I am grateful for the opportunity to speak of the great city of Leeds and its enterprise culture. In June 2003 I launched early-day motion 1488 calling for an award to be created, along the lines of the European city of culture, for the European city of enterprise. Naturally, my view was that Leeds should win that title. Since then, much has happened and Leeds has been shortlisted for the title of 2005 British capital of enterprise. The city has a strong case to make and I would like to look at some of its achievements this afternoon and consider some of the issues that still contrive to hold us back.

My own constituency of Morley and Rothwell, which suffered the demise of its mills and mines a generation ago, illustrates well some of the steps we have taken in the district as a whole. Unemployment has practically halved since 1997, and employment has never been higher. Many new jobs have been created, although only a few years ago the future looked bleak. My hon. Friend may recall a visit he paid to my constituency in 2002 to help me to launch my business survey—one of the first steps I took as a newly-elected MP. Some of the comments I received were enlightening. Many employers were calling for better education for young recruits. When we look at getting people into jobs, we must ensure that we get the right skills. In that regard, I was pleased to learn that the fifth of my five local high schools was awarded specialist school status last week. Bruntcliffe high school will from now on be known as the Bruntcliffe business and enterprise college. The school has reached out to the local community, and has been involved with local businesses in the development of its plans. That will go a long way to meeting the needs of today's employers.

Only last Friday, I was at the awards ceremony celebrating 50 years of the Joseph Priestley college, which is largely based in my constituency. The college, too, reaches out into the community—it was not long after the Minister's visit that I was at the opening ceremony of the college's highly accessible high street IT learning shop in Morley. The college intends to deliver high-quality education where it is needed and make it easy to access.

Elsewhere in my constituency thousands of new jobs have been created. Only recently, 300 more jobs with mobile phone company mmO ₂ were announced at its premises at the Arlington business centre. Some 160 jobs with DePuy International will be created at the White Rose office park, while Northern Foods will establish its headquarters at Thorpe Park. Not all jobs will be maintained or created by outside companies. Since last year I have been working with the Morley chamber of trade and commerce on a retail regeneration strategy designed to stimulate retail interest in parts of the town that have suffered a decline. I am sure that my hon. Friend will agree that we need strategies in place to deal with disparities that persist within larger, economically successful areas. It is probably true that out-of-town shopping centres, such as the successful White Rose centre, have created jobs, but many of them have come at the expense of local shopping centres. In that context I welcome the prospect of business improvement districts—BIDs—so that local people and local businesses can develop their own plans to revitalise defined areas of need. We must ensure that the benefits of economic success do not conceal areas where problems must be addressed. That is one reason why I support such initiatives as the local sustainability proposals, among others, that the New Economics Forum has put forward.

Over the past 20 years, during which we have had a Labour-controlled council, Leeds has become the UK's best performing city for creating jobs outside London. Some 90,000 new jobs have been created in all, which is an astonishing 30 per cent. increase. It would be remiss of me not to mention the distinguished leadership of the council through some of those years, which included my hon. Friends the Members for Leeds, East (Mr. Mudie) and for Hemsworth (Jon Trickett). They and their successors demonstrated that, with a clear vision and the city council acting as a genuine partner, new enterprise would find the city attractive. Since the local elections last June, which resulted in a confusing coalition of convenience, the leadership has been shared alternately by the Liberal Democrats and the Conservatives. Such a Tweedledee and Tweedledum style of leadership cannot be good for the long-term interests of the city. We are, after all, talking about people who would have held back the regeneration of the city centre by opposing the creation of the Millennium square, which has levered in £15 million of private investment, which is more than £3 million more than the cost of the improvement works.

In the civic quarter as a whole, where the Millennium square sits, £150 million has been invested, which shows how much confidence there is in city centre commercial development. People—not just Labour people—find it odd that whereas Mr. Kennedy has declared that the Liberal Democrats would never form a Government with the Conservatives, he is happy to abandon Leeds to that awful fate.

I digress, however. Leeds and those of us who represent it cannot afford to become complacent and say, "There we are—we're the top dog, the capital of the north". After all, Manchester is trying hard to catch up. We must also ensure that, when we talk about the future enterprise prospects for Leeds, we mean sustainable enterprise. By that I mean not only that employment should be maintained, but that new development should be environmentally sustainable. In that sense, one of the biggest negatives of more employment is more congestion. My parliamentary colleagues and I—as well as just about everyone else in Leeds and elsewhere in the region who has given the matter any serious thought—all back the Leeds Supertram bid. Despite the revision of the bid, which has impacted on my constituency in a way that I would have preferred it not to have, the fact remains that Leeds urgently needs to start work on a new mass rapid transport system. Leeds is the largest European city that does not have one.

The benefits of going ahead are impressive. The increase in accessible jobs in neighbourhood renewal areas is estimated to total 83,000. They are not new jobs, but the measure of how people in poorer areas will have improved access to employment opportunities. The estimate of new jobs created in the wake of Supertram is about 28,000 by 2014. The new jobs that are created in Leeds must be accessible to the people of Leeds. It has been suggested that without Supertram, 70 per cent. of the new jobs created could go to people living outside the city, which would further compound the congestion problem.

I hope that my hon. Friends will press those points on the Secretary of State for Transport, as have those of us who represent the city. It is important that as the Leeds economy grows its opportunities are made available to all. Large cities tend to have doughnut shapes of poverty around their core that miss out on the dynamic growth of the city centre. Now that we tend to talk more of city regions, that is even more important. Until we acknowledge that the Yorkshire-Humber region does not get its fair share of transport finance, the development of sustainable economic growth in the region will be stunted.

Does Leeds deserve to win the 2005 British capital of enterprise award? If it did, it would not be the first award it has won. In the last couple of years, independent judges have found Leeds to be Britain's best city for business, the UK's favourite city, the visitor city of the year, the best place in Britain to live, the best UK university destination and, perhaps allied to that, the No. 1 city for clubbing—as a member of the Ackroyd street working men's club, I wonder if the award includes clubs in that category. With more than 100,000 students in higher education in Leeds, it is not surprising that the place has a youthful feel. It is relevant to the debate that a survey has shown that 50 per cent. of students in Leeds expect to run their own company. Many of those young people choose to stay and live in the city in which they graduate, adding to the increasingly diverse economy that drives employment in the city.

Although it still has a significant manufacturing sector employing more than 48,000 people, Leeds has become one of the UK's most important financial services centres, where employment has reached nearly 100,000 people. In 1991, only 57,000 worked in that sector, which shows how well Leeds was able to realign its economy after the second Tory recession. I acknowledge that some of those jobs are in the much-derided call centre sector and are the kind of jobs that are prone to offshoring. However, when considering recent analyses, it could be argued that more jobs have come to the UK as a result of increased markets in those sectors where call centres operate, so we must be sure that locally we are in a position to capitalise on such two-way traffic. The overall strength of the financial sector in Leeds can weather any storms on that front, which must be one of the key features to consider when judging what is enterprise. It is one thing to get something started but another to keep it going. As things stand, it is anticipated that the financial sector in Leeds will deliver another 28,000 jobs over the next 10 years and that 40 per cent. of all the new jobs will be developed in the Yorkshire-Humber region.

The Leeds Initiative—a partnership between public and private sectors—is charged with the task of driving the Leeds enterprise strategy forward. It is one of the first initiatives of its kind and has spawned several other initiatives in which partnerships and relevant interests can influence developments. It has set itself seven challenging measures of success: increasing the wealth created in Leeds and the region every year; creating at least 50,000 new jobs; improving Leeds and the region's productivity performance by at least 15 per cent.; improving Leeds and the region's ranking in the European innovation index; increasing the proportion of the work force employed in high-tech or knowledge-based jobs every year; being recognised as the best UK city for business and students; increasing the number of Leeds residents moving into work.

One of the city's strongest emerging sectors is in media, and the Leeds media initiative has identified more than 1,600 media companies in the city with over 13,000 people employed, which represents a 50 per cent. growth since 1993. It is a sector that tends to rely on small companies with 10 people or fewer. It provides one of the most exciting opportunities for further development of Leeds's diverse and multicultural nature, both in the city and in the wider region and I predict further strong growth in that area.

One last fact convinces me that Leeds deserves to be called the British capital of enterprise: the last census showed that Leeds was the only city in the country outside of London whose population actually grew. Normally, as wealth is created, one expects to see a flight to more leafy locations, but Leeds has become a place for city living. Other cities have lost population as they struggle to adapt, but if people can be attracted to live and work in an area, it means more customers and enterprise. On that measure alone, Leeds is indisputably the 2005 British city of enterprise.

I congratulate my hon. Friend Mr. Challen on securing the debate and championing the cause of Leeds. As the Minister for small businesses, I had the pleasure of meeting him and his constituents and seeing at first hand some of the leading small businesses in Yorkshire.

Leeds has undergone a remarkable transformation in the past 10 years, from an industrial city in decline to recently winning the title of Britain's best city for business. More than 85,000 jobs have been created in Leeds in the past 20 years—more than any other UK city—representing more than a third of job creation in the region. Leeds has the most diverse economy of any major city in the UK outside London, with 17,500 VAT-registered businesses in a wide range of sectors. In the past three years, more than 100 companies have moved into Leeds, representing key sectors from manufacturing to financial and business services, retail, media distribution, transport and leisure. In the past 20 years, Leeds has become a major centre in the UK for financial and legal services, creating more than 40,000 new jobs, accounting for more than a quarter of the income value of Leeds. Leeds has been a model of economic growth in many sectors. Modern creative industries account for 70 per cent. of local self employment bringing £269 million a year into the Leeds economy. Tourism has grown by more than 30 per cent. in three years, bringing 20,000 jobs and £750 million into the Leeds economy. As well as being Britain's best city for business in 2003, Leeds was named visitor city of the year in 2004.

That success is not accidental. It is underpinned by the stable economic conditions achieved by this Government, which have enabled sustained development of the Leeds economy. However, the true success of Leeds comes from the people. They have built the communities and developed partnerships, especially over the past 15 years, to create an enterprising environment. The Leeds Initiative was set up to bring together the main institutional stakeholders and to set out a development agenda for the city. A strong belief in partnership working and co-operation was instrumental in creating conditions for the transformation of Leeds city centre, from the relocation of the Royal Armouries museum, where I spoke with manufacturers in October, to the remodelling of public spaces such as Millennium square and the Victoria Quarter.

I am grateful for the acknowledgement of the part played in Leeds' transformation by the Government's policies on the regions. The creation of regional development agencies and the increasing funding channelled through them has been instrumental in supporting the transformation of the city centre. More than £15 million from Yorkshire Forward, the regional development agency, has been committed to major regeneration schemes in Leeds, including the £3 million Round Foundry and £1 million for the Leeds city centre masterplan. That regeneration has, in turn, levered in considerable private sector investment and inward relocation of major businesses. In the past decade or so, £2.4 billion of investment has been made in large property development schemes, with a further £1 billion-worth under construction and £3.4 billion-worth in the pipeline—a total of £6.8 billion. As the local strategic partnership, the Leeds Initiative has enterprise and the economy as a key theme in its second vision for Leeds. The vision addresses a wide range of issues that contribute to an enterprising economy.

Leeds has recognised the vital importance of education and skills in achieving an enterprise culture. Partners have worked hard to improve education standards in Leeds. Key stage 2 results for 2004 show that Leeds pupils are now above the national average for English and maths attainment. GCSE results have shown a steady improvement, rising from nearly 40 per cent. of students achieving 5 or more A to C passes in 2001, to 45 per cent. in 2004.

The thought has just occurred to me that with the announcement from the Government that Bruntcliffe high school is to be awarded the status of a business and enterprise college, this might be an appropriate time to invite the Minister to visit my constituency to congratulate the school on that award and to visit one or two local companies. One company, a small engineering firm called Ace Engineering, won an award against competition from China, which is a tremendous achievement.

It is always a pleasure to visit Leeds. I am reinvigorated by what I see. I thank my hon. Friend for his kind and warm invitation.

The excellence in cities programme was designed to raise educational standards and opportunities in city areas. Partners with the underperforming schools—businesses and community groups—are able to embed enterprise in schools. The Education Leeds Business Alliance, which provides the formal mechanism for the partnerships, is doing a sterling job. Every secondary school in Leeds has been adopted by at least one local business. Department for Education and Skills enterprise advisers also support Leeds schools in disadvantaged areas.

Leeds has been innovative in the development of family learning centres, which link disadvantaged groups to employment and enterprise opportunities. Four family learning centres have been established in deprived areas of the city. At the core of each centre are employment access and training teams, which help people to make the transition from welfare to useful work. The family learning centres work with a wide range of other partners, including local colleges, Leeds Metropolitan university, local schools, Sure Start, Jobcentre Plus, and public and private sector employees. More than 1,000 people have now obtained jobs by such means.

Universities in Leeds are at the heart of developing the enterprise culture. The university of Leeds and Leeds Metropolitan university combined have 46,000 students, who contribute to the local economy and, more importantly, to the quality of life in the city. Some 5,000 students have benefited from enterprise learning at the university of Leeds since 2001. Every year, around 1,500 Leeds Metropolitan university students study modules on enterprise. The result is that 50 per cent. of students in Leeds expect to run their own businesses at some point in their career. The universities are key partners in a range of enterprising activities. For example, the university of Leeds is a key partner in the Department of Trade and Industry's manufacturing advisory service, which operates four of the regional centres for industrial collaboration funded by Yorkshire Forward to develop commercial applications for research. Leeds Met has implemented a graduate business start-up programme in partnership with Business Link. That is now operating across the whole of west Yorkshire to provide business space, equipment advice, mentoring training and resources to all Leeds students, graduates and alumni who seek help.

Businesses in Leeds can access a wide range high-quality business support to ensure the success of their enterprise. Support is available on all aspects of start-up, business growth, export, and inward investment, as well as property search services and sector-specialised advice and networking. That support is provided through strong partnership working. The partners include Leeds city council, Leeds chamber of commerce, Business Link West Yorkshire, the Asian business development network, Asian trade link, which I have visited on several occasions, and many others. Most Leeds businesses are small or medium-sized enterprises. About 20,000 of them employ up to 10 people each, comprising 15 per cent. of the Leeds work force. In the financial year 2003–04, 1,448 individuals inquired about starting up a business in Leeds and 557 businesses were started. Some 3,500 established businesses were given specialist advice.

A range of regeneration funding has come into Leeds to support economic regeneration, including £98 million from the single regeneration budget. Some £12 million has been provided for the first phase of the regeneration of the Aire valley. The project includes the release of more than 350 hectares of land for development and is expected to create about 5,000 jobs and to safeguard a further 10,000. An investment of £20 million has been generated and major businesses are relocating in the Aire valley, including Arla Foods, Alvis Vickers and Royal Mail. To date, the project team has helped more than 500 people get jobs with inward investors. In addition, the Government's neighbourhood renewal fund has provided £37.5 million to help to improve services in the poorest communities in Leeds. For example, in the Beeston hill and Holbeck neighbourhood renewal area, more than £30 million of additional capital investment has been attracted in the past five years, including four new schools and a health centre.

The Government recognise the importance of transport infrastructure to increasing the success of the Leeds economy. That is why they have already provided £16.6 million for integrated transport and maintenance in Leeds in 2004–05. Leeds has also benefited from the £63.3 million spent on transport in west Yorkshire in 2004–05. In addition the Government have fully approved funding for two major road schemes in Leeds—the Leeds inner ring road and the east Leeds link road.

The proposal for the Leeds Supertram is clearly a significant component in the local strategy, which is why the Government agreed in 2001 to provide public funding of up to £355 million towards the Leeds Supertram, of which 75 per cent. was to come direct from the Government. Sadly, since that decision was made, the project's estimated costs have increased to more than £500 million. No Government could simply sanction such an increase without ensuring value for taxpayers' money. Particularly in the light of the National Audit Office report on light rail, we need to consider how light rail can be made more cost effective, and whether it is always the best solution. I assure my hon. Friend that the Department for Transport is currently working closely with the promoters of the Leeds Supertram together with Leeds city council on new costings for the project and alternative proposals. They are in the process of discussing the bid with promoters and obtaining further information from them. Representatives of the Department have met Metro and Leeds city council representatives several times at official level. The main issues that are being discussed at the moment are, I am advised, the scheme appraisal and the promoter's proposed procurement and risk-sharing approach.

At the conclusion of the discussions a final decision will be made, but all the work that is presented will be considered carefully, and decisions will be based on value for money, including wider benefits and affordability, as happens with all light rail proposals. The Government recognise the importance of good public transport for the future development of Leeds, and we are working on cost-effective solutions to the city's transport needs of the 21st century. I thank my hon. Friend for giving me the opportunity to join him in praising the great achievements of Leeds and its citizens.

Question put and agreed to.

Adjourned accordingly at twenty-two minutes past Four o'clock.