West Midlands

Joan Walley Excerpts

Tuesday 7th September 2010 Westminster Hall

[Joan Walley (Stoke-on-Trent North) (Lab)]

It is always a pleasure to take part in Westminster Hall debates. I am particularly pleased to do so under your chairmanship, Mr Hollobone, because I know you understand the role of Back-Bench MPs and the importance of getting constituency issues on the agenda. I congratulate my hon. Friend the Member for Birmingham, Northfield (Richard Burden) on initiating the debate. I agree with the hon. Member for Solihull (Lorely Burt): it has been a passionate debate, but it has also been very measured.

My hon. Friend’s well informed contribution was based on some of the many debates that took place when we had the West Midlands Regional Committee. I welcome the Minister to his post. I understand that no longer having regional development agencies means there is no need to have Regional Select Committees to scrutinise what is being done. However, if the Minister would like some bedtime reading, I urge him to have a look at the work we did and the evidence we collected. He should also consider the reports of the public evidence sessions. If he wants to get a grounding in the real concerns of the whole of the west midlands—from Staffordshire in the north to wherever the area ends in the south—those evidence sessions should be his bible.

The West Midlands Regional Committee covered much ground in understanding a unique part of the UK that is dependent on manufacturing and has found the world has changed. The real issue is how to deal with the global economic changes we have had and bring together all the skills that are needed to deal with those changes, including the political skills and the area’s institutional needs. As hon. Members have said, things rarely happen by accident in this world; they happen by design. Taking political decisions is about ensuring that the things that need to happen are understood and do happen. I question how we can get the end results that we need without having the relevant institutions in place.

The debate is timely, not least because whatever will replace the RDAs are now in their formative stage; they are going through, if not a regional process, a process at Whitehall. When I came down to Westminster yesterday, I was concerned to read an article in the Financial Times on the future role of LEPs. It speculated on what LEPs might be set up and gave an overview of what might be in place in the south, the south-east, the south-west and so on. For the west midlands, the article stated with great authority that there would be one LEP for Birmingham, one for the black country and possibly one for some of the other marginal areas—I use the word marginal authoritatively, because there was no mention of an LEP for Staffordshire.

Therefore, today I want to argue that the Minister, whatever he does in this brave new world, must understand the needs of Stoke-on-Trent and Staffordshire. I prefaced every meeting that my colleagues from Stoke-on-Trent and I had with the RDA, and with my hon. Friend the Member for Dudley North (Ian Austin) when he was a Minister—he is now representing us on the Opposition Front Bench—by stating that the RDA would only deliver for the Government if it delivered what Staffordshire, and particularly Stoke-on-Trent, needed.

The west midlands has one of the most fragile economies in the UK, and the breakdown of the figures shows that Stoke-on-Trent’s needs are higher than most. That might be a ghastly situation to face, but it means that we all must understand it and be informed. The Government must not adopt party political positions just because there are no coalition Government Members in Stoke-on-Trent. They must recognise that need none the less and do what is necessary.

[Lorely Burt]

The hon. Lady makes a powerful point on behalf of her constituency, but I suggest that that is whole point of the LEPs. The hon. Member for Redditch said that she felt that her constituency had been ignored by Advantage West Midlands. Will it not now be helpful for Stoke-on-Trent and its economically viable areas to have their own say? Its business people and local representatives could make their points, put their business plan together and have ownership of it themselves so that they could say to the Government, “This is what we want. Let’s have it please.”

[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.

--- Later in debate ---

[Ian Austin]

I am not sure I know what the hon. Lady is arguing. I am not sure that she knows what she is arguing. She does not seem to know what the Government are arguing on the issue.

The blunt truth, which the local authorities in Birmingham and Solihull would accept, is that if it were not for AWM, the government office and the other regional organisations, they would not have been able to make progress on the plans to extend the runway. They would not have got to where they are today without such support. For the hon. Lady to pretend otherwise is fanciful, frankly.

Do not take my word only for AWM’s success over the past few years. Independent evaluations, as we heard, show that AWM generated £8.14 in economic benefit for every £1 it invested. Only last week, the National Audit Office ranked AWM among the top two regional development authorities in the country, said it was performing strongly and commended its

“lean and efficient good practices”.

First, I want the Minister to tell us how much funding will be allocated to local economic partnerships in the region compared with AWM’s existing budget. Secondly, how confident is he that decisions on which LEP projects will be funded will be as well informed as decisions taken by AWM in the past? That question deals with the totally spurious and ridiculous point made about localism today. Decisions used to be taken in the region, by local councillors and businesses in the region.

What happened before was that local authorities and local regeneration companies, run by local people and local councillors, presented their case for funds to the RDA. Local councillors and business leaders sitting on the RDA decided which projects to fund in the region. Look at how the regional funding allocation process worked, and the joint strategy and investment board of the RDA achieved a phenomenal degree of cross-regional co-operation. People set aside vested interests and parochial demands to come up with 20 priorities to deal with the underlying structural weaknesses in the regional economy.

What will happen now is that local economic partnerships, presumably made up of those same people who sit on local councils or in local regeneration companies and all the rest, will put their case to remote officials in Whitehall, who will make decisions previously made locally and regionally. Let us hear no more nonsense about the new LEP arrangements being evidence of some sort of localist agenda.

We have also heard today that there will be less money to spend. I am not sure that we can rely on the Minister to admit to the cuts in those budgets, but I am happy to confirm what my hon. Friend the Member for Birmingham, Northfield sought from him. My hon. Friend is absolutely right. Under the previous Government, RDAs nationally had a budget of £1.5 billion a year. The new regional growth fund will amount to £1 billion over two years, which is less than one third of what is currently spent in the area and less than one quarter of what was spent just a few years ago. It does not take a genius to work out that more organisations will be chasing less funding.

As my hon. Friend the Member for Stoke-on-Trent North (Joan Walley) said just a moment ago, the fear of many of us in the region is that the new LEPs representing smaller areas or individual counties will find themselves massively outgunned by strong LEPs such as those based in Birmingham and Solihull. The idea that an LEP in Worcestershire will be able to compete with the expertise, knowledge and so on that are available to the Birmingham LEP strikes me as utterly ludicrous. The truth is that AWM’s work is needed now more than ever.

The blunt truth is that our region was hit harder by the recession than any other, so I would like the Minister to tell us why the region that he represents—London, which all the evidence and research tells us will recover more quickly and more strongly than any other region in the country—is able to keep its RDA but the RDA for the region where recovery will be toughest has been abolished.

The west midlands was hit harder because of underlying long-term structural weaknesses in the regional economy, the most serious of which is skills, our region’s number one priority. We have too many people with poor literacy and numeracy skills and no qualifications, and too few people with level 2 qualifications. We have fewer people with high-level skills than other regions, and the second lowest proportion of managerial and professional jobs in England. The region has 70,000 fewer graduates working in its economy than other regions do. Can the Minister tell us how much money will be invested in skills in the west midlands, as compared with the past?

The central reason why the west midlands suffers from a skills problem is that its regional economy has a higher proportion of small and medium-sized enterprises than elsewhere. The owner-manager of a small business who is desperately trying to keep his head above water and worrying about how he will pay his staff at the end of this week or the next is much less likely to be thinking about innovation, new skills, building links with universities, employing graduates next year, or new apprenticeship programmes. That is why we have fewer graduates working in the region.

The AWM instituted several programmes to bring universities and businesses closer together to tackle underlying structural weaknesses in the regional economy. I would like the Minister to tell us what plans he has to get the region’s brilliant universities and fantastic businesses working together to strengthen our economy for the future. Can he tell us what will happen to the multi-area agreement? For the first time, businesses and universities and eight local authorities in the region are working together.

It is crucial that the west midlands has the skills that are needed to exploit the opportunities presented by new industries, and by new jobs in the growth areas of the future. We will face massive growth in low-carbon technologies, advanced manufacturing, digital media and health care and biomedical technologies. We must make absolutely no mistake about this over the next few years. Our region is at a turning point, and the decisions that we make now about investment in skills and innovation in such areas will determine how many of the high-wage, high-productivity jobs of the future we will get in the west midlands. If we get the decisions wrong, we will face decades more of decline. Look what happened with the computer revolution and the massive investment in pharmaceuticals over the past few decades in Britain: all the jobs went to regions that had the necessary skills.

Can the Minister update us on plans for the manufacturing technology centre at Ansty, which was designed to increase investment in high-technology manufacturing? Can he tell us how the region will continue to exploit the new green industries and lead the way on low-carbon vehicle technologies, which were such important strands of AWM's work? That cannot be done by an individual LEP in Coventry, Birmingham or Solihull, because the work happens across the region, from Stoke-on-Trent to Lichfield, Coventry, Birmingham and the black country, and a regional organisation is needed to pull it together. Who will ensure that the region is able to co-ordinate its activities as it has in the past and profit from those opportunities?

Can the Minister tell us how, without an RDA co-ordinating the work, he plans to get better links between centres of excellence and business so that the region can become more entrepreneurial? Can he give an update on plans to extend the runway at Birmingham, which is crucial for developing more long-haul flights and direct links with emerging and growing economies? Can he tell us what is happening with High Speed 2, which has the potential to turn parts of our region into a new Thames valley?

Who does the Minister think will lead on the region’s approach to the relocation of civil service and public sector jobs in the future, or does he envisage a long list of LEPs, all of which will jump on trains and hammer down to Euston to put competing cases to Departments about where jobs should be located?

[Joan Walley]

I hope that my hon. Friend will ask the Minister to discuss the follow-up to the Smith review. There was a meeting in the west midlands on 11 June, and it is important to know how it is being followed up.

[Ian Austin]

I am sure the Minister will deal with that when he replies.

What are the Minister’s plans for inward investment? Instead of one regional co-ordinating body—the RDA—does he now want every local authority and LEP to charge off to other countries to compete for investment and to put competing arguments about where new companies should locate? All that supports the argument that we need to get the Government, businesses and local authorities working together, which was the central purpose behind RDAs.

The truth about the west midlands is that it faces the brunt of huge economic changes that are taking place faster than ever before. Jobs, businesses and whole industries can move around the world, and our poorest communities have paid the highest price for the benefits of globalisation. We are working in Stoke to tackle the decline of the pits and the Potteries, and in the black country to deal with changes in manufacturing. Faced with massive restructuring, we have a choice. We can blame the Government and say that communities would be free to transform themselves if only we could get government out of the way, or we can say that while communities still struggle with poverty, and while the economy in the west midlands lags behind the rest of the UK, there is a role for an organisation that can get the Government, business, the third sector, educational institutes and local authorities working together to help businesses exploit new opportunities with better skills and more innovation, and to ensure that, as we overcome the recession and as our economy grows again, we will build a stronger economy without leaving any community behind.