West Midlands

Robert Flello Excerpts

Tuesday 7th September 2010 Westminster Hall

[Richard Burden]

My hon. Friend makes a good point, and I will shortly say a little more about Advantage West Midlands and the haziness that seems to surround some of the present Government’s proposals for change. The responses from businesses and from people outside the political sphere are clear. Sometimes, one gets the impression that the future of effective regional co-ordination—I am talking about the type of co-ordination that Advantage West Midlands has been involved with—has been a matter for debate just among politicians, but it has not. It is an issue for the people affected by the decisions of organisations such as AWM, and for every business that has applied for and may have received assistance from the Advantage Transition Bridge Fund. It is a matter of economic health for many businesses in our region, and an issue of importance for the third sector in the region that engages with AWM.

The Regional Committee had a seminar in the west midlands that brought together different organisations, institutions and players to assess the future of governance in the region. Again, the message was clear that what we need is strong regional co-ordination and a strong regional tier that is accountable. It is easy to come up with the slogan, “Scrap the quangos”, and then look for a quango in the west midlands and say, “There’s AWM, let’s get rid of it.” People know that that is the easy bit; the difficult bit is to get away from the headlines and work out and put into effect the policies that will enable our region to win through. My hon. Friend the Member for Birmingham, Erdington was absolutely right about the matter.

I have referred to businesses, but often the impact of Government policy in the west midlands is felt not just by them but by the people whom we represent. The National Housing Federation recently highlighted that Birmingham is one of the places likely to be most badly hit. Its chief executive, David Orr, said:

“The changes could see hundreds of thousands of vulnerable people fall into debt, forced out of their homes and neighbourhoods and crammed into overcrowded ghettos. Many others will simply become homeless.”

He was referring to the coming changes to housing benefit. All this comes at a time when Birmingham city council itself is proposing to cut no less—and it could be more—than £7 million that was allocated by the previous Government to tackle worklessness through the working neighbourhoods fund. It is not going to reallocate or redistribute that money to enable it to be spent more effectively; it is just cutting it and removing that level of support in tackling worklessness. As my hon. Friends know, the council is proposing to cut back on community day nurseries for some of the most vulnerable people in our city, even though such a proposal runs counter to the idea of stimulating and taking forward the principles of early intervention to which every single political party in this place signs up.

I turn to Longbridge in my constituency. I welcome the fact that, in Shanghai Automotive, there is still an important car presence there. There are plans to introduce new models for the coming year and it is the major technical centre for the whole of Europe, which is good news. However, Longbridge can never again be simply a car plant, no matter how important that plant is. Regeneration and the creation of a diverse economy in Longbridge and the surrounding areas are vital to the future. It is important for the regeneration not just of my constituency but of the south of Birmingham and the regional economy as a whole.

A bulletin produced in August by Birmingham city council, Bromsgrove district council and Worcestershire county council, all of which are either Conservative or coalition led councils, said:

“The new government’s intended changes to planning policy and significant budget cuts continue to have a detrimental consequence on the development programme for Longbridge. Certainty of funding for the MyPlace programme, Regional Infrastructure Fund and the future of HCA funding continues to be at risk”

I am pleased that around £4 million of the Homes and Communities Agency’s money, which was earmarked by the previous Government for Longbridge, has now been confirmed by the present Government, but the message of that update remains a chilling one for many of us. The report on housing and economic development in the west midlands by the former regional Committee said:

“Substantial public funding will remain necessary to increase the supply of affordable housing in the region to the extent required.”

That conclusion was not just dreamt up; it was based on the evidence that we received. It is difficult to relate it to the cuts that are now taking place in housing: cuts of £100 million from the National Affordable Housing Programme, of £50 million from the Kickstart programme and of £50 million from the Housing Market Renewal scheme. I have described the likely impact of that on regeneration programmes such as Longbridge. No doubt other hon. Members can give examples from their own constituencies.

Such cuts affect real people in real communities in our region. For example they feel the impact of the scrapping of 64 school rebuilding projects that had been in the pipeline under the Building Schools for the Future programme, not to mention the scores of other schools, including all but one in my constituency, that never even got to the starting grid of the programme.

Hon. Members, particularly those on the Government Benches, may say that difficult decisions have to be made and they are right. They may say that capital spending would have been squeezed by whoever won the general election and there is force in that argument. Difficult decisions were going to have to be made, but difficult decisions are about making choices. It is a question not just of what choices to make but who makes those choices, who one listens to and what one takes into account when making such choices. That is why it is so important in this climate to listen to the people who are most likely to be affected by the decisions. If they are to have their voices heard, they must have institutions through which they can speak. In Birmingham, in my own home town, we now hear that the city council is proposing radically to scale back the very mechanisms through which local people can have a say in council decisions. So much for all the talk about a big society in Birmingham.

What about the voice for our region? The final report of the West Midlands Regional Select Committee before the general election looked at how institutions can engage more effectively with the public and how that engagement can be used to help the region to become more responsive to the needs of the people who live there. We also recognised that Westminster needs to look at regional issues in a more coherent way. Normally when Select Committee reports are published, the convention is that the Government respond not only within a reasonable time scale but in a considered way. The Government will produce a report that will be discussed by the Select Committee. The Select Committee will consider whether the Government have tackled the issues that were proposed in its report and it will be its decision whether to publish the Government’s response. Occasionally, when there are some holes in the response, the Select Committee has the right to send it back to the Government and say, “Have another think about it before we publish this.” In that way, we can ensure that Parliament can consider properly not only what the Select Committee has said but the Government’s response. My hon. Friend the Member for Dudley North, who is a former Minister, will know that that is precisely what happened over the last year. We produced reports, and they were responded to. There was one instance—I am sure he will not think that I am breaking any confidences here—when we felt that the initial Government response was not good enough. We sent it back and the Government had a rethink and came forward with another response, which was then published. It was done in a considered way that respected the region and the issues that it was raising.

The report, “Making the Voice of the West Midlands Heard”, came out before the general election, but it was dismissed by the current Government in just two sentences in a written statement. Our report on housing and planning in the west midlands, which also came out just before the general election, was dismissed in just four paragraphs in the same written statement. Now Ministers are proposing to scrap the regional development agency, Advantage West Midlands. That is despite the fact that, as my hon. Friend the Member for Birmingham, Erdington said earlier, a National Audit Office report judged the RDA’s performance as “strong” and gave it the maximum possible rating across most areas of the assessment, repeating the findings of the NAO’s report of 2007. As my hon. Friend also said, the most recent independent evaluation suggested that for every £1 invested by Advantage West Midlands, a return of £8.14 is generated for the west midlands region.

Advantage West Midlands is not perfect. My Committee—the West Midlands Regional Committee—suggested changes, including changes to the accountability arrangements for AWM. However, the evidence that was given to us was that AWM’s role in co-ordinating effort among regional players, in securing investment and in putting that investment—hard cash—to use in the areas where it was needed was and is absolutely vital. So, when the Government talk about cutting quangos and then relate that talk to AWM, they are not just talking about cutting institutions; they are talking about jeopardising the programmes and the real investment on which our region depends. And it is really not good enough to say that the new bodies that the Government are talking about—the so-called “local economic partnerships”—will pick up where the RDAs are just leaving off.

Partners around the west midlands, including in my own sub-region of Birmingham and Solihull, want to be as constructive as possible and they are putting ideas together about how they could put in place a local economic partnership. However, I ask the Minister today to be as clear as he can be in the information that he gives and if he cannot give information today I ask him to set out some key points in written form for hon. Members from the region.

In my opening remarks, I talked about the importance of research and development for the west midlands and about the importance of having the mechanisms for stimulating R and D in businesses up and down the region. If AWM is going to be scrapped and if local economic partnerships, which are undefined as yet, are going to replace AWM, it is important that we know which programmes will continue and which will not. Furthermore, of those programmes that are going to continue, it is important that we know which ones will be administered entirely centrally by Government and which will be controlled and administered by local economic partnerships in the future.

I ask the Minister to say clearly what actually is the difference between the budget that will be made available in the west midlands to do the type of things that I have been referring to in my speech and the budget for AWM, because I think that people in the region deserve to know what the difference is. If we are talking about AWM, we are talking about a budget of about £1.5 billion a year. However, when we look at the budget that is likely to be available for local economic partnerships, we are talking about £1 billion, which is not per year but spread over two years.

If I am right about that budget difference—the Minister represents the Government, so he will know the figures better than I do—what is it that will go? What is it that is going to be cut? Perhaps he will say, “Well, it will just be the bureaucracy that is going to go. That is what is going to be the difference—just the bureaucracy. The programmes will be maintained.” However, if that is the case, I must ask, “Who is going to pick up and administer those things? Who will do the work?” Is it the Government’s view that local authorities will simply pick up the slack? Is it the Government’s view that local authority and local authority staff will do that work?

[Robert Flello (Stoke-on-Trent South) (Lab)]

I am grateful to my hon. Friend for giving way. He is making an extremely good and impassioned speech, which I am listening to with great interest.

I think that we are already seeing some evidence of where these cuts will fall. In my own constituency, I was approached by a company that wanted to establish a brand new mug-making business, which is something that we have not seen in the Potteries area for far too long. That company was promised a grant of £250,000 from AWM, but that grant has now been cut. The whole project is now in jeopardy; the nine-month order book that the company had already managed to accumulate is now in jeopardy, as are the 50-plus jobs that were planned. I think that we are already seeing the evidence of the cuts.

[Richard Burden]

I welcome my hon. Friend to today’s debate. He makes a very important point. I think that the point that he is making is twofold, and both aspects are important.

The first aspect is the type of thing that I was talking about earlier. All the indications are that there are going to be cuts, which will be real and substantial. Those cuts will not simply be in services but in the very things that will be able to generate the wealth that will keep unemployment down, create jobs and enable regional recovery. So there will be substantive cuts.

However, the second and more insidious thing that is going on at the moment is that because of the policies that the Government have come out with and because they have said that AWM will go, to be replaced by these local economic partnerships that are as yet undefined but will take up the strain, the Government have bred uncertainty and unpredictability at the very time that we need certainty and predictability in order to invest and innovate for the future. That is the story that my hon. Friend is talking about in his area and I think that it applies elsewhere.

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[Richard Burden]

I am also looking forward to the Minister’s response. I simply say to the hon. Lady what I said before, that AWM was not perfect and that choices had to be made, as choices always have to be made. However, to make the choice, there must be the institution that people can debate with; to make the choice, there must be the engagement, and to make the choice we need to have the discussion. That is the point. At the moment, it is unclear what the institution will be in the future, what its budget will be and who will have a say.

[Robert Flello]

I am very grateful to my hon. Friend for giving way; he is being very generous in allowing interventions. If I may respond to his point about the perfectness or otherwise of AWM, I will say that I have been one of its critics in the past. Historically, however, the problem lay very much with Stoke-on-Trent city council not being able to use the resources, the funding and the talents that were being provided. So I think that quite often AWM got the criticism, when it really should have been levelled more locally.

[Richard Burden]

My hon. Friend makes an important point. I just have an inkling that, perhaps a little later on, my hon. Friend the Member for Stoke-on-Trent North may well have some particular things to say, not only about Stoke-on-Trent itself but about north Staffordshire. Earlier I said that our region is one that is in transition and that is diverse. However, the particular problems affecting north Staffordshire are very large and very acute, and targeted help, support and attention are required to tackle them.

Talking about north Staffordshire raises another point. If regional institutions such as AWM are going to be scrapped and if there are going to be these local economic partnerships springing up all over the place, it is understandable—absolutely understandable—that different local economic partnerships in different areas are likely to come up with different priorities and different solutions that affect their own particular area. It is absolutely understandable that they will reflect local aspirations and local circumstances. However, the question will arise in the future—who will be the arbiter of those competing aspirations? In the future, will it actually be the case that, for all the talk about decentralisation, central Government will be the arbiter of those competing priorities, rather than partnership bodies in the region itself? Those regional bodies were too unaccountable, but it is not a case of making them more accountable. It is actually a case of taking that power from the region altogether and giving it to central Government.

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[Joan Walley]

That all sounds very good and plausible, but one needs the necessary recourses, skills, expertise, professionalism and governance to make that happen. One also needs people who know what they are doing and understand their role in delivering that. As my hon. Friend the Member for Stoke-on-Trent South (Robert Flello) mentioned earlier, and as was well documented in the report on Stoke-on-Trent produced by the local government democracy commission, there are particular issues there that cannot be dealt with simply by stating that if local businesses and representatives have a say in what happens it will all be all right, and everyone recognises that. I am afraid that the problems are much more deep seated than such a view suggests.

In traditional manufacturing areas education and skills are often seen as the way out of the problems, and I belief that the key challenge we face is to ensure that our young people get the education they need and that there are the jobs available for them locally so that they can stay in the area and be part of its local governance arrangements. That way, they will become the leaders who will be able, along with the whole area, to make the case for what we need.

Sadly, Stoke-on-Trent was behind other areas in getting its act together and understanding the changing needs of the global economy. However, as was well charted in the meeting MPs had with the North Staffordshire chamber of commerce in June, we now understand that and have started to see an improvement in the local economy, as a result of the measures that the previous Government put in place to get us through the recession. We have started to see further improvements in trading conditions and in levels of job creation, and home market sales and orders for the manufacturing and service sectors have risen significantly, and that has all been charted by the North Staffordshire chamber of commerce. We now have the necessary expertise and know what we need, but just as we start to see those improvements, we find that we are in a period of limbo in which we genuinely do not know what will replace the RDAs, what money will be available and how those scarce resources will be allocated.

[Robert Flello]

My hon. Friend is making an extremely impassioned speech on behalf of an area that I, like her, love and feel strongly for. Does she recognise that, just as things are starting to turn the page in North Staffordshire, and in Stoke-on-Trent in particular, the rug is being pulled from under us, not only in terms of not knowing what the future holds, but in terms of the concrete help, such as the funding for new homes and for businesses, which has been pulled? All those things that we were starting to get to grips with are gone. The other issue, which she might like to comment on, is that there is now a danger that the LEPs will be in competition with each other and that Stoke-on-Trent and North Staffordshire might lose out to the big conglomerate of Birmingham and its immediate neighbours. When it comes to the distribution of funding to the LEPs, there is a danger that Stoke-on-Trent will yet again be hidden away at the bottom of the pile and will have to make do with the crumbs.

[Joan Walley]

There was no intention on my part for Stoke-on-Trent to be hidden away at the bottom of the pile. That is why I am speaking in this debate with my colleagues and saying to the Minister that we look forward to our further meetings in the coming weeks. In one meeting later this week we will discuss the ceramics sector with the Secretary of State, which will give us an opportunity to explain to the Government that ceramics is a creative industry and to educate them on what our local industry is doing. I could talk at great length, had I sufficient time, about how firms, such as Steelite in my constituency, are shortly to launch a major campaign to show the world the tableware that is being manufactured in Stoke-on-Trent and explain that there is a piece of Stoke-on-Trent just about everywhere around the world. We want the Government to recognise that the ceramics industry needs that support and assistance if it is to flourish, particularly in relation to energy issues, a cross-governmental concern.

We have further meetings arranged with the Government to focus on our further education college, so I am pleased that we will have the opportunity to put the case for the investment that is needed. If we can secure that investment, we will secure the skills, education and training for our young people so that they can grasp those opportunities, as my hon. Friend the Member for Stoke-on-Trent South has just said. We are in no way allowing that freefall or the limbo land that we are in to prevent us from making the case for what we need in Stoke-on-Trent.

Having said that, I am worried that we are already starting to see people leave, from the NHS and from key professions. Many professionals are moving to other jobs elsewhere in advance of the redundancies that will be made. My main concern is that people will not stay because there will be no jobs and that we will not have the people in the positions or the institutional framework to secure that funding. Some of that money will come from Europe. European innovative funding has already been dedicated to Stoke-on-Trent and we need to ensure that it is kept there.

I am conscious of the time and the debate being short. In summary, the local economic partnership plan being submitted is not what I would prefer, but it has to be supported by the Government to the fullest extent when the application arrives on their desk.

We have an issue about the uncompleted funding in the university quarter. The money needed for the further education colleges has to be there. Money is also needed to complete the bus station that serves Stoke-on-Trent in Hanley. Never mind Birmingham runway extensions or anything like that—we do not have a basic bus station to keep our essential infrastructure going which, again, will not help us get the regeneration that we need. Having said that, money must not come at the expense of the European and other funding that is taking place in the six towns of Stoke-on-Trent, such as Burslem. Those issues need to be thrashed out.

I have major concerns about how the demise not just of Advantage West Midlands but of the regional government office will leave us with no planning strategy. We could well end up being left with no solution for the brownfield sites, on which we should be concentrating, in the urban area of Stoke-on-Trent. We could get investment decisions whereby people will take their plans elsewhere and develop on green belt sites. In the absence of a coherent environmental strategy, it is difficult to see how all that will take place.

I am anxious to hear in good time about the Minister’s plans. Unless we know those plans, we cannot ensure that what we are having to salvage can be taken forward. Our fragile economic improvement is too precious—we must not see a double dip recession. I look forward to what the Minister will say and to the many ministerial letters saying that he has understood the needs of Stoke-on-Trent and north Staffordshire.

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[Robert Neill]

The hon. Gentleman cannot go on blaming the recession. That is a fantasy land. The Opposition like to think that a recession walked in and destroyed everything. No. They mucked up on their watch. The people of this country, including those in the west midlands, are paying the price for the previous Government’s incompetence.

[Robert Flello]

I invite the hon. Gentleman to Stoke-on-Trent South—specifically, to what used to be known as Coalville and is now known as Weston Heights—where he will see a fantastic housing success story that ground to a halt because the investment also ground to a halt.

[Robert Neill]

That is why the coalition has made it clear that getting the economy back on a safe track has to be central to what we do. There is a risk that, unless one gets to grips with the deficit of £156 billion, we will not have an economic base enabling us to take forward the initiatives that we all wish to see and which unite people from all parties. We disagree about the remedies, but the need to make some reductions in spending programmes, which have been mentioned, goes back directly—I am sorry to have to say it—to the previous Government’s failure to tackle the deficit. I cannot accept the proposition advanced by some people, however sincerely, that the solution is to carry on spending when the country is already mired in debt. I do not believe that that would serve anyone.

Let me return to specific points raised in this debate. Against the context that I have mentioned, the answer is to unlock initiative, partnership and co-operation. The point was well made by my hon. Friend the Member for Solihull that there is no reason to assume that a one-size-fits-all approach will automatically meet all the needs and requirements of such a diverse area as the west midlands. We take the view, as we always have done, that Government office regions frequently do not represent the natural economic units, which may be a much better basis for economic collaboration. That is why we have said that we will not rigidly use those regions as the basis for regional development agencies or Government office interventions, but will instead let the people on the ground, who know their area best, come forward with ideas about the way forward.

I am pleased that some nine proposals have been submitted for local economic partnerships from local authorities and business in the west midlands, in a number of configurations. I can say to the hon. Member for Stoke-on-Trent North (Joan Walley), who mentioned that, as well as other matters, that a Stoke and Staffordshire LEP has been proposed. Those proposals will be evaluated by my right hon. and hon. Friends who are responsible for such matters and they will consider the best way to go forward, as my hon. Friend the Member for Solihull said.

There has been a positive and rich response from business and local authorities in the west midlands. I am not as disdainful as the hon. Member for Dudley North (Ian Austin) is of local initiative. The answer does not always lie in sneering at the little people and in the big battalions. Often, local initiative is likely to get more focused results. That is why we have confirmed the abolition of the regional development agencies, along with a plethora of top-down machinery of which they were a part. Although I, too, recognise good work done in individual cases by such agencies, that does not justify the highly centralised remit of which they were part. I want to make some other points, but I shall give way one last time to the hon. Gentleman.