Economic Regeneration (West Midlands)

Lord Austin of Dudley Excerpts

Tuesday 8th February 2011 Westminster Hall

[Ian Austin (Dudley North) (Lab)]

It is great to see you in the Chair, Mrs Riordan, and to be taking part in this debate. I congratulate the hon. Member for Wolverhampton South West (Paul Uppal) on securing the debate, and the two Wolverhampton MPs on their brilliant contributions. My right hon. Friend the Member for Wolverhampton South East (Mr McFadden) was absolutely correct when he said that the central issue that faces us is how to restructure our economy to exploit the opportunities provided by the new industries to bring new jobs and prosperity to Wolverhampton and the wider black country, including to my own constituency.

My right hon. Friend listed a series of great 19th and 20th-century companies that have made a huge contribution to the British economy. I represent Dudley, which lit the spark that fired the industrial revolution. It was the first place to learn how to smelt cast iron using coke, without which the industrial revolution would never have taken place, changing not just Dudley and the black country but the whole of the world. The central question now is how we learn from those great innovators, who were thinking not just about the future but how they could bring in new industries and new jobs to change the region in which they lived and worked. We must do the same again in the 21st century.

Let me speak briefly about the particular issues that relate to Dudley and then about those that relate to the wider sub-region. I grew up in Dudley. I love it to bits and am really proud to represent it. Anyone who lived in Dudley in the ’70s and ’80s will know that our town centre has seen better days. We have been hit hard by three things: the growth of out-of-town shopping, the decline of traditional manufacturing on which the area’s prosperity was based, and the loss of our university campus—it was originally a teacher training college.

Under the leadership of Bill Kirk, the council is at last introducing long-awaited redevelopment plans, but they need to be put into action urgently. Will the Minister tell me whether those plans will receive the same level of support in the future as was planned in the past? It is crucial that they do so that we can get new investment in the town centre, develop vacant sites and provide new car parking and new shopping. It is crucial that the world-renowned tourism attractions at Castle Hill, such as Dudley zoo and the world-class black country museum, receive the funding that they are bidding for from the regional growth fund so that we can attract new visitors and boost the town’s economy.

I invite the Minister to visit Dudley. He will not regret it, because it is the greatest town in the country. He will see our fantastic facilities and our great plans for the town centre, which I hope he will support.

Dudley is the largest place in the country to have no university campus. The university was originally Dudley teacher training college. I grew up on the street that had the teaching training college at one end and the halls of residence at the other. As a child, I would see students with books under their arms walking up and down the road, and that must have persuaded me that staying on at school and going to college and university were the normal things to do. It is tragic that we no longer have that example in our area, because we need to get more young people staying on at college and going to university. Is the Minister prepared to treat Dudley as a special case?

[Paul Uppal]

I thank all hon. and right hon. Members for such a good debate. I am very heartened by the non-partisan attitude that has prevailed. It is obvious that we all have our own constituencies at heart here. I am also a trustee of the Sikh temple on Upper Villiers street in the constituency of the right hon. Member for Wolverhampton South East (Mr McFadden). It used to be the site of the original Sunbeam motor factories. Although cars are no longer produced there, love and happiness can still be found there on a Sunday—because of the more spiritual dimension that the temple has brought to Wolverhampton.

Let me return to the point about education and how we can tap into our young people’s ambition and aspiration. Much of the heritage that has been fondly mentioned here today came from a buccaneering spirit: people often felt that they could beat the world. I am sure that that attitude still exists, but it is latent and needs to be inspired. Coming from a modest background and going to a state school, I am aware of the issue. It is about being exposed to an environment that makes us think we can do whatever we want to do. We need to spread that message and ensure that it reaches down not just to teenagers but to primary and secondary schools.

[Annette Brooke in the Chair]

[Ian Austin]

The hon. Gentleman is absolutely correct. We have many great strengths in our region: hard work, ingenuity, adaptability and innovation. Those are the attributes on which we launched the industrial revolution and built Britain’s economy. As my right hon. Friend said, although we have some world-beating companies, we do not have enough. The truth is—this is the central point that I want the Minister to consider—that our region has been hit harder than anywhere else in Britain during this recession. The recovery is more fragile. We will take longer to emerge from the recession and to attract new industries and new jobs unless we take action now. Such structural problems are not the result of mistakes made over the past few years. In 1971, the combined economies of the midlands and the north were greater in size that those of London and the south-east. By 1976, the economy of the west midlands had fallen behind and we have not matched the national average of output and productivity on a per capita basis for more than 30 years. We have been falling further and further behind.

Our region is the only place in the country where private sector investment has declined over the past 20 years. That is as a result of major structural challenges in relation to transport, trade, innovation, reputation and skills. The central issue is that of skills. It absolutely underpins the challenges that we face and how we need to address them. As my right hon. Friend said, we have made major improvements in this area over the past 10 years or so. For example, in 2005 employer investment in training and retraining in the west midlands was the lowest in England. By 2007, it was the fourth highest. In 2005, we had the highest proportion of vacancies owing to skill shortages, but by 2007 we had completely turned that around so that we had the lowest. We had the best performing apprenticeship programme in the country and the best Train to Gain service.

We need to boost the number of graduates working in the regional economy. We have 70,000 fewer graduates working in the west midlands than in other parts of the country. Much of that is about the structural make-up of our economy. Our region has a larger proportion of small and medium-sized enterprises than elsewhere. A struggling owner/manager of a small business who is trying to keep their head above water is not likely to be thinking about how to build links with universities, employ graduates and invest in new technologies and all the rest of it, as the major companies are able to do, so we need to address that point in particular.

Despite our region attracting some of the world-beating aerospace and engineering companies that my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) and my right hon. Friend have both listed, the central issue of skills is the reason why we have not been able to attract the new industries in ways that other regions have. For example, Britain is a world leader in the manufacture of pharmaceuticals, but all the jobs in that sector went to the south-east because we did not have the skills that the pharmaceutical companies were looking for. Similarly, during the computer revolution in Britain we did not manage to attract the number of jobs that the Thames valley did because we were unable to persuade the computer companies investing in Britain that we had the skills they were looking for.

During the next few years, there will be major opportunities in the low-carbon sector, in advanced manufacturing, in health care and biomedical sciences, and in digital media, which will provide hundreds of thousands of well-paid, highly skilled jobs, and it is absolutely crucial that we have a new industrial revolution to bring those jobs to the black country. That is why the whole of our sub-region should decide collectively that we will set for our communities the ambition of achieving the biggest rise in educational standards anywhere in the country. If we do that and get colleges and universities working together to equip people with the skills they will need for the advanced manufacturing revolution and the new low-carbon industries that will emerge, as well as getting the councils working together on these issues, I am absolutely convinced that we can build a stronger economy for the future.

There are just a few final points that I want to raise with the Minister. First, I have to tell him that, for an area such as the black country, increases in tuition fees present very serious challenges to the aim of getting more young people to stay on at college and go to university. Also, the abolition of the education maintenance allowance is a disaster for the communities that the Members here today represent. I visited students at Dudley college and I found that four out of five students at the college receive EMA. Many of them are very worried about whether they will be able to stay on at college if they lose it. They are not using it for going out or for luxuries. Those who are studying construction or public services have to buy uniforms and equipment with it. They and other students use it for their transport, to buy their lunch and for their books. It is the funding that is enabling them to stay on at college, and I plead with the Minister to make an area such as ours a real priority for the support that will be available for students so that they are able to continue their studies.

Will the Minister reflect on the points that I have made about the structural challenges that the black country faces and consider how he can make an area such as ours a priority when it comes to allocating funds from the regional growth fund? If we do not restructure and breathe new life into the economy in an area such as the black country, there is no way we will be able to get the economy of the country as a whole moving forward in a way that I am sure the Government want.

--- Later in debate ---

[Mr Prisk]

The point that I am trying to make is that we are talking to businesses and asking them what they need. I am not the Minister with responsibility for skills, so before he tells me that I have said something incorrect, I will check with him and write back to hon. Members here. I am wary of making a statement that might prove incorrect. However, the right hon. Gentleman has made a sensible point. I will double-check before giving an incorrect answer.

University technology colleges are important because students will be able to start at age 14. One of the first UTCs will open at Bloxwich in the black country this September. It is an important element.

[Ian Austin]

I am excited by the idea of university technology colleges. I have written to the leader of Dudley council asking whether she is prepared to consider having one. I do not see why Walsall should have one and not Dudley. Perhaps when the Minister comes to Dudley he can meet the council leader and extol the policy’s virtues to her.

I do not want to get into a debate about the rights and wrongs of abolishing the education maintenance allowance, but if student numbers in a place such as Dudley, where education skills must be our No. 1 priority, decline as a result of its abolition—although I know that the Minister hopes that they will not—will the Government think again and restore the funding that enables students to undertake studies? I am not trying to catch him out. It is a serious question.

[Mr Prisk]

I realise that. Our view is that by putting a strong emphasis on vocational education rather than on higher education alone, as has been the habit in recent years, we will help those numbers to grow. When the previous Government went from no tuition fees to £3,000, I suspect that we all thought that the number of participants would drop, but it rose. We must be careful when speculating, but I take the point.

A number of other issues were raised. I am aware that I have only four minutes left, so I will canter through them briefly. On the Moog deal, I say to the hon. Member for Wolverhampton North East (Emma Reynolds) and other Members that I was aware of it at the start and am pleased that regional, local and national officials were able to sort it out, because it was a concern early on. I agree with her on that point. On the broader issue of aerospace, we are strengthening our national focus on it, as we have tremendous national assets. However, we also recognise that local enterprise partnerships are best placed to lead. I know that several of them with a strong aerospace dimension are considering how they want to collaborate to work with us nationally. Getting the fusion right is important.

On the role of the local enterprise partnership, I was pleased that Wolverhampton became part of the black country LEP. Along with Dudley, Sandwell and Walsall and under the new chairmanship and board, it has drawn together strong civic and business leaders. The right hon. Gentleman was right to say that the board now looks outward, and it hopes to play on its Indian connections globally.

My hon. Friend mentioned business rates. We want to help, which is why we are simplifying how small business tax relief operates, so that it is automated and need not be bid for. We are considering greater discretion for local councils to ensure that they can use the business rate system in a way that helps locally.

Other questions were asked about assets. We have received a full register of assets from the regional development agencies. We are mindful of the balance that we need to strike between local economic regeneration and public value for money, and we will set out shortly exactly how the process will operate. The hon. Lady and others made several pitches. That is understandable, but as there are 450 applications, I will remain mute on the subject, for the obvious reason that we want to ensure that the process is open and fair.

We are investing an additional £50 million in the Manufacturing Advisory Service over the next three years. We want the service to be consistent. It has always been highly regarded, but it is of course an outreach service. I say to the hon. Lady that no decisions have yet been taken about where the headquarters might be. My concern is to ensure that the small and medium-sized businesses get a good, consistent service and, importantly, an outreach service that comes to them.

I was asked how foreign direct investment will work. Our view is that UK Trade and Investment abroad should be the voice and face of the UK when we seek inward investment, but that there should be a strong national network within England that handles inquiries. That should and will include the west midlands and the area represented by the hon. Lady.

A number of other questions relating to planning were asked, and I am sorry that I did not come to them. However, the long-term—