I beg to move,
That this House has considered the Midlands Engine.
It is a pleasure to serve under your chairmanship, Mr Howarth. I thank the Backbench Business Committee for granting this debate.
Some 105 Members represent the midlands region. We may not have all of them here this morning, but we are represented by quality if not quantity. The midlands is a major contributor to our national economy. It generates 13% of the UK’s gross value added and has enormous potential to be at the forefront of economic growth. The midlands engine initiative is therefore extremely welcome and necessary to develop a long-term strategy that works for business, the region and its people.
As I am sure we all know, the midlands is the biggest economic region in the UK outside London. It has a £210 billion economy and employs 4.6 million people. If we adopt the right approach, it will be well placed to build significantly on that, and that is what I hope to discuss this morning.
We have a rich industrial heritage going back to the industrial revolution; our constituencies are linked by a comprehensive canal structure that dates from the beginning of that time. Today’s economy is much more diverse, but our sense of regional identity remains strong and manufacturing continues to be an essential and vibrant sector. It is right for the midlands engine to pay tribute to that history and to use it as a foundation for the prosperity and growth to come.
In formulating the strategy, the first consideration is the extent to which powers should be devolved from the Department for Business, Energy and Industrial Strategy to the midlands engine, our local enterprise partnership, our local authorities and the West Midlands combined authority, striking a balance between empowering the region and maintaining sufficient oversight of returns on investment.
It is good to see the Minister, who represents a Warwickshire seat, in his place. As I have told him, we could devote time to unitary authorities as part of this discussion, but we will save that debate for another day. Perhaps he will put a date in his diary.
The midlands is already an attractive proposition for business, but to improve the situation further more investment in infrastructure is absolutely essential.
I congratulate my hon. Friend on securing this important debate; he is a strong champion for our region as well as for his constituency. On infrastructure, he welcomes the tone of our Prime Minister towards the midlands engine. Although the announcement on infrastructure yesterday was largely to do with northern areas, there is a strategy paper on the way—and, crucially, LEP allocations to go with it.
I thank my hon. Friend for that intervention. I hope we will see over the coming weeks a more tangible effort and energy going into the midlands region, with local enterprise partnerships having the necessary funding to do what we require them to do.
It is great that the hon. Gentleman has secured this debate, and I congratulate him on it. The point about infrastructure spending is really important because there is a massive disparity between the amount of spending in the midlands and that in other parts of the country. Transport funding per capita in the west midlands is less than half that of Scotland and 40% of the level in London. In the midlands as a whole, which has 10 million people, we got a mere £1.72 billion spent on transport compared with London, whose population is smaller—it had £3.87 billion. Over a decade, £15 billion less has been spent on transport in the midlands than in other parts of the country.
I get the hon. Gentleman’s point. I am sure the Minister is listening to see how we can rebalance our regions to make sure essential investment will be forthcoming.
Does my hon. Friend believe that the hon. Member for Dudley North (Ian Austin) should include in his figures all the investment that is going into HS2 in the midlands, particularly in Birmingham?
I was coming on to HS2, which I have religiously voted against at every single opportunity. However, even I am beginning to see that it may become a reality. If it does, we must make sure that we take the benefits that HS2 brings, whatever they may be.
The hon. Gentleman, like me, is obviously opposed to HS2. The only area of the midlands to benefit will probably be Birmingham and the surrounding area, but Coventry and Warwickshire, where he has a seat, will not necessarily benefit.
More importantly, whatever the negotiations in relation to Brexit are, we need the Minister to reassure us that regional aid will be replaced with another form of aid for the midlands. We do not want to lose out. When I was leader of Coventry City Council, we did not get regional aid; companies such as Nissan went to Sunderland instead, because that area got regional aid. That is a very important point.
I thank the hon. Gentleman for his intervention. He says, perhaps unkindly, that Birmingham might be the only place that benefits from HS2, but there has been a suggestion that only London will benefit. He is tempting me into a debate that is perhaps for another day.
Digital infrastructure is also part of our connectivity and a vital component today. That will increasingly be the case in the interests of the local economy. Each region has its own specialisms and needs, which means that it is necessary to make tailored decisions that will impact positively on each region. Midlands Connect has an important role in this, representing the transport partnership of the midlands engine with 28 local authorities, Network Rail, Highways England, Government and the business community working together. In addition, developing a skills base to match the demands of an ever-evolving business world is imperative. As such, aligning skills with regional business can be instrumental in boosting our economic growth.
The Government’s industrial strategy, which I was delighted to see launched yesterday through a statement in the House, is a policy I have spoken on at length before. I see the midlands engine as an important part of the broad approach. As the strategy develops, regional empowerment must be at its core so that the constituent parts of the UK reach their potential and the whole nation benefits.
As with the industrial strategy, the midlands engine must be underpinned by a focus on individuals and communities feeling a part of the policy. If each community understands how relevant the strategy is, that strategy will seem much closer to individual citizens than something such as a long-term economic plan. Individuals and communities can better understand the role that they can play in an industrial strategy.
I congratulate my hon. Friend on securing the debate. He will be pleased that I am steering clear of HS2; my thoughts are broadly in line with his, if not a little stronger.
One of the key industries for my constituents is the motor industry. Does my hon. Friend agree that it is important to support businesses that choose to locate themselves in north Warwickshire, such as Plastic Omnium, Sertec and the smaller businesses that play such a vital part in the supply chain and the local economy?
I worked for MG Rover and I know Plastic Omnium and its role in the supply chain. We are very proud to be home to Jaguar Land Rover in Warwickshire, and investing in the supply chain is just as important as investing in and supporting Jaguar Land Rover.
“The Midlands Engine for Growth: prospectus”, which was produced in 2015, saw 11 local enterprise partnerships join together to produce a vision for the region. I was particularly heartened to see manufacturing and engineering highlighted as the cornerstone of future success. As the co-chair of the all-party parliamentary group on manufacturing, I recognise how important it is to incentivise UK-based production, whether through new investment or reshoring.
Advanced manufacturing is a notable aspect of the midlands economy and can propel our competitiveness globally. As the prospectus identifies, advanced manufacturing is the bedrock of the region, employing more than 600,000 people and accounting for just less than 20% of the UK’s manufacturing output. It was good to visit Jaguar Land Rover with the Secretary of State for Business, Energy and Industrial Strategy on Friday, to see some of the technologies taking place there that will lead not only the region but the country, on a global level.
I welcome the Government’s support for the Catapult network. The high-value manufacturing Catapult has generated £15 of benefit to the economy for every £1 of funding. It cannot be said enough that research and development is key to our future success; it acts like a magnet for business and is the core of business and manufacturing. To lose our R and D facilities would be to endanger our manufacturing output, which is just beginning to recover. Other projects include the Energy Research Accelerator, where six world-class universities are working together with the support of £180 million investment, as well as the energy systems Catapult, which is located in Birmingham.
Energy storage is an issue for the future and the midlands can be a driving force in developing those technologies. If we are serious about electric cars, which are the cars of the future, we need the batteries to power those cars. To be able to produce those batteries where the cars are manufactured—in Warwickshire, in the midlands, at Jaguar Land Rover—we need the power supplies to be able to make that happen.
I congratulate my hon. Friend on securing this important debate. He is making a very good speech. Would he agree that apprenticeships, which have been championed by the Government, have had a real effect on the midlands region? In particular, they have stopped our region from being at the bottom of the employment league table in Britain and have significantly increased the number of new businesses that are starting and growing in the west midlands.
I thank my right hon. Friend for that intervention. Apprenticeships are very much part of our future. I was also very fortunate to visit Warwickshire College with the Minister for Apprenticeships on Thursday. It was great to see how those young people are taking a totally different path for their future—one becoming more recognised for the skills that it will deliver—and to see them designing clays for cars and getting right into the process. Any encouragement we can give to make sure that business, schools and colleges are working together to increase the number and deliver on the 3 million apprenticeships that we need by 2020 can only be beneficial to our regional and national economy.
We need to have a thriving environment for innovation and tech. In my constituency, that includes the creative industries—the video games sector cluster is rapidly becoming the second or third-biggest cluster outside London. We need to create a framework in which such sectors can thrive, providing a flow of talent into the industry.
Developing a local identity on a regional level can be a catalyst for success. We have a proud tradition of manufacturing that we must build on, but other sectors can come to the fore and boost the region’s international prospects—in particular the creative and digital industries.
I hope that our strong academic base can continue to grow. The midlands is home to 25 universities and 50 further education colleges. Closing the skills gap across a variety of sectors is an integral part of the midlands engine and poses one of the greatest challenges ahead. Technological advances are shifting the needs of industry and we need to embrace the opportunities ahead, such as in Industry 4.0, and pinpoint areas that we need to strengthen, such as encouraging children to study science, technology, engineering and maths subjects. I note that the midlands engine prospectus highlighted proposals to create a network of regional science parks. I fully support efforts to push the midlands to the forefront of academic research in the UK, complementing our advanced manufacturing and technical skills base.
On a slightly negative point, productivity is a key challenge for the midlands—it is 10% lower than the national average. Improving infrastructure, as well as continued investment in science and research, could have a profound effect on reversing that figure.
In the autumn statement, the Chancellor announced that a midlands engine strategy was to be published, and I understand that more details will be provided in the coming weeks. Yesterday’s industrial strategy Green Paper pointed to places making their own unique contribution to driving national economic growth. Much has been made of the northern powerhouse and the regeneration of the north, which is an important goal, but I hope that the midlands engine can develop in parallel, working with other regions wherever prudent. We must continue to attract foreign investment, which will naturally happen as we strengthen our network of business, research and education.
Part of attracting foreign investment is connectivity through Birmingham Airport. As my hon. Friend is probably well aware, Birmingham Airport is, frankly, a couple of decades behind Manchester in many aspects at the moment, although it does have spare capacity. Would he support my call, and that of the hon. Member for Dudley North (Ian Austin), to devolve air passenger duty so that Birmingham Airport can compete on a level playing field as devolution moves forward?
I thank my hon. Friend for his intervention, which got a “Hear, hear!” from the other side of the Chamber. I suggest that those sorts of powers could be devolved; at the same time, if my hon. Friend could ask Birmingham Airport not to increase the number of flights over my constituency, that would reduce my postbag.
The important thing about Birmingham Airport, with its 12 million passengers last year, is that it contributes £1 billion a year to the regional economy. With HS2 on the way, expanding capacity at Birmingham would enable it to play a much bigger role as a global hub, increasing the region’s connectivity and enabling travellers and businesses to come to the midlands and local businesses to export much more easily.
The hon. Gentleman makes a valid point about the connectivity of our transport infrastructure. The airport issue, which could be contentious, deserves time for its own debate. Debates on the midlands engine and everything that will underpin that engine need to happen again and again. Just to discuss the issue this morning and then close the door would not serve any purpose.
My hon. Friend has been talking about Birmingham Airport. I would remind everybody that there are two airports in the midlands—there is East Midlands Airport as well. We need to make sure that there is connectivity across the whole of the midlands, not just the west midlands.
That is a salutary reminder that the midlands are made up of both the west and east, and I thank my hon. Friend for that contribution.
Will the hon. Gentleman give way on that point?
I will, although I can imagine what the hon. Lady is going to say.
I just wish to follow up on the point made by the hon. Member for Erewash (Maggie Throup). East Midlands Airport is, of course, different from Birmingham Airport in that it is the second-largest freight airport in the country, which is hugely important for serving businesses across the whole region. Will the hon. Gentleman acknowledge that point?
I thank the hon. Lady for making it simple for me by asking me to acknowledge the point. I most certainly do.
As with the industrial strategy, it is important to provide measures to understand how the midlands engine initiative is succeeding. For example, to what extent do we need to boost foreign direct investment? How many apprenticeships are needed in the region? What is the required level of financial support for science and research? An office for industrial strategy could and should be created and held accountable for the progress made, including our region’s economic success.
The Green Paper sets out 10 pillars to boost the nation’s economy, from business growth and investment in infrastructure to clean energy and world-class research. The midlands engine touches on all those pillars and will benefit from the strategy. In turn, the region can play an instrumental role in our nation’s success.
It is a pleasure to serve under your chairmanship, Mr Howarth, and I congratulate the hon. Member for Warwick and Leamington (Chris White) on securing the debate. I am sure the Minister will enjoy the opportunity to talk about the Government’s industrial strategy, but I am afraid that most attention right now is probably focused on what is happening on the other side of Parliament Square. I will return to the significance of our relationship with the European Union later.
Outside this place, many people still ask what the midlands engine is. The answer is simple: we are the midlands engine—we being the many right hon. and hon. Members who stand up for their midlands constituencies in this place, and the entrepreneurs, innovators and grafters back at home. All of us are working harder than ever, together, to build our collective identity; to develop our competitive offer; to promote the midlands to the world; and to attract people to come to us to invest, to study, to work and to live. The midlands engine is not just a brand, an organisation or a place. It is all of us working together to show that when the midlands succeeds, Britain succeeds.
The assets of the midlands engine will be familiar to everyone, not only up and down the country but throughout the world—Range Rover, Rolls-Royce, JCB, Toyota and Boots are a few of the names that have made the midlands famous. What is great about all those assets is that their industrial evolution is constant as they reinvent themselves and their products to meet the demands of our ever-changing world.
No clearer evidence for midlands resilience and ability for reinvention exists than in my constituency. The site where thousands were once employed to manufacture Raleigh bicycles is now the University of Nottingham’s innovation park, where businesses and researchers work together on everything from satellite navigation, aerospace and sustainable energy technologies, to drive-chain engineering and sustainable chemistry. The city centre site where ibuprofen was discovered by Dr Stewart Adams is now one of the UK’s largest bioscience incubators, commercialising cutting-edge research. When I came through Nottingham yesterday, I saw that the brand-new BioCity Discovery Building is almost up and finished, showing how the sector is developing and growing.
None of that is new. As the hon. Member for Warwick and Leamington said, the midlands has been an engine for growth for centuries, and will be for centuries to come. The strong midlands DNA is rooted in our industrial heritage, which is reflected in our being the advanced manufacturing heartland of the nation, responsible for almost a quarter of the UK’s total manufacturing capability.
Two and a half centuries ago, new canals connected England’s major rivers, opening up the interior for the movement of raw materials and trade of finished goods. High Speed 2 can have that same transformative impact, with the potential to unlock huge economic benefits for the midlands and for the UK as a whole. To me, HS2 is a once-in-a-lifetime opportunity for us to transform Britain’s infrastructure, linking the cities of the midlands and the north with fast, frequent and reliable services, connecting people and places, businesses and workers, markets and customers, driving up growth and productivity, and expanding the life chances of more than 11 million people in the midlands engine region. HS2 is not about the much mocked 20 minutes off the journey time to London—although who would not want to have even better connections to one of the world’s mega-cities? It is about improved capacity and incredible connectivity within the midlands region.
The hon. Lady is absolutely right. HS2 is not about speed; every day 4,000 people stand on trains going into and out of Birmingham.
The right hon. Gentleman is absolutely right. Phase 1 of HS2 in particular is about vitally needed extra capacity, although for phase 2 connectivity and journey-time savings are important. Cutting the journey time between Nottingham and Birmingham from a dawdling 1 hour and 13 minutes to only 36 minutes will make a real difference to the choices available to workers, businesses and investors. We should not downplay that.
HS2 can and must act as a spur to regeneration and job creation. The West Midlands combined authority’s growth strategy aims to add £14 billion to the economy and to create and support 100,000 jobs. The Curzon investment plan is designed to regenerate that area around the planned HS2 station. In the east midlands, councils, local enterprise partnerships and the East Midlands chamber of commerce are working together to develop ambitious but deliverable proposals for maximising the economic potential of a new HS2 and classic-rail hub station at Toton, not only for that immediate area, important though that is, but for the whole region.
The benefits of HS2 for the region will be fully realised only if they come alongside other transport improvements. I recognise the danger of my sounding like a broken record, but Conservative Cabinet Ministers came to the east midlands before the most recent elections promising to deliver our region’s top transport priority—the electrification of the midland main line—only then to pause it, unpause it, delay it by four years and now give the impression of wanting to scrap it altogether. That is not good enough. The midlands deserves 21st century infrastructure, and the Government must deliver on the promises they made to our region if we are to be ready for the global challenges ahead. I am sure the Minister understands the importance of the midland main line electrification to our region, so I hope he will speak to his Department for Transport colleagues and ask them to think again.
I remain optimistic about what the midlands has to offer and its ability to seize the coming opportunities. However, I cannot fail to sound a note of caution about the UK’s future relationship with the EU and the profound risks that that poses to the midlands engine. The midlands is the manufacturing heart of the UK, so the potential loss of tariff-free access to the single market and the potential imposition of customs controls would surely have a chilling effect on those businesses I mentioned. We know that Toyota is considering how it can survive in a post-Brexit UK. Boots tells me that it is deeply concerned about our being outside the European Medicines Agency. Our world-class universities are extremely worried about their ability to maintain their position in global league tables without access to the Horizon 2020 funding, and without the ability to recruit and retain the highest-calibre students and staff from around the world.
In the coming weeks and months, therefore, I will press the Government hard to ensure that they do not put obstacles in the way of the bright future that our region is heading towards.
Order. While we are on the subject, it might be of benefit to those present to know that the Supreme Court has ruled that an Act of Parliament will be necessary to trigger article 50. Whether that changes anything that the hon. Lady wishes to say, I do not know.
Thank you for that update, Mr Howarth, which I am sure is welcome to everyone who wants to both participate in this debate and follow what is happening outside.
I will not just take the Government to task on their approach to Brexit negotiations—we now know that we will have the opportunity to do that through legislation—but raise concerns about cuts to school funding. Those are hitting my constituency and will make it harder for us to close the skills gap, which is important to the success of the midlands engine.
Whatever the Government throw at us, we will find a way around or over it. Midlanders always do. They are very resourceful, and necessity was ever the mother of invention. When they are done working their way over and through all the obstacles, midlanders can enjoy everything else that our region has to offer, whether that is sport; art or literature; caves, canals or castles; theatre or music; or food or drink. My city of Nottingham alone, which is a city of literature and football—although our ice hockey team needs to expand its trophy cabinet at the moment—has everything from a two-star Michelin restaurant under a flyover to a castle that is not a castle but has been the rebellious heart of the country for centuries. That is just one corner of the midlands engine. No wonder we are what makes the country go.
It is a great pleasure to serve under your stewardship, Mr Howarth. I congratulate my hon. Friend the Member for Warwick and Leamington (Chris White) on securing this important debate.
As I come from Derby North, the success of the midlands engine is incredibly important to me. In 2015, the then Chancellor launched his vision for the midlands engine—this Government’s 15-year vision for our region to create an engine for growth in the United Kingdom. Everyone who attended that launch was excited by that plan’s potential benefits for the region: the creation of hundreds of thousands more jobs, the opening up of more trade routes around the globe, and overall improvements to the quality of life in the midlands. The plan envisages boosting our regional economy by £34 billion. We can reach that target, but to do so, we must come together and all sectors—public and private—must co-operate.
The midlands engine can be a vehicle to deliver policy to support the vision that we develop for a successful United Kingdom outside the EU. We have a strong offering in the midlands, which can deliver growth that is both balanced—by sector, geography and trade—and sustainable, in that it creates skilled, highly productive roles backed by private sector investment.
What are the opportunities? The midlands engine must focus on elements that give us competitive advantage, central to which is our expertise in key sectors, especially advanced manufacturing. We have a high density of original equipment manufacturers. In and around my constituency alone, we have Toyota, Rolls-Royce and Bombardier, and well-established supply chains that serve them all. Greater competitiveness in those supply chains will boost jobs and attract inward investment, and that is a key area where the policy we set here can have a real impact.
Our location has fantastic connectivity to the north and south. If we capitalise on that, we can be as good at moving things as we are at making them. My hon. Friend the Member for Erewash (Maggie Throup) and the hon. Member for Nottingham South (Lilian Greenwood) mentioned East Midlands airport, which is the UK’s largest pure freight airport. Although east-west connectivity requires improvement, we hope that Midlands Connect’s work to inform road and rail infrastructure spending will start to address that. Affordable land is available for development, and our workforce has a heritage in manufacturing. In recent months, we have also seen companies looking to relocate from the EU to the midlands to be closer to their customers.
Importantly, our starting position is strong. According to East Midlands Chamber’s quarterly economic survey, east midlands businesses ended 2016 performing stronger than they had for six quarters, and businesses are already reporting revised investment plans and new overseas strategies to capitalise on forthcoming opportunities. However, with opportunities come challenges. We must work collectively to sell the midlands as one region, not continue to divide ourselves as representatives of the east or west. We need to ensure that the strengths and attributes of the whole midlands are brought to bear. The strategy also needs to have the private sector at its heart, shaping and informing activity.
Under this Government, the midlands has started to grow faster than the UK average outside London, and that trend must continue. Opening up the midlands to overseas investment, encouraging our small and medium-sized enterprises to export and showcasing the fantastic manufacturing and engineering firms that help drive our economy overseas are all steps we can support to make the vision of the midlands engine a reality, and to open the region to previously untouched markets.
Crucially, we must have an environment underpinning the midlands engine in which local people are educated and trained in skills that match needs.
As a west midlander, I completely agree with my hon. Friend that we should speak with one voice as one region. In that way we will do better. On skills, the Government’s agenda to deliver 3 million apprenticeships is to be commended. That is probably one of the biggest benefits for our region and manufacturing.
Absolutely. I was going to come to apprenticeships, which are significant in Derby North. We really need to look at having training and skills that match local employers’ needs. Our local enterprise partnerships outlined that as a key theme when they were consulted by the Government about plans for the engine. During my time as an MP, I have regularly heard concerns that more needs to be done to tailor skills to play to local strengths and boost our productivity. Brilliant work is being done in Derby to try to tackle that problem. For example, in response to the needs of businesses such as Rolls-Royce and Bombardier, the university in the city recently opened a new science, technology, engineering and maths building. Apprenticeship providers such as 3aaa are building initiatives to link employers, schools and apprenticeship providers to tailor skills. More needs to be done to support such initiatives if the midlands engine is to live up to its full potential.
Sir John Peace, chair of the midlands engine, said yesterday that
“playing to our strengths and enabling new sectors…will deliver the high wage, high skill economy of the future.”
We know what our strengths are in the midlands. We now need to ensure that they reach their full potential.
It is a great pleasure to serve under your chairmanship, Mr Howarth. I welcome this debate on the midlands engine, which my hon. Friend the Member for Warwick and Leamington (Chris White) secured. It is also a great pleasure to follow my hon. Friend the Member for Derby North (Amanda Solloway), who is a fellow east midlands MP.
This year, among other special dates, I am celebrating 30 years of living in the midlands. When I first moved there, I thought I would move on and not stay, but the midlands has offered me so much, both socially and from a work point of view, that I have stayed. I moved from Yorkshire as a result of a promotion. People tend to move further south as they move on in their careers, but the midlands has so much to offer, as we have heard from both west midlands and east midlands MPs, that more people need to hear about what we have in the midlands, and that is what we are doing today.
May I confirm, as everyone will agree, that in moving from Yorkshire to the midlands my hon. Friend has been promoted?
I thank my right hon. Friend for that. I do not want to offend anyone from Yorkshire who still lives there, but I am proud to say that I live in the midlands and represent a midlands seat. It is really important that we bang the drums and fight our corner to ensure that we get everything that we need to make the midlands a true engine for growth.
Just yesterday, the Green Paper on our new modern industrial strategy was published. Although I welcome that and its focus on skills and training, it would be remiss of me, as the representative of Erewash, not to stand up for traditional industries as well as new technologies. So many traditional industries are taking on board new technologies, and it is important that we combine those. I am proud to represent a constituency that still makes. Despite being called Nottingham lace, it is made in Ilkeston in Derbyshire—work that one out. It is still made on the traditional looms in historic mill buildings.
I am also proud to represent a constituency that proudly proclaims to those arriving at Long Eaton station that it is a UK centre of excellence for upholstery manufacture. We export sofas and chairs, and the upholstery is sold in some of the UK’s top stores; it can also be bought in some cheaper stores. Many seats that people sit on at home or in friends’ houses, and in hotels and public buildings, are made in Long Eaton. We must never forget that there are many traditional businesses that boost midlands growth.
Erewash is a place that provides a great example of how traditional and modern industry meet. Anyone driving through the constituency is likely to see storage yards full of concrete pipes and drains. Perhaps that seems strange, but I was delighted when a few weeks ago I officially opened a new “magic manhole” plant at Stanton Bonna, which will help to speed things up, provide consistent quality, and decrease waste. Interestingly, when the pipes leave my constituency we shall probably never see them again, because they go underground. Whether they are for new housing, industrial sites, Crossrail or—fingers crossed—HS2, those reinforced concrete pipes made in Erewash will form a critical part of construction in years to come.
As I have explained, Erewash already plays its part in the midlands engine; but I know it can go further. That is why I welcome the Government’s commitment to the area and their ambition to make the midlands a true engine for growth. We have heard about the west midlands, but I want to think about the east midlands. The commitment includes £250 million of investment funds providing access to finance for small and medium-sized enterprises. My constituency has many SMEs rather than huge employers, so that is important for Erewash. There is £60 million for the energy research accelerator, and some of it is going to the University of Nottingham, which is close to my constituency. Also, there is multimillion pound investment to make the most of the HS2 hubs in the west and east midlands; the east midland HS2 hub abuts my constituency. That brings me to the subject of skills, specialist STEM subjects, and engineering in particular.
HS2 and the HS2 hub create economic and employment opportunities for my constituency, but we need to make sure people have the right skills. We should also not forget the residents who will lose their homes and the businesses that will lose their premises to make way for the track, which will come right through my constituency. It is vital that they get timely and appropriate compensation, especially as many of them have lived in their homes for 30 or 40 years; some have lived in them all their lives.
To maximise the potential of HS2, residents need the right skills—including employees of flagship companies, some of which have already been mentioned, such as Rolls-Royce, Bombardier and Toyota. Businesses and the local economy can continue to be successful only if people and goods can get around, as has been mentioned, and if there is the right infrastructure. The road network across and around Erewash is already creaking at the seams. I welcome the benefits from the east midlands HS2 hub and the additional proposals for 2,000 new homes, with light industry, on a brownfield site in Stanton, but we need dramatically to improve the road network, and to bring it into the 21st century. Otherwise the area will become a huge car park, and that will not stimulate growth but stifle it. That is why I am calling for an additional motorway junction on the M1, to help ease current gridlock and keep Erewash moving well into the future.
We need the investment and commitment that the midlands engine brings, but we also need more joined-up thinking; and we need to make sure that no area is left behind. It must not revolve around the big cities—Birmingham in the west midlands, and Nottingham and Derby in the east midlands. Too often I get the feeling that my local enterprise partnership, D2N2, puts Erewash at the bottom of the list. We need to address that. The midlands engine must be maximised, as a strategy and an investment mechanism. We must nurture full collaboration between businesses and universities. It should be used as a vehicle to attract domestic and foreign investment, on top of what the Government have put in, if we are to have long-term, sustained economic growth across the whole of the midlands. We need to make sure that the midlands is a true engine for growth for the whole UK.
I thank the hon. Member for Warwick and Leamington (Chris White) for bringing this issue to our attention so that we can tease out some important issues. I declare an interest, of sorts. West Bromwich Albion FC beat Everton FC in the FA cup final on 18 May 1968 at Wembley, by scoring three minutes into extra time. It was a traumatic experience for an 11-year-old Evertonian. However, I hold no grudges against the midlands and I deny that I was psychologically scarred by the event, so my comments today should not be taken in that context.
I was pleased that the hon. Member for Warwick and Leamington dealt with a wide range of issues, including academic research, research and development in general, energy storage, matters affecting the creative industries, and the challenge of low productivity. Of course there is also the vexed question of the airport.
My hon. Friend the Member for Nottingham South (Lilian Greenwood) talked about the midlands engine being not a brand but the people, and an engine for growth. I fully concur with her view that when the midlands do well the UK does well. She also made crucial points about HS2 helping to transform Britain’s infrastructure, other transport investments in the area, and Brexit concerns. The hon. Member for Derby North (Amanda Solloway) talked about working together and playing to the region’s strengths, and of course the hon. Member for Erewash (Maggie Throup) talked about the need to stand up for traditional industries as well as new technologies. In that respect, when I sit on my sofa I will be reminded of her.
As a former leader of a council in the Liverpool City Region I have, as the saying goes, been there, to some extent. I am pretty au fait with the difficult gestation period that comes with setting up the structures and mechanisms of a city region and the wider region; but it is about time, and long overdue. The dragging hand of Westminster and Whitehall on regional policy is a danger; that approach is well past its sell-by date. In fact, the centralisation from London has clearly left the other regions in a less favourable position than the south-east and London. That is not to say that I have any criticism of those regions. Quite the opposite—good luck to them. But it is time that other regions also got more attention. I think that that point has been raised today several times. The same thing has been true of successive Governments who over the decades have to an extent had a stranglehold on local government, leaving it passive and dependent. However, that is changing, and that failed approach cannot continue.
The “Midlands Engine for Growth” prospectus of 2015 mentions that the offshore wind market is worth up to £100 billion. In fact, as you know, Mr Howarth, in Liverpool Bay, off the coast of my constituency, there is a large wind turbine field, which is growing exponentially with investment from, among others, DONG, a majority state-owned Danish company, and, if I remember rightly, some input from the city of Copenhagen. It is a pity that local government and regions in this country are not in a position to do the same. I am very concerned that the Government are ideologically opposed to such ventures even if they would be in the best interests of city regions such as Liverpool working collaboratively with city regions in the midlands, or combined authorities in the midlands. I am afraid there is a danger of there being many words but little action from the Government, with that ideology hidden in the small print.
Conversely, at the same time as the former Business Secretary, the now Secretary of State for Communities and Local Government, talked in the prospectus of freeing up local government and its partners to compete in the global market, he was interfering in their day-to-day affairs with the Trade Union Act—which sought to micromanage local authority labour relations—with no recognition of any irony at all. Meanwhile, one of his predecessors at the Department for Communities and Local Government wanted to tell local authorities how to run off and on-street car parking arrangements. That state of mind has to be broken out of.
The consequences of the incapacity to deal with devolution in a significant way fall on and negatively affect people in the regions, such as the midlands. I am afraid that this rather petty, Lilliputian and prosaic interference reaffirms that the Government and Whitehall simply cannot let go; it is endemic, and it has to stop. Can anybody imagine the equivalent Secretary of State in Germany, France or Italy having the time or inclination to be bothered with such trivial interferences in the affairs of local government? I raise these issues simply for context. If the dead hand of Westminster continues to stifle innovation, imagination and entrepreneurship in the regions, and in the midlands in particular, because of a pathological ability to let things go, things will not change.
The Government set out their aims for the midlands machine in February 2015, which include raising the long-term growth rate of the midlands to at least that forecast for the whole UK, creating 300,000 extra jobs in the Midlands, which is enormously welcome, creating a new skills matching service for local people and increasing the number of skilled apprenticeships, which others have referred to. They also include delivering £5.2 billion of investment in new transport infrastructure in the midlands, to which my hon. Friend the Member for Dudley North (Ian Austin) referred, and backing science and innovation, including by developing an energy research accelerator through local universities. The Government also aim to support new technology in the automotive sector, to support the construction of 30,000 new homes and to make improvements to local education. The Opposition’s main concerns are how the Government will meet those targets and whether they are committed to fully funding them, particularly as our economy heads into a difficult period that will be defined by high inflation, a continued weakened pound and potentially flatlining tax receipts.
More specifically, the prospectus indicated that the midlands engine partnership would develop a £180 million fund of funds, utilising the European Union’s joint European resources for micro to medium enterprises programme, which combines European regional development funds with matched funding from the European Investment Bank. Will it still? Does the Chancellor’s slush fund, as I like to think of it, account for the loss of that money, and will it be put back into the midlands engine? My hon. Friend the Member for Coventry South (Mr Cunningham), who was here earlier, referred to that.
The Government’s aim for the midlands economy is to raise its long-term growth rate to at least that forecast for the UK. That target is based on the ability of the midlands to continue to grow at the same rate as between 1997 and 2013. There are a plethora of reasons why that is unlikely and, perhaps, overly-ambitious unless the Government pull their finger out and deal with many of the issues raised by hon. Members here today. As the prospectus says, the region’s gross value added is currently £222 billion annually, which is about 14.6% of the UK’s total economic output, and has grown by 30% in the past decade. With 24% of the 11.5 million population under the age of 20, the midlands clearly has the potential to offer a long-term, sustainable workforce. That has been referred to today in terms of skills. However, although the midlands accounts for 15.7% of all employed people, the average GVA per worker is lower than the national average.
In fact, the midlands has not been able to keep up with the north and the south-east in employment, investment and job creation. A Resolution Foundation report found that, prior to the financial crisis, employment in the west midlands city region stood at 66.7%, which was 3.2% below the city region average. It also found that, while the recovery from that crisis has seen the proportion of people in work nationally rising to record levels, the west midlands is still not back to where it was, with an employment rate of just 64.5%, compared with 71.6% across other city regions. Barring Solihull, each local authority in the west midlands has an employment rate below the average across the UK’s other city regions. That is important.
I am referring to Government statistics; I am happy to send them to the Minister. In the east midlands the situation is worse. I do not want to push on; I think we have to look at this in a constructive and positive fashion. If we are going to do that, the Government need to pull their finger out and get that midlands machine cranked up and going. Members across the Chamber have highlighted and indicated where that could be pushed and sustained. The hon. Member for Warwick and Leamington laid it out fairly clearly, but laying it out and practically putting it into effect are completely different things.
The reality is that the call to take back control that we heard during the referendum debate extends not only to the national level. It is not just about bringing back control—whatever that means—to the United Kingdom, it is about a demand from the regions for the Government to move aside to some degree and let them get on with wealth creation for all people, not just a chosen few. Andrew Bounds from the Financial Times made the point that so long as the Government control from the centre and focus so much attention on the south-east and London, the regions will not be able to move on.
The Government need to give the midlands—the home of the industrial revolution—its independence back, with powers to do the job that central Government are not capable of doing. Hon. Members have referred to the entrepreneurs, the businesses, the people who go to work and the families in the midlands and other regions as the people who deliver the wealth. Local people in the midlands are much more capable of doing the business, so to speak, than the Government will ever be. The Government have to free them up to do that. The sooner the Government stop paying lip service to regional devolvement, the better, because the 11.5 million people in the midlands deserve much better than they are getting from the Government. I exhort the Minister to push on with the midlands engine, not just in words but in practice.
It is a pleasure to serve under your chairmanship, Mr Howarth. I begin by thanking my hon. Friend the Member for Warwick and Leamington (Chris White) for calling this important debate. He brings a wealth of knowledge to the House, not only about the midlands but about manufacturing, from his role in chairing the all-party parliamentary group on manufacturing and from his experience in industry.
I am pleased to have the opportunity to set out the Government’s vision for the midlands engine. It has been a generally positive debate about the midlands, its strengths and the potential across the region. I very much like and have a great deal of time for the hon. Member for Bootle (Peter Dowd), but I was slightly disappointed by the tone of his comments. The Government are setting out on a serious path to deliver devolution across the country, and I do not recall the type of devolution happening in the midlands ever happening in any great way, shape or form under the last Labour Government. The mark of what the current Government are achieving is that 447,000 more people are in employment across the midlands now than in 2010, when the hon. Gentleman’s party left office.
As a proud midlander myself, I am passionate about the midlands and the role that it plays in our nation’s economy. The midlands’ success is vital to the UK’s economic wellbeing and to creating an economy that works for everyone. As we have heard from hon. Members, the midlands economy is built on a globally significant advanced manufacturing base. Last year, the midlands accounted for 23% of all English goods exports, with products going to more than 100 countries. Our transport manufacturing base includes international brands such as Jaguar Land Rover, Rolls-Royce, Toyota, Bombardier and JCB. In the MIRA innovation technology park, which borders my constituency, the likes of Aston Martin, Bosch, Changan and many other world-renowned companies continue to grow and innovate.
Our science and innovation capabilities speak for themselves. Warwick, Birmingham and Nottingham are all in the world’s top 150 universities. Those plus Leicester, Loughborough and Aston are in the UK’s top 50 universities. Hon. Members mentioned a number of other universities that are delivering excellence across our area.
That said, there are still challenges. Productivity is a key issue. GVA per capita in the midlands engine area is about 20% below the England average, and there is much more to be done to promote growth across the midlands. Just yesterday, we launched a Green Paper setting out our ambitions for the UK’s modern industrial strategy. Our aim is to improve living standards and economic growth by increasing productivity and ensuring that growth is spread across the whole country. This is a consultation, and we are asking people to tell us how we can best achieve our goals. Our industrial strategy will lay the foundations for a more prosperous and more equal Britain. Our focus is on improving productivity, rewarding hard-working people with higher wages and creating more opportunities for young people. Following the consultation, we intend to publish an industrial strategy White Paper in 2017. That will set out the plan for the long term.
The midlands engine is at the heart of our country and must be central to our approach. A key part of our vision is to spread growth across the UK economy, ensuring that the economy is working for everyone. Local partners have come together and formed a midlands engine partnership, which stretches from the Welsh border on one side of the country to the North sea on the other. The partnership is led by the internationally respected businessman Sir John Peace.
There has been very good progress. Under this Government, the midlands has been growing faster than the UK average, excluding London. Our support for the midlands includes the £392 million that we allocated to local enterprise partnerships in the midlands in the third round of growth deals, announced in the autumn statement. That is in addition to the first two rounds of growth deals, through which the midlands local enterprise partnerships will receive almost £1.5 billion.
The Government will publish a midlands engine strategy shortly. We are working with Departments across Government to set out the priorities for delivering the midlands engine. We will set out our plans to improve connectivity, employment, innovation and investment, which are all very important factors in improving the prosperity of people in the midlands and very important issues that have been raised by hon. Members throughout the debate.
We have of course already published a northern powerhouse strategy. The future of our economy is too important for this to be seen as a race between the northern powerhouse and the midlands engine. We are working with each area on its specific needs to ensure that all of the UK is economically strong.
Many of the Government’s existing initiatives are spreading growth and empowering local communities in the midlands. Our devolution deal for the West Midlands combined authority devolves significant powers, such as skills provision and funding. It includes a £1 billion investment fund and a £1.8 billion enterprise zone extension. My right hon. Friend the Chancellor made a commitment in the autumn statement in November that the Government will continue to work towards a second devolution deal with the West Midlands combined authority.
Our local growth fund has supported projects across the midlands. For example, the £20 million north-south rail and Coventry Station scheme will improve passenger capacity and secure an increase in train service frequency between Coventry, Bedworth and my constituency of Nuneaton. There has also been support through city deals. In the Leicester and Leicestershire city deal, the advanced technology innovation centre received £2 million to create more space for high-technology jobs and businesses. That supports one of our largest science parks, where major companies include Caterpillar and E.ON.
As hon. Members have been keen to point out, many major routes and railways go through the midlands. Improving connectivity there has real benefits for the rest of our country, as well as significant benefits for local residents and businesses. Better transport connectivity allows businesses to grow and helps people to get to work. The midlands will be a major beneficiary of HS2 with various stations, but particularly at Toton in the east midlands and at Birmingham, as has been mentioned. The Government have recently committed to funding Midlands Connect to the end of this Parliament and have signalled our intent to see it established as a sub-national transport body. That will enable local partners to develop regional transport proposals for the midlands.
The Minister talks about the importance of HS2 to the region. That is important not just because of the transport connectivity and capacity improvements it will provide, but because the east midlands is the largest rail cluster in the world, and there is the obvious potential for us to benefit from it industrially. Will he say how, within the industrial strategy, he will ensure that HS2 procurement, including the £2.7 billion for new rolling stock, is used to boost our rail industry in the midlands region?
The hon. Lady asks a very good question. We have significant capacity in the midlands region in regard to rail infrastructure and the manufacturing base around it. I am sure she has already looked at the Green Paper released yesterday, which contains a section that relates to procurement. I urge her to contribute on the Green Paper. My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has made it clear that he is keen to hear from right hon. and hon. Members in relation to development of the Green Paper and the reality of the White Paper. I encourage all colleagues to get involved in that process.
To elaborate on the potential of HS2, there is a lot of debate about speed. I say to hon. Members that speed is important and, if we are delivering a brand-new rail line, why would we not use up-to-date technology? The biggest wins, however, are in developing additional capacity and reliability. My constituency is on the west coast main line. Because there is very little if any capacity left on that line, there are perpetual reliability challenges. The situation should improve once we secure HS2.
Does the Minister agree that the benefits of HS2 stretch out not only to the building of railway carriages, but to environmental needs, namely trees? Trees along the HS2 route will be grown in my constituency even though, sadly, HS2 is quite a way away from it. That is an example HS2 investment having a benefit across the whole of the midlands region.
My hon. Friend makes an extremely pertinent point. It is often said that only the places that have the hubs will benefit from HS2. It is certainly the case that there will be many related situations that we might not automatically think off—in my hon. Friend’s case that means the trees that will be grown in her constituency. As she says, that will have an important economic benefit to her constituency. I am sure there are many other examples we will be able to point to as that project moves forward.
A key component of the midlands engine is trade and investment. The Secretary of State for Communities and Local Government led the inaugural midlands engine trade mission to the US and Canada in September, and Sir John Peace led a second mission, in November, to China. The successes of those missions include £1.3 million of business secured, and a further £6.2 million of business expected over the next 12 months. To date, more than 70 companies have benefited from those missions.
Before I conclude, I want to pick up one or two more points, particularly on transport infrastructure. There was a suggestion that there was a significant lack of investment in transport infrastructure across the midlands. I reiterate that £5 billion of capital investment into new transport infrastructure is being made across the midlands. That includes upgrading sections of the M42, M5, M1 and M6 to four-lane smart motorways, and £2.7 billion for new trains on the east coast main line. In addition, a £55 billion investment is going into HS2. As hon. Members know, a significant amount of local funding is also being devolved across the region to our local enterprise partnerships.
We should not understate the importance of Birmingham airport and East Midlands airport to the midlands region. East Midlands airport is at the forefront of freight and is the second busiest freight hub in the country. It is probably the biggest dedicated freight hub in the country. Birmingham airport is now seeing significant passenger growth. As part of the regional growth fund made by the Government during the last Parliament, a significant project was undertaken to extend the runway at Birmingham airport, including the diversion of the A45. As a subsequent benefit of that longer runway, Birmingham airport is now able to serve longer-haul markets than it was, because it has that longer runway to support the long-range planes.
To conclude, I thank hon. Members for their thoughtful contributions. I know that all the Members who are here representing midlands seats bring a passion not only for the country, but for the midlands region. Many of the topics that have been mentioned—connectivity, enterprise, trade and investment—will be covered in our midlands engine strategy, and the midlands engine will have found the points made in this debate extremely helpful in its future work. We will continue to work with the midlands engine to respond to the challenges and opportunities set out in the industrial strategy and to develop its vision for making the midlands an important engine of growth.
Once again, I thank you for your chairmanship, Mr Howarth. I am grateful for the Minister’s response to the debate, and am also grateful for all the Members who were able to contribute. I agree with the Minister—one thing we share is our passion for the midlands. How we reach a consensus on a direction for the midlands will play a key role in how the strategy develops.
I cannot end this debate without mentioning that, in terms of vibrancy and desirability to live, Warwick district has just come top in the west midlands. That is possibly because we have the skills, we have low unemployment, we have the colleges and we have the great universities on our doorstep. I hope what we have in Warwick district is a microcosm of what we will be able to achieve in the midlands as a whole. I hope that, as the strategy develops into a White Paper, the debate will continue to ensure that we achieve the best we can for our constituents and the region as a whole.
Question put and agreed to.
That this House has considered the Midlands Engine.