Westminster Hall

Tuesday 15 January 2013

[Hywel Williams in the Chair]

Manufacturing (West Midlands)

Motion made, and Question proposed, That the sitting be now adjourned.–(Greg Hands.)

Mr Pat McFadden (Wolverhampton South East) (Lab): I congratulate the hon. Member for South Staffordshire (Gavin Williamson) on securing this timely and important debate on an issue close to all our hearts as west midlands MPs.

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I am sure there could be much discussion with my neighbour, my hon. Friend the Member for Dudley North (Ian Austin), on the genealogy of manufacturing in the west midlands. My constituency’s claim probably focuses on the activities of John Wilkinson, who launched the world’s first iron boat in Bradley and made other innovations in the Bilston and Bradley area. I suspect that that ground is contested and we would all have to make our own claim.

The debate, of course, is not only the story of the past; it is the story of the present and future. I echo the welcome for the Jaguar Land Rover announcement and, indeed, for the investment under way on the border of Wolverhampton and south Staffordshire for the new engine plant. That site was ready for development only because of the activities of Advantage West Midlands, the regional development agency at the time, which prepared and kept the site to have something ready for Jaguar Land Rover to go into. I make that point not necessarily to try to rewind the clock, but to say that the state has a role, either locally or nationally, in helping to make such investments happen.

The important thing for the local enterprise partnerships, which have replaced the regional development agencies, is that they have the power and punch to carry out their role. That is why Lord Heseltine’s recommendations for more devolution of power and spending are important. There will be significant institutional resistance to that within Whitehall. The report is easy to write but a challenge to implement. If the LEPs are to be effective, and if the commitment of business people is to pay off, they need power and punch.

The hon. Member for South Staffordshire was right to say that manufacturing is not all about headline names; critically, it is about the supply chain and the small companies that dot our constituencies. I call that the ecosystem of manufacturing, and others refer to it as the industrial commons, but all those companies are interdependent and reliant on one another. I do not want to repeat what companies have asked for, because other Members have already addressed that, but the hon. Gentleman is familiar with Wescol-the owners live in his constituency, and the business is in my constituency -a manufacturer of gas equipment. LS Manufacturing in my constituency makes quality textiles. Wednesbury Tube makes copper pipe, and there are many others.

Businesses want the things that hon. Members have mentioned. They want reasonable energy costs; they look with some envy at the rebates available to energy-intensive industries in Germany. They certainly want a skilled work force, as my hon. Friend the Member for Dudley North said. They also want the freedom to operate. That is an important message that we receive: they want freedom from business crime and metal theft-problems that we are not yet on top of that challenge manufacturing businesses in many parts of the country.

Businesses want a stable tax environment. I welcome the autumn statement changes in capital allowances, but they prompt the question why capital allowances were cut in the first place. It never made sense to talk about the march of the makers and then impose more tax on the activity of making things. That position has now been reversed, which I welcome and have called for consistently over a number of years.

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On the regional growth fund, there is a difference between announcing expenditure and getting expenditure to the companies that need it. Again, I reflect something that the Minister will undoubtedly be experiencing: due diligence is a good thing, but paralysis is not. There is a difference between announcing money and spending it. We need to get better at getting money out the door after it has been announced. It is important that that happens with the regional growth fund.

I have two other points to make in closing. Many of the issues that we are discussing are about supply-side measures. Businesses also need demand in the economy. There is not enough demand, and given that every major developed country is pursuing austerity policies, it is not surprising that businesses are struggling to employ, create and grow. It is important to have demand and the right investment to avoid the collective austerity that is dragging down demand across our economies.

I echo the point made by my hon. Friend the Member for Birmingham, Northfield (Richard Burden): business needs certainty. If we are about to embark on years of uncertainty about where we stand in the world and in relation to Europe, it will not do our manufacturing businesses any good. Of course we are in a global game-it is not only about Europe; it is about China, India, Russia and other markets-but Europe remains our biggest export market. Sending a message to both inward investors and our own domestic investors that we will now have years of uncertainty about our relationship with our biggest export market is not good for manufacturing. I am sorry to make this somewhat partisan point in what is otherwise a fairly consensual debate, but it is important to stress that all of us in this Chamber are united in wanting more of the activity of making things. I believe that geopolitics-where Britain stands in the world-is critical to investment decisions. That is the important point on which I close.