Manufacturing (West Midlands)

Debate between Lord Spellar and Lord Austin of Dudley

Tuesday 15th January 2013 Westminster Hall

[Ian Austin (Dudley North) (Lab)]

It is great that we are having this debate, and I congratulate the hon. Member for South Staffordshire (Gavin Williamson) on securing it. He is absolutely right to highlight the great news we have had this week of 800 new jobs at Jaguar Land Rover, and to draw attention to the contribution that small and medium-sized enterprises make to the manufacturing sector in the west midlands.

We have companies such as Revolvo at Queen’s Cross, which is a traditional bearings manufacturer that now exports to Brazil and produces bearings for large wind turbines, showing that traditional manufacturers can find new markets in emerging economies abroad and in new industries in this country. Eurocraft at Netherton produces the cabinets that house the communications equipment installed in streets across the country for broadband connections. Boss Design produces what is, without doubt, the best furniture in the world. The chairs that world leaders sat on at the Gleneagles G8 meeting and those that right hon. and hon. Members sit on when filming “Question Time” on a Thursday night are all manufactured in the middle of Dudley. Cab Automotive is a fantastic company in Tipton producing car components for manufacturers around Europe. It is bringing the supply chain back to the black country by beating German companies for contracts with German manufacturers.

Like many right hon. and hon. Members, I spend a lot of my time visiting local companies and meeting with organisations such as the chamber of commerce and Made in the Midlands and listening to their views. They tell us that they want, first, a stable and competitive tax regime that enables them to plan and invest for the long term; I therefore welcome the decision to reinstate capital allowances. Secondly, as we have already heard, they want access to finance—that is absolutely crucial. Eurocraft, for example, is winning orders from around the world but it has to turn business away because it cannot get the finance it needs from the banks to invest and fund expansion. Thirdly, they often complain about skills shortages in the region and their inability to attract young people into manufacturing.

It is no exaggeration to say that my constituency of Dudley has had a bigger impact than anywhere else in the country on the development of Britain’s economy. Dudley lit the spark that fired the industrial revolution and changed not just Dudley and the black country, but Britain and the whole of the world. That happened in Dudley.

[Mr Spellar]

My hon. Friend is of course entitled to make his case in his own way, but as the Member of Parliament for Smethwick, which contains the Soho works of James Watt and Matthew Boulton, I think that his proposition is, at the very least, contestable.

[Ian Austin]

It is true that Watt and Boulton and the rest of them exploited the industrial revolution, but it was triggered—[Interruption.] It is true. Perhaps my right hon. Friend needs a history lesson: the industrial revolution was triggered by learning to smelt iron ore with coke, which enabled the production of cast iron in sufficient quantities, and that happened first in Gornal in my constituency, so it is absolutely true that the industrial revolution started in Dudley. My point is that we have to be inspired by that history and to create in the 21st century a new industrial revolution to bring new businesses, investment and jobs to the region.

As we have heard, we have great strengths in the west midlands. We excel at innovation, which is the driving force behind our economy, we have an adaptable work force and we have companies that can produce absolutely anything, but we have to be honest about the fact that the regional economy faces major challenges in transport and trade, innovation and investment, and jobs and skills.

The recession hit the west midlands harder than anywhere else in the country. Since 1976, the region has fallen behind the national average—36 years in which we have dropped further and further behind. During a decade of growth under Labour, ours was the only region in which private sector investment fell, and although we have some world-beating businesses and great universities, we have not managed to attract new industries to replace the jobs lost in traditional ones. Fundamentally, that is because we have not had the skills that investors in industries such as computing and pharmaceuticals look for.

Even before the recent recession we had higher unemployment than in the rest of the country, and the proportion of jobs that are in the public sector or low-growth industries is above average. Birmingham should be the engine driving the region’s growth, but one in three jobs there are in public services and only one in 10 are in manufacturing. Underpinning all of that are the most worrying facts of all: we have too many people with poor literacy and numeracy and too many with no qualifications. In our regional economy, there are 70,000 fewer workers with high-level skills than in other regions, and we have a lower proportion of managerial, technical and professional jobs. Over the next 20 years, there will be huge growth in areas such as low-carbon manufacturing, advanced manufacturing, digital media and biomedical technologies, but the areas that get the jobs will be the ones that have the skills investors are looking for.

I refuse to accept that our best days are behind us. I am ambitious for our region and I believe that we are as good as anyone. I want to ensure that people in the west midlands have the opportunities that people elsewhere in the country take for granted. As west midlands MPs we should agree, first, to make education and skills the No. 1 priority, setting as an ambition for the region the biggest rise in educational standards anywhere in the UK. We need more people doing technical apprenticeships. I want to see a university technical college in every town in the region, equipping youngsters with the skills manufacturers need and persuading them to take up fulfilling and rewarding careers in industry. We need better links between schools and universities and a real focus in the black country, with businesses, schools, colleges, universities and local authorities there coming together to work out how to attract new investment.

We should consider introducing regional and industrial banking. Could we use local authority pension funds in the region to fund investment in new industries and emerging technologies? Let us sort out the region’s transport problems. I would like to see High Speed 2 not stopping at Coleshill, but going through Birmingham and into the black country, where we have the largest concentration of manufacturing companies anywhere in western Europe. Let us extend the runway at Birmingham and have more direct flights to India, China and Russia. As my right hon. Friend the Member for Warley (Mr Spellar) said, let us sort out procurement, to support the regional economy.

As Britain emerges from recession and the economy starts to grow again, if we do some of those things we will be able to build a stronger economy and exploit new opportunities with better skills and more innovation. That will transform the west midlands and the lives of the people who live there.