Speech

Chancellor: The Midlands should be Britain’s engine for growth

On a visit to engineering firm Garrandale, in Derby, the Chancellor sets out how the government will deliver for the working people of the Midlands.

Chancellor, George Osborne giving a speech in Derby.

Well good morning everyone, and welcome and thanks for coming along today to this fantastic business, to Garrandale.

Thank you to Malcolm and the whole team here for allowing us to use these fantastic premises.

And in many ways the reason we wanted to come here to this company is because this company tells a story, a story of our country, a story of the Midlands.

The story of a company that four or five years ago was, I think it’s fair to say, in quite a mess.

But with the help of the management team here and the brilliant workforce, you have turned things around, employed more people and you are now a market-leader.

And that’s a story we see replicated right around our country.

You’ve trebled your turnover.

You’ve won your biggest ever order with Bombardier, another great local employer.

You’re starting to export much more and you’re taking on apprentices.

And it’s no surprise there’s a real buzz in the Midlands right now.

It’s because of companies like you.

You’ve created 40 new jobs in the last five years.

And this firm is part of a strong and growing cluster of great transport and engineering businesses in Derby all helping each other to grow.

And it’s also fantastic to see so many local businesses here from the East Midlands Chamber.

Thank you too for coming along.

For your growth and success, that story of creating new opportunities for people who live here, that’s been replicated in firms, not just in Derby, but right across the whole of the Midlands: the East Midlands and the West Midlands.

Now of course the fact is it hasn’t always been this way.

For too long the Midlands was overlooked by successive governments in London, and I’m here to tell you not any more.

We’re going to attract the jobs, make the investments, bring the prosperity here.

The Midlands should be Britain’s engine for growth, and this government has a plan to back you – the people of the Midlands – at every stage of your life.

How do we do that? How do we build this Midlands engine?

Well first, of course, you need an economy that works.

Without that, nothing else is possible.

Five years ago our country was on the brink.

Millions of people had lost their job as a result of the great recession.

The country was borrowing £1 in every £4 that it spent.

So we took tough decisions to control welfare spending, to make our businesses more competitive, to start to get our debts under control.

Because we know that, when an economy fails, it’s not the politicians or those in the City of London who suffer.

It’s the working people in places like this who pay the price.

Five years ago almost half a million people in the Midlands were looking for work.

Five years ago over a hundred businesses here went bust every single day.

Fast forward five years, and there are now more than a quarter million more people in work in the Midlands and in new businesses being created here every 13 minutes.

Now these aren’t just abstract numbers.

That’s a quarter of a million more people with the security of a job, a quarter of a million more people with the opportunity that brings to build for your future, provide for your family.

And that brings me on to my second point.

You can only get people into work if you back the businesses that are creating jobs.

Because it’s not government that creates jobs; it’s businesses, businesses large and small who create jobs.

And let’s start by identifying the specific strengths of an area.

What are the strengths here in the Midlands?

What are the components to that Midlands engine?

Well of course there’s the incredible engineering coming out of firms like JCB, Bombardier, Toyota, Rolls-Royce and Jaguar Land Rover.

But there are also the hundreds, nay thousands, of small medium-sized businesses that are part of those manufacturing and engineering supply chains.

You also have some of the world’s best science happening here: university campuses from Nottingham to Warwick, Birmingham to Loughborough, Aston to Leicester.

I said earlier this year that I would back the great universities in the Midlands, and in February your leading universities came to me with an exciting idea for a new Energy Research Accelerator so that this part of our country, this part of our world was at the forefront of energy research.

And in the Budget in March we responded with £60 million of central government money to fund that idea, transform the way we do energy research in the UK and base it here in the Midlands.

And that sits alongside the new Energy Catapult Centre which we’re creating in Birmingham.

And to make sure that we turn great science into great innovation, we want to go further and faster this parliament to create more Enterprise Zones here in the Midlands.

I want to see bids from Derby, from Lincoln, Loughborough, Wolverhampton, Walsall, Dudley, Corby, and other towns and cities too. So we back the engineering and the manufacturing strengths of the Midlands.

And as well as backing your strengths, we also need to invest in the long-term infrastructure of the Midlands to attract even more companies to set up here.

That starts with transport.

I think anyone in the room from a business will tell you that good transport links are essential if we want firms to flourish and to expand.

And that’s why we are committing a record £5.2 billion in total to specific transport projects here, so that the Midlands can act as a transport hub for the entire country.

We’re upgrading key roads like the M1 and the M6, widening the A453, fixing key road junctions in Derby and Nottingham.

We’re electrifying the Midland Mainline from St Pancras to Sheffield which will benefit Leicester, Derby and Nottingham.

We’re going to build a new station at Kenilworth, new station at Ilkeston.

And I know there are lots of other ideas like extending the Robin Hood line to Ollerton and Edwinstowe.

So let’s get a bid for this and other exciting transport projects into our Local Growth Fund to start things moving right at the start of this parliament.

And then there’s the massive project over in Birmingham to modernise New Street station.

That’s going to be completed later this year and it was one of the first things five years ago, when I became Chancellor, that I signed off on.

And that’s on top of the huge investment we’re making in High Speed Two, which will bring massive benefits to the Midlands by way of new jobs, enhanced connectivity, capacity and regeneration.

It is the great engineering project of our age and it will transform the economic geography of our country.

And today we’re committing to maximise the value of the investment for Birmingham by extending the current Enterprise Zone there in the centre of the city so it covers the whole of the regeneration area around the new Curzon Street station.

And we’re also going to extend how long that runs so the local Enterprise Partnership can invest more in infrastructure to maximise the benefits of HS2.

Now we wouldn’t be able to make these vital investments in the Midlands if we hadn’t taken difficult decisions to control public finances and get them in order, difficult decisions we’ve got to on making so we can spend on the priorities that mean we can create jobs in this country.

And that brings me to my third point about this Midlands engine.

Those jobs are only going to come here and businesses will only invest here if the people of the Midlands have the right skills for these jobs, and that starts by giving the young people a top quality education.

In the last parliament, we created over 1,100 academies in the Midlands and there are now a quarter of a million more children here getting an education in a good or an outstanding school compared to five years ago.

But I am not complacent.

We all know there is plenty more to do to improve the skills of our young people.

So a key part of the Queen’s Speech which we’re debating in parliament at the moment is about pushing ahead with our education reforms and creating even more great school places for kids in the Midlands.

And we’re going to expand the fantastic Birmingham Baccalaureate so that even more pupils get the chance to work on school projects designed by local businesses.

But raising the skills of our young people isn’t solely about schools.

In the past five years, almost half a million people here have started an apprenticeship.

And in the next five years, we want to go much further and hugely expand our apprenticeship programme, creating another 600,000 apprentices.

A big part of the long-term plan for the Midlands, the Prime Minister and I launched here in February, was getting local businesses involved in training people.

And we’re developing an innovative scheme here to place apprentices from some of the largest and most prestigious companies in the Midlands into the smaller firms in their supply chains.

And Andy Street, known to many of you as the Chief Executive of John Lewis, but also Chairman of the Birmingham/Solihull LEP, has agreed to work with local businesses and bring all their opportunities together for the first time in one place and invest in 100 new Jobs Coaches to match unemployed people specifically with their job vacancies. It’s the first time we’ve tried this anywhere in the country.

It’s an idea that has come to us from the Local Enterprise Partnership in Birmingham and we’re making it happen. It will launch later this month, and I know there are lots of top businesses already signing up to take part.

The fourth part of our plan to create this Midlands engine is this.

Once you have got that job, we believe that people should keep more of the money that they earn.

It’s a key incentive to make sure that people are in work and stay in work.

Now, we’ve already lifted the tax free personal allowance, the amount you can earn tax free, from £6,500 to £10,600. To put that in real terms, it means four million people in the Midlands will be £500 better off each year by 2017.

In this parliament we’re going further still and raising the personal allowance to £12,500, so you can keep the first £12,500 you earn without paying any income tax.

And we also believe we should support people who want to own their own home.

That’s why we’ve introduced the Help to Buy scheme, to help people who can’t afford big deposits.

It’s already helped over 17,000 families in the Midlands, most of whom were first-time buyers, and of course it supports the construction industry as well, and we’ve got the new Help to Buy ISA coming in later to help people save for that deposit.

We’re also going further and extending the right to buy to 385,000 housing association tenants here. People who oppose this measure, this measure to give people who are in their home the right to buy their own home, I think are enemies of aspiration in our country.

We also want to support the mums and dads who want to go back to work.

It’s not right that the cost of childcare is a block to parents who want to work. Our prime minister is today setting out our plans on this, again, central to our programme for government.

We’re going to double the amount of free childcare on offer to working families, increasing it from 15 hours per week for three and four year olds to 30 hours per week.

So fixing the economy, backing business, boosting skills, supporting working people here: this is our plan for supporting you at every stage of your life.

But I also want it to be a plan that hands power back to people of the Midlands.

At the moment, the UK has one of the most centralised systems of political power of any major country in the world, and I think that model of trying to run everything in our country from the centre of London is broken.

It’s made people feel remote from the decisions that affect their lives.

And one of the things that I want to see over the course of this parliament, over the next five years, is a radical shift of power away from Whitehall and back into the hands of local people.

You, the people who live and work in the Midlands know far better than I do, or any politician based in Westminster, what’s right for your local area.

So my first speech, after this recent general election, I said we’ll introduce a new City Devolution Bill.

And this new law will pave the way for cities and counties in the Midlands to take greater control over all the key things that make a city, for example, work: the transport, the housing, the skills, key public services like health and social care. It’s a historic opportunity to change for the better the way cities are governed.

So how do we make this happen?

Not by imposing solutions on people, or dictating a specific approach.

I want local leaders, local communities, to decide what they’re interested in taking part in, and how far they want to go in this new revolution in city government.

And then again, working together, local and national government needs to identify a model that works well here.

We’ll work with local council leaders across the party divide, assess each case on its merits, as every area is different.

And I know that one size doesn’t fit all.

But I’m also clear that with new powers come new responsibilities.

It’s right that there’s a single point of accountability, someone elected to take decisions and carry the can.

And that means, if we go for the full suite of devolved powers, a metro wide mayor.

Now, Manchester has already said it will travel down this exciting road to the future.

It is my sincere hope that the cities of the Midlands will choose to be part of this revolution in city government.

Later today, I will be over in the West Midlands talking to some of the elected leaders there about how we can make it happen.

Not overnight: we’re not expecting instant decisions.

But let us take these first steps.

At the election last month, the people of the Midlands made a decisive choice.

You chose a government that will back business, large and small.

You chose a government that will boost skills.

You chose a government that backs working people.

You put your trust in us, and we will repay that trust and deliver for the working people of the Midlands.

We will build that Midlands engine, we are one nation, and we have a plan to back you at every stage of your lives.

Thank you very much.

Published 1 June 2015