Economic Regeneration (West Midlands)

Pat McFadden Excerpts

Tuesday 8th February 2011 Westminster Hall

[Paul Uppal (Wolverhampton South West) (Con)]

I thank hon. Members for attending this debate. I have wanted to speak about the future of economic regeneration in the black country for some time. It is a pertinent matter that I am sure all hon. Members present deal with in their constituency case load. It is a topic high on everybody’s list as we seek to promote economic growth in the black country constituencies that we represent.

Government plans for planning policy and economic growth contain a strong emphasis on local powers and decision making, and it is important to look at how such tools can be used to promote economic regeneration in our area. As hon. Members are aware, the black country has missed out on some capital regeneration projects that we have seen across the country. I want this debate to raise the profile of our region at national and parliamentary level, provide a forum for discussing how to encourage private and public investment in the black country, and look at how to assist local businesses and communities to get involved in future ideas for the region.

Within Wolverhampton, the proposed £300 million Summer Row development has recently collapsed. That is a huge disappointment for the city as it would have provided new shops, cafés and much-needed jobs for the area. With one of the highest numbers of vacant shops in the country, regeneration in the area is desperately needed. However, I want not to dwell on the past, but to learn the lessons from what has gone before and move forward. As councillors in Wolverhampton have said, we must signal a new dawn for the city and, to quote the city’s motto, “Out of darkness, cometh light.” I am pleased with the attitude of the council and the local business men and women of the city who are looking forward to what the future can bring for Wolverhampton.

Previous Government plans have sought to close the gap between the greater south-east and the rest of England. In truth, however, the economy is still as regionally unbalanced as before—perhaps even more so at the moment. It is important to focus on projects that are already under way in the region and look ahead to what future investment can be attracted to our area.

In Wolverhampton, the council is currently implementing two main regeneration projects—the Wolverhampton Interchange, and the i54 technology park. The Wolverhampton Interchange is a great proposal for the city, but only the first phase of the project has currently received funding and is under way. It seeks to create a new transport hub for Wolverhampton, while also revitalising the station and the entrance to the city that people see when they arrive by train. The plan includes a new hotel, offices and canalside bars. It provides a great opportunity for the city, creating not only jobs but an important first impression when people arrive. I have looked into the funding options available, and I hope that by working with fellow MPs and the council, we can see the whole project succeed. I am aware that retailers such as Debenhams are interested in locating to Wolverhampton, and it is important that any future retail developments are well managed and receive support.

The Government have outlined their plans for promoting economic growth and regeneration across the country. I want to pick up on some of the points raised by the Localism Bill and the White Paper on local growth from the Department for Business, Innovation and Skills, which provide important tools and guidance for driving regeneration in the black country.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

Before the hon. Gentleman moves on from his list of important projects, I am sure that he will not miss out Bilston urban village, which is based in the part of the city that I represent. It is crucial for providing future homes, bringing former industrial land back into use, and providing new leisure facilities for people in Bilston.

[Paul Uppal]

I will refer later to Bilston, and I echo the right hon. Gentleman’s sentiments completely. There has been very good work there.

For regeneration of the black country it is important to give power to local authorities. I also want to talk about business rates and reforming the apprenticeship system. The important focus of the Localism Bill and the White Paper on local growth is the emphasis on giving power to local authorities and communities. That provides an important opportunity for the black country to lose some of the burden of nationally driven goals and targets, and allows instead for a tailored approach that reflects the needs of the region. The open source planning system will ensure that local governments can create sustainable and attractive places to live. I have no doubt that reforming the planning system is important to creating the confidence to invest.

Some people have expressed doubts over how localism will work in practice, such as how projects can be financed locally, and whether communities will have the will or the information to get involved in the planning process. On the first point, I think that the changes provide an important opportunity to encourage private investment into our region. I am confident that with the right co-ordination and guidance, we can see real involvement by communities, and investment by business in the future of the black country.

I have met many local people who are passionate about regenerating Wolverhampton into a more thriving city. Henry Carver, a local business man, has recently launched the Wolverhampton business group that aims to bring together businesses in the city, and put forward policies on what it believes the city needs. I have also met with the Black Country Reinvestment Society, which provides loans to small businesses that have struggled to get finance from the banks. It is pleased with the success it has seen so far, and I have supported its application to access the regional growth fund so that it can support even more businesses in the city. I hope that with increased money in the regional growth fund, it will be successful in its bid. Recently, I also met representatives from Lloyds bank and the Royal Bank of Scotland in Wolverhampton. I am encouraged that in these difficult times, I have seen practical examples of things being pushed forward. We are all conscious, however, that lending is not as free-flowing as we would wish.

The right hon. Member for Wolverhampton South East (Mr McFadden) referred to Bilston. I visited a business in Bilston called Tile Choice, which has been through a tough time over the past few years and reduced its number of staff from 80 to 60. I met the managing director and was encouraged to see that the business was being built back up, and that it was looking forwards rather than backwards. That is important; we must change the mindset. We can get immersed in looking at what has gone before, but I was struck by the optimism of a business that seemed to be going places and was looking forward to how it could take on new members of staff.

The Government plan to provide further incentives for councils to attract investment and economic growth, and the proposed business increase bonus will provide an incentive to all councils to seek long-term sustainable growth in their business rate base. Local enterprise partnerships may create an important link between businesses, communities and local government, and help to achieve economic growth and regeneration plans for the region. Too often, regeneration projects have been slowed down by time-consuming and complex planning procedures. For example, UK Trade and Investment has stated that complexities in the planning system are among the top five issues that deter inward investment into the UK. The Government are to introduce a national planning policy framework that will place a priority on economic growth through simplifying planning procedure and reducing guidance. Furthermore, the Localism Bill seeks to include communities in planning decisions from an early stage.

All such measures seek to change attitudes and foster a pro-development approach that will remove barriers to development and allow communities to get involved in planning proposals so they do not feel that developments are forced on them. Providing local authorities with a general power of competence gives them the freedom to implement proposals that work specifically for their area. Neighbourhood plans also provide an important opportunity for residents to be involved in the future of their areas. I understand that both the British Chambers of Commerce and London First believe that those proposals could be used in town and city centres and business parks, allowing whole communities to be involved in creating local ideas for their local areas.

An important new proposal, which in hindsight might have helped with some of the difficulties with the Summer Row development, is that large-scale developers will have to consult people in the local community before submitting planning proposals. That could help to ensure that communities get the development that they want.

I shall now move to my second point. The local growth White Paper outlines plans to change the nationalised system of business rates. It hands over more power to local governments, allowing them flexibility in respect of funds and business rates. New proposals will allow local authorities to offer local discounts on business rates, provided that they are funded locally. The Government recognise that different areas have different needs and economic circumstances. That policy will allow councils to respond to the economic circumstances in their area.

I will, however, enter a caveat in respect of business rates. At one of my weekly surgeries recently, I was approached by a constituent—a gentleman who owns a retail unit in the centre of Wolverhampton. He spoke to me about his situation. He felt almost at his wits’ end because of business rates. He felt driven almost to remove the roof from his shop because he felt that business rates had been particularly punitive. I ask my hon. Friend the Minister to pass on a message to the Government to be very conscious of that issue. It is very much about a mindset. The difficulty that we have with some of the investment angles for Wolverhampton is the perception that we are dealing with a problem. Having been in business for 20 years, I know that it is important to look at things as an opportunity rather than a problem. When it comes to business rates and the current system for empty properties, and industrial property in the black country and the wider west midlands, investors and business people are sometimes almost preoccupied with avoiding paying business rates, rather than looking at development, getting a tenant into a property and getting a thriving business going.

Let us turn to more optimistic things. In Wolverhampton, the council plans for a Wolverhampton technology corridor could benefit from the proposal under discussion. As the Municipal Journal notes, it could help new technology start-ups to access discounts. The i54 technology park has secured Moog, which is relocating to the park, and the council is in talks with the Indian aerospace industry about moving in. However, they need to address more businesses. The proposal under discussion could help to achieve that.

We are all aware that this is a time of economic austerity. In such times, regeneration may appear to be a difficult task. However, the local growth White Paper outlines approaches such as tax increment financing, which can assist councils to obtain the extra funds that they may need for regeneration projects. That approach allows councils to borrow against future additional uplift in their business rates base. Obviously, that will need to be managed to minimise risk, but it could provide the means for additional investment to go ahead. A point that I have previously made in the main Chamber is that in the US, where many of these business rate projects were piloted, they were often developer led. An article in Estates Gazette highlighted the fact that the Government might consider such an approach to financing: rather than the onus being put on local authorities and councils, perhaps the developer could move forward.

Linked to attracting new investment and businesses to our region is ensuring that we have the skilled work force to fill the new job vacancies created. The strategy for sustainable growth highlights the importance of skills in creating the conditions needed to reduce the deficit and to stimulate growth. Reforms to the apprenticeship programme, creating up to 75,000 new apprenticeship places, investing up to £250 million during the spending review period and increasing advanced level apprenticeships, will improve the skills of the potential work force and help to meet our target of having a world-class skills base. We need to ensure that training providers work with businesses to ensure that training meets the needs of employers and that businesses are helped to offer apprenticeship placements.

Recently, Professor John Bryson from the university of Birmingham has highlighted the fact that insufficient attention has been paid to equipping the work force with the skills required to take advantage of new high-tech, high-value engineering opportunities. There has been a lack of forward thinking. He estimates that 90,000 hard-to-fill manufacturing jobs will appear in the west midlands during the next five years. That is in line with research conducted by the region’s councils, which found that two thirds of the work force lack the technical skills required by employers. It underlines the importance of reforming the apprenticeship programme—creating more advanced level apprenticeships and ensuring that training matches the skills that the job market wants.

Let me illustrate the point. I remember being on vacation a few years ago with my son. We were at an event and at one point all the children were invited on to the stage and asked what they wanted to do in the future. Some said “journalist”. Most said that they wanted to be on TV. My son proffered the idea that he would like to be an engineer. I remember the look of incredulity on the faces of the parents in the audience, which illustrates the problem that we have in relation to engineering. I know from talking to lecturers at the university of Wolverhampton as well that there is huge demand from the engineering sector. We need to break down the perception that engineering is the sort of job where people have to roll up their sleeves and do difficult manual work. It is not. It is a very creative aspect of our economy at the moment and will offer great potential.

I shall return to the main point. Manufacturing is doing quite well at the moment. We have had encouraging figures in relation to manufacturing, and I would like to see the Government embed that for the future. Much of the discussion on this issue relates to the fact that sterling is quite low at the moment, but let us consider the German analogy. A few years ago, the Germans were in a similar situation. The question is how we can embed the progress that has been made, so that manufacturing becomes something that we can sing really loudly and proudly about, especially in the black country and in the west midlands in general.

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[Mr Pat McFadden (Wolverhampton South East) (Lab)]

It is a pleasure to see you in the Chair, Mrs Riordan. I congratulate my constituency neighbour, the hon. Member for Wolverhampton South West (Paul Uppal), on securing the debate. My other neighbour, my hon. Friend the Member for West Bromwich West (Mr Bailey), the Chair of the Select Committee on Business, Innovation and Skills, said that he would have liked to be here, but he has Select Committee business.

This is an important debate because it is really about the hinge between the area’s past and its future. Wolverhampton and the wider black country rightly are proud of the industrial heritage that they enjoy. They are proud of the great names that put their stamp on the area. In my constituency, those names include Stewarts and Lloyds, Sankey’s, GKN, Rolls-Royce and Sunbeam. Those names ring through the years. Those names matter, and history matters, because it is from history that people draw identity and meaning. The question today, however, is what the black country will do for a living in the future. Where will people find jobs? How will they make a living? That matters very much in my constituency, which is, sadly, among the top 15 constituencies in the United Kingdom in terms of unemployment. In the time I have, I want to make a few points about that.

First, we should not pronounce manufacturing’s death rites, as we are sometimes too ready to do. Many of the big names I mentioned a few moments ago have gone, as have the individual sites that used to employ thousands of people, but manufacturing still employs a greater proportion of people in the local economy than it does in the national economy. In my constituency, companies such as Nuclear Engineering Services, Mueller Europe, Fortress Interlocks, Bilston Engineering, Barnshaws and many others do an excellent job and provide valuable local employment. As the hon. Gentleman said, we also have an important aerospace cluster, with firms such as Goodrich, Timken and Moog. That is a potential growth area, which can be nurtured and built on.

What the Government do on manufacturing can help or hinder it. If we want to support an economy that makes things—I think that that desire is shared across the House—it is a mistake to abolish programmes such as grants for business investment. Over the past six years, those grants amounted to £400 million across the country, they secured about 10 times that amount in private sector investment and they protected or created about 80,000 jobs. There is good news in manufacturing at the moment, but that is a reason to support it, not to withdraw help.

I make the same point about the changes that the Government have announced to capital allowances. Just because this complex issue is not widely understood, that does not mean that it does not have an effect. The Government are keen to talk about the cut to corporation tax, but it is actually being paid for by cuts in the tax support to manufacturing industry. The Budget Red Book makes it clear that the £2.8 billion that will be taken from manufacturing is exactly the same as the amount that will be given in corporation tax cuts. In effect, there will be a shift, with the help being given to the whole economy, rather than directly to manufacturing. To put it another way, manufacturing will pay for a tax cut for the rest of the economy, which is not in the interests of the economy in my area or the companies that I mentioned.

The second point I want to make is that, when it comes to the area’s regeneration, its future and investment, we should use the local population’s diversity as a source of economic strength. Some years ago, I co-founded the Wolverhampton India project with other partners in the city, such as the city council, the university and Wolverhampton college. It was founded precisely to build on the fact that we have a large Indian population and to see what more we could do in the fields of trade, education and sport. We had fantastic support from the city’s educational institutions and the Punjabi Wolves supporters club—a fine body of people, who have driven and created a groundbreaking friendship agreement between Wolverhampton Wanderers and Jagatjit Cotton and Textile Mills football club of Punjab. Such cultural and sporting links can help with future commerce and trade. The fact that the city has a large Indian population gives us a strong and living link to a country that is one of the economic giants of the 21st century. We should build on that for future trade and commerce, and the city is already trying to do that through aerospace work with the Bangalore area.

The third issue I want to raise is skills and equipping people for the future. We have made progress on skills. There has been a lot of investment in Wolverhampton university, as well as significant investment in Wolverhampton college, and we have some excellent schools. However, in too many cases, achievement in Wolverhampton and the black country is still lower than it should be, and opportunity is denied. Governments —of either colour—cannot make globalisation go away, but they should leave no stone unturned in equipping people for globalisation. That is why educational improvement is essential. Put bluntly, we need higher standards, better results and fewer excuses for underachievement.

In that light, it is a mistake to abolish education maintenance allowances when it is crucial in today’s labour market that people can get the skills and qualifications they need. In Wolverhampton, the abolition of EMAs will affect 4,000 young people. It will affect 2,000 16 to 18-year-olds at Wolverhampton college. I recently met its students, who told me that that will make it harder for them to achieve the skills and qualifications they need. We should remember that many of these young people are not from families with a history of people going on to further and higher education and that they are sometimes the first generation to do that. The Government’s role should be to help those young people, rather than to take away the support that is there.

[Emma Reynolds (Wolverhampton North East) (Lab)]

Does my right hon. Friend agree that it is not only short-sighted and wrong to end the education maintenance allowance, but that the so-called evidence base that was used for the decision did not take into account the particular circumstances of students who go to further education colleges such as Wolverhampton college? Many of my constituents travel there and back every day. Leaving school and going on to a further education college is difficult, and the costs involved are significant, but the Government’s decision has not taken that into account.

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[Mr McFadden]

My hon. Friend makes a good point. The Institute for Fiscal Studies said that the maintenance allowances paid for themselves, given the benefits of higher participation in further education in the future. Issues such as transport have an important impact when families are often making decisions in difficult financial situations. The question of skills and equipping people for the future is therefore absolutely central to the economic future of Wolverhampton and the wider black country.

I want to touch on a point that the hon. Member for Wolverhampton South West made about decision making and planning, because it is crucial. He mentioned the Summer Row development, which dragged on for years. The fact is that the economics never really stacked up in the recession in the way they did beforehand. It is sad that the project is not going ahead, but we at least have clarity now, and we can plan for the future. However, I have an important question for the Government. I do not really expect the Minister to go into this in much detail, but if I was a betting man, I would say that robust discussions were taking place between his Department—Business, Innovation and Skills—and the Department for Communities and Local Government. There is a legitimate desire for localism and for people to be more involved in local decision making, but the Minister and the hon. Gentleman will also know that major investors want clarity and speed. Sometimes those two things are in tension, which is why the Labour Government made planning changes towards the end of their period in office to try to speed up the granting of permission for major projects, which has been too slow. My question as regards the rhetoric and practice of more localism is whether that tension will lead to businesses becoming frustrated about future planning and decision making. The truth is that we cannot say for certain at the moment, but it would be wrong to deny that there is a danger, because there is.

Although projects have been cancelled—in addition to Summer Row there has been the announcement by Hilton Hotels—there are also projects going ahead. On Friday I had the pleasure of being at the opening of the new Bilston police station, a development of several million pounds at the heart of the town. The increased visibility of the police presence in the town is very welcome. Of course it is a pity and an irony that we are opening a new police station at the moment when the number of police in the West Midlands police force is set to be cut significantly; but the police station itself is of course welcome. I was also able to tour the partially built new Bilston leisure centre. That is also a multi-million pound project. It is part of the Bilston urban village project, which is so important to the future of my constituency. It will have a new swimming pool, a training pool, indoor sports courts and a gymnasium. It is a crucial investment, not just because of its construction, but for quality of life and the future health of the local people. After I went there I visited a private sector development along the black country route, where a new car auction will be opened. The owners told me that at least 15 new jobs will be created there. Although we have had bad news, therefore, developments are going ahead in the city and we must build on that fact.

We must do better in decision making. The supermarket wars that affected the constituency of the hon. Member for Wolverhampton South West and my own constituency dragged on far too long. The problem was that although the different supermarkets may have owned the land they were not the only owners of the interest in the matter. The people of Wolverhampton also had an interest, which was in major sites not lying fallow for years while landowners fought battles in court, and in not having such blight on major parts of the city.

The city council has produced new plans, including the plan for the Bilston corridor. I recently attended a meeting of the Metro business partnership, which represents businesses sited along the Metro line, between the city centre and Bilston. It was ably chaired by Anna-Maria McAuliffe of the McAuliffe construction group. The concern expressed by a number of businesses was about whether we get the right balance between allocation of land for housing and for future employment. I think that in a constituency that is in the top 15 for unemployment it is important to allow potential for business to locate, and for jobs to be created. We should not get that balance wrong.

As to the local enterprise partnership, we could go back over Government decisions but I do not propose to. They made their decision to abolish the regional development agency. I would not have made it, but it has been made, and the question is what to do in the future. I pay tribute to the business people from around the black country who have worked so hard to put the local enterprise partnership project together. As we were briefed by Mr Stewart Towe last week at a meeting with the black country chamber of commerce, those people have identified a serious agenda involving skills, planning and some of the issues that we have been discussing, including transport, on which they want to take action. However, they need resources to do that, and the regional growth fund is already heavily oversubscribed. I believe that the Government will have given a false prospectus to businesses in the black country and, indeed, elsewhere in the country if, having worked so hard to put the partnerships together, they do not get the resources to deliver. We shall watch closely to see whether their effort is matched by Government effort to provide those resources. If that does not happen, it is not only the business people who have worked so hard, but our constituents, who will feel very let down.

These have been tough times for the black country economy. It was hit hard by the recession. Although unemployment is high, the interventions made by the previous Labour Government had an effect in stopping recession turning into depression. The figures for unemployment, business failure and home repossession are all significantly lower for the recession we are coming out of than they were in the previous ones. Our challenge now is to take the strong history and identity that I mentioned at the beginning of my speech and bend it to a new purpose. Our opportunity is there. We have a strong aerospace cluster: let us use it to win more trade and business. The economy is shifting towards lower-carbon purposes. Let us use the excellence and creativity of the manufacturing tradition, so that we can take opportunities in the automotive field and other low-carbon fields. The creative industries are a growing percentage of the economy and they should also be supported and nurtured in the local economy, as should distribution industries and retail, and many more. We need the right skills and the right decision-making framework, nationally and locally, and we need the backing of Government to make it happen.

[Emma Reynolds (Wolverhampton North East) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Riordan. I congratulate my parliamentary neighbour, the hon. Member for Wolverhampton South West (Paul Uppal), on securing this important debate. Each of the three Wolverhampton MPs agree, I think, that driving regeneration in our city is a priority. There has been recent frustration about the Summer Row project to which the hon. Gentleman referred. If anything good can come out of bad news it will be the mood of co-operation in Wolverhampton—the sense that we need to pull together to make regeneration happen.

I know that in last week’s and previous council meetings there have often been heated debates, but councillors of each of the three parties understand how difficult it is to bring about regeneration. It might be easy to draw up the plans but it is hard to deliver, and lessons should be learned about the lack of progress on Summer Row, and other projects, which my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) mentioned. I pay tribute to my right hon. Friend in particular for his work as Business Minister in the Labour Government, and I want to echo some of his concerns, and the questions he put to the Minister today.

As a Member for the north of the city I shall, as the House might expect, concentrate my first remarks on the aerospace industry because there is an aerospace cluster in the north of the city. We have three major aerospace companies: Moog, Goodrich and HS Marston. We also have Timken in the south of the city. The hon. Gentleman mentioned the i54 business park and the importance of that site in creating and sustaining jobs in the city.

One of my first meetings as a Member of Parliament was with Moog, which was considering moving out of Wolverhampton, or to the i54 business park. We were determined to make sure it stayed in Wolverhampton so that we could retain the hundreds of jobs it supports. I thank Advantage West Midlands not only for working with Moog to ensure it stayed in Wolverhampton and moved on to the i54 site, but for getting the project off the ground. A lot of decontamination work was done on the site, thanks to the work of Advantage West Midlands. As my right hon. Friend said, we understand that the decision to abolish the regional development agency has been made, but I should like the Minister to comment on how to retain some regional strategic vision for the west midlands, and the black country in particular. I think that the i54 is central to that. Will the Minister say how the Government will see that vision once Advantage West Midlands has been abolished?

I would also like to comment, as did my right hon. Friend, on the work of the local enterprise partnerships. It is important that LEPs in the black country and elsewhere in the region work together. Like the i54 technology park, they have a strategic importance.

I have another question for the Minister about the i54. I know that consultation is taking place at the moment, but what will happen to the assets of Advantage West Midlands? Wolverhampton city council and South Staffordshire council have a stake in the i54 site, but most of it is owned by the RDA. I would prefer the state to retain ownership of that significant asset, as the cost of security there is substantial and I doubt whether a private sector company would want to take it on at the moment.

I turn now to exports and inward investment, which were mentioned by both of my parliamentary neighbours. I wish to speak specifically about exports. Last year, I went on a parliamentary visit to China. On my return, I was inspired to ask the manufacturing advisory service in the west midlands if it would organise a meeting for local businesses in Wolverhampton and more widely with the aim of helping them to export to China, as it is not always easy to export there. The meeting took place two weeks ago in Birmingham and there was a great turnout, with great demand from local businesses. Will the Minister say a little more about the Government’s overall strategy on driving up such exports, and ensuring that local businesses have the necessary advice and are given it on a timely basis?

My right hon. Friend mentioned partnership work with India, which is incredibly important. I know that the leadership of the council—both the Labour leader, Roger Lawrence, and the chief executive—are determined to ensure that we exploit the cultural and trade links, referred to by my right hon. Friend, between our city and India and other emerging economies around the world. Will the Minister reassure this House that when the Government finally set out their growth strategy they will take account of the strengths and weaknesses of the regions? I agree with the hon. Member for Wolverhampton South West that many of the opportunities presented by globalisation have in the past gone to London and the south-east, and that we have not always been able to grasp them. The Government should take account of those strengths and weaknesses and of the needs of the regions, and particularly of the black country. As my right hon. Friend said, the black country is shaped by its history. We used to be the beating heart of the industrial revolution. Although we still have a large manufacturing base, we have lost jobs in that sector. There is much talk about rebalancing the economy, but will the Minister tell us how much work is going on to make it happen?

I declare an interest, in that the manufacturing advisory service is based in my constituency at the Wolverhampton business park. However, that is not the only reason why I would like MAS to have a continuing regional focus. Will the Minister tell us something of the Government’s intentions? Various rumours are flying around about wanting to centralise MAS in London, but I would advise against that. Local businesses need advice that is tailored to their specific needs, and it should be delivered locally. I have received that message from several businesses in Wolverhampton, and I urge the Minister to take it on board.

I deal now with the regional growth fund. We know that that there is a substantial decrease in the money being made available. The RDAs used to receive in the region of £2 billion a year, and the regional growth fund is set at £1.4 billion over three years. If my maths is correct, that is a little over £500,000 a year, which is barely a fifth of what we had before. Like my right hon. Friend, I do not want the Government to give local business organisations a false prospectus about how much money they will receive from this pot. Will the Minister clarify the timing of decisions on bids for the regional growth fund? As expected, I support the bid from the black country local enterprise partnership, as well as that of the Black Country Reinvestment Society mentioned by the hon. Member for Wolverhampton South West. Will the Government give special consideration to those parts of the country whose needs are greatest and who were hit particularly hard?

[Mr McFadden]

I endorse what my hon. Friend said about the Black Country Reinvestment Society. Every time we meet businesses, they question us about access to credit, difficulties with the banks, the terms of loans and all sorts of other conditions being changed—and sometimes refusals, which makes life harder for them. The society plays a crucial role in filling that market gap by lending to small businesses that cannot otherwise get credit. It helps them to survive, to grow and to employ. I am sure my hon. Friend will acknowledge that many in our region have supported the society’s bid to the regional growth fund precisely because it fills that gap. Daily experience tells us that the banks are not filling it.

[Emma Reynolds]

I could not agree more. The Minister will doubtless take on board the strong message that he has received from the three Members for Wolverhampton about our support for the bid from the Black Country Reinvestment Society. As my right hon. Friend said, it is important that the Government fill that gap, to ensure that loans are available to enable local businesses to grow, and thus to employ more people. Frustration is felt across the House—this is not a party political point—that the banks are not lending to viable businesses that need money to be able to flourish. The Minister will have received that message loud and clear.

Some projects have been set back by various problems, the main one being planning. My right hon. Friend mentioned the fact that two supermarkets are wrangling with each other over sites in his constituency and in that of the hon. Member for Wolverhampton South West. As my right hon. Friend so eloquently said, it affects not only the two supermarkets but our constituents. We have seen those sites lying redundant for many years while the supermarkets fight it out in the courts. I hope that progress will be made, and that the Raglan street and the old Royal hospital sites can be developed. There is a great need and a demand for that.

Another site in my constituency that has gone through this process, with bids and projects falling through, is the Springfield brewery site near the railway station. It is another example of plans being frustrated. The hon. Gentleman mentioned phase 2 of the Wolverhampton interchange project. I would like to see the railway station completed, but the work has been put back. There are uncertainties about whether it will take place, but I hope we can get it back on track.

My right hon. Friend made the good point that there is a tension between the drive for localism and the demand of business, which we hear loud and clear, for clarity and speed in the planning process. I would like to hear the Minister’s thinking on this. If we are to drive regeneration in Wolverhampton, it is essential that some of these planning problems are resolved, and that businesses have the certainty necessary to invest in Wolverhampton. We need to think about these things clearly. Is there a tension between the spirit and the provisions of the Localism Bill, and in some of the issues that we have outlined today?

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[Ian Lucas (Wrexham) (Lab)]

It is a pleasure to appear before you again, Mrs Brooke, and it has been a pleasure to listen to the debate.

I commend the hon. Member for Wolverhampton South West (Paul Uppal) for initiating this debate on behalf of his constituency and, of course, the wider region. I hope that I get all the geographical directions and references correct in my contribution. I also commend all the right hon. and hon. Members who have spoken eloquently on behalf of their constituents today. It is extremely valuable to have the opportunity in Adjournment debates to focus on particular areas. Although that is very valuable for me, it is even more valuable for the Minister, because he can focus on that particular area of the country and the particular issues relating to it not only in the contribution that he will make to today’s debate but in his preparation for it.

The contribution that debates such as this make cannot be undervalued, especially when we have had such excellent speeches today from all parts of the House. As the hon. Member for Wolverhampton South West said, it has been a non-partisan debate because all of us want Wolverhampton and the black country to succeed. Although we have different road maps to achieve that aim I am sure that all of us can make positive contributions towards achieving it.

One issue is that we are, of course, in difficult economic times. We have just come through the worst recession since 1929 and a huge banking crisis. There are difficult times at present with very difficult growth figures. In that context, finding the right policies to allow Wolverhampton and the black country to develop and prosper is extremely difficult, and there are different routes that can be taken.

Concerns have been expressed about the possible conflicts that exist in legislation such as the Localism Bill. In an area such as Wolverhampton, it seems to me—although I of course defer to the local knowledge of the area of all right hon. and hon. Members who have spoken today—that getting the balance right between the interests of business and the interests of residents will be extremely difficult. We all have planning issues that arise in our area that are difficult for us to make calls on, because there are different and conflicting ideas about them.

One of the themes that has emerged in the debate is that, as far as Wolverhampton and the black country are concerned, the focus must be on business and growth. My right hon. Friend the Member for Wolverhampton South East (Mr McFadden) referred to the fact that his constituency is in the bottom 15 in the country as far as unemployment is concerned. That is a major threat to the prosperity and the attractiveness of the area, as it would be for any area of the country.

Of course, Wolverhampton has been well established for many years as a hugely important manufacturing city and as a city that has a huge amount to offer. As we have already heard, what needs to happen is that the attractions that made Wolverhampton successful in the past—entrepreneurial drive and individuals with ideas who were able to use those ideas to create manufacturing, jobs and prosperity—need to be developed once more. Those attractions have been developed before and they need to be developed again.

At the heart of that process is the skilled work force that we have just heard my hon. Friend the Member for Dudley North (Ian Austin) talk about. He referred to the fact that, at present, there are young people who are training and trying to get on in their lives, and they are being given support through the education maintenance allowance, but that support is being withdrawn. That is pulling a ladder away from those young people and it is a very damaging policy.

I know that the Government are introducing alternatives to the EMA. However, earlier this morning I was speaking to a group of young people from my constituency of Wrexham about the EMA. For the west midlands, that Government policy will lead to a competitive disadvantage, and that also applies to tuition fees. Therefore, that educational limb of development policy is putting Wolverhampton at a disadvantage.

What is very striking about the globalised world in which we live is that it is intensely competitive. Globalisation will not go backwards. It will continue and become more intense. Consequently, if we are to compete we must devise in our own country the right policies to deal with it. That means that we need to take advantage of the skills and the established industries that we have.

In the Wolverhampton area, aerospace is a hugely important industry. We are one of the leading aerospace manufacturers on the planet. In fact, we are the number two aerospace manufacturer, behind only the United States. To ensure that we continue in that position and continue to offer work of the highest quality, an area such as Wolverhampton needs to compete. It needs to compete internationally, so it needs to have the support of Government with provisions such as the grants for business that were referred to by my right hon. Friend. The reality is that, if that Government support is not provided within the UK, it will be provided in France, Germany, Spain, China and other parts of the world. It is simply not the case that businesses and industries such as aerospace will not move. If we do not compete on a level playing field—to use that dreadful phrase—with those countries, in terms of the type of support that the Government offer, we will lose out.

[Mr McFadden]

Does my hon. Friend agree that the other important point about that state help is that it is not just the Government going around signing cheques for business, as it has sometimes been characterised, but their playing a, usually, small role in levering in significantly more private sector investment? One of the striking characteristics of the Department for Business, Innovation and Skills figures on the grants for business investment scheme is that for every £1 spent by the Government £10 more was levered in from the private sector. This is not, therefore, just about propping up failing industries or holding back the future, it is about the Government playing a small role to get the private sector to play a far bigger one.

[Ian Lucas]

My right hon. Friend is of course absolutely right, and the examples are many, the most obvious recent one being Nissan in the north-east. Its Leaf vehicle manufacturing is supported by this Government, who decided that it was a sensible investment. With one exception, the Government have looked at the investments made by the previous Government and have supported them. They do lever in private finance, and that inward investment has to come.

We have heard that Wolverhampton has a strong Indian connection. As someone from outside of the region, I beg to suggest that that connection be used strongly by the community—I am sure it is—in relation to its competitiveness within the UK. The type of connection that culturally can exist between a city with Wolverhampton’s background and the Indian community locally can create huge export opportunities, and I venture to suggest that the university of Wolverhampton will develop Indian contacts. Does the Minister believe that the student visa restrictions being considered by the Government are in the best long-term interests of UK industry? The granting of those visas brings so much inward investment and income to our universities, and I am receiving many representations about the visa restrictions, from universities both in my constituency and beyond.

--- Later in debate ---

[Mr Prisk]

I agree entirely. It is not just about the core elements in the curriculum; it is also about how individuals learn what I call employability skills. [Interruption.] Did I gather that the right hon. Member for Wolverhampton South East (Mr McFadden) wanted to intervene?

[Mr McFadden]

I am happy to wait.

[Mr Prisk]

Okay. I will canter on until the right hon. Gentleman wants to intervene further. Another important issue about skills that is relevant to the black country is the new generation of university technology colleges where students will be able to start training at age 14.

[Mr McFadden]

rose—

[Mr Prisk]

Now the right hon. Gentleman would like to intervene.

[Mr McFadden]

I thank the Minister for giving way. I wanted to intervene before he moved on from apprenticeships, but I did not want to cut short his answer to the hon. Member for Wolverhampton South West (Paul Uppal).

When I was in the Minister’s shoes and had some responsibility for these issues, we put more funds into what we called higher-level or technician-level apprenticeships, precisely in order to address the skills gaps that have been referred to. Will he acknowledge that a significant proportion of the funds that the Government are putting into apprenticeships is coming from the Train to Gain scheme? Therefore—this is a factual question; I do not want to enter into a debate about the whys and wherefores of Train to Gain—will he acknowledge that, given the cost of one apprenticeship, for which we trained three or four people under the Train to Gain scheme, if we fast-forward two years or so, the Government will actually be funding fewer learners at work than they are today?

[Mr Prisk]

The difficulty is that we are not comparing apples with apples. What is gained under Train to Gain is different from what is secured by apprenticeships. That is why we have sought to increase the number of apprenticeships over that period. I do not think that one can say that it is just about head count; it is also about quality, not least because engineering employers say to me that they need the right people with the right range of skills.

[Mr McFadden]

We could have a debate about the benefits, but my question concerns the number of people at work being helped by Government support. The Minister must know the answer. Will he acknowledge that in two years, there will be fewer learners at work funded by Government as a result of the decision to switch Government money from the Train to Gain budget, as he outlined?

[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.