The West Midlands must be spared a second wave of job losses and given the opportunity to build Britain’s capital of Green Manufacturing, Labour’s Shadow Mayor Liam Byrne MP has told government chancellor Rishi Sunak. 

 

He says “We can deliver this if you finally give us our fair share of the national investment pot. Nothing more, nothing less, our fair share”

 

Byrne is calling for a seven point stimulus and recovery programme for the region including a plea to build British and buy British.

 

His plea comes as the consultation ends on the government’s comprehensive spending review, which will set the scene for government spending in the next five years.

 

“This review will determine the funding for regions such as the West Midlands. It must be commensurate with addressing the devastating impact of COVID-19 and able to overcome our  long term challenges so we can build a better future.

 

“In parts of the West Midlands we have seen unemployment soar from between 59% to 76% since March, even before the ending of furlough. In Birmingham, we have seen the closure of the iconic John Lewis flagship store, which was to be the harbinger of better times.

 

“Huge numbers of small businesses in the region are worried for their future. We are the heart of UK manufacturing but face an unprecedented crisis with the loss of high-skilled jobs with firms and supply chains stretched to breaking point. We need an urgent package of measures to prevent a second wave of job losses.

 

“A top priority must be a fixing of the response to the COVID-19 crisis. Delays in testing and treatment are creating chaos in every workplace’, he added.

 

Liam Byrne’s seven-point plan for Rushi Sunak, will stimulate the region’s economy and create a safer, more prosperous and forward looking West Midlands:

 

  • A fair share of the investment pot to build, build, build. 
  •  A plan to deliver the right to work, and the right to train – especially for young people.
  • Keep the public pound local – build British, buy British – and make it in the Midlands. 
  • An ambitious roadmap to help the West Midlands become the UK’s first net zero carbon region. 
  • A fair share of the national budget to support our world beating cultural sector ahead of the Coventry City of Culture and Commonwealth Games. 
  • Pay back the money owed to our local authorities for tackling Covid 19
  • A plan to plug the funding gaps suffered by West Midlands Police.

 

 

 

Full text of letter below

 

 

 

Rt. Hon Rishi Sunak MP

Chancellor of the Exchequer

HM Treasury

1 Horse Guards Rd

Westminster

London 

SW1A 2HQ

 

 

Dear Chancellor,

 

Open letter to the Chancellor from Liam Byrne, Shadow Mayor of the West Midlands

 

The purpose of this letter is to set out recommendations for your Comprehensive Spending Review to ensure the West Midlands becomes Britain’s capital of Green Manufacturing, the best place in Britain to grow up, and a region of strong and thriving communities. 

 

We can deliver this if you finally give us our fair share of the national investment pot. We ask for nothing more - and nothing less - than our fair share. 

 

Context: an unprecedented threat to livelihoods and the Government must not block a recovery

 

The World Bank is warning that we face the largest recession since 1870 - and here in Britain, the West Midlands is forecast to be hardest hit. We need therefore the biggest kickstart to get us back on our feet, to save lives and to save livelihoods: 

  • The Bank of England is forecasting West Midlands unemployment to double. 
  • In the nine Birmingham constituencies in the West Midlands there have been unemployment increases ranging from 59% to 76% since March, even before the ending of furlough. 
  • We have seen John Lewis close its flagship store in Birmingham. 
  • Huge numbers of small businesses in the region are worried for their future. 
  • The West Midlands is the heart of UK manufacturing, but it faces an unprecedented crisis with swathes of high-skilled jobs, firms and supply chains threatened. This world-class industry that is the backbone of our exports and private sector R&D cannot be allowed to collapse. 

 

Government errors are now blocking the recovery: the testing system has been chaotic, councils are unclear on future funding and future support for the economy beyond Halloween is unclear. I therefore propose the following key steps:

 

A/. Fix testing and give clarity on local lockdowns;

 

B/. A Fair Deal for the West Midlands which includes:

 

1. Pay the money promised to councils to navigate the crisis 

 

2. A fair share of the investment pot to build, build, build

 

3. A plan to deliver the right to work, and the right to train - especially for our young people 

 

4. A new goal to keep the public pound local - and build British, buy British - and Make it in the Midlands

 

5. An ambitious roadmap to help us become the first net zero carbon region in Britain 

 

6. A fair share of the national budget to support our world beating cultural sector, ahead of the Coventry City of Culture and Commonwealth Games 

 

7. A plan to plug the funding gaps suffered by West Midlands Police, the second largest force in Britain  

 

A. Fix testing and give clarity on local lockdowns

 

The Government’s COVID-19 response is failing the West Midlands; host of errors - from inadequate PPE to a crisis in care homes - has cost lives, especially in our ethnic minority community, as revealed in the devastating testimony to our Inquiry into BAME fatalities. The national testing system is wanting not world beating. Birmingham, the largest area the West Midlands, is currently receiving half the testing the city needs. We require 20,000 tests a week but there are only 10,000. Birmingham residents have been sent to Oldham. Coventry residents have been sent to Scotland. Chaos has consequences. Manufacturers have told us that that lack of testing capacity is badly hurting lean manufacturing systems. This risks economic disaster.

 

Local lockdowns have now been implemented in parts of the West Midlands. We support strong action to tackle outbreaks. But, the Government has not outlined the conditions and protocols to exit lockdown. This creates confusion for businesses and residents.

 

B. A Fair Deal for the West Midlands

 

We must have an immediate and credible funding stimulus to kick-start the West Midlands and build back better. Such a stimulus and response should include:

 

1. Pay the money promised to councils to navigate the crisis 

 

Councils were asked by Ministers to rise to the challenge to tackle Covid - and they did. Ministers said the Government would pick up the bills. Now, ministers have broken their promises. The Ministry of Housing, Communities and Local Government is refusing to cover all costs, including the money spent to address COVID-19, and the impacts from lost business rates and council tax income. This shortfall risks devastating consequences for services - and care homes, which have been on the sharp end of tackling Covid. We urge ministers to honour the promise - and pay up. 

 

 

2. A fair share of the investment pot to build, build, build - and keep the West Midlands working 

 

We need a big capital kickstart to deal with rising unemployment and keep the West Midlands Working. 

 

Other countries are taking precisely this action. France has agreed an immediate a €100bn economic stimulus package. Germany is investing €130bn. 

 

The UK Government five year capital envelope is £350 billion. This should be reprofiled to bring forward a significant amount - up to 25% of this - into next year. And we need our fair share. So far, the funding for ‘shovel ready projects’ totals 50p per person per week.  

 

If the capital budget was allocated on a per capita basis, the West Midlands would receive an extra £7 billion over the next four to five years. If re-profiled, this could deliver a capital kickstart of about £3.5 billion in the West Midlands next year. 

 

That money is 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. 

 

3. A plan to deliver the right to work, and the right to train - especially for our young people 

 

The ending of the furlough scheme on Halloween risks a nightmare for everyone - but especially our manufacturing and hospitality industry. 

 

We urge you to continue with furlough, or subsidised short-time working to protect and support jobs and the many viable businesses that otherwise risk collapse. Mass unemployment will scar for a generation. 

 

The Government’s Kickstarter is a good start, albeit late. But we need to go further, and offer a job guarantee scheme, as the last Labour Government established during the 2008 financial crisis alongside a right to retrain and an apprenticeship guarantee. 

 

This can be achieved by combining five funding pots - the ‘shared prosperity fund’ which replaces the European Union structural funding of £2.1bn p.a.; the £100 million National Retraining Scheme held by the Department for Education; the National Skills Fund supposed to be £600m a year; recycling the budgets for apprenticeship starts which have dropped by half; and the £100+m Adult Education Budget already held by the West Midlands. This programme should be managed by the West Midlands Combined Authority. 

 

4. A new goal to keep the public pound local - and build British, buy British - and Make it in the Midlands

 

The West Midlands is the heart of UK manufacturing. The sector needs urgent support. Make UK is warning the UK will be left in the slow lane. Two-fifths of manufacturers have had to cut jobs and a further third say they will need to ahead. 

 

We need urgent action to save our manufacturing sector and avoid a second wave of job losses. 

 

The priority is continuing the furlough scheme to stop further jobs losses. But we need market demand too. The UK spends more than £290 billion a year of taxpayers’ money procuring goods and services. 

 

We must build British and buy British. If we buy it here, we can make it here. This procurement spend can support UK manufacturing and accelerate the transition to the green economy including infrastructure and housebuilding, vehicle fleets, public transport networks (railway, bus, tube and tram renewal and expansion), and fulfilling our military capabilities. 

 

To build our future the Government must bring forward programmes including backing the development of the Coventry battery Gigafactory. Building this could create thousands of jobs for our region. To boost demand too, the Government should support a scrappage scheme to accelerate the take up of electric vehicles, which we can make in the Midlands. 

 

Many manufacturing firms have experienced a difficult time without orders. When a recovery takes hold, liquidity will be tested, and this is when investment finance is particularly needed. The package for manufacturing needs flexible access to long-term finance and support for firms to restructure including for the transition to net zero and diversification to the green economy. The Government should reintroduce incentives around capital allowances. The record low borrowing rates for companies should be harnessed to incentivise spending the debt on reinvestment and encouraged through a capital allowances tax incentive. A replacement for the European Investment Bank is needed with the UK leaving the EU. The Government should therefore support the setting up of a network of regional investment banks, with one for the West Midlands, to help us mobilise capital investment and invest in our firms for our future. 

 

Manufacturing requires certainty for capital investment and export certainty for key markets, particularly the EU, the UK’s largest market. The political games and posturing over a deal with Europe are putting jobs and industries at risk. A no deal outcome with cause severe economic damage to manufacturing.

 

5. An ambitious roadmap to help us become the first net zero carbon region in Britain 

 

I want our region to be the first net zero carbon region in Britain. Our region started the carbon revolution. We want to lead the zero carbon revolution. Climate catastrophe will bring untold insecurity and further threaten lives and livelihoods. Our response must be ambitious and at scale. The West Midlands can be at the heart of building that future and critically the centre of green manufacturing, trading our way to a sustainable future. 

 

The Government’s timetable for action is unclear and inadequate - as are the plans of the West Midlands Mayor. Indeed, the UK is on track to miss meeting the fourth carbon budget starting in 2023. Before COVID-19 the West Midlands saw bus passengers down 15% since 2009 and overcrowding on trains. It is a region with one of the biggest unmet cycling demands, the worst ratio of EV charging points per vehicle and it estimated that there will be 15,000 deaths over the next decade due to toxic air.

 

The Government needs to:

  • Commit to bringing forward deadlines for transitioning from petrol and diesel vehicles, retrofitting homes, expanding green energy, scaling EV charging infrastructure, backing a hydrogen economy programme (production and application including trains and buses), and greening industry supporting micro-grids. 
  • Support establishing the National Centre for Decarbonisation of Heat, here in the West Midlands. 
  • Provide funding for the West Midlands to bring forward derelict brownfield sites, and establish the world first zero carbon industrial cluster and the ability to underwrite green industrial zones, co-locating businesses on sites with green energy and transport and which in turn can attract industrial investors.
  • Inject in transport investment to ‘level up’ the lack of green and active transport options to rapidly expand the West Midlands metro, begin the Coventry and Dudley light rail network, expand and green bus services, improve, expand rail networks, and bring forward segregated cycling and walking routes.  
  • Back a tree planting programme, including support for a West Midlands forest and creating new public open spaces to address the lack of green space for many people

 

6. A fair share of the national budget to support our world beating cultural sector, ahead of the Coventry City of Culture and Commonwealth Games 

 

We have seen immense community spirit during lockdown and responses to the COVID-19 crisis, but the fabric of our communities is under pressure. Culture is what brings us together. And our region is soon to host the City of Culture in Coventry and the Commonwealth Games. Yet, local arts funding is now 38.5% lower than it was in 2009 and this year our key cultural institutions have seen a collapse in income and are being forced to make staff unemployed. Many who work in the cultural sector have not qualified for government help. We need an urgent funding plan that delivers. In June, the government offered a £1.57bn support package for the arts sector to accommodate the challenges posed by the coronavirus pandemic - but it took 20 days for the first tranche of funding, 0.2% of the total, to become available, and so far support has barely reached the West Midlands. We urgently need a plan that delivers our fair share.  

 

7. A plan to plug the funding gaps suffered by West Midlands Police, the second largest force in Britain  

 

The Government is asking our police force to oversee the new COVID-19 restrictions such as the ‘Rule of Six’. To achieve this enforcement needs to be at a scale never seen before. In turn Ministers have failed to provide funds to the police. The Government is creating expectations that cannot be met. We therefore urge you to properly fund our police force for the actions that they are expected to undertake. The nature of the COVID-19 pandemic has meant the ongoing financial implications to public services are considerable.  In policing this includes extra costs such as officer overtime and decreased income.  Also there are implications for long term funding of Police & Crime Commissioners (PCC) including council tax collection rates and the impact on council taxbases.  PCCs need to be fully funded for all the financial implications of COVID-19 throughout the CSR period.

 

 

Second, the funding formula for our police is completely out of date and does not ensure forces receive funding based on policing need. Current arrangements mean that the West Midlands is penalised by £40m a year under the current formulas damping arrangements. Reform to address this is long overdue. Furthermore, it is vital that the West Midlands Violence Reduction Unit (VRU), established in 2019 and which brings together specialists from local government, health, education, police, and criminal justice to work alongside partner organisations and communities to reduce serious violence across the West Midlands, is now funded for its work going forward.  

 

Third, surge funding such as Project Guardian launched during 2019 to reduce serious violence, with a focus on reducing knife crime in young people.  The project is funded through a £5m grant from the Home Office. Again this is provided on an annual basis and it is important the government through the CSR period commits to providing this on an ongoing basis.

 

Fourth, police forces have significant increasing financial commitments that need to be paid for each year.  For example, the national agreed pay award for police officers in 2020/21 will cost £5.5m in the West Midlands. A pay award for police staff of 2.5% will cost an additional £2.1m in 2020/21. The impact of contractual pay increments across the workforce is forecast to cost £3.7m.  Price inflation across other costs is forecast to cost £2.5m. The total cost of these commitments in the West Midlands is forecast to be £13.8m in 2020/21 and will be at a similar annual increase across the CSR period. Other ongoing financial commitments are the costs of police officer and staff pensions. Any increased pension costs will have a significant impact on PCC budgets.  The pension grant needs protecting to ensure PCCs are not impacted by another financial pressure. These financial commitments need to be taken into account over the CSR period within the funding settlements to policing.  

 

Finally, the funding of the uplift in police officer numbers should not be at the detriment to mainstream police funding where PCCs are forced to make savings elsewhere in their budgets to fund the uplift programme. This would have the unintended consequence of police officers performing roles that could be undertaken by non-warranted staff. The distribution of uplifted officers should also be reviewed. Under current plans West Midlands Police are set to receive funding for 1,200 officers over three years, despite losing over 2,200 officers before the uplift programme. Officer allocations should be based on risk and threats, rather than the outdated Home Office funding formula. Unless this changes areas like the West Midlands will continue to lose out.

 

This package of support and measures is urgent and critical. We recommend that these measures are fully reflected in the CSR to help address the challenges that the West Midlands faces and help us meet the future with confidence. 

 

 

Liam Byrne

Shadow Mayor for the West Midlands