West Midlands

Baroness Burt of Solihull Excerpts

Tuesday 7th September 2010 Westminster Hall

[Richard Burden]

My hon. Friend makes an important point. I just have an inkling that, perhaps a little later on, my hon. Friend the Member for Stoke-on-Trent North may well have some particular things to say, not only about Stoke-on-Trent itself but about north Staffordshire. Earlier I said that our region is one that is in transition and that is diverse. However, the particular problems affecting north Staffordshire are very large and very acute, and targeted help, support and attention are required to tackle them.

Talking about north Staffordshire raises another point. If regional institutions such as AWM are going to be scrapped and if there are going to be these local economic partnerships springing up all over the place, it is understandable—absolutely understandable—that different local economic partnerships in different areas are likely to come up with different priorities and different solutions that affect their own particular area. It is absolutely understandable that they will reflect local aspirations and local circumstances. However, the question will arise in the future—who will be the arbiter of those competing aspirations? In the future, will it actually be the case that, for all the talk about decentralisation, central Government will be the arbiter of those competing priorities, rather than partnership bodies in the region itself? Those regional bodies were too unaccountable, but it is not a case of making them more accountable. It is actually a case of taking that power from the region altogether and giving it to central Government.

[Lorely Burt (Solihull) (LD)]

I congratulate the hon. Gentleman on securing this important debate. He says that the fact that we have lost our regional development agency will make Government more accountable. The whole purpose of the local enterprise partnerships is to prevent Government from dictating the programmes for each region. The region’s businesses and its elected representatives will make the decisions that affect them directly. I believe that the situation is the opposite of what he is suggesting.

[Richard Burden]

I very much hope that the hon. Lady is right, but I do not see the evidence for it. Perhaps the Minister will enlighten us about whether she is right.

If different local economic partnerships come up with different priorities and aspirations, who will decide who gets what? Central Government. If I am wrong about that, what body will decide? If another body is created—perhaps it will bring together regional stakeholders and players from the different sub-regions—it will need a staff and some presence in the region if it is to work, will it not? It will need the ability and the reach to work out what needs to happen in the region. I guess that we could give a body like that a name, could we not? Because it would be involved in developing the region, we could call it a regional development agency.

The RDAs were not wrong; the problem was that they were not sufficiently accountable. However, my difference with the present Government—I look forward to the Minister’s speech, because I may have this wrong—is that they appear not to be improving accountability. All the accountability mechanisms are as vague as ever—arguably more so. The Government are undermining the institutions that need to be held accountable, their budgets, their reach and their strategic relevance to the region. That is the problem.

These matters are not of academic importance; they involve how the west midlands can address the big challenges that it faces in the coming months and years. Inevitably, there will be and are political differences in this place about what economic strategies we think are right for the country or for our region. Understandably, views will differ about the scale, pace and timing of deficit reduction. We will differ politically about when, in order to prevent double-dip decisions and secure recovery, we may need to maintain spending and, in some cases, even expand it. Those differences are absolutely understandable.

However, the point of this debate is not just to touch on those issues; it is to return to the issue of choice. Who will decide? Who will be the voice of people, businesses, the third sector and communities in the west midlands? Will it be local councils? As I said, Birmingham city council is scaling back devolution internally. Will regional players make strategic decisions for different businesses and industries? Who will decide, and by what mechanisms?

It is time for the Government to come clean, not because I as a Labour MP from the west midlands say so, not because I have taken umbrage because they scrapped the Select Committee that I chaired but because this is the voice of the west midlands. They should look at what business organisations and the third sector in the west midlands are saying, and what local authorities themselves are saying in their more reflective moments, and act on it. We need more clarity so that we can meet the challenges in the west midlands and secure for our people the recovery and the future that the region deserves.

[Lorely Burt (Solihull) (LD)]

I congratulate the hon. Member for Birmingham, Northfield (Richard Burden) on his passionate speech. I know how much he loves and cares for the west midlands; so do I, and we have worked together positively in the past. We may have slightly different views about how to do things, but we always want the same end result: the success and prosperity of our region.

I will concentrate on one or two issues. Like the hon. Gentleman, who spoke about this at some length, I am particularly worried about the impact of the cuts expected in our region. On 22 October there is the comprehensive spending review, which we know will have a big impact on our public sector jobs. We are all bracing ourselves with concern for any job cuts that might be coming our way. My constituency has the UK Border Agency, so the cuts are of concern to everyone there.

The region as a whole has 636,900 public sector jobs. They represent 27% of the region’s total, which is high. The west midlands is the only region in Britain to have suffered a net loss in private sector jobs since 1988, according to a Financial Times investigation done 18 months ago. It is a concern, and we need support from Government. We know that we are going to lose public sector jobs, so we need help diverting resources into ensuring that we achieve growth in the private sector.

The regional growth fund announced by the coalition Government is extremely welcome. I want to learn as much as possible about how it will affect the west midlands, what it will do and how it will work. I do not know whether the Minister can enlighten us to any great degree this morning, but information as early as possible would be extremely welcome.

The Government have issued various types of support to business generally by waiving some employment taxes on new businesses’ first 10 jobs and cutting the main rate of corporation tax from 28p to 24p for larger companies and from 21p to 20p for small ones. Another £200 million has been announced for the enterprise finance guarantee scheme, and so on. The Government are not unaware that business needs support. Sometimes that support comes in the form of tax reductions, but it also comes in other forms.

The hon. Member for Birmingham, Northfield spoke at some length about the importance of infrastructure to our region. He spoke amusingly about how we might manage regional challenges such as infrastructure and sectors that span more than one local enterprise partnership in the region. It is important that we tackle that issue. There is no reason why different local enterprise partnerships cannot work in harmony. My area, Solihull, is going in with Birmingham, but we have a lot of sectoral interest with Coventry and Warwick. There is no reason why we cannot work with those areas on joint projects to help each other in local enterprise partnerships.

I want to bring to the Minister’s attention three projects that will make a big difference. The Government have already agreed that the Birmingham New Street station development will definitely go ahead, but two other projects are absolutely vital to the prosperity of the region. One such project is the runway extension at Birmingham International airport, for which the small matter of £25 million needs to be dealt with. Although the vast majority of the ownership relates to private and local authority areas, we need an injection of £25 million to square the circle and make that project viable again.

We also need High Speed 2, which I am delighted the Government have backed. Centro has estimated that High Speed 2 will provide 22,000 jobs and £1.5 billion per annum for the region. The project will also free up the west coast main line for local traffic, which is important because we cannot get any more trains on the tracks at peak time. In addition, the development of Curzon street—the regeneration of that area and the creation of retail opportunities there—is very important. The west midlands, particularly Birmingham, is the hub of the project. We should be viewed as an international destination for visitors and for businesses that want to invest. Once we have High Speed 2, it will take a short time to get to London, and that will make our region a very desirable destination indeed for inward investment. I urge the Government to get on with that project—I know it cannot not happen tomorrow—because it will make a very big difference to our region.

The hon. Member for Birmingham, Northfield talked with some passion about Advantage West Midlands and the Government’s replacing it with local enterprise partnerships. I agree with him that Advantage West Midlands has done a good job with the remit the Government gave it; however, that remit was determined by Whitehall. There is some local representation on the board of Advantage West Midlands, but the piper calling the tune has definitely been central Government. The introduction of local enterprise partnerships has led the Government to ask local authorities and local businesses to work together in partnership. They have been given a blank sheet of paper and asked, “What do you want? We want you please to think for yourselves. Don’t just expect to be told what you need. You know what you need, so you should put forward a proposal for endorsement by the Government.” That is how things are going to happen. There will be a lot more localism, and local companies and locally elected representatives will be able to determine what should happen.

In the Birmingham Post, Jon Walker refers to local councils throwing off the shackles of Whitehall and states:

“residents will elect people who actually make decisions for a change.”

I am looking forward to that happening, but there is no question but that the process is scary. The hon. Member for Redditch (Karen Lumley) talked about Worcestershire developing an LEP on its own. I am worried about some of the proposals being made. It is unfathomable why Herefordshire, Shropshire and Telford should be together and Worcestershire should be missed out—unless the old traditional political ties make such partnerships feel more comfortable. It is more important that any LEP have geographical centres of economic common interest, and I want to ensure that that happens.

The deadline for LEP proposals was yesterday, and whatever has landed on the Minister’s desk will doubtless prove varied, interesting and challenging, to say the least. It will be fascinating to see the Government’s response to all the new ideas that are being brought forward. I suspect that they will take the best of them and help the areas where proposals are not quite hitting the mark. In the end, local areas should have a say, because the people who are involved locally know about their area and what it needs. We should have true democracy and business involvement in future decisions.

I have some concerns about Advantage West Midlands and the interim period, which could turn out to be a hiatus unless some careful work is done. Advantage West Midlands is making cuts to programmes, and it has said to me that some of its decisions about which programmes to cut are based more on the cost of getting out of the programme in question than on its value. I have asked Advantage West Midlands to produce a list of those programmes. I raise the matter with the Minister because the last thing the Government want is for good programmes to go down the drain for the wrong reasons. The days of making any organisation jump through hoops because of a centralising view should be over. That must not happen to some of the good programmes that Advantage West Midlands is rolling out.

I look forward to hearing the Minister’s response to the comments of the hon. Member for Birmingham, Northfield.

[Joan Walley (Stoke-on-Trent North) (Lab)]

It is always a pleasure to take part in Westminster Hall debates. I am particularly pleased to do so under your chairmanship, Mr Hollobone, because I know you understand the role of Back-Bench MPs and the importance of getting constituency issues on the agenda. I congratulate my hon. Friend the Member for Birmingham, Northfield (Richard Burden) on initiating the debate. I agree with the hon. Member for Solihull (Lorely Burt): it has been a passionate debate, but it has also been very measured.

My hon. Friend’s well informed contribution was based on some of the many debates that took place when we had the West Midlands Regional Committee. I welcome the Minister to his post. I understand that no longer having regional development agencies means there is no need to have Regional Select Committees to scrutinise what is being done. However, if the Minister would like some bedtime reading, I urge him to have a look at the work we did and the evidence we collected. He should also consider the reports of the public evidence sessions. If he wants to get a grounding in the real concerns of the whole of the west midlands—from Staffordshire in the north to wherever the area ends in the south—those evidence sessions should be his bible.

The West Midlands Regional Committee covered much ground in understanding a unique part of the UK that is dependent on manufacturing and has found the world has changed. The real issue is how to deal with the global economic changes we have had and bring together all the skills that are needed to deal with those changes, including the political skills and the area’s institutional needs. As hon. Members have said, things rarely happen by accident in this world; they happen by design. Taking political decisions is about ensuring that the things that need to happen are understood and do happen. I question how we can get the end results that we need without having the relevant institutions in place.

The debate is timely, not least because whatever will replace the RDAs are now in their formative stage; they are going through, if not a regional process, a process at Whitehall. When I came down to Westminster yesterday, I was concerned to read an article in the Financial Times on the future role of LEPs. It speculated on what LEPs might be set up and gave an overview of what might be in place in the south, the south-east, the south-west and so on. For the west midlands, the article stated with great authority that there would be one LEP for Birmingham, one for the black country and possibly one for some of the other marginal areas—I use the word marginal authoritatively, because there was no mention of an LEP for Staffordshire.

Therefore, today I want to argue that the Minister, whatever he does in this brave new world, must understand the needs of Stoke-on-Trent and Staffordshire. I prefaced every meeting that my colleagues from Stoke-on-Trent and I had with the RDA, and with my hon. Friend the Member for Dudley North (Ian Austin) when he was a Minister—he is now representing us on the Opposition Front Bench—by stating that the RDA would only deliver for the Government if it delivered what Staffordshire, and particularly Stoke-on-Trent, needed.

The west midlands has one of the most fragile economies in the UK, and the breakdown of the figures shows that Stoke-on-Trent’s needs are higher than most. That might be a ghastly situation to face, but it means that we all must understand it and be informed. The Government must not adopt party political positions just because there are no coalition Government Members in Stoke-on-Trent. They must recognise that need none the less and do what is necessary.

[Lorely Burt]

The hon. Lady makes a powerful point on behalf of her constituency, but I suggest that that is whole point of the LEPs. The hon. Member for Redditch said that she felt that her constituency had been ignored by Advantage West Midlands. Will it not now be helpful for Stoke-on-Trent and its economically viable areas to have their own say? Its business people and local representatives could make their points, put their business plan together and have ownership of it themselves so that they could say to the Government, “This is what we want. Let’s have it please.”

[Joan Walley]

That all sounds very good and plausible, but one needs the necessary recourses, skills, expertise, professionalism and governance to make that happen. One also needs people who know what they are doing and understand their role in delivering that. As my hon. Friend the Member for Stoke-on-Trent South (Robert Flello) mentioned earlier, and as was well documented in the report on Stoke-on-Trent produced by the local government democracy commission, there are particular issues there that cannot be dealt with simply by stating that if local businesses and representatives have a say in what happens it will all be all right, and everyone recognises that. I am afraid that the problems are much more deep seated than such a view suggests.

In traditional manufacturing areas education and skills are often seen as the way out of the problems, and I belief that the key challenge we face is to ensure that our young people get the education they need and that there are the jobs available for them locally so that they can stay in the area and be part of its local governance arrangements. That way, they will become the leaders who will be able, along with the whole area, to make the case for what we need.

Sadly, Stoke-on-Trent was behind other areas in getting its act together and understanding the changing needs of the global economy. However, as was well charted in the meeting MPs had with the North Staffordshire chamber of commerce in June, we now understand that and have started to see an improvement in the local economy, as a result of the measures that the previous Government put in place to get us through the recession. We have started to see further improvements in trading conditions and in levels of job creation, and home market sales and orders for the manufacturing and service sectors have risen significantly, and that has all been charted by the North Staffordshire chamber of commerce. We now have the necessary expertise and know what we need, but just as we start to see those improvements, we find that we are in a period of limbo in which we genuinely do not know what will replace the RDAs, what money will be available and how those scarce resources will be allocated.

--- Later in debate ---

[Ian Austin (Dudley North) (Lab)]

I congratulate you on your appointment or election—I do not know how such things work—to the Panel of Chairs, Mr Hollobone.

I congratulate all the Members who have taken part in an important debate. I congratulate my hon. Friend the Member for Birmingham, Northfield (Richard Burden) on securing the debate and for the work he has done over the past 20 years as a Birmingham MP and, more recently, as Chair of the Regional Select Committee, highlighting regional issues and campaigning for more help and support for the west midlands.

As has been said, we have many great strengths in the region: hard work, ingenuity, adaptability and innovation. Those are the attributes on which we launched the industrial revolution and changed not just the west midlands and Britain but the whole of the world. We have some world-beating companies too, just not enough of them. The truth is that our region has been hit harder than any other region during the recession and the recovery in the west midlands is more fragile.

Not as a result of mistakes made over the past few years, our region has lagged behind the national average, in terms of output and productivity, since 1976—more than 30 years in which our region has been falling further behind. Secondly, as pointed out by the hon. Member for Solihull (Lorely Burt), ours is the only region in which private sector investment has declined over the past 20 years.

I want to discuss some of the structural challenges that our economy faces, some of the opportunities ahead and how we should be preparing to exploit them, so that we can bring new industries and jobs to the west midlands.

We face major challenges in the region on transport and trade, innovation, reputation and skills. The region was beginning to get its act together, but we cannot say that we have worked together to present our case to Whitehall as effectively as other regions have for decades. We have some brilliant universities, but the links between them and business are less effective in the west midlands than elsewhere.

The organisation tasked with strengthening our economy and tackling such underlying structural weaknesses was, of course, Advantage West Midlands. I want to pay tribute to Mick Laverty, his predecessor John Edwards and their colleagues, and to Sir Roy McNulty and his predecessor Nick Paul, and to thank them for their hard work, their contribution and everything they have achieved in the west midlands so far.

Let us look at the organisation’s record: 87,000 jobs, 7,500 new businesses and 127,000 people helped to get better skills. It drove forward the regeneration of the south side of Birmingham city centre and led the Rover taskforce—to which my hon. Friend the Member for Birmingham, Northfield made such an important contribution—which enabled more than nine out of 10 of the former Rover workers to get back into work. AWM also led the regional taskforce, which got the whole of the region working together and helped thousands of people and hundreds of businesses to weather the storm of the past few years. It sorted out major projects, such as Fort Dunlop, the Edgar Street Grid in Hereford and New Street station in Birmingham.

Look at Fort Dunlop, which was the largest single regeneration project in Europe. They are massively complex projects. The New Street station project had to bring together Network Rail, train operating companies, the private sector, shops, businesses, the local authority and the Government. That could never have happened without an organisation, such as AWM, with the necessary expertise, strength and knowledge.

Look at the airport project, which involved two local authorities, businesses, the owners of the airport and the Government, who had to contribute. There is no way a local economic partnership in Solihull would have the authority and clout to bring all of them to the table and to find a way through the complex legal arrangements or to get the airport the necessary investment.

[Lorely Burt]

I have to disagree with the hon. Gentleman. Birmingham Solihull does have the ability, skill and expertise for a project such as the extension of the runway. However, he is making an important point about regional infrastructure and the skills needed for such big projects. A small local economic partnership might need to bring in particular expertise.

I guess I am arguing against myself for a moment, and agreeing with the hon. Member for Birmingham, Northfield. There will be times when we need a much more structural regional overview to ensure that we are working together as a region. The Government are mindful of that.