11/12/2011 The Politics Show West Midlands


11/12/2011

Jon Sopel and Patrick Burns are here with the top political stories of the week.


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

:01:06.:01:10.

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

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

:01:15.:01:25.
:01:25.:01:25.

Apology for the loss of subtitles for 1809 seconds

:01:25.:31:34.

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

:31:34.:31:38.

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

:31:38.:31:45.

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

:31:45.:31:49.

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

:31:49.:31:54.

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

:31:54.:31:59.

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

:31:59.:32:04.

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

:32:04.:32:09.

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

:32:09.:32:12.

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

:32:12.:32:17.

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

:32:17.:32:23.

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

:32:23.:32:28.

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

:32:28.:32:31.

administration, a Coventry and Warwickshire presence here. First,

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Giles Latcham reports on three contrasting reports of the Midlands

:32:36.:32:44.

economy at work. -- three contrasting accounts.

:32:44.:32:49.

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

:32:49.:32:58.

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

:32:58.:33:02.

but in certain sectors of the Midlands economy, certain companies

:33:02.:33:12.
:33:12.:33:17.

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

:33:17.:33:21.

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

:33:21.:33:26.

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

:33:26.:33:32.

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

:33:32.:33:39.

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

:33:39.:33:44.

interest from manufactures and warehouse customers looking for

:33:44.:33:48.

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

:33:48.:33:53.

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

:33:53.:33:58.

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

:33:58.:34:03.

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

:34:03.:34:08.

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

:34:08.:34:12.

usually smaller, enterprises, consolidating, just trying to

:34:12.:34:18.

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

:34:18.:34:22.

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

:34:22.:34:28.

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

:34:28.:34:32.

passion for manufacturing, is relentlessly positive, and has just

:34:32.:34:36.

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

:34:36.:34:39.

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

:34:39.:34:44.

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

:34:45.:34:49.

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

:34:49.:34:55.

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

:34:55.:35:02.

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

:35:02.:35:05.

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

:35:05.:35:15.

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

:35:15.:35:20.

The latest forecast suggests unemployment levels been --

:35:20.:35:23.

employment levels will languish behind the rest of the country up

:35:23.:35:28.

to 2020. Less than encouraging for volunteers at this furniture

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

:35:31.:35:36.

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

:35:36.:35:40.

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

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

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

:35:49.:35:53.

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

:35:53.:35:57.

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

:35:57.:36:04.

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

:36:04.:36:12.

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

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

:36:16.:36:22.

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

:36:22.:36:26.

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

:36:26.:36:30.

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

:36:30.:36:34.

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

:36:34.:36:38.

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

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

:36:43.:36:46.

south but manufacturing, financial services, service industries, they

:36:46.:36:50.

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

:36:50.:36:53.

balanced economy. To help manufacturing we can ensure tax

:36:53.:36:58.

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

:36:58.:37:03.

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

:37:03.:37:05.

and development and ensure the right tax credits available for

:37:05.:37:10.

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

:37:10.:37:14.

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

:37:14.:37:19.

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

:37:19.:37:24.

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

:37:24.:37:28.

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

:37:28.:37:33.

educational quangos, private sector companies before that, then science

:37:33.:37:36.

parks on the periphery creating successful new businesses. A world

:37:36.:37:40.

of extremes. That is true and rebalancing is also about

:37:40.:37:44.

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

:37:44.:37:48.

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

:37:48.:37:52.

private sector jobs created, half a million nationwide since this

:37:52.:37:56.

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

:37:56.:37:59.

pretending that over the period of rebalancing there would be

:37:59.:38:04.

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

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

:38:08.:38:12.

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

:38:12.:38:16.

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

:38:16.:38:22.

is stagnating and one objective of government policy is not being

:38:22.:38:28.

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

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

:38:31.:38:35.

increasing unemployment, shutting down factories, although we have

:38:35.:38:45.
:38:45.:38:45.

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

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

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

:38:53.:38:59.

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

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

:39:03.:39:07.

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

:39:07.:39:13.

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

:39:13.:39:17.

Unemployment is variable across the region. In my constituency the

:39:17.:39:21.

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

:39:21.:39:25.

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

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the West Midlands is actually the region were the greatest variation

:39:28.:39:32.

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

:39:32.:39:35.

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

:39:35.:39:39.

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

:39:39.:39:43.

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

:39:43.:39:48.

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

:39:48.:39:52.

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

:39:52.:39:58.

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

:39:58.:40:02.

important thing the government could do right now would be

:40:02.:40:04.

crudities in. Unfortunately everything they have tried to

:40:04.:40:09.

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

:40:09.:40:13.

reconstructing manufacturing, and what could happen now, and making

:40:13.:40:16.

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

:40:16.:40:20.

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

:40:20.:40:24.

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

:40:24.:40:32.

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

:40:32.:40:37.

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

:40:37.:40:41.

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

:40:41.:40:46.

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

:40:46.:40:50.

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

:40:50.:40:54.

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

:40:54.:40:58.

apprenticeships at Level 4, equivalent of the first year of

:40:59.:41:02.

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

:41:03.:41:12.
:41:13.:41:14.

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

:41:14.:41:18.

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

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

:41:24.:41:27.

successive prime ministers since Margaret Thatcher. Things took off

:41:27.:41:31.

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

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

:41:36.:41:39.

Production. 10 years after that, Professor

:41:39.:41:43.

Bhattacharya founded the now world famous Warwick Manufacturing Group

:41:43.:41:47.

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

:41:48.:41:52.

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

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

:41:57.:42:00.

Jaguar Land Rover and Tata research and development staff are working

:42:00.:42:04.

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

:42:04.:42:09.

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

:42:09.:42:12.

transfer three years ago of a much troubled JLR from American

:42:12.:42:16.

ownership under Ford to that of Ratan Tata of India.

:42:16.:42:20.

The company that of course, famously needed state assistance,

:42:20.:42:27.

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

:42:27.:42:31.

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

:42:31.:42:39.

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

:42:39.:42:44.

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

:42:44.:42:47.

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

:42:47.:42:53.

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

:42:53.:42:58.

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

:42:58.:43:07.

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

:43:07.:43:11.

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

:43:11.:43:16.

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

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

:43:23.:43:28.

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

:43:28.:43:33.

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

:43:33.:43:37.

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

:43:37.:43:42.

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

:43:42.:43:47.

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

:43:47.:43:53.

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

:43:53.:43:57.

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

:43:57.:44:01.

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

:44:01.:44:05.

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

:44:05.:44:09.

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

:44:09.:44:13.

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

:44:13.:44:17.

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

:44:17.:44:24.

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

:44:24.:44:29.

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

:44:29.:44:33.

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

:44:33.:44:39.

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

:44:39.:44:44.

of research and development tax credits becoming easier and above

:44:44.:44:49.

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

:44:49.:44:54.

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

:44:54.:44:59.

alignment in government with opposition that things have to

:44:59.:45:04.

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

:45:04.:45:08.

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

:45:08.:45:13.

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

:45:13.:45:22.

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

:45:22.:45:27.

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

:45:27.:45:32.

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

:45:32.:45:41.

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

:45:41.:45:47.

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

:45:47.:45:51.

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

:45:51.:45:56.

pool. Maintaining a strong Coventry and Warwickshire presence, Kumar

:45:56.:46:01.

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

:46:01.:46:06.

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

:46:06.:46:11.

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

:46:11.:46:15.

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

:46:15.:46:19.

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

:46:19.:46:23.

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

:46:24.:46:29.

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

:46:30.:46:35.

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

:46:35.:46:39.

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

:46:39.:46:43.

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

:46:43.:46:48.

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

:46:48.:46:52.

no leadership or Investment and continuing strikes. Given the

:46:52.:46:58.

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

:46:58.:47:01.

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

:47:01.:47:05.

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

:47:05.:47:08.

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

:47:08.:47:15.

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

:47:15.:47:17.

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

:47:17.:47:21.

established links with schools to get apprenticeships going and be

:47:21.:47:26.

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

:47:26.:47:32.

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

:47:32.:47:38.

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

:47:38.:47:42.

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

:47:42.:47:47.

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

:47:47.:47:52.

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

:47:52.:47:56.

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

:47:56.:48:01.

you they had great difficulty securing people in the supply chain

:48:01.:48:05.

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

:48:05.:48:09.

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

:48:09.:48:13.

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

:48:13.:48:17.

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

:48:17.:48:21.

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

:48:21.:48:24.

research and development tax breaks, apprenticeships and that sort of

:48:24.:48:28.

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

:48:29.:48:32.

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

:48:32.:48:39.

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

:48:39.:48:42.

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

:48:42.:48:46.

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

:48:46.:48:51.

investing and falling further behind. Jeremy Wright. We are

:48:51.:48:56.

behind other regions historically. Investment is happening. I accept

:48:56.:49:00.

there are regional variations but business and industry across the

:49:00.:49:03.

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

:49:03.:49:07.

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

:49:07.:49:12.

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

:49:12.:49:15.

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

:49:15.:49:21.

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

:49:21.:49:24.

clear competition. We have succeeded and securing that

:49:24.:49:27.

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

:49:27.:49:31.

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

:49:31.:49:35.

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

:49:35.:49:38.

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

:49:38.:49:42.

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

:49:42.:49:48.

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

:49:48.:49:51.

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

:49:51.:49:55.

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

:49:55.:49:59.

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

:49:59.:50:03.

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

:50:03.:50:06.

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

:50:06.:50:09.

transport corridors when have we can and do less environmental

:50:09.:50:13.

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

:50:14.:50:17.

how can you deliver the extra capacity required without building

:50:17.:50:21.

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

:50:22.:50:25.

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

:50:25.:50:30.

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

:50:30.:50:38.

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

:50:38.:50:42.

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

:50:43.:50:46.

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

:50:46.:50:51.

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

:50:51.:50:55.

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

:50:55.:50:59.

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

:50:59.:51:02.

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

:51:03.:51:07.

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

:51:07.:51:11.

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

:51:11.:51:15.

Midlands today, and indeed for this year, throughout the forthcoming

:51:15.:51:19.

festivities, Midlands Today and local radio will be open for

:51:19.:51:22.

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