West Midlands

Jack Dromey Excerpts

Tuesday 7th September 2010 Westminster Hall

[Richard Burden]

My hon. Friend is right. I fully accept his apology. Indeed, I congratulate him, a fellow west midlands MP, on being elected as Chair of the Select Committee on Business, Innovation and Skills. I also welcome my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who is a member of that Select Committee, and my right hon. Friend the Member for Warley (Mr Spellar), who takes a keen interest in automotive affairs.

My hon. Friend the Member for West Bromwich West is absolutely right: if one industry sums up the fragility of the recovery, it has to be the automotive industry. It was one of the hardest-hit sectors, but it came through strongly. However, that did not happen by accident, but because people in the industry—whether the management or the work force—willed it to happen and because the Government were prepared to stand behind them. I do not say that the car scrappage scheme turned the automotive industry around, but it was part of the jigsaw of things that allowed that to happen. I do not say that the creation of a taskforce in the west midlands allowed the industry to come through, but it was part of that jigsaw.

[Jack Dromey (Birmingham, Erdington) (Lab)]

I give the same apology, Mr Hollobone, as that given earlier. As a member of the Select Committee I have to be at its 10 am sitting.

Advantage West Midlands has evidence that for every £1 of public money invested, £8.14 is generated in wealth for the local economy. It was rated by the National Audit Office as the top-performing regional development agency, and it was praised for its management of the shock of what happened to Rover between 2000 and 2005, and for consolidating an automotive cluster that employs 150,000 people in the midlands and which is vital to the regional economy. Does my hon. Friend agree with the clear voice of business in the west midlands, which supports Advantage West Midlands and argues for the retention of a strong regional economic structure?

[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?