WEST MIDLANDS AND FUTURE BUSINESS PROSPERITY NON-VERBATIM MINUTES

DATE: Tuesday, 8 September 2020

TIME: 15:00-16:00

Method: Zoom Meeting

CHAIR: Preet Kaur Gill MP, Co-Chair of the All-Party Parliamentary for the West Midlands

PARLIAMENTARIANS IN ATTENDANCE:

• Preet Kaur Gill MP • Jane Stevenson MP • Office of Stuart Anderson MP • MP • MP • Office of MP • Office of • Office of Lord Taylor of Warwick

MINUTES

The Chair, Preet Kaur Gill MP began the session by thanking all attendees for joining. She set out the focus of the meeting and acknowledged that the immediate focus for all businesses will be Covid-19. She said the Group recognised however that there were a range of other concerns for enterprise across the region. She outlined that she hoped the meeting would serve as a practical session for businesses to update parliamentarians and provide helpful feedback in advance of the Government’s Comprehensive Spending Review. EMSI - William Cookson, Director, Economic Development The Chair introduced the first speaker, William Cookson from EMSI, who provide labour market data and economic analysis. The Chair explained that EMSI create a range of tools to help professionals understand all facets of employment and economic trends. EMSI had been invited to provide a general overview of the economic picture in the West Midlands. William Cookson outlined that there were several key “takeaways” from assessing the labour market data across the country and in the West Midlands. He noted that when looking at unemployment statistics, those most affected by the economic downturn largely derived from “lower skilled” roles such as retail and manual labour. He explained that it would take more time for structural data from the region to become available but that at the outbreak of the pandemic,

unique job postings in the West Midlands fell sharply by 30%. He added that these numbers had begun to steadily rise over June and August. On a positive note, he argued that although the initial shock of the pandemic hurt the West Midlands economy more significantly than the rest of the country, it appeared that the region was recovering at a slightly quicker rate than the national trend. He also presented an “exposure index” created by EMSI which demonstrated the sectors which have seen the highest exposure to coronavirus. The index took into account furlough and key worker status to establish those workers who are most at risk. Following the session, William Cookson provided a briefing document on the economic picture in the West Midlands which accompanies this minute. HSBC Commercial Banking - Jon Bramwell, Managing Director, Large Corporates The Chair thanked William for his contribution and introduced Jon Bramwell. She outlined that Jon is based in and is responsible for HSBC’s activities across the East and West Midlands, where they work to provide a range of products and services including lending, payments and cash management to a range of businesses. Jon began by explaining that the past few months had been unprecedented in terms of the support HSBC had provided to support businesses of all sizes. Jon noted that to date, over the course of the pandemic, HSBC had loaned over £11.5 billion and approved 139,000 loans as part of the Bounce Back Loan Scheme. He said that 10 years’ worth of lending was delivered in a 7-week period. Looking ahead, Jon argued that autumn looked challenging and that capacity constraints were likely to impact profitability at a time when Government support mechanisms were being phased out. He welcomed the Government’s commitment to champion international trade and argued that now was not the time for the UK to move towards a more protectionist or nationalistic model. More generally, Jon also stated that the pandemic has catalysed some of the structural changes in the economy that were already in motion, such as the growth of online retail. He concluded by outlining that HSBC would continue to offer businesses across the region Midland Heart - Jack Kelly, Director of Corporate Affairs The Chair thanked Jon for his insights and introduced the next speaker, Jack Kelly. She outlined that Midland Heart is a leading housing organisation, delivering homes and services across the Midlands. The Chair detailed that Midland Heart own and manage 33,000 homes and provide a range of services for 70,000 customers. Midland Heart are also a sponsor of the APPG. Jack began by providing an overview of Midland Heart as a business and their response to the pandemic. He outlined that a large proportion of Midland Heart’s housing stock is made-up of affordable homes and retirement housing villages. The residents of both types of housing have been those most acutely impacted by the virus. Jack outlined that Midland Heart employs 1200 people, none of whom had been furloughed due to the organisation’s ability to move staff across the business into customer focused roles. As a result, Midland Heart scored its highest ever customer satisfaction rating in recent months. He continued by stating that the nature of their customer base meant that Midland Heart continued to grow and were able to recruit in this period also. Midland Heart estimated that it will be able to

complete 90% of its planned new builds, 61% of which will be social housing. He stated that this totalled round £87 million investment into the economy, helping the region’s recovery. Jack further highlighted Midland Heart’s contribution to the region’s recovery through a new degree apprenticeships programme which had received 600 applications for just 6 spaces. He argued that this potentially illustrates the state of youth unemployment and the lack of opportunities available for young people both in the West Midlands and across the country. He ended by discussing the Government’s proposed planning reforms, stating that there was a need for change in the system. He said that in many cases planning applications were taking up to a year rather than the 12-week aim, and that a solution to this issue would speed up recovery and growth in the region. Steelite International Group - Jon Cameron, Group Finance Director

The Chair thanked Jack and introduced Jon Cameron. She explained that Steelite is a world leading manufacturer of award-winning tableware that exports from the West Midlands around the world. Jon added to this by sharing that Steelite are the largest pottery manufacturer in Stoke-on-Trent, with 100% of output going to the global hospitality industry. In 2019, Steelite employed around 850 staff, however these numbers have been impacted by the pandemic. Jon expanded on this, explaining that in the second quarter of 2020 they experienced an 88% reduction in orders. He stated that despite the businesses success being directly tied to the hospitality sector, Steelite missed out on large portions of Government support as they are classified as a large manufacturer. Jon raised the importance of other forms of Government support, arguing that without the Job Retention Scheme, Steelite would have likely had to close. Unfortunately, Steelite has lost around a third of its staff, some 250 people due to the pandemic. Jon outlined that this has had a serious impact on the skillset in the workforce, as well as attracting school leavers who may have had the opportunity to join the industry. He stated that despite some difficult months, Steelite are beginning to see some improvement and are currently around 70% down on orders. Jon re-emphasised however that the unpredictability of the economy remained the main difficulty. In relation to Brexit, Jon said that agreeing a trade deal with the European Union is crucial for Steelite, particularly as 35% of its output goes to Europe. He added that in the case of a no-deal exit, he would expect European nations to take a duty on imports and that the next key priority for the Government should be looking to secure a trade deal with the United States. Another key concern for Steelite was the potential of having to repay a large portion of a regional grant that was awarded to the company five years ago. He outlined that a condition of the grant was a guarantee to create jobs, which as result of the pandemic, the company has not been able to meet. He asked Parliamentarians present to make representations to Government on finding a solution to this type of issue, as Steelite is potentially facing a repayment of between £750,000 to £1,000,000. Jon concluded his presentation by stating that he wanted the Government to encourage the public to buy British manufactured products, as well as secure a trade deal with the European Union, and in the longer term, the United States.

Harborne Village Business Improvement District (BID) - Kate Smart, Manager

The Chair thanked Jon for his contribution and wished Steelite the best in their recovery. She introduced the session’s final speaker, Kate Smart.

Kate began her presentation by outlining the role of BIDs in the local community, particularly in the West Midlands. She explained that it is often assumed the work of BIDs is carried out by local councils when in fact they are often responsible for a range of local services such as street cleaning, security and Christmas lights. Kate informed the attendees that there are over 300 BIDs across the UK which seek to improve local areas through inward investment and strategy. She added that Birmingham has one of the highest concentration of BIDS in the country which together oversee £4.2m in direct business investment every year. Kate added that there were a range of challenges facing BIDs at this time. She outlined that a primary concern was that local BIDs are running the risk of having to pay back funding to Birmingham City Council (BCC). This is due to the fact that Birmingham BIDs received 70% of their funding from BCC but had only collected 36% of the total levy from businesses. She warned that many BIDs may be forced to close in the near future, with some currently in negotiations about whether to continue. In addition to the funding concerns, Kate also discussed the problem of absent landlords and empty premises. She outlined that there is currently a 10% void rate in premises in her area as well as recurring problems of poor maintenance. She asked if there was a possibility to explore a policy of forced sales after a period of time, as having attractive premises remain vital when competing with online business. Kate raised the Future High Streets Fund, which she felt has fallen off the Government’s agenda and asked what measures could be taken to protect small businesses from online shopping. She added that the Commonwealth Games in 2022 provided an opportunity for local business and that local stakeholders should explore different ways for the Games to collaborate with the surrounding area. Question & Answer Session The Chair thanked all the speakers for their contributions and invited Parliamentary attendees to ask questions to the panel as part of the Question and Answer session. Mark Pawsey MP asked Will Cookson from EMSI for more detail on how the West Midlands varied from the broader national picture and whether he could offer any insight into what would happen when the furlough scheme ends. Will Cookson outlined that it was difficult to paint a broad picture in the time provided but that in short, the underlying trends remain the same. This was that the manufacturing industry had been particularly impacted by job losses and that trends that had existed prior to the pandemic have been accelerated. Mark Pawsey MP asked whether the fact the West Midlands economy had a higher reliance on manufacturing was good or bad in terms of a recovery. Will responded that an understanding of the economy of the West Midlands would be crucial to recovery but added that manufacturing tends to have a higher proximity of staff and was therefore more prone to an outbreak of the virus

in the workplace. Will added that furlough does often hide redundancies, particularly in low-skilled jobs, but that the extent of this was not known yet. Mark Pawsey MP addressed Kate Smart, explaining that he had assumed that suburban retailers had performed reasonably throughout the pandemic. He added that he was concerned and disappointed that the picture appeared so bleak. Kate Smart responded that many businesses had closed for a fair amount of time, with beauty salons and hairdressers taking particularly long to return. She added that suburbs were in a better position than some city centres but that many were still struggling. The Chair asked the panel if they had any particular asks for MP’s to take to the Government. Jon Cameron from Steelite outlined that he did not expect the hospitality sector to recover until 2022, so longer term he would like to know what support there would be for business when furlough ends. Jon Bramwell from HSBC reiterated these points, stating that he felt the Government schemes such as the Job Retention Scheme and Eat Out to Help Out had been positive for business. He added that the prospect of this support dropping away was difficult for business and asked what plans the Government had to continue support. He suggested that intermediate capital support to help businesses in the longer term may be one solution. The Chair then opened up the discussion and invited all other attendees on the call to make a contribution or ask a question to the panel. Neil Anderson, Black Country Chamber of Commerce added that for many businesses, Brexit still remained a key concern. He added that the business community are eager to avoid a messy end to the transition period and were hopeful that the Government would be able to secure a deal with the European Union. Neil also stated that many businesses were irritated by the Government’s call to return to work as they feel companies should have final say on whether to bring back staff. He suggested that Government could implement incentives to business to get back to office, such as support for implementing Covid safety measures. He also stated that increased support for how to set up start-ups would be a welcome step from the Government to encourage recovery. The Chair then asked attendees if there were any concerns for business around the test and trace system and safety measures. Jack Kelly, Midland Heart stated that the safety processes were not unduly onerous although some of their offices were still closed, particularly in retirement villages. He added that maintaining discipline within the office was particularly challenging, but the difficulties had provided an opportunity to think more broadly about office working and its effectiveness. Lee Marsham, Birmingham Commonwealth Games 2022 added that the Games provided a real opportunity to boost the West Midlands economy. He stated that throughout the pandemic the organisation had doubled its staff number and created £140m in supply chain opportunities for local business. He added that there was an opportunity to engage with local high streets, including the potential to route the Queen’s Baton through local villages such as Harborne.

The Chair ended the session by acknowledging that the recovery would be difficult for many businesses and that the pandemic has changed many things, from the way we work to our high streets. She thanked the speakers and the participants for joining and notified them that the Secretariat would be in touch to inform them of the next meeting of the APPG for the West Midlands.