trial new customs arrangements in Plymouth.
• Plymouth has three Higher Education Institutions (HEIs) that collectively employ 3,125 FTEs with a number of world class areas of subject expertise and facilities. The University of Plymouth specialisms in marine and maritime science, medicine, environmental science and geosciences and psychology and neuroscience are especially important to the local economy.
• EU research collaborations also directly benefit UK teaching often leading to exchange and movement of students where partnering of institutions often follows success in research funding.

Benefits

• There is potential for coastal communities such as Plymouth, and the wider UK, to see substantial benefits upon leaving the Common Fisheries Policy.
• Overall, it is the access to research networks and the opportunity to build long-term collaborations which is the most important outcome of EU funding.
• International students provide overwhelming benefits to the local area spending an estimated £34.2m each year in the city. 
• International students and staff are important drivers of economic growth in the UK and make a vital contribution to the UK’s world-leading higher education sector. The income and economic activity of these students across the UK resulted in an estimated £25.8 billion in output and 206,600 jobs for the UK economy in 2014-15 alone, according to Universities UK.

Outcomes

• New customs requirements do not put at risk existing routes for goods.
• A thriving and resilient local fishing industry.
• Projects that are live under current EU structural research funding programmes will remain funded and access to research networks and the opportunity to build long-term collaborations continues.

2. Deals

Asks

That Government engages with the South West Peninsula through various mechanisms to drive economic growth. In particular we ask that the Government:-

• Agrees to fund a Growth Corridor Study and instructs the National Infrastructure Commission to undertake the study, to provide a strong evidence and set of recommendations identifying critical investments in infrastructure that will accelerate economic growth across the Peninsula.
• Commences discussions on a Housing Deal to accelerate housing delivery to stimulate and support growth across the far South West Peninsula
• Works with Plymouth City Council to narrow the £15m funding gap for the delivery of phase 3 of Oceansgate.
• Supports the Great South West - a new partnership with Government, focusing on digital, energy and transport connectivity.

Context

Plymouth, ‘Britain’s Ocean City’, is one of the largest cities on the south coast and the 15th largest city in England with a population of approximately 264,200, an economic output of £5.2 billion and 108,000 jobs. The City has a strong growth potential with ambitions to grow its population to over 300,000, deliver the planned development of 26,700 homes and create 13,200 jobs by 2034.

We recognise that Plymouth cannot be seen in isolation and the city’s growth is mutually dependent on the wider infrastructure provision across the south west peninsula. The City is therefore not only working across the Heart of the South West (HotSW) partnership to tackle the issues of productivity and infrastructure but also with Exeter and Torbay on the High Growth concept.

Great South West

Plymouth strongly welcomes the focus on ‘place’ in the Industrial Strategy. In order to compete with other UK regions, public and private sector organisations (including Local Authorities, LEPs, businesses and academic bodies) are currently coming together to develop a common brand that Government will acknowledge, in the same vein as the Northern Powerhouse and the Midlands Engine. With over £100bn of business opportunities, the South West has much to contribute to UK plc; a dynamic and progressive South West economy can generate the critical success factors needed for a successful national economy. Plymouth is the one of the most significant economic growth areas in the South West region and is a key player in this agenda.

‘Great South West’ is a developing regional brand that could be used to lobby for additional funding and powers from Government, including devolving powers from Europe when the Repeal Bill becomes law.

Heart of the South West High Growth Corridor

Plymouth and Exeter, together with Torbay in South Devon are the three major urban areas south west of Bristol. As a group of polycentric urban areas they form the core of a high growth corridor within the Heart of the South West region. This area generates £21 billion GVA per annum, has a population of over 1.1 million, and over 0.5 million jobs. It has globally important knowledge based assets; a good track record for delivery and innovation; and the appetite and collective leadership to deliver nationally significant growth. Within the Heart of the South West area and the wider South West Peninsula, this area, and particularly the A38/M5 axis between Plymouth and Exeter has the greatest potential to drive transformational economic growth for the far South West region.  

The key ambitions for the area are to drive growth by delivering a substantial place-based programme, led by the area’s world-leading institutions together with private sector investment, which in turn will stimulate innovation and entrepreneurship and attract further investment.

Highlights include:

• Developing Oceansgate, the UK’s first Marine Enterprise Zone in Plymouth, spearheaded by world-class companies and capitalising on the opportunities for research, innovation and production in a collaborative environment.
• Establishing Greater Exeter as the world’s leading location for applied environmental science, and applied data analytics, and with an ambitious route map to energy independence by 2025.
• Promoting Torbay as a leading location nationally for high-tech photonics, optics and microelectronics industries, supporting innovation, business start-ups and the commercialisation of new technologies.

In February 2017, the three councils of Plymouth, Exeter and Torbay submitted a proposal to Government asking the NIC to undertake a study similar to the Cambridge-Milton Keynes-Oxford corridor study which has provided the foundation for a better understanding of how to support high growth through investment in infrastructure. This high growth corridor proposal is now being scaled as a proposition to Government to undertake a high growth corridor study across the wider South West Peninsula. Such a study would provide a strategic long term plan for the wider sub-region, ensuring that investment in infrastructure is properly prioritised and sequenced to maximise growth across the area, and ensuring a genuine city-region approach.

The high growth corridor also translates concepts from the Industrial Strategy into a localised sub-regional programme that has the right critical mass, key assets and institutions to accelerate housing growth and drive higher productivity levels for the whole South West Peninsula.

Plymouth and South West Peninsula City Deal

The centerpiece of the Plymouth and South West Peninsula City Deal was the creation of the UK’s first Marine Enterprise Zone. Plymouth has also been instrumental in the development of the South Coast Marine Cluster which brings together a wide range of sector based institutions and private sector companies. 

Oceansgate, occupies a 35 hectare site located at the southern edge of Devonport Dockyard. The site is comprised of a unique complex of industrial buildings and docks for commercial use and direct deep water access to the English Channel. Three phases of development are planned totalling 270,000 sq ft (25,000 sq m) of flexible employment space for the marine and advanced manufacturing sectors.

Phase 1 and 2 are now underway with Phase 1 completed in May 2018. There is strong industry demand for all phases of development and a Marine Business Technology Centre (MBTC) is to be based in Phase 1. The MBTC is a new innovation service to support business growth harnessed to new sea based test facilities and to support marine technology clusters, such as that around marine autonomy.

When the Oceansgate project started it was recognised there would be a significant funding gap of circa £28m to complete the development. The Council, LEP and partners have been successful in obtaining additional support that has enabled significant progress on Phases 1 and 2. However, there is an £15m funding gap to prepare Phase 3 for private investment.

Proposals

• The Plymouth – Exeter – Torbay geography alone has a ‘city-region’ scale, comparable with core cities (1.1m population), and has the right critical mass, key assets and institutions to deliver strategic interventions, accelerate housing growth and drive higher productivity levels, scaling up to have an impact across the whole South West Peninsula.
• There needs to be a joined-up plan for infrastructure, housing and economic development, endorsed and co-owned by Government. This would catalyse a conversation with Government about a ‘housing deal’ to accelerate housing delivery.
• Oceansgate is further developed as a world class hub for marine industries, with opportunities for research, innovation and production in a collaborative environment adjacent to one of the largest marine companies in the UK, Babcock International.

Offers

• If we can agree an infrastructure deal we could deliver 50,000 new homes over the 2017-30 period - effectively bringing forward Local Plan targets by 4-5 years.
• Our marine industries, advanced manufacturing and defence sector (including nuclear) represent clear areas of competitive advantage on which to drive increases in productivity. Plymouth’s strengths across these industries have already attracted global companies and world-leading research institutions.

Benefits

• By 2030 the High Growth corridor has the potential to more than double GVA to over £44bn p.a.; to deliver 50,000 new homes; and to improve net fiscal balances by over £4bn p.a.
• Phase 1 and 2 of Oceansgate will provide 2,900m2 of office space and 2,600m2 of light industrial workspace creating 367 jobs. There is a strong pipeline of business interest and the potential for further development including the relocation of the Naval Heritage Centre. Phase 3 has the capacity to create 600 jobs and range of docks and jetties with access to deep water.

Outcomes

• A diverse and strong economy across south west spearheaded by the South West High Growth Corridor providing the catalyst for faster growth across of the whole far south west peninsula.
• Plymouth continues to be a global leader in marine industries.

3. Devonport Dockyard and Naval Base

Ask

That the Government:

• Requires the Ministry of Defence to continue to demonstrate a visible and sustained commitment to the City of Plymouth as the base port for the Royal Navy’s amphibious capability including landing craft training, Type 23 Frigates, remaining T Class Submarines, Hydrographic and Survey Squadron, and the Flag Officer Sea Training Organisation, all supported by Defence Munitions Ernesettle and Oil Fuel Depot Thankes.  

Specifically that the Government;

• Clarifies its position on the future of HMS ALBION and HMS BULWARK
• Consolidates all the Royal Marine units in the South West within the Plymouth/Devonport area
• Agrees that Plymouth should base-port all Type 26 Frigates and provide the maintenance of the 31 Frigates
• Commits to ensuring that the next Fleet Solid Support Ships are designed and built in the UK

As well as home to the Royal Navy in the South West, Devonport is also the centre of specialisation for deep maintenance of surface ships and submarines with a highly skilled industrial workforce. It plays a vital role in the Plymouth and wider regional economy directly supporting 10.1% of Plymouth’s total Full-Time Equivalent (FTE) employment and 14.1% of its economic output, i.e. Gross Value Added (GVA, 2017). In terms of jobs, in Plymouth alone the Naval Base and Dockyard provides 14,384 jobs rising to 16,185 in Devon and Cornwall (direct and indirect) this equates to an economic output of £770m in Gross Value Added (GVA) for Plymouth (out of £5.2bn) rising to £839m within Devon and Cornwall.

Devonport is home to the amphibious fleet (HMS ALBION AND HMS BULWARK), Hydrographic vessels and all of the Royal Navy’s Anti-Submarine Warfare Frigates (Type 23s) in addition to being the operational training hub of the front line fleet and the Royal Navy’s Amphibious Centre of Excellence at Royal Marine Tamar.

The Royal Marines’ amphibious capability is a key component of ensuring that the UK has an up-to-date, modern and adaptable naval capability. The MoD has previously recognised the significant role and value that the amphibious capability brings with a recent £30m investment in RM Tamar in 2013 to build the Amphibious Centre of Excellence and the recent regeneration of HMS ALBION in 2017 costing £85m. The effective use of this investment is therefore reliant on the retention of these ships and their associated maintenance in Plymouth, in addition to retaining the specialist skills and jobs in the local economy. The loss of the ALBION-class amphibious ships would have put 1,176 jobs directly at risk and reduce the annual GVA of Devon and Cornwall by £61 million.

While the Government has stated in its response to the Defence Committee’s Third Report ‘Sunset for the Royal Marines? The Royal Marines and UK amphibious capability’  that, ‘there are no current plans to decommission HMS ALBION and HMS BULWARK early…’ further clarity is needed to provide long term confidence that the City will remain a strategic centre to support the Royal Marines and amphibious capability.

In December 2016 it was clear that the MoD’s intention was to consolidate Royal Marine units from Chivenor, North Devon and Norton Manor Camp in the Plymouth / Devonport area though no site has been confirmed. It was also hoped that with the estimated disposal date of 2023 for Stonehouse Barracks, home to 42 Commando, that these units are also reprovided for in the Devonport area. The Citidal home to 29 Commando Royal Artillery is also due to close in 2024

All sites included in the announced proposed closures are subject to further assessment studies for feasibility and cost. The outcome of the Modernising Defence Programme (MDP) will also confirm the future of our amphibious capability (including HMS ALBION and HMS BULWARK) and the future basing arrangements of the Royal Marines.

We ask for assurances that work to optimise the Royal Marine Estate and proposals to consolidate this around Plymouth through an Amphibious Centre of Excellence are upheld. We are deeply concerned that this may not now happen. We would ask that any proposals are shared with the City Council to ensure that the opportunities and risks associated with land and building disposals in Plymouth and the potential for increased use of other Defence assets by re-based personnel in the Plymouth travel to work area are fully consulted. The Modernising Defence Programme is due to deliver high level findings in July and concludes in the autumn.

In terms of the surface fleet the Type 26 Global Combat Ship will replace the Type 23 undertaking the Royal Navy’s three core roles – warfighting, maritime security and international engagement.  Eight planned Type 26s are due to come into service, the first one in 2026. Devonport is well placed to welcome all the ASW Type 26s hosting all the frigates’ refit, design and support work at Devonport. HMS ARGYLL (a Type 23) is already equipped with the combat systems (tech and operational control functions) of the future Type 26s. The city therefore already has the personnel equipped with the skills to maintain the future Type 26 fleet and potentially the 31s (general purpose frigate) when they come on line. Base-porting all the Type 26 frigates would contribute to securing the future prosperity of the dockyard and naval base which is an integral and significant part of Plymouth’s economy.  The skills and expertise in the city also position Plymouth well to undertake all the maintenance associated with the Type 31 Frigates.

In support of the Royal Navy’s surface fleet the MoD has also announced its intentions to commission the build of three Fleet Solid Support ships (FSS). The ships will support the Carrier Strike capability, by supplying vital supplies such as ammunition, spare parts, and engines for the F-35B Lightning II aircraft. Each of the three FSS vessels has specific tasks that will require differences in their design and build. All three are complex ships and each should be seen as a one-off vessel, funded as a £1-1.5bn programme.

The two new aircraft carriers HMS QUEEN ELIZABETH and PRINCE OF WALES and the Type 26 Frigate Programme demonstrate that the UK has a shipbuilding industry with the skills, knowledge and capability to design and build warships of the most complex type. However, the National Shipbuilding Strategy (NSBS) makes it clear that the MoD does not regard these vessels in the same sense as its frigates and destroyers and intends to open the design and build of these specialist ships up to international competition, whilst only “encouraging” UK bids.

There are strong reasons why the FSS ships should be seen as warships. No other country, including EU nations, competes vessels of this size or complexity. Many foreign yards are also either state owned or receive significant direct or indirect subsidy where UK yards do not placing them at an unfair disadvantage. The Aircraft Carrier Alliance (ACA) also has the experience of building large, complex military vessels e.g. Rosyth. The FSS cold smooth the workload and maintaining the skills and key asset following the completion of the Queen Elizabeth class aircraft carriers.

Building the FSS in the UK would also contribute to the nation’s prosperity. According to the CSEU there would be a direct tax and National Insurance return to the Treasury work up to £215m – 20% of the contract cost. They also state that data from other countries indicates that in naval shipbuilding for every £1 spent, £1.34 is generated in long term benefits – or £1.35bn for a £1bn programme cost.  Plymouth City Council will support the campaign by the CSEU to build the FSS in the UK. This is due to be launched in Plymouth on the 13th July 2018.

4. National Marine Park

Ask

That the Government:

• Designates Plymouth Sound as the country’s first National Marine Park

The Environment Secretary is considering expanding the network of national parks and the city is pressing for Plymouth Sound to be at the centre of the country’s first National Marine Park. The review is led by Julian Glover.

In Plymouth we have Dartmoor National Park to the north, South Devon AONB and Cornwall AONB to the east and west. The beautiful landscapes that frame our City are hugely valued and we work with our partners to ensure that the City compliments and enhances these protected landscapes on our doorstep.

Although we value these landscapes greatly we feel that Plymouth Sound is one area yet to receive the recognition that these land based designations provide. In Plymouth, we have a fantastic marine environment, which has shaped the City’s past and is having a hugely positive influence on its future.

Plymouth Sound and Estuaries contains a wealth of rare and diverse wildlife, a significantly important port and industries reliant on the marine environment and it forms the arena for communities to interact with the natural environment. The seascape and landscape value of the area is unrivalled and is as important as any of the land-based National Parks.

The review of the country’s natural landscapes would enable this marine landscape and its associated communities, wildlife and businesses to be recognised in the same manner as the land based National Parks. A National Marine Park would add value and diversity to the network, of currently land based sites that are our country’s finest gems.

Plymouth is in the perfect position to become the first National Marine Park and its designation would fit with all the points you outlined in the announcement that the designations need to be reviewed for the 21st Century. A marine park would bring together existing protections such as marine protected areas, marine conservation zones and the Plymouth Sound and Estuaries Special Area of Conservation.

A Marine Park conference was held at the National Marine Aquarium in June 2018 which heard from experts around the world. The conference was organised by the Blue Marine Foundation (BLUE) – the UK-based marine conservation charity which has been instrumental in setting up marine reserves around UK overseas territories such as Ascension Island.

Plymouth’s marine space with diverse habitats, vibrant fishing industry, recreation and maritime industry is the perfect location for a National Marine Park. Over the coming months consultation and community engagement events will be held culminating in a Marine Park event for stakeholders in October with final proposals by the end of the year. 2019 presents the ideal opportunity to designate the country’s first Marine Park in light of the 70th anniversary of the National Parks and the start of the Mayflower 400 celebrations in time for July 2020.

We would value the opportunity to discuss with the Secretary of State and Mr Glover how we could deliver a National Marine Park in Plymouth and how it could align with the natural landscape review.