West Midlands and Coventry

Jim Cunningham 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.

[Mark Pawsey (Rugby) (Con)]

I compliment the hon. Gentleman on securing an important debate on a serious matter, but I was interested in his remarks that not all is doom and gloom. My constituency, which is immediately adjacent to his, has over the past 12 months had a fall in unemployment of 13.2%, which we attribute to a progressive council going out to seek new businesses, bringing them in and having a constructive attitude to development. Does he think that there is some good news and that there is a way forward?

[Mr Cunningham]

I do not know about good news. As the hon. Gentleman knows, the economy goes up and down in patches, so we cannot ever predict what the future will hold. We like to think that things will improve, but we will have to see—I do not want to diversify too much and get on to Europe, but after what happened on Friday, I will be very careful what I say about the future, frankly.

Returning to the Coventry situation, the city has embraced new technologies and is leading the way for the whole of the UK. A Coventry coach company has won £3 million of new contracts and taken on 40 new staff. It will produce the UK’s first electric bus—we hope so this time, although we have been down that road before. Only last week, I visited the Institute of Digital Healthcare, which was established in 2010 and is a five-year, £4 million project, which will have a real benefit for patients and their care support networks. I advise any of my colleagues that, if they get the opportunity to go up to the university of Warwick, the IDH is well worth visiting. It will address a number of health care issues, including the use of monitoring and communication devices to support people in their own homes, the development of new platforms to measure, analyse and communicate health data to support health care and to promote well-being, meeting the information and training needs of clinicians and health care technologists and improving the targeting of activities by health and social care teams.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

My hon. Friend is absolutely right to emphasise some of the positives, but there are some huge negatives, as he is aware. I do not know whether he read the report only the other day in the Coventry Telegraph about the massive increase, because of the rise in unemployment, in the cost to the Government of benefit pay-outs in the city, which is not out of line with what is happening elsewhere and is by no means the worst. That in itself is an indication that the Government will not get the deficit right, despite people being thrown out of work because of the austerity programme.

[Mr Cunningham]

I saw that article in the Coventry Telegraph, and I am also aware that my right hon. Friend’s constituency is probably the top of the list; my hon. Friend the Member for Coventry North West (Mr Robinson) is second and I am at the bottom somewhere. What I am saying is that, despite the Government’s measures, there are things happening in Coventry. That is the message that I am trying to get across.

Some hon. Members will remember the major improvements planned for the Coventry to Nuneaton rail corridor, which is known as the Nuckle project. It will help to improve accessibility and encourage increased use of the train for journeys that might otherwise be undertaken by car. When Warwickshire county council has received outline funding approval, it will aim for final approval by the end of the year or the start of 2012.

On Friargate, a recent meeting with the local enterprise partnership revealed that the project is making reasonable progress. It is an office-based project with residential, retail, car parking and delivery facilities, and an acclaimed arrival point for rail passengers. It, too, is expected to start in 2012 and has the firm backing of Coventry city council.

We have seen Coventry and the west midlands benefit from private sector investment. However, I am deeply concerned about the prospects for young people throughout the region and, more generally, about the loss of skills in various sectors. We have already seen a fall in university applications of more 19,200 in the west midlands region. We have also seen a fall in the number of skilled graduates in medicine and nursing who can find work in their qualified field because of public sector cuts, and that is against a backdrop of high youth unemployment.

[Lorely Burt (Solihull) (LD)]

I am sure that there is deep concern on both sides of the House about youth unemployment. Does the hon. Gentleman accept that the coalition Government are seeking to extend opportunities for young people in particular through enhanced apprenticeships and the Work programme to ensure that we do not lose a generation of young people? All employers are being galvanised to take youngsters on and to give them experience, so that when the upturn comes, they will be able to utilise the skills that they have developed.

[Mr Cunningham]

There is weakness in what the hon. Lady says. We have been here lately, and frankly we have seen this before. If we really want to give young people work experience, we must pay employers to take them on for six or nine months. Two or three months are not really helpful, because they do not then get another job. If I had my way, I would make it 12 months, but that is another argument.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate my hon. Friend, who is making a passionate case for Coventry and on issues that affect us all more generally. Is not part of the answer to the hon. Lady’s question that many employers would like to take on more apprentices and provide more skills training, but they need demand in the economy and demand for their products to do so? The Government’s failure to achieve that demand in the economy is leaving it flatlining. We need the plan for growth that the Labour party has suggested.

[Mr Cunningham]

I do not disagree with my right hon. Friend, but I would add that the Government, despite their protestations, must consider small businesses and help with their financial situation and their liquidity problems, perhaps with loans from the banks. If my earlier suggestion about six to nine months’ payment was adopted, they might be able to take on young people. The Government will never crack the problem unless they provide that.

To wind up, I want to ask the Minister some questions. Will he tell us what evidence-based assessment he has made of the Government’s industrial policy? What confidence can he give to global manufacturers with long-term investment horizons? What confidence can he give to companies to take on apprentices? How will the Government support small and medium-sized businesses to retain skills in the region?