West Midlands and Coventry

Geoffrey Robinson Excerpts

Tuesday 13th December 2011 Westminster Hall

[Mr Jim Cunningham (Coventry South) (Lab)]

It is a pleasure to be involved, for the first time, in a debate that you are chairing, Ms Osborne. I also take the opportunity to thank Mr Speaker for granting us the debate.

I will start with an overview of the employment situation in Coventry. Coventry suffers from high unemployment, with just less than 10,500 claimants; that is above the west midlands average, which, in turn, is well above the UK average. The public sector accounts for 23% of the total employed, which is more or less the same throughout the west midlands. In the past six months, there have been 1,648 redundancies in the public sector. Coventry was home to a number of national public bodies and has been hit harder by public sector job cuts: 155 jobs have gone at Becta, 153 at the Qualifications and Curriculum Development Agency, with 400 more by the end of the year; and 258 at the Skills Funding Agency. Additionally, at least 620 jobs have been cut by local authorities and other public services; the main casualty so far has been Coventry city council. In the private sector in the past six months, according to Jobcentre Plus, there have been 1,237 redundancies, with 204 in the manufacturing sector and 38 in a small catering company.

Coventry is a city where many jobs can be lost and won in the space of a day. The Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk), will no doubt be aware of the Gateway development, which was designed to create 10,000 jobs and had secured £250 million in private sector investment to develop airport infrastructure, a technology hub and a business and distribution park. However, both bids by the local enterprise partnership, for enterprise zone status and to the regional growth fund, were unsuccessful. I understand that, despite the plans to go ahead, the project could now be in jeopardy, given the Chancellor’s recent announcement of £110 million for highways infrastructure improvements. The money from the Treasury would need to be fully integrated with the Gateway scheme, which has allocated funds to a solution for the Tollbar issue—most of the Coventry and Warwickshire MPs know what I am referring to—or else the project could be scrapped. Can the Minister update us about what he understands to be the progress in that matter?

On the problems facing small businesses in particular, I have already mentioned a small business in Coventry that was forced to lay off 38 people, and there are 9,240 small businesses in Coventry, with 44,090 in Coventry and Warwickshire county. That example is symptomatic of the problems facing small businesses throughout the west midlands; 31% of them miss out on growth opportunities because they cannot get credit from the high street banks and 70% experience late payment and have cash-flow problems. Furthermore, the Government must take steps to simplify the tax system and to introduce targeted VAT cuts for key sectors, as a temporary measure. There are also problems at big companies, and we have held various meetings with the Rolls-Royce combined shop steward representatives. In particular, we have some concern about Ansty, despite the company’s assurances.

On young people’s prospects, I have heard a lot from young people in my constituency about their employment anxieties. To take one example, highly skilled medics are graduating from the universities in the Coventry area and are unable to find work. I am concerned that we are not retaining the skills in the area that are necessary to regain a balanced economy. The Minister might be aware of Coventry’s recently launched plan for 100 apprentices in 100 days, and it is hoped that 100 firms will join the scheme. Can the Minister tell us whether the Government will bring forward proposals to encourage firms to take on apprentices, with a view to giving them a full-time job?

Not all is doom and gloom in the region, however. The manufacturing sector has a vital role in the recovery of the west midlands economy. The biggest recruiter has been Jaguar Land Rover, which has two bases in Coventry and is powering ahead with a multi-million pound investment; it has taken on 525 new staff throughout its businesses. The other big recruiter has been Ricoh Arena, with 86 posts, mainly in catering. The most symbolic deal for the city has been the news that car production is set to return—we hope—to the site of the former car plant at Browns Lane.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

I have listened with great interest to my hon. Friend’s comprehensive review of the situation in Coventry. I am pleased that he is emphasising some positive aspects; but, sadly, the return of any sort of car production to Browns Lane crashed when the Government turned down a bid from a local company under the regional development fund, with which we have so far had no success for Coventry city.

[Mr Cunningham]

I was aware of that, but there are still indications that something might happen, although the possibility is pretty remote given what my hon. Friend has said.

--- Later in debate ---

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

I thank Mr Speaker for granting this debate, and I congratulate my hon. Friend the Member for Coventry South (Mr Cunningham) on securing it. For us in Coventry, it is an important and timely debate, and we look to the Minister to give what answers he can today and some sense of a future for Coventry and similar cities in the west midlands and beyond. At the moment, with the dramatic situation in Europe, the likelihood of a further recession there and the possibility of a double dip in this country, the outlook for employment and prosperity in the west midlands particularly is grim indeed.

I want to follow my hon. Friend in saying that we are pleased to see guests and supporters from Birmingham and Oxford with us for this debate. Its national significance and relevance should not be overlooked. I shall speak first about unemployment. Coventry always seems to suffer a double whammy. The first public sector cuts were pushed through by the Secretary of State for Education, who went for Becta—the Bringing Educational Creativity to All agency—the Qualifications and Curriculum Development Agency and the Skills Funding Agency.

Those good-quality jobs had been located to Coventry from London because it is central and as part of a clear-cut Government policy to promote growth and quality jobs in the region; but they were cut just like that, in a disgraceful and wanton act without notification, without warning and without consultation. The Secretary of State issued a rude letter closing them down without more ado. He then mended his ways to some extent. We had a debate about the matter in this Chamber, and told him that that was no way to behave and that we hoped he would reconsider. I note that the number of job losses is somewhat lower than was announced, but the total number is 1,237 in the private sector, plus 620 in local authorities and public services. That has created a grim situation in Coventry city, and we can do nothing about it until the Government stop the national cuts, to which my right hon. Friend the Member for Oxford East (Mr Smith) referred.

There is no salvation for Coventry in isolation, although we shall make some suggestions to the Minister today about what he could, and should, do to help. But in the background is the single objective that the Government have set for their economic policy—the reduction of the deficit, come what may. Whatever cuts and deflation are necessary, that is what the Government intend to achieve. We have pointed out many times, and my hon. Friend the Member for Coventry South said again today, that they cannot achieve that objective with policies that are destroying so much of the economy. It is as simple as that, and until they change their policies, the outlook for Coventry and Britain is grim indeed.

Where do we stand on some of the Government’s initiatives that were intended to improve the situation? Some were referred to by my hon. Friend. First, we have had no luck in Coventry with the regional growth fund, and the Minister knows the situation with CPP, which was turned down. I do not want to reopen the matter at this stage, but we hope that it will return. It might have restarted car production at Browns Lane, but I do not think that it will, nor do I think that we will have much luck there. We tried for enterprise zone status, but failed for some reason, and I would like the Government to reconsider that and to explain the criteria that Coventry failed to fulfil.

Similarly, Coventry is suffering badly with youth unemployment, and that is the most serious aspect of unemployment. Some unemployed kids are the third and fourth generation of families that have never been in work and will never get into work because they do not know what it is about. That is why the Government were so wrong, when they came to office, to cut Labour’s scheme that was running successfully. They have now scored the unique achievement of promoting 1 million young people out of work. That came as a shock to everyone in the country, not least the Government. They are now trying belatedly to do something about it, but unless they change their economic stance and the sheer deflationary course on which they have embarked, that will simply not happen.

I turn to something else that the Government could do that would be useful to the nation as a whole and to Coventry: credit easing. Where do they stand on that? Various schemes have been suggested, and we are supposed to hear the details of the present scheme in January. Can the Minister tell us when the credit will flow from that and when it will be available in Coventry? As my hon. Friend said, many small companies that are okay at the moment could do so much better with credit easing in place; they could obtain the credit they need for working and investment capital to improve their output and their sales. It is as simple as that, but until we know the details, we have nothing to go on.

The situation with the Nuckle project, which involves transport, is similar. The paraphernalia and bureaucracy surrounding various Government investment projects were supposed to be cut back. It is a good scheme for linking the north-south train run through Coventry. It is a very good project. We have been dealing with it for about five years or more, partly because of Government bureaucracy, but this Government are even worse. I hear now—I think that my hon. Friend referred to it—that they have promised a decision this month, before Christmas. Can we at least have some indication? What assurance can the Minister give us that the decision will not only be taken, but be positive? That would be the most important thing that we could hear from him today. I hope that he will take that on board. If he cannot answer this morning, will he answer as soon as possible?

We are looking for Government action. The people of Coventry are finding it more and more difficult to respond to the situation. There is no future in cuts, in recession and in an economy that is depressed and looks like remaining so. We shall have growing youth unemployment and growing national unemployment, and we will never create the new businesses, jobs and growth that we need to put the deficit right. Coventry is a microcosm of that problem. It certainly highlights all the problem’s worst aspects in an area that has suffered so much in every recession and throughout the period since this Government took office.