Department for Business, Innovation and Skills (Performance)

Jack Dromey Excerpts

Wednesday 2nd February 2011 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab)]

When times are tough, it is all the more important for the Government to have a strategy for growth. That is why the Labour Government, at a time of global crisis, invested in the economy to get it moving, with enormous benefits for our manufacturing base. The car scrappage scheme was warmly welcomed by the Society of Motor Manufacturers and Traders because 400,000 cars were built. The stimulus package in the construction industry was warmly welcomed by everyone from the National House-Building Council to the Home Builders Federation. Some 110,000 homes were built, and 70,000 jobs and 3,000 apprentices were created or saved.

The Government inherited a growing economy when they took power, but they have slammed on the brakes, and the economy has gone into reverse. Let me give three examples. First, 10% of our gross domestic product growth comes from construction. The construction industry was growing in the first half of 2010 as a consequence of the steps that Labour took in government, but in the last quarter of 2010, it fell by 3.3%. The construction industry and house builders are increasingly concerned about the consequences of the Government’s actions in respect of everything from cuts in capital investment to the scrapping of regional spatial strategies. Two hundred thousand planned homes will not now be built, which is why the Federation of Master Builders, which represents SMEs in the building industry, predicts 11,000 job losses, and why the Construction Products Association predicts a 2% fall this year.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Is my hon. Friend aware that one of the major concerns of the construction industry is skills training and whether it will have a skilled work force for the future? Labour worked to increase the number of apprenticeships vastly, and it is welcome that the Government have made a similar commitment. However, it will not be sufficient to meet the future demand of the construction industry, especially in a low-carbon economy.

[Jack Dromey]

I agree with my hon. Friend. Representatives of the construction industry who have come to see me have said with one voice that the danger in what is now happening is that capacity is going and vitally needed skills are being dispersed and, in the event of recovery, they would no longer be available.

My second example comes from local government, which has had 27% cuts, frontloaded by the Secretary of State. The impact will be enormous, and it is already clear from the Local Government Association that 140,000 jobs will go in local government. But as PricewaterhouseCoopers has said, for every job that goes in local government, a job will go in the private sector. Local government’s procurement budget is £38 billion. Some £20 billion goes to SMEs, so the impact of these savage, deep and frontloaded cuts will be catastrophic for SMEs that depend on local government throughout Britain.

[Anne Marie Morris]

Is the hon. Gentleman aware that the Reed job index went up nine points in January, and that the growth is in engineering and construction?

[Jack Dromey]

With the greatest respect, I am not sure what planet the hon. Lady lives on. The figures on the economy are clear: the Government inherited a growing economy, but it has now stalled and gone into reverse.

My third example relates to the abolition of the regional development agencies. Thirty years ago, the midlands used to be one of the two strongest economies in the country, but it is now one of the two weakest. We had the most successful RDA, Advantage West Midlands, of anywhere in Britain. For every £1 of public money invested, £8.14 was produced in wealth in the private sector. Crucially and in addition, Advantage West Midlands managed shocks to the motor industry, such as the closure of Rover, and promoted the motor manufacturing cluster in the midlands. The cluster is 150,000 strong, from the prime companies through the components companies, the machine tool companies and the logistics companies, all the way down to the games companies with which Jaguar Land Rover is working right now on the next generation of in-car entertainment systems. That cluster, galvanised by Advantage West Midlands, was one of the key reasons why Jaguar Land Rover last year decided to commit to Britain as its global hub and to invest £5 billion over 10 years, creating thousands of jobs and bringing wealth to our economy.

[Mr Marcus Jones]

The hon. Gentleman praises the RDA Advantage West Midlands. How does he square that praise with the fact that private sector employment in the west midlands fell rather than increased during the time that this RDA was in place?

[Jack Dromey]

I believe in the real world of work and in listening to the voice of the business community. There has been widespread concern and criticism from across the business community in the midlands about the abolition of Advantage West Midlands. Indeed, Business Voice WM, on behalf of the business community in the midlands, has put forward a proposal that stresses the importance of maintaining a regional strategic structure if the success of that motor manufacturing cluster is to continue.

[Lorely Burt]

The hon. Gentleman’s experience of the business community in the west midlands is not mine. I have found that the business community has been excited about the prospect of taking its destiny in its own hands, together with elected representatives from the local authority, and creating a forward-thinking local enterprise partnership.

[Jack Dromey]

Again, with the greatest respect, I am not sure which business community the hon. Lady is talking about. All five of the organisations that represent the business community in the midlands have told me that they are determined to try to make the best of a bad job, following the abolition of Advantage West Midlands, and make the LEPs work, but they are dealing with confused and competing voices. The LEPs have no statutory basis and no funding at a time of major local government cuts. Those organisations are increasingly despairing, because they have lost what worked in favour of something that, at the moment, looks like it will not work.

I listened with amazement to the arguments which in effect said that the Government should get out of the economy and industry. Anyone who has ever had anything to do with the real world of work, here in Britain and in France or Germany, knows the simple truth that the role of good government is key to a successful economy. Time and again over the years I have worked with the private sector and engaged with the Government to try to get them to do the right thing—such as the scrappage scheme and the stimulus scheme that kept our house building industry from collapse.

In the next stages, I hope that Ministers will recognise the value of partnership and industrial activism, and will make the right decisions. Jaguar Land Rover is making applications, under the regional growth fund, on both the lightweight platform and the small engine. Investment in those will create tens of thousands of jobs in Britain. Warwick university’s proposal to become a technology and innovation centre would make it the global hub for automotive research and development worldwide and is strongly supported by Jaguar. Investment in that would greatly strengthen the motor manufacturing cluster in the midlands.

Let us not repeat the mistakes of history. It was a tragic error of judgment not to agree the Forgemasters application. If we are to see a renaissance of the nuclear industry in Britain, with British manufacturing benefiting as a consequence, we should back Forgemasters.

Education Maintenance Allowance

Jack Dromey Excerpts

Wednesday 19th January 2011 Commons Chamber

[Michael Gove]

I am now confronted with an embarrassment of riches. I would like to give way to ensure that as many Members as possible have the chance to intervene. I give way first to the hon. Member for Birmingham, Erdington (Jack Dromey).

[Jack Dromey (Birmingham, Erdington) (Lab)]

I am grateful to the Secretary of State. Erdington has high youth unemployment, but excellent young people who want to get on. Does the right hon. Gentleman not accept that it is the combination of soaring tuition fees, the abolition of EMA, the scrapping of the future jobs fund and now the cuts forced by his Government on local youth services—a toxic combination—that will dash hopes, deny aspiration, fuel rising youth unemployment and lead once again, as in the 1980s, to a lost generation of young people?

Oral Answers to Questions

Jack Dromey Excerpts

Monday 12th July 2010 Commons Chamber

[Michael Gove]

My hon. Friend makes a critically accurate point. As a result of the massive bureaucracy that used to exist under the Building Schools for the Future scheme, people in dilapidated classrooms were denied the resource that they needed, as it was going into the pockets of bureaucrats rather than into bricks and mortar for those most in need.

[Jack Dromey (Birmingham, Erdington) (Lab)]

The Secretary of State will be aware that in his announcement to Parliament last week, a special needs school in my constituency of Birmingham, Erdington was listed under two separate titles, “Stopped” and “Unaffected”. Hopes were raised, confusion was then caused, and hopes have been shattered. Will the Secretary of State come to my constituency to meet the head of Queensbury school, which, along with its sister school Kingsbury, has a remarkable vision for a world-class centre of excellence catering for the children of Birmingham with special needs?

[Michael Gove]

I am grateful to the hon. Gentleman for his question and for showing me the great courtesy of calling me before the weekend to explain precisely the question that he would ask. We will have the opportunity to meet one on one later this week to discuss the precise circumstances of the school that he mentions. I or one of my ministerial team will certainly join him in a visit to that school, to provide the head, teachers and parents with all the information that they need to ensure that in future we do everything possible to help to support them and the great work that they do.

Oral Answers to Questions

Jack Dromey Excerpts

Thursday 8th July 2010 Commons Chamber

[The Minister of State, Department for Business, Innovation and Skills (Mr John Hayes)]

My hon. Friend has been a champion of apprenticeships since he arrived in the House and before. I congratulate him on his initiative in that respect. He will know that this Government have already transferred £150 million into the apprenticeship budget to create 50,000 more apprenticeships. I can announce today that one of them will be joining my office in Whitehall, and I invite other Ministers to do the same.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Can the Secretary of State clear up the confusion on the future of regional development agencies that has arisen out of conflicting statements? On the one hand, there is an apparent open-mindedness on the part of the Secretary of State; on the other, his counterpart in the Department for Communities and Local Government has taken a more hard-line and ideological approach. If there is a desire in any region, including the west midlands, for the retention of a strong regional structure—albeit with sub-regional arrangements, including local employment partnerships—will the Secretary of State be open to the retention of a strong regional development agency there?

[Vince Cable]

There is absolutely no conflict, dispute or ideological perspective involved in this at all. We have made it clear that all the RDAs will be replaced by local enterprise partnerships. They will have a change in function from the current RDAs. We have also made it clear that if there is a will in a region to operate on a regional basis, a regional structure can emerge. The Minister of State, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), will shortly produce a White Paper setting out how the regional process will develop.

Education Funding

Jack Dromey Excerpts

Monday 5th July 2010 Commons Chamber

[Michael Gove]

My hon. Friend makes an impeccable point. The fact that so much money was spent—I would argue wasted—on consultancy rather than on going to the front line marks one of the greatest deficiencies in the way in which the Building Schools for the Future programme was managed.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Does the Secretary of State accept that, to use his words, the truly appalling legacy was the legacy that was left to a Labour Government in 1997—that of schools throughout Birmingham with leaking roofs and kids getting taught in corridors? Does he also accept that today’s announcement will be a bitter blow for Birmingham, leaving 50 schools in limbo; a bitter blow for the children of Birmingham, who deserve new schools to get the best possible start in life; and a bitter blow for Birmingham’s construction workers, many more of whom will end up on the dole as a consequence of the Secretary of State’s announcement?

[Michael Gove]

I am grateful to the hon. Gentleman for his question. I appreciate his disappointment and the passion with which he puts his case. As regards the impact on the private sector, as I pointed out earlier, under the projections for reductions in capital spending made by the right hon. Member for Edinburgh South West, capital spending overall would have been reduced by 50%; we are operating within that capital envelope.

On the hon. Gentleman’s broader point about the legacy that the Labour Government inherited in 1997, that legacy was a healthy economy, growing fast, and an opportunity to make investment not just in schools but in hospitals. It is a pity that the Building Schools for the Future programme was so bureaucratic that in the 13 years that the Labour Government had, only 96 new schools were built.

Industry (Government Support)

Jack Dromey Excerpts

Wednesday 16th June 2010 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab)]

First, I congratulate you, Madam Deputy Speaker, on your election and the hon. Member for Bracknell (Dr Lee) and my hon. Friends the Members for Bolton West (Julie Hilling) and for Wansbeck (Ian Lavery) on their witty and wise maiden speeches.

In 1981, I was one of the organisers of the people’s march for jobs—500 unemployed men and women from the ages of 16 to 60 who marched with dignity to London, such as the mother and her son from Whaley Bridge and the 150 people who joined the march from Birmingham and the midlands. They were the victims of a Conservative Government who stood back and said that unemployment was a price worth paying. That was an error of historic proportions, which severely weakened our manufacturing base, with catastrophic consequences still being felt to this day, including in the poorest parts of my constituency—Birmingham, Erdington.

All that stands in stark contrast to the wise decisions that were taken by a Labour Government in the depths of an unprecedented global economic crisis to embrace industrial activism. Short-term measures were taken such as the scrappage scheme on the one hand and strategic investments in Sheffield Forgemasters, Nissan, Airbus, General Motors and others on the other hand. As a consequence, the scrappage scheme alone created 400,000 jobs, with tremendous benefits for the supply chain in the automotive industry. Those strategic investments have built firm foundations in areas of growth: the nuclear industry and renewables, aviation and the car industry. Nissan is a classic example, with £20 million of public investment levering in £420 million of investment by the company, 50,000 new cars and 60,000 batteries—a good deal for Britain.

We now have the right hon. Member for Tatton (Mr Osborne). He is the Private Frazer of Downing street. “We’re doomed. Doomed,” is his daily refrain. “Labour mismanaged the economy,” is the moan that we constantly hear from Ministers. It could not be further from the truth. By 2007 we had reduced borrowing and debt to beneath the levels that we inherited from a Conservative Government. Then, in a global economic crisis, we borrowed to invest, to boost the economy and the order books of the companies in my constituency, such as those in the machine tool industry—companies such as Dana, Guhring and Micro. All those benefited from the wise and brave leadership given by our Government.

[Mr Brian Binley (Northampton South) (Con)]

Will the hon. Gentleman explain why, when Labour came to office, Northampton was 440th in the long list of areas of low unemployment. We rose to 132nd in that list under Labour. What do the people of Northampton have to thank a Labour Government for, in that respect?

[Jack Dromey]

A Labour Government in the most difficult times did not do what a Conservative Government did in the 1980s—abandon people to their fate. The Labour Government stood on the side of ordinary people and took the necessary strategic long-term decisions to rebuild our manufacturing economy.

[Christopher Pincher (Tamworth) (Con)]

I am obliged to the hon. Gentleman. We are both Members of Parliament in the west midlands, and he waxes eloquent about public investment being the only panacea for the problems that we have in the west midlands. There is an organisation that he will know about called Advantage West Midlands. I am sure the shadow Secretary of State also knows about it, because he appointed the board when he was a Minister. I have business men in Tamworth queuing up to tell me how inefficient and how ineffective that organisation is. One of them is a former Labour councillor who went to AWM, asked for investment, did not get it and lost his business—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Interventions should be short.

[Jack Dromey]

I will come to the truth about Advantage West Midlands in a moment. The truth is the opposite of what has just been said.

What we are hearing is the politics of the alibi, camouflaging an ideological objection on the part of the Con-Dem alliance to what its members call big government. It fails to understand the critical role of Government in boosting manufacturing in Britain. Of course it is true that good companies are those that help themselves. I have been involved in negotiating ground-breaking deals in the nuclear industry, the food industry, dockyards and the defence sector—ground-breaking deals that have transformed what were failing companies, working with the employers by way of a change and investment agenda.

I know from my experience in the real world of work, not the world of the trading floors, that time and again, with good employers, we have had to go to central Government, local government and the regional development agencies. Only last year I was involved in an exercise together with Scottish Enterprise and the Scottish Government with a leading food manufacturer. Had it not been for partnership, we would not have got the investment, which in turn levered in further investment from the company, securing the future of 500 jobs in an area of high unemployment.

[Gordon Birtwistle]

Can the hon. Gentleman explain to me where the 400,000 jobs came from, as a result of the car scrappage scheme? He gave a list of machine tool manufacturers. How many are based in the UK and manufacture in the UK?

[Jack Dromey]

First, the reference was to 400,000 cars. Secondly, the companies are British-based world class manufacturers of machine tools who, when I was at their exhibition last Friday and met many of them, said with one voice, “For us to succeed, we look to support from and partnership with Government.” Those are precisely the companies that were rescued from the brink by the car scrappage scheme.

The lesson from experience in the real world of work is that industry best flourishes in partnership with Government, with a framework provided by good government, and sustained and strategic investment underpinned by a determined national will. One need only look at Germany’s enduring strengths in manufacturing, which exist precisely because there is that national will. I am proud of the fact that a Labour Government embraced industrial activism. Now is absolutely not the time to pull back from that, because it would be an error of historic proportions. The decisions we make now will decide whether we grow or decline in the future—whether we condemn another generation to no hope. It is therefore essential that we invest to grow and act to rebalance our economy, which had become too heavily dependent on the finance sector.

That is why, for manufacturing, capital allowances matter because they incentivise investment in machinery and plant. That is why, for manufacturing, the patent box matters, with its 10% reduction in corporation tax to encourage innovatory companies to locate intellectual property and manufacturing here in Britain. That is why, for manufacturing, it matters that there is support for research and development. I hope that in refocusing current support, it is not so severely circumscribed as to avoid support for world-beating companies such as Jaguar Land Rover. The Jaguar plant in my constituency is at the heart of a hub of 150,000 people in the midlands who depend on the motor industry for their livelihoods. I will look to the Government to work with me, as the Member for Erdington, in respect of the Jaguar plant, and the hon. Member for Solihull (Lorely Burt), in respect of the Land Rover plant, to secure the future of those two beacons of manufacturing excellence.

That is also why regional development agencies matter. What we have heard today is ill-informed prejudice that flies in the face of the history of, in particular, the successful RDA that is Advantage West Midlands. I have seen that at first hand. After the crisis at Rover in 2000, the supply chain became less dependent on Rover, thanks to the work of Advantage West Midlands. As a consequence, when Rover collapsed in 2005, the supply chain did not collapse, as might otherwise have been the case. The manufacturing technology centre and the manufacturing advisory service are prized by manufacturing employers in the midlands, and that is because of what Advantage West Midlands has done.

Let me issue a challenge to the Secretary of State: necessary as it is to move beyond myths, will the Government now publish the independent evaluation of regional development agencies ordered by the Labour Government before the election? Will he confirm that that demonstrates that Advantage West Midlands is one of the best two RDAs; that for every pound of public money invested, £8.14 of wealth is created in the regional economy; and that it has scored the maximum possible score and has been deemed to be performing strongly? In this new era of openness, will that report now be published?

Birmingham is historically the laboratory of manufacturing and of the genius and enterprise of the British people; too often, now, it is British genius but made in China. Our single biggest task is the renaissance of manufacturing in our country. That will not happen if Government once again abandon British manufacturing.