The Economic Secretary to the Treasury (Miss Chloe Smith)
I shall do my best in the six minutes remaining to cover a selection of the points raised by the hon. Members for Coventry South (Mr Cunningham) and for Coventry North West (Mr Robinson). I thank both for the passion with which they have spoken about their city in this interesting debate.
The Government made clear in Budget 2012 that our priorities are threefold: to create a stable economy; to create a fairer, more efficient and simpler tax system; and to introduce reforms to support growth. The Budget and the national infrastructure plan published the preceding autumn set out the Government’s latest steps towards achieving those priorities, based on a new model of sustainable and balanced growth, including in Coventry and more widely.
As the hon. Gentlemen made clear, the west midlands is not without its challenges, but the region remains a significant contributor to the national economy. The reforms set out in the Budget will give businesses and individuals in the region a further boost by cutting corporation tax by an additional 1% on top of the rate cuts announced last year. From April this year, the rate will be reduced from 26% to 24%—it will eventually fall to 22% in 2014.
The reforms also provide a boost by increasing the personal allowance by £1,100, taking 75,000 people in the west midlands out of tax altogether, and by increasing the Growing Places fund to provide additional funding for the infrastructure needed to unlock developments that will lead to jobs and growth. Local enterprise partnerships in Coventry and Warwickshire will receive a further £4.1 million. We confirm that Birmingham has been selected to become a super-connected city, and we are investing almost £60 million in stalled development projects within the west midlands. Furthermore, we will support individuals and families to buy new build property with just a 5% deposit through the NewBuy scheme, and increase the maximum right-to-buy discount to £75,000, which is £49,000 more than the current west midlands limit of £26,000.
The hon. Member for Coventry South spoke of youth unemployment, which I agree is a vital issue for our country. He will be aware of the answer given to him by the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), on 13 December 2011. He directed the hon. Gentleman
“to the new programme recently announced to make it easier and simpler for SMEs to take on apprenticeships”,
and said that the Government
“are providing funding to the tune of up to £1,500 per apprentice.”—[Official Report, 13 December 2012; Vol. 537, c. 254WH.]
That scheme is to be welcomed.
The challenge laid down by the hon. Gentlemen, which the Government have taken up, was to return the UK economy to sustainable economic growth that is more balanced across the country. We have established local enterprise partnerships and enterprise zones.
Miss Smith
I have only three minutes left, but if the hon. Gentleman wishes to intervene, I will give way.
Mr Robinson
The Minister mentioned the west midlands, but could she not say something about Coventry? She even mentioned Birmingham. I made some unfortunate remarks about Birmingham not so long ago—I will not repeat them—but we are talking about Coventry tonight.
Miss Smith
The hon. Gentleman pre-empts my next paragraph. I should like to draw his attention to the successful bids in the Coventry and Warwickshire LEP area, including the Elonex advanced engineering supply chain and Alamo Manufacturing bids, which I am sure he welcomes, because they and others will create many thousands of jobs in the west midlands.
The hon. Member for Coventry South said there was little evidence of private sector growth. I simply dispute that statement. The core city deal for Birmingham, which was mentioned by both hon. Gentlemen, will have spillover effects for the wider west midlands region, although I hear the call for me to speak about Coventry in its own right.
The hon. Member for Coventry South raised concerns about the impact of regional pay—those were his words—across the country. I reassure him that the Government are not setting out detailed proposals at this stage, but simply asking the experts how public sector pay might better reflect local markets. He will be aware that the Institute for Fiscal Studies made an estimate of the public sector pay premium—he quoted off-hand some figures in that respect. In principle, the premium has the potential to hurt private sector businesses, which need to compete with higher public sector wages. A premium could prevent them from expanding and lead to unfair variation in the quality of public services.
On public spending, the previous Government left an appalling financial mess behind, which this Government have a moral obligation to sort out. We have delivered a challenging but fair settlement for local government, including for Coventry. The formula grant in Coventry will be £493 per person in 2012-13. The average per person across England is far lower, and it is £200 to £300 per person in some southern areas. That reflects the higher level of need in Coventry.
I thank the hon. Gentlemen for speaking in the debate. I believe the approach set out in the Budget is a strong one and am confident that it will benefit all areas of the country, including Coventry and its environs.