16/12/2012 Sunday Politics West Midlands

His transport policy stuck in And in the Midlands, if Whitehall

can't deliver economic growth, would our local leaders do better?

They bet they would. Roll the dice, pass go, collect a billion-pound

Apology for the loss of subtitles for 2147 seconds

Hello once again from the Midlands. I'm Patrick Burns. And with us here

today, two former Government ministers, better known these days

for saying it as they see it. Digby, Lord Jones of Birmingham, was a non

party political trade minister under Gordon Brown. Gisela Stuart,

the Labour MP for Birmingham Edgbaston, was a health minister

under Tony Blair. Let's begin with Jaguar Land Rover

where the unions are seeking reassurances over jobs here

following confirmation that the firm are not only setting up a

joint venture to produce vehicles in China, they're also considering

opening a plant in Saudi Arabia. JLR have so far declined the BBC's

repeated invitations to put someone up to talk about it. You act as an

ambassador for Jaguar Land Rover, but makes you the next best thing.

You can understand why the unions are anxious. I can understand

anxiety. My job is very much external and flying the flag. The

first I knew about it was when you knew about it. I know no more. But

they are such a global success, JLR. They have not got enough capacity

to make enough of the stuff. If you are in a market... Saudi Arabia is

a good example. They buy lots of Land-Rovers. Looking ahead 10, 15

years. If there is going to be extra growth, you really do score

hugely if you build near your market. Not one person making them

or selling them in Britain should worry about this at all. This is

not substitution. Are you satisfied with this as someone who represents

Birmingham? I want some kind of reassurance because it is quite

right that the closer you produce to the market, the better. But part

of the Saudi deal is aluminium. Energy costs for any aluminium

production is very important. I want reassurances that the

aluminium smelters, and we have got them from the government... The

unions are right to be worried. We want the technological developments

that go with production. One leading motor-industry expert

is certainly bullish about Jaguar Land Rover's overseas prospects

which he says should hold no fears for workers here. They have to

expand abroad. That is where the markets are. They're going to build

a market -- factory in China. If anything does happen in Saudi

Arabia, it will not be for many years. But the jobs here are very

safe. In fact, because of expansion aspirations, there could be even

more good news for jobs going forward. Sounds good enough. But

the crux of the issue is that if production in these overseas

locations really is tailored to growing markets, we are stuck with

the markets that are more sluggish. If they produce them more cheaply

and efficiently, there is a worry. This is an enormous long-term

Capital Investment Game. You're right in saying that the

aluminium... They're going to build and Saudi Arabia the biggest

aluminium smelter in the world. That seems a good idea. The 4th

biggest market for Jaguar cars is Russia. No one is talking about

building factories there. America is still an enormous market for JLR

but nobody is talking about building factories there. We in the

Midlands have got a fabulous global product that everyone wants to buy.

You have said that eventually we are going to leave the EU, at least

they are looking beyond to the a while -- the wider world. I said

the EU is leaving us. It is no longer primarily with Europe, trade,

it is looking the other way. But we still need reasons for people to

buy from us and our competitive on frontage will continue to be new

products. That is what I want -- our competitive advantage will

continue. Coming up a little later, we're

playing the billion-pound investment game. Christmas, so

often a time for settling down over board games. It's our business

leaders who're hoping the roll of the dice brings glad tidings for us

all. Find out who wins in a few minutes.

Before that, dairy farmers will soon be able to join forces to give

themselves some extra clout in the marketplace. It follows months of

angry protests which started in Staffordshire against cuts to the

prices they're paid by milk processors and supermarkets. Here's

Jackie Kabler. The robot milking machine at this

Shropshire farm means the cows decide when they want to be milked

and when they want to eat. But life has been less certain for dairy

farmers. The summer saw votes for direct action against cuts in milk

prices. But now a step forward. The UK currently imports more dairy

produce better exports to the tune of over �1.2 billion a year. After

the summer of protests, is seen to the British dairy industry could be

in real trouble. With the announcements this week, it seems

the government has finally got the message. Farmers will now be able

to form producer groups to give them a louder voice in the industry.

You have a lot of individual producers operating separately,

negotiating their own contracts with the processors, the

supermarkets. What this means is that they will be able to get

together and have a single entity which I think is going to hugely

help their competitiveness. Tuesday night again saw farmers

protesting outside Muller's dairy in Droitwich, still unhappy about

the prices they're getting. Unfortunately we are still in a

position when we set up on this campaign to get the industry on a

cost of production as a minimum figure for the milk by the

beginning of the winter. Dairy UK, which represents processors such as

Market Drayton based Muller, described the proposals as a

constructive way forward for the industry. Producer organisations

are already widespread in Europe. When set up, they'll give farmers

here more clout too, but there may still be a long way to go.

Jackie Kabler. And we're also joined here today by the West

Midlands Liberal Democrat MEP, Phillip Bennion. He's a farmer

himself and a former member of Lichfield District Council. This

agreement has been hailed by Derry UK representing principally the

processors as a constructive way forward. Do you agree with them?

do. Considering they are representing the purchasers, I

think it is positive. This measure will actually help the producers.

It is very important for the producers to have the strength in

numbers to be able to negotiate on an equal term with the buyers. This

will give them a right to form the organisations that they need to

form to be able to have that power. I understand it is modelled on a

dairy farmers' co-operative on the Isle of Wight. 17 have come

together to work in the dairy industry. Is that the model? What

does it take to make a co-operative in your view? That is probably

going to be one of the smaller ones. To really have the negotiating

power, I think we need far bigger co-operatives, far bigger producer

organisations. For geographical reasons, the one on the Isle of

Wight would be smaller. There was a �5 million fund to exploit new

markets, new technologies. What sorts of things are we talking

about? I am not exactly sure. That is up to the industry. It is only a

small amount of money but certainly there are dairy products...

import far more than we export. The worry I suppose is that there is

still in negotiation under way over the price the farmers are getting.

They get something like 16p out of the 46p per upright. It is roughly

a 26p up to 30p. But his for the litre. It is a small proportion

considering they seem to do most of the work. This is giving them the

right to move forward. The current contracts still exist. So what is

going to be a few months down the line before we see the prices

change. There is a European model in this. German farmers and

particularly have responded in the same way after serious problems

there. You may not know this, I am a Bavarian farmers daughter and I

can milk a cow! We will not ask for a demonstration of! The model is

the kind of co-operative and that gives them a much bigger clout. One

of the problems of milk production is that the big supermarkets have

imposed purchasing models which make their work and sustainable.

When I saw that, I thought, great. I was just surprised it has taken

so long. One of the problems is that it is a commodity and so it is

all about price. It is not like making a Jaguar. There is value-

added and brand. Milk is milk is not. You are exploited by the

person who has the money. Coming together to give yourself something

which the supermarkets need which is folly in which has got to be the

right thing -- his volleying. The only worry is do you remove the

competitive impetus to become more competitive? Because your market is

more guaranteed, you do not need to invest or trained in people.

Possibly. But you might be overplaying the worry. The cost of

production contracts, they only take account of the input variables,

the feed costs, the fertiliser costs, they are extremely volatile.

You can see feed costs doubling and then two years it later they might

be half of that. If you are in a long-term contract... Farmers are

not big businesses that can write out years of losses. Not can also

Bee Gees. That is value-added. do not see a situation where that

factors in and do get a squeeze on the cheese price in order to cope

with rising prices of milk? That makes the fact that we are

importing even more bizarre. We ought to be able to produce enough

in this country. I think this balance came in when you had the

huge purchasers. The supermarkets took the leading role and... If you

squeeze the supply chain, the farmer is not left with any profit

and therefore he cannot invest in teas which is value-added and

butter and yoghurt. It is a vicious circle. Because the dairy industry

is very difficult to enter. Once you have lost the supply, it does

not come back. We have heard fears about the dairy industry as we know

it under an existential threat potentially. We have heard that but

I think we have such good conditions in this country and

farmers know what they're doing, we can produce a grass particularly in

the west of the country with rainfall and cows on grass of the

most economic for of producing -- form of producing... I do not think

in the long term we will be under an existential threat. It is

specifically now that we have the farmers on a level playing field.

For the moment, thank you very much indeed.

Could we, here in the Midlands, be about to scoop a billion-pound

regeneration jackpot? Our biggest Local Enterprise Partnership

covering Greater Birmingham and Solihull is increasingly hopeful

that it will be chosen to pilot the regional growth strategy unveiled

six weeks ago by the former Deputy Prime Minister, Lord Heseltine. Our

business correspondent Peter Plisner has been following the

Imagine playing a board game that requires money to buy things. But

the difference here is, you haven't got any. A serious handicap if you

want to invest and grow. But that's exactly the situation the Local

Enterprise Partnerships have found themselves in. The LEPs have

effectively taken over from the Regional Development Agencies. But

unlike the RDAs, they don't have a pot of money to invest. Instead, to

fulfill their remit of driving economic growth, they have to bid

for money from the Government and other agencies. But that might be

about to change because of this former Tory Minister. Lord

Heseltine is suggesting that the Government devolves money and some

powers down to the LEPs. While the idea is still in the embryonic

stage, it's becoming clear that the LEP, based here at Birmingham's

Baskerville House, could be about to pilot the concept. Around the

city, many business leaders think the idea makes perfect sense.

talking to Lord Heseltine weakly at the moment. He is revelling to come

up to Birmingham as soon as the Prime Minister says yes. If there

is one thing he could achieve is speeding up the availability of the

money and making it work more effectively. Too often we see it

being wasted or duplicated. Music to the ears of this technology firm.

They have benefited from government cash but Whitehall red tent meant

it took months to materialise. -- red tape. There would be less

bureaucracy and the people involved in the process would be able to

make informed decisions about where to place the money. They would know

the businesses and how great the need is. In Wales where they have a

devolved budget, they can move quickly went need is most important.

But some are concerned that in the pursuit of growth and jobs, the

LEPs aren't doing that much to help the unemployed. I would want

funding to go to the old most needed. -- go to the most needy.

The focus should go on the unemployed. Giving leading players

in the regions the chance to roll the dice and decide where to invest

is something successive governments have tried but failed to do in the

past. Now in Birmingham it could be about to happen. You have expressed

frustration at the way successive governments have done regeneration

including the one in which you served. Does there seem to you like

a way forward? I think it is the only act in town. Really, it is not

for you and I to say that it is not good enough. This is happening. You

play the hand you are dealt. In that respect, this money is up for

grabs and if it is not coming here it will go somewhere else in

Britain. I would rather it came to my city and I would rather it was

done this way. People like me who... I really regret the Regional

Development Agency is going. I thought they were excellent. You

could have cut cost out of it. They did not need them in the south.

They need them in the north. Why is it that... Politicians always have

to do it all at one. I am optimistic that what we are offered

now is right. My biggest worry today is that if you sat in the

boardrooms of investors, they do not think of Birmingham and

Solihull anymore than they think of Coventry and Warwickshire. They

think of this as the Midlands. Any of that money going anywhere near

Birmingham Airport... The engine plant in Wolverhampton, that is not

in Birmingham. But is the problem. You have lamented the passing of

advantage West Midlands, but these represent a targeted initiative and

you can have targeted local leadership running the show. That

is true. We are very lucky in the West Midlands. They will have to

work together and create a city- region structure and that is the

real challenge. Absolutely. missed opportunity would have not

just being a City mayor, it would have been a regional mayor. What

troubles me is that this money is coming out of other departments.

What is happening underneath it? The structure at the moment, the

future job generation will not come from the big companies, it will

come from the small ones. The creative industries, employers of

fewer than 10. The big structures at this stage... This is worrying

because I am agreeing with you. Some months ago you told me web

ruling yourself out of the Birmingham elected mayor because

the Civic limits were too small. There was talk of a city region

agenda of an elected chief executive. I was wondering if that

was the sort of thing... That is the sort of thing that will attract

far more talent, you would widen the talent pool and make it more

attractive for many more people because a city region is what it is

all about. If this billion pounds is the first step for getting the

Black Country working with Solihull and Birmingham, then you start to

give a lot of people a reason to stand for it. At the end of your

peace there, the principle of Bournville College talking about

giving people skills... And not enough involvement for local people.

This region has a dearth of skills and a young population. You need

the Small Business... And the Birmingham baccalaureate. If you

can employ a couple more people and get a small business to work with a

college and take on apprentices and put the money into that. You will

not bound... Quick final word on this. The TUC tweeted that there

were not enough worker representatives will stop there are

concerns that young people do not get enough of a look into it either.

It is too much dominated by the big companies. But is why something

like the city council with Birmingham baccalaureate and the

responsiveness of that will respond to the job needs. But it is the

only show in town and we have got to make it work.

Now our regular round-up of the political week in the Midlands in

60 seconds including some Christmas cheer from BBC WM's Breakfast

presenter Pete Morgan. Moving out. The final patients have

left the old North Staffordshire Royal Infirmary. All beds are now

Ready for Christmas? Me neither. But the parliament choir is, led by

a Midlands MP. Things like singing in the choir, you can cross the

barriers between the parties so that you make friends with people

even if you do not agree on policies. 250 staff have been laid

off after Tamworth firm Drive Assist went into administration.

Unions met the Government to try and keep manufacturing of the world

famous black cab in Coventry. We would not be able to recruit the

staff. And a public meeting heard how Stafford Hospital faces being

broken up because it's effectively bankrupt.

In spite of a �20 million bail out, Stafford Hospital will still be �10

million in the red, even after another round of savings. Let us

talk to the former Health Minister about this. What is the way around

it? Is at a federation of hospitals? A share things between

Volvo -- Wolverhampton... You have had problems of quality of care, it

is not just money. I do not think money on its own will solve it. I

am not sure whether the new commissioning system will respond

to it. I am quite gloomy. But in a sense it is the local people who

will have to make the decision as to where the priorities are. We are

short of time but his Deraa business model which can crack this

problem we have with hospitals? -- is there a business model? There is

nothing about money in this. This is about a systemic issues. This is

about the product, the system and secondly, management. The business

model to lookout has to be management. So often you get good

and bad businesses with the same amount of money in the same market

and one succeeds and one doesn't. It is the quality of the management.

You should look at what they do and where they do it. The money comes

after that. This I regret to say it is where we have to leave it in the