Article for West Midlands EEF
Article

The longest period of continuous economic growth this country has known in the last hundred years has ended. The crucial question now is how soft the landing will be.
As an opposition MP I'm happy to acknowledge the unprecedented success of recent years because credit for it is at least shared. Gordon Brown's decision to give independence to the Bank of England sustained confidence in the British economy which had been growing strongly since mid 1992, five years before he became Chancellor. Of course no one could have foreseen the extraordinarily benign international conditions of the last ten years and in particular China’s contribution to international low inflationary growth.

Times now, though, have firmly changed - as they always do eventually. Here in the West Midlands, things look grim. One economic survey on the region published in the middle of August featured these headlines:

"Activity continues to fall as new business deteriorates further. Inflation rates outpace UK averages. Shrinking order books result in build-up of capacity. Fewer active projects led firms to cut employment."

It's at times like this that the EEF comes into its own as the most powerful voice for manufacturing in the country. I am a West Midlands MP, although I prefer to describe myself as being from Worcestershire! I'm also Chairman of the Commons Business and Enterprise Committee and we really value the reports and evidence we get from the EEF.

I'm not going to pretend that any report or recommendation from my all-party committee is going to change things overnight for local employers - even government ministers are something less than omnipotent in a globalised world - but we can help give momentum to important policy initiatives and ideas as our recent report on energy prices showed.

We are engaged at present on a major report on how the UK economy can stay ahead of the game. Competition from traditional countries like the USA and Germany is not going to go away, while the emerging economies of China and India are moving determinedly up the value chain. Here in the West Midlands, while we have many outstanding firms doing excellent work, we also have a significant tail of underperforming manufacturing companies that are not innovating as they should to meet this competition. I hope our report (and it's not too late to give us ideas for it) will identify things that could be done here to address this problem.

A lot of my committee's time is going to be spent on energy over the next year. I'm worried about prices, and the uncompetitive charges for energy that face UK manufacturers, but I'm even more worried that if we don't invest in sufficient new generating capacity we could face actual electricity shortages as soon as 2015 or 2016.

Perhaps the most topical thing we are doing in the autumn is a review of regional development agencies. The government is about to introduce legislation extending their powers from strictly economic issues to regional planning. When the business community and local government have reservations about the RDAs as it is, it seems strange to be adding to their responsibilities in this way. Evidence on this issue would be welcome.

I look forward to working with the Martin Wassell. There's a lot for my committee and the EEF to do together.


Back to Articles