11/12/2011 The Politics Show West Midlands

In the Midlands: The warning lights are flashing Fry two speed economy.

Some firms to cut red while others get the green light and forge ahead.

And as Jaguar Land Rover make a billion, we are on the inside track

Apology for the loss of subtitles for 1809 seconds

with the man who helped turn them Hello from the Midlands. After all

week when Cadbury's owners Kraft told us they were cutting 200 jobs,

but JCB announced the creation of 350, confusing, isn't it? We have

foreign economic forecast from the lake up -- Labour peer who brokered

the Indian takeover of Jaguar Land Rover. Joining JLR in the fast lane

are Amazon, Marstons Brewery and Monarch Airlines, all creating jobs

and hoping to deliver Growth. We expect unemployment figures to be

up again next week, leaving more of us stuck in the crawler lane. No

wonder there's so much talk these days about our two-speed economy.

What is to be done is a question today. Jeremy Wright, the

Conservative MP is with us, and Geoffrey Robinson, the Labour MP

who served as a Treasury minister in Tony Blair's first

administration, a Coventry and Warwickshire presence here. First,

Giles Latcham reports on three contrasting reports of the Midlands

economy at work. -- three contrasting accounts.

Slow, slower, stationary, reach for handbrake and stop, you have ground

to a halt. Haven't we? Or have we? They may not be in the fast lane

but in certain sectors of the Midlands economy, certain companies

We have the loading on the side there. Gazeley, for example, that

logistics firm which brought Amazon to Rugeley along with 900 jobs,

have yet to sell this site north of Stoke-on-Trent but are facing 2012

with optimism. This year, we started with six buildings, and we

are left with one, but we also have sites in Stoke where we have

interest from manufactures and warehouse customers looking for

development sites. That takes a lot of investment in our company and

confidence. And Gazeley are not alone. 2000 jobs in prospect in

Wolverhampton at Jaguar Land Rover's new engine plant, 1000 jobs

at Black country brewers Marstons, 200 jobs at the John Lewis store in

Tamworth. But for every green light company, there are many more,

usually smaller, enterprises, consolidating, just trying to

survive, stuck on amber. At a tool maker and injection

moulding firm in Cannock, there is not much in the way of growth. What

has the forecast? The boss, a former investment banker with a

passion for manufacturing, is relentlessly positive, and has just

spent a quarter of a million pounds on new machinery. If I run my

business listening to the media, I would probably have slit my wrists

by now. It doesn't seem like that at all. It is a complete disconnect

as far as I am concerned between what we see for 2012 and the news.

The gloom and doom about their is all-pervasive, but for us, we see a

better 2012. They still employ 25 people here and four rival firms

have gone under. By one estimate, since May last year across the

region we have lost 39,600 jobs, in the public and private sectors.

The latest forecast suggests unemployment levels been --

employment levels will languish behind the rest of the country up

to 2020. Less than encouraging for volunteers at this furniture

recycling scheme, some who have been job hunting for months, others

for years. Since I have been volunteering I have had the

confidence to be able to apply for jobs. It is not that hard now for

me to be able to have the courage to just go there and apply for them

and just send them off, even if most of the time I don't get a

reply. The larger companies seem to be, as I say, providing more and

more jobs, so fingers crossed things will get better. We still

have to have times ahead, I think. Smaller companies will struggle. It

is a case of hanging on in there to my mind, to find something.

If it is a waiting game we are playing, it is longer for some than

others. Patience, please. Yes, Granta's patience but be quick

about it. Giles Latcham reporting. Jeremy Wright, your government has

pledged to rebalance the economy. They are thinking about the gap

between north and south, but it seems the lesson of that report is

that we have those imbalances right here and around noses in the

Midlands. We do and we don't just talk about rebalancing north and

south but manufacturing, financial services, service industries, they

all need to be balanced to ensure we have a safe -- successful and

balanced economy. To help manufacturing we can ensure tax

rates are low for manufacturing companies, bring Corporation -- we

are bringing down corporation tax this year, we can look at research

and development and ensure the right tax credits available for

that, and there is good news for that in the or -- Autumn Statement,

and we can help provide a well- educated, well-trained, highly

skilled work force. Is that enough? If you look at your area, Coventry

and Warwickshire, Coventry has been hit by a private sector and public

sector job losses during your time in government, the Bonfire of

educational quangos, private sector companies before that, then science

parks on the periphery creating successful new businesses. A world

of extremes. That is true and rebalancing is also about

rebalancing between the public and private sectors, and the truth is

that we have to see, and are already seeing, are large and of

private sector jobs created, half a million nationwide since this

government came into office, but this is a painful process. I'm not

pretending that over the period of rebalancing there would be

difficulties but we are heading in the right direction. Jeremy, do you

think that is such -- sufficient to deal with the difficulties? It is

just not working. If it was working we could accept it, buckle down and

go ahead but the truth is that unemployment is rising, the economy

is stagnating and one objective of government policy is not being

achieved, the deficit reduction. They are missing the target by �168

million and unless we get out of this mindset of cutting and

increasing unemployment, shutting down factories, although we have

had wonderful successes, as Kamal Bhattacharya it shows, where we had

those successes, they don't reflect the economy as a whole. Industry

does best when the economy is rising and until we get back their

and get employment rising again, I think we will stagnate. Does it not

reinforce the point that the IPPR, the research group, says that

unemployment in this region will remain higher-than-average until

2020. It will take that long to recover from the downturn of 2008.

Unemployment is variable across the region. In my constituency the

claimant count for jobseeker's allowance is lower now than a year

ago. There are huge variations and I think I am right in saying that

the West Midlands is actually the region were the greatest variation

of the whole country. But to return to something Geoffrey says, he is

right that the general state of the economy is important, and we have

to ensure there is confidence out there, but confidence comes partly

at least, from an idea that the government has got to grips with

the main problems we face, one of which is a deficit which is far too

large, debts which are far too big. The way you resolve that is most

certainly not to do what Geoffrey's party did. I think the most

important thing the government could do right now would be

crudities in. Unfortunately everything they have tried to

arrange with the banks so far has failed there. We have talked about

reconstructing manufacturing, and what could happen now, and making

credit available and getting it into all sectors of the economy,

but particularly the productive sectors, is something they could do.

They have to get on with it and did better than so far. Money should be

made available, for companies to use it. 18-24 year-olds, one in

five unemployed, what would you do about that, Geoffrey Robinson?

would get the economy moving as a whole. Geoffrey mentions credit

easing. We are making �20 billion available for small and minute --

medium-sized businesses. The crucial question about 18-24 year

olds is more apprenticeships and better training. There will be new

apprenticeships at Level 4, equivalent of the first year of

university. Our traffic lights are moving to amber so we must pause

Few people can be better-qualified to the home truths about the state

of the economy in our part of the country than Lord Kumar

Bhattacharya, born in what is now Bangladesh. He has had the ear of

successive prime ministers since Margaret Thatcher. Things took off

for him when he came to Birmingham in his twenties. He became an

apprentice at Lucas Industries and in 1970 gained a PhD in Engineering

Production. 10 years after that, Professor

Bhattacharya founded the now world famous Warwick Manufacturing Group

at the University of Warwick. Now Baron Bhattacharya of Moseley sits

in the Lords as a Labour peer. I caught up with him in his natural

habitat, a workshop in the heart of the Warwick campus, where 350

Jaguar Land Rover and Tata research and development staff are working

on the next generations of their top-selling brands. We began by

reflecting on his key role as the link-man who'd inspired the

transfer three years ago of a much troubled JLR from American

ownership under Ford to that of Ratan Tata of India.

The company that of course, famously needed state assistance,

and then two years later, a billion pounds in profit. What a turnaround.

It is wonderful. People used to think that in the Midlands we don't

have the talent and we are all lazy, idle, and see what happens. Given

the right leadership, a lot of things can happen. Of course, the

investment we are seeing going into the new JLR engine plant near

Wolverhampton, 1000 more jobs in Solihull, Castle Bromwich, where is

this leading to and where will it end? It is great. We are at the

start of a great revival. When I speak to Ratan Tata, he always says

that Jaguar Land Rover is a Midlands icon and we have to

preserve this in the Midlands, and he supports it. Whatever is

required, he does. He comes here every month. How many chairmen come

and sit and talk to the junior and senior engineers month after month?

That is what leadership is all about. Of course, yes, we do have

great companies at the top, but the difficulty, of course, is that

beneath that there is a long trail of strugglers. That is basically

what Britain has been over the last 40 or 50 years. But it wasn't so

exposed in the past. Now that we have got great competition, it is

getting exposed. What's more, if you visit parts of the West

Midlands, the Black Country, parts of what used to be called the

Potteries, Stoke on Trent, that area, there is a shortage of skills

which really goes against the history of this part of the country.

What can be done about it? It is not a question of what a shortage

of money. If you look at the amount of money we spend in the Learning

and Skills Council, it takes two to tango. It requires the people that

want the skills to be involved with developing the skills. In the

autumn Budget, they said very good things. The business of the

regional growth fund for growth in employment, then the whole business

of research and development tax credits becoming easier and above

the bottom line, then you have the whole business of apprenticeships,

a university, Technology Colleges, science schools, there is an

alignment in government with opposition that things have to

happen. Successive governments, in a way, lost sight of the importance

of the manufacturing industry and were overruled by the City as the

next best thing after North Sea oil. -- enthralled by the City. History

will tell us that it was easy money, but it requires a tremendous shock

for things to change. We have just had that shock. People have

realised that we have to rebalance, and once that is understood, then

we can get a the young people into apprenticeships, and have one or

two icons. You require one or two icons, which acts as a market Paul

for others, and that is happening in the Midlands, I think. -- market

pool. Maintaining a strong Coventry and Warwickshire presence, Kumar

Bhattacharya. You can visit my block fought my thoughts on that

conversation. What has Jaguar Land Rover got now that it didn't when

you were in charge? It had a bad period under Ford. For the

ownership turned out to be, sadly, an unmitigated disaster, but there

were many good things there that we Jaguar base, which have come

through. We have Ratan Tata's Investment and leadership and also

a new product, which has come with key appointments, notably the chief

executive, brought in by Ratan Tata, an outstanding industrialist. They

have invested more in product and take a longer view and seek

consensus with their workforce. Those three things he has brought.

We lacked those at Rover. When they were owned by BMW they had no money,

no leadership or Investment and continuing strikes. Given the

shortage of skills we talked about in the interview, where are the

2000 or so it -- or so highly skilled people for the new engine

plant going to come from? We had training boards which ensured

companies to the training and if they didn't they had to send

employees to retain -- retrain. There is no excuse for engineering

companies saying they do not have the skills when they have not

established links with schools to get apprenticeships going and be

self-sufficient. So that is the answer, Jeremy, companies saying,

he waffles stop I don't think governments can create growth on

their own. Geoffrey is right. We have been successful in the last 18

months in creating apprenticeships at all levels, but I think there is

a broader problem. When the plant at Solihull was advertising for

jobs, they have 1000 jobs to offer and 8000 applications. The problem

is broader than that and goes down to the supply chain. JLR will tell

you they had great difficulty securing people in the supply chain

with the necessary skills. Jaguar Land Rover is an important company

because it provides jobs but also because it has an extensive supply

chain supplying to it and giving employment there as well. Geoffrey

Robinson, I was interested that Baron Bhattacharya is a Labour peer,

so he said there was a lot to welcome in the Autumn Statement,

research and development tax breaks, apprenticeships and that sort of

thing. He is talking about a realignment between the two parties

to finally get the message after this tremendous shock, after the

crash. Yes. He was right to become one of two things and be optimistic.

For certain sectors or companies you can be, but you cannot get away

from the fact that we are stagnating, laying people off, not

investing and falling further behind. Jeremy Wright. We are

behind other regions historically. Investment is happening. I accept

there are regional variations but business and industry across the

country has invested �3 billion more this year than last, so these

things are happening. What is worth bearing in mind that Jaguar Land

Rover is that is a global company who could locate manufacturing and

R&D operations anywhere in the country. There was clear

accommodation from India both for the RMT jobs and manufacturing --

clear competition. We have succeeded and securing that

investment for the UK which is good for the long-term employment

prospects in the West Midlands. Looking at the wider economy, your

Prime Minister described high-speed rail as a project that could

rebalance the economy. You are in the government but have a

constituency issue there. As I understand you're a pro high-speed

rail but anti- H S two. I have no problem with high-speed rail as a

concert. I think travelling by train or rather than plain is

better for the environment and the economy, but my problem is that I

think as currently conceived, HS two is not the best way of doing

high-speed rail. I have problems with the business case and I think

it has picked the wrong route. I think we should follow existing

transport corridors when have we can and do less environmental

damage that way. Geoffrey Robinson, you have spoken out against it, but

how can you deliver the extra capacity required without building

a new system and if we are building a new one, why build a slow one?

That is not the right way to put it. You can get the extra capacity

without building a whole new line, but there is a case for a just two,

and I am pleased to agree with Jeremy -- HS two. The point is that

you can take an east coast route following the main corridors as

they exist without smashing up the whole of the children's and lovely

parts of Warwickshire -- the whole of the children's, and to have

Spurs including Coventry and Stoke and make its own national railway.

We will talk about this again when the government comes up with its

decision in January. This is where our own lights are moving out

towards the colour red. I have to draw a halt. Thank you for joining

us today. That is just about it from the Politics Show in the

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