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The Economic Secretary to the Treasury (Justine Greening)
It is a pleasure to serve under your chairmanship for what must be the first time Mr Dorries.
I congratulate the hon. Member for Coventry South (Mr Cunningham) on tabling and securing an important debate. It is important not only for Coventry itself but more broadly. I also pay tribute to the hon. Member for Coventry North West (Mr Robinson) who spoke, as did the hon. Member for Coventry South, with great passion about the challenges facing Coventry. In the time available to me, I will try to address a number of wide-ranging points that the hon. Members made.
The hon. Member for Coventry South is right to make the points that he did, in the sense that there is not going to be one thing that helps to regenerate and grow the Coventry economy, and create jobs. We need a broader strategy in place to ensure that we are successful in helping Coventry. As the hon. Gentleman will be aware, the main backdrop to the policies that the Government are pursuing is the huge budget deficit that we inherited, which we must tackle. In his speech, he talked about young people; the worst thing that we could do for young people is to pass on to them that debt of the money that our generation has spent, so that they can pay it off. We have an obligation to get our finances back in order so that young people do not face that additional challenge as they enter the economy.
We need to tackle the deficit. However, as the hon. Gentleman pointed out, we have also got to increase economic growth and rebalance the economy across all regions of the UK. I think that he would recognise, as many of us do, that too much of the last economic boom, which took place roughly between 2000 and 2007, was enjoyed by London and the south-east, and not enough of it was enjoyed by cities and regions outside the south-east. We must ensure that, as we generate and create the right ingredients for the next period of growth in our economy, that growth is enjoyed by precisely those communities that can benefit most from it, in terms of jobs, skills and opportunities.
The key aspect at the last Budget was not only economic growth itself but ensuring that we had some plans to stimulate that growth. The hon. Gentleman will be aware that we made a series of proposals at the last Budget to create a model for more sustainable and more balanced growth, including in Coventry and more broadly in the west midlands.
As hon. Members have made clear, Coventry faces some difficult challenges, but it remains a significant contributor to the regional economy in the west midlands. As has also been mentioned, during the last 20 years Coventry has rebalanced its economy somewhat by moving towards more high-tech manufacturing and business services. The reforms set out in the plan for growth, and indeed in the broader Budget, will give businesses and individuals in the region, including in Coventry, a real boost. Those reforms include cutting corporation tax from this month, so that it will be 23% by 2014; increasing the personal allowance by £630 next year, following the increase of £1,000 last month, which will take 25,000 people in the west midlands out of tax altogether; and, of course, building on the success of the manufacturing technology centre in Coventry and in other cities, by creating high-value manufacturing technology innovation centres. They will be the first of an elite network of centres that will enable businesses to access state-of-the-art equipment and technical skills.
The hon. Gentleman will be aware that a further opportunity for Coventry—one that I am sure is already being investigated in the city—is the enterprise zones policy. The west midlands already has two of the enterprise zones that were announced at the Budget. He will be aware of the zone in Birmingham and Solihull, created by the local enterprise partnership, and of the zone in the black country. During the coming months, I hope that Coventry itself will submit a proposal to become part of an enterprise zone.
Mr Jim Cunningham
Can the Minister talk to her colleagues in other Departments about one issue that I do not think her Department—the Treasury—actually handles? That issue is the future of Ansty. A list of sites has been published. In particular, we are talking about Advantage West Midlands, which is the regional development agency. On that list of sites, Ansty is not mentioned, so we do not know what is happening with it. That is one of the points that I made in my speech. A lot of taxpayers’ money has been invested in the site and a lot of effort has been put in by myself and my colleagues to get it developed. We and the public want to know what exactly will happen to it. I do not expect the Minister to answer me directly today, but perhaps she could go away and consider that matter.
Justine Greening
One of the things that the hon. Gentleman has been able to do very effectively in his speech is to raise a number of issues—such as transport and infrastructure, which I will come on to shortly—that are not necessarily a concern of the Treasury, but that doubtless have been recognised by the Departments concerned. I will ensure that I pass back his specific comments about the Ansty site to my colleagues in the Department for Business, Innovation and Skills and I will write to him in more detail about that specific site.
As I was saying, enterprise zones are another opportunity to bring some genuine benefits to the hon. Gentleman’s area. In his speech on the Budget debate and again today, he has expressed the hope that Coventry will benefit from inclusion in an enterprise zone in the future. I welcome his enthusiasm for the enterprise zone policy. Of course, the Coventry and Warwickshire local enterprise partnership is welcome to bid to be part of the second tranche of 10 enterprise zones. Regarding timelines, I have no doubt that his local LEP will be working on its proposal already. We expect to take some decisions within Government in the summer about where the next tranche of enterprise zones will be. We do not intend to spend a long time making those decisions. We are aware of the urgent need to get on with this policy, because we believe that it can make a real difference.
The Government have also established the regional growth fund, which is worth £1.4 billion overall, to help to grow a private sector-led economy in England. Of course, Coventry will benefit directly from the first round of awards from that fund, with Jaguar Land Rover having won support for a project to undertake design engineering for a new small common vehicle platform that will be developed in part in its Whitley centre.
There have been other signals that the private sector sees Coventry as being “open for business” and that it has real confidence in the future of the city. Only last week, it was announced that the overhaul of Coventry airport will go ahead, creating new infrastructure and business opportunities in a £250 million development.
The second round of the regional growth fund, in which we are aiming to allocate the remaining £950 million of funding available, is now open for bidding. The second round closes on 1 July and I look forward to seeing many more exciting proposals, including from businesses in Coventry.
Hon. Members have raised concerns about local government funding. As I have already made clear, the last Government left an appalling financial mess behind them and we have a moral obligation to ensure that we pay down our debts as quickly as possible. Tough decisions have been necessary across all areas of public spending. Local government, which makes up a quarter of all public expenditure, has its part to play in that process.
The Government have delivered a challenging but fair settlement for local government to ensure that the most vulnerable communities are protected. Although financial settlements have been tight, local authorities will still receive £29 billion in grant next year. It is also worth noting that formula grant in Coventry will be nearly £500 in 2011-12, which is more than twice what it will be in west Oxfordshire, precisely reflecting the higher levels of need in Coventry. I know that Coventry council is getting on with calculating how it will make the savings that it needs to make. In fact, its deputy leader, Councillor George Duggins, has said that the council was in a “good position” compared with other councils, because it has taken early action.
There is no doubt that these are difficult decisions to make and of course they should be made at the local level by local authorities, to ensure that the priorities of local people, including those of people in Coventry, are reflected in those decisions. Ultimately, however, there is no doubt that the worst thing that we could do is to ignore the huge deficit that our country faces and the need to tackle it.
The hon. Gentleman rightly mentioned the issue of infrastructure in his speech and I want to refer to it briefly. During the spending review period, the Government will actually spend slightly more on infrastructure than the last Government had planned to spend. Of course, investment across the board has already been announced by my right hon. Friend the Secretary of State for Transport, but I have no doubt that the points that have been made today about the regional transport infrastructure in the west midlands, including rail, will also be taken on board by him. Hon. Members are right to point out that high-speed rail is a strategic project that can bring benefits not only to the west midlands but nationally. However, there is still the need to ensure that we get investment in the existing track. Of course, that existing track has a clear role to play in the coming months and years, by helping Coventry and other areas to regenerate their economy.
Finally, I will mention the Building Schools for the Future programme. I recognise the concerns that the hon. Gentleman set out about that programme—they are concerns that I face in my own constituency. It says everything about the BSF programme that a Government who were in power for 13 years could come to the end of their term and still have existing schools in the sort of state that the hon. Gentleman and his colleague, the hon. Member for Coventry North West, described.
However, I have no doubt that such considerations are being taken into account by the James review and I assure both hon. Gentlemen that, as we go through the coming years, we want to ensure that parts of the country outside the south-east, such as Coventry, benefit to the maximum from the next period of economic growth.