Economic Regeneration (West Midlands)

Baroness Burt of Solihull Excerpts

Tuesday 8th February 2011 Westminster Hall

[Paul Uppal]

I will refer later to Bilston, and I echo the right hon. Gentleman’s sentiments completely. There has been very good work there.

For regeneration of the black country it is important to give power to local authorities. I also want to talk about business rates and reforming the apprenticeship system. The important focus of the Localism Bill and the White Paper on local growth is the emphasis on giving power to local authorities and communities. That provides an important opportunity for the black country to lose some of the burden of nationally driven goals and targets, and allows instead for a tailored approach that reflects the needs of the region. The open source planning system will ensure that local governments can create sustainable and attractive places to live. I have no doubt that reforming the planning system is important to creating the confidence to invest.

Some people have expressed doubts over how localism will work in practice, such as how projects can be financed locally, and whether communities will have the will or the information to get involved in the planning process. On the first point, I think that the changes provide an important opportunity to encourage private investment into our region. I am confident that with the right co-ordination and guidance, we can see real involvement by communities, and investment by business in the future of the black country.

I have met many local people who are passionate about regenerating Wolverhampton into a more thriving city. Henry Carver, a local business man, has recently launched the Wolverhampton business group that aims to bring together businesses in the city, and put forward policies on what it believes the city needs. I have also met with the Black Country Reinvestment Society, which provides loans to small businesses that have struggled to get finance from the banks. It is pleased with the success it has seen so far, and I have supported its application to access the regional growth fund so that it can support even more businesses in the city. I hope that with increased money in the regional growth fund, it will be successful in its bid. Recently, I also met representatives from Lloyds bank and the Royal Bank of Scotland in Wolverhampton. I am encouraged that in these difficult times, I have seen practical examples of things being pushed forward. We are all conscious, however, that lending is not as free-flowing as we would wish.

The right hon. Member for Wolverhampton South East (Mr McFadden) referred to Bilston. I visited a business in Bilston called Tile Choice, which has been through a tough time over the past few years and reduced its number of staff from 80 to 60. I met the managing director and was encouraged to see that the business was being built back up, and that it was looking forwards rather than backwards. That is important; we must change the mindset. We can get immersed in looking at what has gone before, but I was struck by the optimism of a business that seemed to be going places and was looking forward to how it could take on new members of staff.

The Government plan to provide further incentives for councils to attract investment and economic growth, and the proposed business increase bonus will provide an incentive to all councils to seek long-term sustainable growth in their business rate base. Local enterprise partnerships may create an important link between businesses, communities and local government, and help to achieve economic growth and regeneration plans for the region. Too often, regeneration projects have been slowed down by time-consuming and complex planning procedures. For example, UK Trade and Investment has stated that complexities in the planning system are among the top five issues that deter inward investment into the UK. The Government are to introduce a national planning policy framework that will place a priority on economic growth through simplifying planning procedure and reducing guidance. Furthermore, the Localism Bill seeks to include communities in planning decisions from an early stage.

All such measures seek to change attitudes and foster a pro-development approach that will remove barriers to development and allow communities to get involved in planning proposals so they do not feel that developments are forced on them. Providing local authorities with a general power of competence gives them the freedom to implement proposals that work specifically for their area. Neighbourhood plans also provide an important opportunity for residents to be involved in the future of their areas. I understand that both the British Chambers of Commerce and London First believe that those proposals could be used in town and city centres and business parks, allowing whole communities to be involved in creating local ideas for their local areas.

An important new proposal, which in hindsight might have helped with some of the difficulties with the Summer Row development, is that large-scale developers will have to consult people in the local community before submitting planning proposals. That could help to ensure that communities get the development that they want.

I shall now move to my second point. The local growth White Paper outlines plans to change the nationalised system of business rates. It hands over more power to local governments, allowing them flexibility in respect of funds and business rates. New proposals will allow local authorities to offer local discounts on business rates, provided that they are funded locally. The Government recognise that different areas have different needs and economic circumstances. That policy will allow councils to respond to the economic circumstances in their area.

I will, however, enter a caveat in respect of business rates. At one of my weekly surgeries recently, I was approached by a constituent—a gentleman who owns a retail unit in the centre of Wolverhampton. He spoke to me about his situation. He felt almost at his wits’ end because of business rates. He felt driven almost to remove the roof from his shop because he felt that business rates had been particularly punitive. I ask my hon. Friend the Minister to pass on a message to the Government to be very conscious of that issue. It is very much about a mindset. The difficulty that we have with some of the investment angles for Wolverhampton is the perception that we are dealing with a problem. Having been in business for 20 years, I know that it is important to look at things as an opportunity rather than a problem. When it comes to business rates and the current system for empty properties, and industrial property in the black country and the wider west midlands, investors and business people are sometimes almost preoccupied with avoiding paying business rates, rather than looking at development, getting a tenant into a property and getting a thriving business going.

Let us turn to more optimistic things. In Wolverhampton, the council plans for a Wolverhampton technology corridor could benefit from the proposal under discussion. As the Municipal Journal notes, it could help new technology start-ups to access discounts. The i54 technology park has secured Moog, which is relocating to the park, and the council is in talks with the Indian aerospace industry about moving in. However, they need to address more businesses. The proposal under discussion could help to achieve that.

We are all aware that this is a time of economic austerity. In such times, regeneration may appear to be a difficult task. However, the local growth White Paper outlines approaches such as tax increment financing, which can assist councils to obtain the extra funds that they may need for regeneration projects. That approach allows councils to borrow against future additional uplift in their business rates base. Obviously, that will need to be managed to minimise risk, but it could provide the means for additional investment to go ahead. A point that I have previously made in the main Chamber is that in the US, where many of these business rate projects were piloted, they were often developer led. An article in Estates Gazette highlighted the fact that the Government might consider such an approach to financing: rather than the onus being put on local authorities and councils, perhaps the developer could move forward.

Linked to attracting new investment and businesses to our region is ensuring that we have the skilled work force to fill the new job vacancies created. The strategy for sustainable growth highlights the importance of skills in creating the conditions needed to reduce the deficit and to stimulate growth. Reforms to the apprenticeship programme, creating up to 75,000 new apprenticeship places, investing up to £250 million during the spending review period and increasing advanced level apprenticeships, will improve the skills of the potential work force and help to meet our target of having a world-class skills base. We need to ensure that training providers work with businesses to ensure that training meets the needs of employers and that businesses are helped to offer apprenticeship placements.

Recently, Professor John Bryson from the university of Birmingham has highlighted the fact that insufficient attention has been paid to equipping the work force with the skills required to take advantage of new high-tech, high-value engineering opportunities. There has been a lack of forward thinking. He estimates that 90,000 hard-to-fill manufacturing jobs will appear in the west midlands during the next five years. That is in line with research conducted by the region’s councils, which found that two thirds of the work force lack the technical skills required by employers. It underlines the importance of reforming the apprenticeship programme—creating more advanced level apprenticeships and ensuring that training matches the skills that the job market wants.

Let me illustrate the point. I remember being on vacation a few years ago with my son. We were at an event and at one point all the children were invited on to the stage and asked what they wanted to do in the future. Some said “journalist”. Most said that they wanted to be on TV. My son proffered the idea that he would like to be an engineer. I remember the look of incredulity on the faces of the parents in the audience, which illustrates the problem that we have in relation to engineering. I know from talking to lecturers at the university of Wolverhampton as well that there is huge demand from the engineering sector. We need to break down the perception that engineering is the sort of job where people have to roll up their sleeves and do difficult manual work. It is not. It is a very creative aspect of our economy at the moment and will offer great potential.

I shall return to the main point. Manufacturing is doing quite well at the moment. We have had encouraging figures in relation to manufacturing, and I would like to see the Government embed that for the future. Much of the discussion on this issue relates to the fact that sterling is quite low at the moment, but let us consider the German analogy. A few years ago, the Germans were in a similar situation. The question is how we can embed the progress that has been made, so that manufacturing becomes something that we can sing really loudly and proudly about, especially in the black country and in the west midlands in general.

[Lorely Burt (Solihull) (LD)]

I am listening to my hon. Friend’s speech with absolute fascination because it is a very good analysis of where we are at the moment. I am from the black country myself, hence my interest. On the importance of sterling and the manufacturing figures, which those who maintain the purchasing managers index say are the best since they started keeping records 19 years ago, does my hon. Friend agree that the figures relate also to extra demands, extra exports, more jobs being created and new orders coming in? It cannot just be down to sterling. It is because manufacturing is finally getting off its knees, and of course the black country is the home of manufacturing.

[Paul Uppal]

The hon. Lady makes an excellent point. She has pre-empted, as is always the case, something that I was going to come to. We in the UK are uniquely positioned in the global market to tap into the new emerging markets in India, China and south America. To go down to an even more specific level, the black country, with the significant community from the Indian sub-continent who have settled there, has a unique and wonderful opportunity to take that forward and expand on it. I wholeheartedly agree with the hon. Lady. There are great opportunities. It is not just a sterling issue.

I am confident that the Government are implementing plans that will put this country back on track financially. I know that the tools that they are providing for local growth will help the black country immensely. I sincerely hope that this debate will allow us to put a focus on the region that we all represent. I welcome everyone’s views in the debate and their opinions on how we can kick-start the investment that our area so desperately needs.