Dear Chancellor,

 

I wrote in September during the Comprehensive Spending Review (CSR) consultation to underline the urgent need for public investment in the West Midlands.

 

I write again today to restate our case which has now grown more acute:

  • The West Midlands is forecast to be hit hardest by the economic impacts of COVID-19. 
  • Within the West Midlands, Birmingham has the second highest rate of employment in the country at nearly 10% 
  • The city has more people on furlough that any other authority. 

 

Providing the necessary support is a key test of the CSR on Wednesday and whether the Government is credibly supporting our region.  

 

There are four priorities:

 

  1. An immediate fiscal stimulus and a fair share of investment to keep the West Midlands working  

We must have an immediate and credible funding stimulus to kick-start the West Midlands and build back better. This should involve a capital kickstart of £3.2bn, which is the scale of investment needed to combat the forecast scale of unemployment, to keep the West Midlands working and to commence important ‘shovel ready’ projects in our region. 

 

The Government’s five-year capital envelope should be reprofiled to bring forward as much as a quarter of the five year budget into next year. More generally, re-allocating the national capital budget on a per capita basis would award the West Midlands an extra £7 billion over the next four to five years. If re-profiled, this could deliver a capital kickstart of over £3.0 billion in the West Midlands next year. That would be enough to: build over 10,000 new homes, retrofit over 100,000 homes, and install solar on 200,000 homes - and support around 92,000 jobs. 

   

  1. Supporting for the West Midlands to be the capital of green manufacturing  

    The response to the climate crisis must be ambitious and at scale to help address runaway temperature rises and counter the insecurity arising from the climate catastrophe and to support lives and livelihoods. Further action is needed to build on the Government’s climate announcements last week. We should also receive our share of this investment. Our region can be the first net zero carbon region in Britain and the capital of green manufacturing, building and trading our way to a sustainable future. This means building the new electric vehicles and green transport, scaling electric charging infrastructure, retrofitting homes with energy efficiency measures, expanding green energy, backing a hydrogen programme, greening industry with support micro-grids, and bringing forward derelict brownfield sites as green industrial zones. 

 

Funding and support from the Government is required to drive this necessary programme. A core element is unlocking the new funds for a gigafactory in Coventry to manufacture the batteries for electric vehicles – a demand that I, business organisations and the Coventry Council leadership have long called for – and will bring good, full-time jobs. Government must give support to the Gigafactory.

 

  1. Pay the money promised to councils to navigate the COVID-19 crisis. Councils in the West Midlands must be properly funded. They have spent millions, rising to the challenge of COVID. Ministers said that the Government would cover these costs. This has not happened and must be rectified. The funding shortfalls will be devastating for frontline local services including care homes and follow a decade of cuts to our authorities. Allowing these funding gaps to persist would be completely counter to the Government’s supposed goal of ‘levelling up’ and would have a long-term damaging impact on our region.  

 

The Local Government Association says that £8.7bn is needed to cover the shortfall across authorities and cover rising demand for services.

 

  1. Urgent support for the self-employed. Many self-employed have had no support during this pandemic with their plight now acute and needing to be addressed. The October statistics on the Self-Employment Income Scheme show that in the West Midlands, the total potentially eligible self-employed population for the second grant was 261,000 people, but 121,000 of these, nearly half (46%), were ineligible due to the targeting and criteria.

 

As the Resolution Foundation research has shown the poor targeting of the scheme has meant some people that have not experienced lost income have received support but more than 500,000 self-employed people without work in September had received no support at all. The impact of those without self-employment work is most acute among 18 to 34-year olds. When the Resolution Foundation reported last month, a quarter of young selfemployed workers were still without work.

The West Midlands has the youngest population in the country. 

 

These critical areas for the West Midlands must be priorities with the CSR. If the Government fails to back the West Midlands, then it will be devastating for our region resulting in deep and long-lasting harmful impacts. 

 

Rt Hon Liam Byrne MP

Shadow Mayor of the West Midlands