Coventry and Warwickshire City Deal

Marcus Jones Excerpts

Thursday 14th February 2013 Commons Chamber

[Chris White (Warwick and Leamington) (Con)]

I am grateful to have secured this debate on the Coventry and Warwickshire city deal proposal, which has now been put before the Government. I congratulate the Coventry and Warwickshire local enterprise partnership, the Coventry and Warwickshire chamber of commerce, Warwickshire county council, Warwick district council, Coventry city council and all the local organisations, businesses and authorities—as well as my colleagues in the Chamber this evening—who have contributed to and supported the bid.

I fully support the city deal concept. I believe that devolving power to local communities and the principle of subsidiarity—devolving power to the organisation most capable of taking a decision—should be at the heart of Government policy. The city deal approach is that principle in action. Our city regions can be the engines of growth, and by crafting deals that provide targeted support and resources, we can generate significant economic momentum.

There are three factors in building a good city deal. First, it needs to build on local strengths and expertise. The UK economy is diverse, and city deals therefore have potential.

[Mr Marcus Jones (Nuneaton) (Con)]

I congratulate my hon. Friend on securing this important debate. He mentioned local priorities. In our area, manufacturing is a local priority. It has been a strength for many years and continues to be so. Does he agree that the city deal will enable us to build on the strength of our manufacturing skills—there could well be a skills gap in the next few years—and thereby of our manufacturing industry?

[Chris White]

I thank my hon. Friend for attending the debate. The main part of my speech addresses those very issues.

The UK economy is diverse and city deals have potential as they can be tailored to the needs of local economies and build on the infrastructure that already exists. We should not be trying to reinvent the wheel or impose a top-down plan for economic growth on the country, and a good city deal will work with the grain of the local economy.

--- Later in debate ---

[The Financial Secretary to the Treasury (Greg Clark)]

I congratulate my hon. Friend the Member for Warwick and Leamington (Chris White) on his excellent speech, and on securing a debate that is very important to his area. In the two and a half years for which he has been in the House, he has already established a reputation for being a tenacious champion of manufacturing industry and, indeed, the area that he represents. I know that his passion for manufacturing and for the creation of jobs in his area is entirely shared by our hon. Friends the Members for Rugby (Mark Pawsey) and for Nuneaton (Mr Jones). It is delightful to see them both in the Chamber.

As Members will know, the debate is very timely. The expressions of interest in the next wave of city deals were submitted just a few weeks ago. I am considering them as we speak—not at precisely this second, but as soon as I leave the Chamber I will resume my consideration of them. This bid is a tribute to the joint working and the enthusiasm that has been generated locally. The litany of different organisations that my hon. Friend the Member for Warwick and Leamington mentioned underlines the degree of support for and consensus behind what could be a major opportunity for his area, if we are able to approve this city deal.

My hon. Friends will know that I visited Coventry last month to discuss the evolution of the city deal bid, and I was particularly impressed by the level of representation from all the local authorities in the area and businesses at the highest level. Sir Peter Rigby, the chairman of the local enterprise partnership, chaired the meeting, and other business organisations were represented, as were the universities and people from right across the board. It was clear that this is a united bid, very much looking to a very positive future for the area. It was particularly impressive to see everyone working together in that way.

It was also impressive to see the laser-like focus on manufacturing and skills there. My hon. Friend is absolutely right to say that one of the proudest traditions of the area that he and his colleagues represent is that of being the heartland of British manufacturing. Far from that being a story just about the past, it is very much a story of today and of the future. The people behind this bid were prescient in emphasising that the undoubted opportunities that will flow through the increasingly internationally competitive world of advanced manufacturing can be grasped only if we make sure that the work force in the area are equipped with not only manufacturing skills, but the particular skills that the new technologies of the future in this field will offer. The support of the universities, in particular, and of the research institutions make it clear that this is a very high-quality offer that is being made.

My hon. Friend will understand that it would be invidious of me to give any kind of nod or wink to him this evening—tempting though that might be—not least because this evening’s proceedings will doubtless be being viewed by 19 other places around the country. They will be very envious of his good fortune in securing this debate, so he will forgive me if I do not do that. Let me instead take the opportunity to reflect on the city deals process and the arrangements we have put in place. I start with a point that my hon. Friend made, which is that we should recognise the importance of local strengths in the future of our economy.

Obviously, it is of prime importance that our country has the right macro-economic conditions to sustain growth and prosperity in the future. Paying down the deficit we inherited and having an economy in which international lenders can have confidence is the foundation of any future economic success. All Government Members are engaged, day after day, in making the changes necessary to secure that. However, it is also important that we have the right micro-economic conditions: a tax system that is supportive of business and enterprise, and that encourages investment; and flexible labour markets that allow people to go into the places with an expanding number of jobs and allow employers to expand employment with confidence. Again, the work being done in not only my Department, but the Department for Business, Innovation and Skills and the Department for Work and Pensions is very much geared to having those conditions in place.

If we do all that, it is still necessary to reflect that our economic prosperity ultimately depends on local places prospering. Economic growth does not happen in the abstract; it happens in particular places, when employers locate, expand their production and take on people. These are places that people can visit and address; they are tangible.

For too long—over many decades—how we have conducted our economic policy has paid too little heed to the importance of locality. It is tempting for politicians in Westminster and our officials in Whitehall to peer out from London SW1 and assume that the rest of the country is uniform, when we know that one of the glories of our country is that it is full of areas, towns and cities with proud traditions that are the foundation of our future economic success. The city deals programme is intended to ensure that that sense of place is part of our economic policy.

As soon as one considers that we should have a sense of place in economic policy, it becomes obvious that every place is different. We have already discussed the importance of manufacturing in the traditions in the west midlands, but that is true across the country. Everywhere has its local traditions and capabilities. Even cities as close together as Liverpool and Manchester are very different in their economic character, their skills, trades and industries, their politics and in almost every respect, so to treat them as if they are identical seems to me to deny them the possibility of living up to their potential and planning for the future.

The city deals programme was designed to reflect the differences between places. We started with the eight bigger cities outside London and in July 2011, when the Prime Minister asked me to become the Minister responsible for cities, we gave each of those cities the right to take the initiative and set out to negotiate what, in their view, would be the measures that would best unlock their potential. There was some scepticism at the time about whether it would be possible to break the monopoly of Whitehall in determining how things should be done, but in less than a year we were able to conclude a city deal with each of those eight places, which were transformational. In Greater Manchester, for example, £2 billion of local investment in infrastructure is being made in return for the city’s share in the resulting prosperity. In Leeds, apprentices and school leavers are being trained in the skills that the city’s future economy needs, as Leeds and the authorities around it have identified needs that should attract a particular focus.

[Mr Marcus Jones]

My right hon. Friend is making an extremely important point about locality and the need to ensure that we tailor the Government’s support package to each area. Does he agree with me that that is a far better and more effective approach than that taken by the previous Government through regional development agencies such as Advantage West Midlands? Private sector employment fell during that time rather than increasing. I appreciate that, as he has told us, my right hon. Friend will not be able to tell us the result today, but does he agree that if the Coventry and Warwickshire city deal was granted, it would be a far better step forward for the area than the previous regime?

[Greg Clark]

My hon. Friend is absolutely right. The problem was that the regional development agencies were branch offices of Whitehall in the country, which seems to be the opposite of the approach we need to liberate the entrepreneurialism and local strengths of particular areas. The areas should be coming to Whitehall, as they are—as the Coventry and Warwickshire local enterprise partnership has—and saying what they want to do. The problem with the RDAs was that it was the other way around.

The RDAs described a geography created by administrators rather than something that reflected the genuine historic and economic geography that prevails. The west midlands is one example, but the north-west is another. The identities of world-renowned cities such as Manchester and Liverpool were subsumed and became totally anonymous in the Northwest Regional Development Agency, so it is absolutely necessary to make these changes. My hon. Friend is right to point out that even in their own terms the regional development agencies were a failure because the differences between London and the south-east and the regions widened during all that time. So it was right for city deals to be a priority.

One of the contrasts between our country and other countries on the continent of Europe, for example, is that in Germany almost every German city outside the capital of Berlin has a higher income per head than the national average, whereas in this country only one of the bigger cities outside London, Bristol, is above the national average. All the others are below. On the continent, not just in Germany but in France, Italy and other countries, the powerhouses of the regional economy drive the national economy, whereas regrettably over the past 20 years ours have been lagging behind that.

[Mr Jones]

I thank my right hon. Friend for giving way again. He is making an extremely important point, which is reflected in the west midlands region, where gross value added has been on the decline since the mid-1970s, with the decline in manufacturing industry and the unbalancing of our economy. What he says is absolutely right. With the city deal that we hope to get for Coventry and Warwickshire, we could see that manufacturing base start to increase again, accompanied by an increase in gross value added and a better average income in our area, compared with the south-east and London.

[Greg Clark]

I totally agree with my hon. Friend. That is exactly the point of the city deals programme. It is designed to reflect what is undoubtedly the case, especially with the strength and breadth of the local engagement that this bid demonstrates. Who better to be able to make the decisions and the analysis of what is needed for the Warwickshire economy than the business people, the civic leaders and the leaders of some of the finest universities in the country, who are there? It is important that we build on those strengths.