With permission, Mr Speaker, I will make a statement on the Industrial Strategy White Paper, which has been published today.
Today, at one of the most important, exciting and challenging times in our history, the future is unfolding before our very eyes. New technology is creating new industries, changing existing ones and transforming the way in which we live our lives. We need to ensure that we are well prepared to prosper in this future. The decision to leave the European Union makes that even more important. More decisions about our economic future will be in our own hands to take, and it is vital that we take them well.
We start from a position of considerable strength: we are an open and flexible economy, built on trade and engagement with the world; we have earned a reputation as a dependable and confident place in which to do business thanks to our high standards, respected institutions and the rule of law; we have achieved higher levels of employment than ever before in our history; we are known for innovation and discovery, with some of the best universities and research institutions in the world producing some of the most inventive people on earth; and we have commercial and industrial sectors, from advanced manufacturing to financial services, and from life sciences to the creative industries, which are among the best in the world.
Our industrial strategy will build on those strengths, but it will also address weaknesses. We need to do more to make the most of our untapped potential. As the Chancellor said in last week’s Budget, although we are proud of our strong record of high employment, our average productivity—output per hour worked—is less than it could be. Productivity may not be the most exciting term, but it really does matter for people all around the UK. High productivity means greater earning power and better paid jobs. For our country, it means more money to spend on our public services.
Today’s Industrial Strategy White Paper starts with the five foundations of productivity: ideas; people’s skills; infrastructure; the business environment; and the importance of every place in the country. For each, we are clear about the kind of economy that we need to be.
Our vision is that the UK will be the world’s most innovative economy. It will have good jobs and greater earning power for all, make a major upgrade to our infrastructure, be the best place in which to start and grow a business and have prosperous communities across the country. It is a long-term strategy, working to make changes now, but looking to the future, and we are taking action to realise it. Let us take research and development as an example. Our reputation is as one of the best countries in the world for science and research, but we cannot take that for granted; we must reinforce it. Last week, we announced an increase in public investment in R and D, with the aim of reaching a combined public-private spend up from 1.7% to 2.4% of GDP by 2027, and to 3% thereafter.
I strongly believe that there are few problems that cannot be solved by the innovation and ingenuity of British business and science. History has shown that partnerships between business, Government and science can work—from the outstanding collaborations that we have had in the automotive and aerospace sectors to the recent partnerships in our creative industries.
Strategy has to be for the long term; a short-term strategy is a contradiction in terms. Other countries have benefited from establishing policies and institutions that can endure. That is why, through the consultation on the Green Paper, we have worked with businesses, industry bodies, investors, trade unions, universities, colleges and research institutions, and many others to establish a shared commitment to the actions that we will take now and in the future.
After our consultation on the Industrial Strategy Green Paper, we saw an overwhelming response to the question that we asked on whether we should pursue sector deals, as industries came forward with plans for their future. Today, we have struck ambitious sector deals with four sectors: life sciences, construction, artificial intelligence and automotive. I welcome the huge interest on the part of other sectors that are coming forward with their plans. There are still those who hear the words “industrial strategy” and associate them with the mistakes of the past—of thwarting competition, shielding incumbents and continuing with the status quo. This is not the approach that we will take. Our modern industrial strategy is not about protecting the past. It is about taking control of our future as a nation.
We have set out four grand challenges—identified on the advice of our leading scientists and technologists—that will be supported by investment from the challenge fund and matched by commercial investment. The challenges are: artificial intelligence and the data-driven economy; clean growth; the future of mobility; and meeting the needs of an ageing society. Whether we like it or not, these challenges are sweeping the world. If we act now, we can lead from the front, but if we wait and see, other countries will seize the initiative. For each of these challenges, our industrial strategy sets out how we can seize the opportunity—from using AI to raise productivity in all sectors to making our energy intensive industries competitive in the clean economy, and from supporting the transition to zero-emission vehicles to harnessing the power of big data to diagnose illnesses earlier and improve the quality of life for so many people in this country.
Britain needs to be a leader, not a follower—a country that is ahead of the curve, not behind the times. This is an opportunity to rally behind this industrial strategy, to raise our productivity and to build a country that is fit for the future. I commend this statement to the House.
I am pleased that the White Paper seems to acknowledge many of the fundamental problems faced by our economy, and give credit to the Secretary of State for adopting one of Labour’s policies to set national missions or “challenges”, as he likes to call them. But as I delve into the finer details of the paper, the aims of which may be well intentioned, it appears to be little more than a repackaging of existing policies and commitments.
The Office for Budget Responsibility figures contained in last week’s Budget were a damning assessment of the impact of seven years of Conservative austerity, with productivity, real wages, and GDP growth and GDP per capita revised down, but debt revised up. The Conservatives’ economic credibility has been shot to pieces, with people earning less than they did in 2007 until at least 2023. We have to go back to 1820, when George IV ascended the throne, before we find a time when productivity increased less than this over a 10-year period.
Today, I was full of hope—desperately hoping that the Government would press the reset button—but they have simply restated their plans for a £31 billion national productivity investment fund. As TUC analysis shows, this only raises investment to 2.9% of GDP, whereas the average for leading OECD industrial nations is 3.5 %. Labour even called on the Chancellor to use his Budget to level up regional investment in line with London, but only one—just one—of the named transport projects in the national productivity investment fund is in the north. The development of local industrial strategies is certainly welcome, but will the Secretary of State admit that they simply could not deliver the desired effects under the Government’s current investment plans?
The strategy restates the commitment to raise total research and development investment to 2.4% of GDP. This is moving in the right direction, but it is still behind world leaders and far less ambitious than Labour’s commitment to reaching 3% of GDP by 2030. The allocation of £725 million to the industrial strategy challenge fund is again welcome, but it seems to lack any real strategy. As Sheffield Hallam University recently found, the areas already identified by the fund
“account for little more than 1 per cent of the whole economy (by employment) and 10 per cent of UK manufacturing.”
Many of the policies focus on R and D spending in only a handful of specified sectors in which the UK already has a comparative advantage. This will do nothing to help the millions who work in large, low-wage, low-productivity sectors such as retail, hospitality and care, or people who do not live in the golden triangle made up of London, Cambridge and Oxford.
Finally, this industrial strategy fails to start from the bottom up. It is all well and good talking about leading the fourth industrial revolution, but this can only happen with a highly skilled, technology-savvy workforce. After seven years of Conservative Government, only 11% of students in England take IT at GCSE, and only 30% are at schools that provide it. That is certainly not laying the foundations for an economy of the future, and the amount of money for skills outlined today does not even begin to make up for the cuts inflicted on our education system since 2010. Indeed, the money allocated for the national retraining scheme amounts to only 6.6% of the funding slashed from the adult skills budget since 2010.
This industrial strategy may well be a start, but I fear that the Government have simply produced a public relations gimmick that is thin on detail, thin on investment and thin on ideas. I truly hope the Secretary of State will listen to my concerns as well as those from business and the trade union movement over the coming months, because we have one chance to reset our economy, and if we let this slip through our fingers, the people of Britain will never forgive us.
I am grateful to the hon. Lady. When she has the time to read the Industrial Strategy White Paper we have published today, I hope that she will reflect on the substance, content and ambition of this strategy and that she will come out in support of it.
One thing that the hon. Lady should know, and that every Member of the House knows, is that for our country to prosper, we need a sound economy. The last time the Labour party was in government, we had the biggest financial crisis since the 1930s, racking up billions and billions of pounds of extra debt for our children and grandchildren to pay. As usual, the Labour party has not learned the lesson from that, because its proposal is to borrow an extra £250 billion. In attracting the confidence of the world to invest in this country, the hon. Lady needs to make sure that the economy is sound. In the prospectus that she puts forward, there is nothing that is capable of achieving that.
In the weeks ahead, I hope the hon. Lady will discover that, around the country—from north, south, east and west, and from business organisations to trade unions to our respected scientific institutions—there has been substantial collaboration, based on the Green Paper, which has resulted in some major changes. It is a strategy for the long term—it is right that it should be the strategy for the long term—but it is being backed up by investment now. In the Budget just last week, we saw the announcement of the biggest increase in investment in research and development in this country that there has ever been. The hon. Lady should welcome that because it is being welcomed throughout the country.
With our partners right across the United Kingdom, we will implement this industrial strategy. I hope, when the hon. Lady goes out and talks to businesses and leaders across the land, that she will find that there is great support for this approach and that she will join us in seeking to implement it and to provide the certainty we need in the years ahead.
Order. Just before we get under way, I remind the House that the subsequent business is very heavily subscribed. Secondly, I point out again to the House, as I did on Thursday, that there is a growing phenomenon, I am afraid, of Members turning up late for statements—that is to say, after the relevant Minister has begun the statement—and then expecting to be called. This is in defiance of very long-standing parliamentary convention. So, today, I am afraid, and there are some very capable and assiduous Members involved—no fewer than seven—I am going to say I will not call people who turned up late. Members have really got to get used to looking at the monitor and getting here in time, and if they do not, they lose out. So please do not come to the Chair and say, “Yes, but there is a special mitigating circumstance. I was responding to an email from a long-lost relative” or, alternatively, “I was feeding my budgerigar, and it couldn’t wait.” The answer is, those matters, if they arise, must be put second, and the Chamber first. We will await the contributions of those distinguished and illustrious Members on another occasion.
After the unremitting negativity from Labour, may I say how enthusiastic my right hon. Friend has been—and rightly so—about advanced manufacturing, R and D, science and technology, and pharmaceuticals? What steps is he taking to increase productivity in a different sector that employs over 3 million people in the United Kingdom—tourism and hospitality?
My hon. Friend is absolutely right, and I am grateful for his question. One of the challenges is that we have is to make sure, right across the economy, that we are taking the opportunities to raise the productivity and performance of sectors in which many people are employed. The tourism and hospitality sectors are very important in that. They feature in the industrial strategy as two areas where it is particularly important to work together with firms big and small, as we are doing, to establish training institutions and spread technology so that we can raise their performance to compare with the strongest performance elsewhere in the economy.
I thank the Secretary of State for advance sight of the statement.
We welcome, finally, this overdue industrial strategy. We welcome also the recognition of the grand challenges of artificial intelligence, clean growth, future mobility, and the ageing society—all of which are very important to Scotland. It therefore says everything that there has been no consultation with the Scottish Government nor any attempt to match the Scottish Government’s economic plan, particularly given that the Scottish Government lead in life sciences. How will that working with the Scottish Government be taken forward?
This is not an outcomes-based approach such as we have seen working successfully in Scotland. A plan without knowing its destination is just a plan, and it does not guarantee success. If it did, it would answer the big question on skills. The Secretary of State said that there was no point in having short-term strategy, but it has been pointed out, in terms of the Budget, that the training and learning budget fell by 13.6% per person in real terms between 2007 and 2015. With the uncertainty over Brexit already affecting EU nationals, perhaps he could tell industries where the skills that will be required in the short to medium term will come from.
While we welcome the £7 billion, which is a very big number, for productivity, why, according to the Red Book, does it apparently not come into effect until 2022? Do we not need to address productivity now?
I am grateful to the hon. Gentleman for his questions. Working together with the Scottish Government is very important. On some devolved matters, it makes sense for them to be joined up. Last week, I had the privilege of meeting Keith Brown, the Scottish Government Minister responsible for this area. When the hon. Gentleman gets a chance to read the paper, he will see that there is substantial reference to our close working with the Scottish Government. It is very important that we do that.
On skills, the hon. Gentleman is absolutely right. It is foundational that we should equip our people with the skills that they need to take on the jobs that are being created. He might have missed the fact that we have increased very substantially the number of hours that people are being taught in further education colleges, so as to raise them in line with the best in the world. That is a very important contribution to this.
On the extra investment that the Chancellor announced, the national productivity investment fund is to be further extended to 2022. That is why the figure that he announced was for that particular year.
I congratulate the Secretary of State on this document. The problem with Labour Front Benchers is that they think it is all about money. Money is important, but it is how and where we spend it that matters the most. We need an industrial strategy that is bold, realistic about the failings, and has a huge vision. This document has that. Will he commit to making sure that he continues to work with British business to put this excellent strategy into action?
I am grateful to my right hon. Friend, not least for her excellent work as a Minister in the Department for Business, Innovation and Skills in laying the foundations for this work, which is of benefit to every single part of the country. One of the mistakes that was made over many decades by successive Governments was not to recognise the importance of local economies in creating the right conditions for businesses to succeed. That is prominent in the strategy, and I know that she has been a particular champion of it.
Industrial strategy, particularly in sectors such as the automotive sector, depends on a model of just-in-time delivery. One concern of that sector, in particular, is that things will be held up at ports if we leave the European Union and the customs union. What assurances can the Secretary of State give businesses that we will have frictionless as well as tariff-free trade after we leave the European Union? Without that, productivity will deteriorate even further.
The hon. Lady is absolutely right about the importance of making sure that we can continue and, indeed, expand our trade, not just with the European Union but with the rest of the world. She is absolutely right that the model of the automotive sector and many other sectors requires the availability at very short notice of components and products. That is why it is very important that the deal that we negotiate should give us the ability to trade without tariffs and with the minimum of friction.
My right hon. Friend asks a characteristically acute question. It is true to say that some of the measures of productivity do not do justice to the importance of the issue. We would not, for example, want to substitute our model of very high employment for the model of some other countries, where there is very high productivity among people who are employed, but a large number of people unemployed. That would be the wrong thing to do. We propose in the strategy to set up an independent council, which will set a baseline against which our performance can be judged independently and which will report to the House. I think that that is the right way to apply rigour to the question that he raises.
I welcome the statement, albeit that it has taken the Government two and a half years to conduct what is, essentially, a rebranding exercise. Does the Secretary of State agree that the essence of improving productivity is skills? If he is going to reverse the absolutely catastrophic decline now occurring in apprenticeships, he should go back to the model that he and I worked on. It would have increased the number and quality of apprenticeships and scrapped the apprenticeship levy, which has been appallingly maladministered.
I had hoped that the right hon. Gentleman would give a more enthusiastic welcome to some things, which I thought he would be in favour of, not least the substantial increase in investment in research and development. When he was Secretary of State, we managed to maintain the level, but this is the biggest increase there has ever been, and I thought that he would welcome that.
Apprenticeships are very important. We have made great strides in improving the number and quality of apprenticeships. The new system is bedding in, and I think most observers recognise that the initial figures are not a guide to the future. The right hon. Gentleman is absolutely right that we want to encourage the take-up of more good apprenticeships.
Unlike my former Secretary of State, the right hon. Member for Twickenham (Sir Vince Cable), may I welcome what the Secretary of State has said, which is both insightful and forward looking? In the light of that former relationship, I encourage him to be willing and patient in dealing with collaboration, which is something that the right hon. Gentleman and I had to deal with.
May I ask my right hon. Friend about a local question, which also concerns life sciences? Hertfordshire has the highest life sciences sector concentration of almost any county. May I therefore ask Ministers to involve our businesses, our local enterprise partnership and our local authorities closely when it comes to life sciences—welcome as it is that investment has been announced today, albeit elsewhere?
I am grateful to my hon. Friend for his welcome for the White Paper. He will see that one of its important features is the recognition that clusters—that is to say, businesses in the same sector all reinforcing each other—can lead to excellent performance.
On the basis of this strategy, substantial new investments have been committed in the life sciences sector, but these are the first in a pipeline of new investments that will follow all across the country and in every part of the United Kingdom, justifying the attention and the work that we have been engaged in—led by Sir John Bell, the eminent scientist—to make sure that we are the go-to place in the world for anyone with an interest in the future of the life sciences.
The publication of the strategy is welcome, but I have two asks of the Secretary of State. First, for this to succeed in the long term, it has to be able to survive changes of Government. Is it not about time that we set up a cross-party commission to build the political consensus needed to produce further iterations of the strategy? Secondly, let us be honest and recognise that the biggest institutional barrier to what he is proposing is the Treasury. Treasury orthodoxy has never properly got behind the concept of an industrial strategy. Is it not time to change his Department into a proper Ministry of economic reform that takes on all non-fiscal economic policy, across the Government, and which is equal to, not subordinated to, the Treasury?
The hon. Gentleman makes an intriguing set of suggestions. Let me start by completely agreeing with him that it is right to establish and support a strong consensus on the long-term commitments that we need to make in this country. It seems to me that other countries around the world have benefited from having a shared commitment to policies and institutions that investors know are going to endure, and that is the approach we intend to take. That is precisely the reason why we have had such an extensive consultation, involving all parts of the country and all parts of the economy—and across parties. He is right that the best way for the strategy to endure is for it to have the commitment and involvement of people who have an interest in the future success of the United Kingdom.
This is true across Government, too. The hon. Gentleman is right to say that in times past—in decades past—the finance Ministry has regarded itself as precisely that, but I think the importance of accepting that our national prosperity requires business to succeed in all parts of the country is recognised. Anyone who looked at the Budget last week and saw the commitment made by the Chancellor to, for example, research and development, will recognise that this is a whole-Government commitment, but the hon. Gentleman is absolutely right that it also needs to embrace the whole country.
On the point made by the right hon. Member for Twickenham (Sir Vince Cable), it is worth noting and putting on the record that we have 900,000 apprentices at the moment, which is the highest ever figure in our island’s history.
I strongly welcome the industrial strategy. Does my right hon. Friend not agree that a key part of it is supporting further education and skills, including through institutes of technology? An important example is the multimillion pound investment in the new Harlow College skills academy at Stansted airport, which was visited today by my wonderful hon. Friend the Minister for Climate Change and Industry.
I am grateful to my right hon. Friend for his comments. He worked very hard to achieve the success in the number of apprenticeships that we now have. He is right in what he says about Harlow College. That is a very good example of how working closely with a big local employer—in this case, Stansted airport—can make sure that the jobs available through the success of that airport and its associated industries can be taken up and spread among people in his and neighbouring constituencies. It is doing a fantastic job—I know my right hon. Friend was thrilled by the Minister’s visit today—and I am pleased to say that it features very strongly in the industrial strategy.
Does the Secretary of State seriously think that it is possible to convince the country that a Tory Government—I repeat, a Tory Government—have got the capacity to introduce a decent industrial strategy? In 18 Tory years while I was in the House, they closed down most of the shipbuilding industry, they got rid of a lot of the steel industry, they closed every single pit and now they are buying 40 million tonnes of coal from countries we do not even trust. These are the actions of a Tory Government, and—remember—let us stop this nonsense about trying to tell the people that unemployment is now lower than it was after a Labour Government, because during the Labour Government after the second world war, it was down to 2.2%, or 440,000, and when it hit 1 million, Ted Heath was in government. What a lousy bunch!
What I say to the hon. Gentleman is that every time there is a Labour Government, it is a Conservative Government who have to reverse the chaos caused and revive the economy. To give him an opportunity to calm down and reflect on the policies set out in the strategy, let me make him a present of this copy of the White Paper, which I hope he will find inspiring reading. I am sure that he will look at the policies in detail and, when he comes back for the next Question Time, bring himself to commend them.
I commend my right hon. Friend’s statement. Many of us know how hard he has worked on the strategy, and how widely he has engaged. I invite him to use this opportunity to reaffirm the central role of Britain’s universities in future growth and technological advance. I invite him to visit my constituency and see what Bournemouth University has done to create an incredible new tech sector, resulting in Bournemouth being voted the fastest growing digital economy in the United Kingdom.
I am grateful to my hon. Friend for his comments. The role of universities is absolutely vital. They have worked with us very closely on the development of the strategy. They are central to the local economy in almost every part of the country, and not just in educating the population—local people and those who travel to study—but in the research and leadership they offer. I would be delighted to visit Bournemouth’s excellent university with my hon. Friend, to congratulate it and to discuss how we can take its success forward in the local area.
The Secretary of State answered my hon. Friend the Member for Leeds West (Rachel Reeves) elegantly, but all he really did was restate the premise of her question, so let me give him another chance. Page 202 of the White Paper refers to a
“programme that will target areas where businesses need to improve to match the best in Europe.”
The problem with competing with businesses in Europe is that they will be members of the single market and, according to the Government, we will not. Has he made representations to the Prime Minister, asking her to change her position?
I am interested that the hon. Lady has got to page 202 already—that is high productivity. Of course, as the White Paper makes very clear, we want not only to continue our international collaborations, but to deepen them. That is very important, because the most productive industries are international. A big part of our negotiations, which she knows full well are continuing, is focused on getting a deal that is not just in our interests, because exactly the same logic applies to our European partners; they have no more interest than we do in interrupting those deep and successful relationships. That is why we have made that commitment.
I welcome the industrial strategy, as a proud midlands MP representing a constituency that played its part in building our reputation as the workshop of the world. Will my right hon. Friend please say a little more about how we will go further in addressing some of the productivity gaps between London, the south-east, Oxford and Cambridge and our regions? May I suggest that a great way to do that would be to build an institute of technology in Redditch?
My hon. Friend makes an excellent proposal. Let me choose one of the aspects of the industrial strategy that is relevant: the importance of local leadership with the powers to make a difference. She is fortunate as a midlands MP, as we are fortunate in this country, to have Andy Street as the new West Midlands Mayor, who is already playing such a significant leadership role in the area. As my hon. Friend will know, last week, the Budget set out significant investment in the region’s transport system in order better to connect those areas that have not been well connected to Birmingham and other towns and cities in the midlands, which we know internationally is key to raising productivity.
I absolutely applaud the industrial strategy for saying that we need to build on our strengths. One of our great strengths is our foundation industries, such as steel. Will the Government get on with energetically pursuing a sector deal with the steel industry, so we can add it to the other four deals he announced today?
I will indeed. The Minister for Climate Change and Industry—there is no more energetic person than the Minister of State—met the steel sector today to pursue those discussions. The sector features in the White Paper published today and the hon. Gentleman knows that I agree with him on its importance. I am full of enthusiasm for that being brought to a conclusion.
I welcome the Secretary of State’s emphasis on creative industries and construction, both of which are large employers in my constituency. Does he agree that there is a real risk of inflationary pressure in the construction sector, particularly if we are to meet our ambitious housing targets; and that in the short term, as we leave Europe, that will mean a need for continuing immigration and, in the longer run, for encouraging more young people into this industry, which is often very well rewarded?
As my hon. Friend knows from the Budget, we are committed to a big expansion of housebuilding. It is therefore important to ensure we have the skills and the workforce to take up those opportunities. One of the prime areas of focus in the construction sector deal is investment by the sector in training the next generation of construction workers, so we can avoid precisely the problem he describes.
Does the Secretary of State recognise the urgency of reaching a decision on our future participation in successors to Horizon 2020? Does he also recognise that further public investment will be needed to reach 2.4% of GDP on research and development spend? How will he ensure that that public investment is spent around the country, so that everyone benefits from it?
I am grateful to the right hon. Gentleman for his questions. He is right that international co-operation in research—not just with other European countries, but around the world—is the foundation of our success. Typically, Nobel prizes are these days awarded to teams representing many different countries. We are very clear in the strategy that we want to continue and extend the joint work we do with other countries. On the increase required, he will see in the strategy document that it is to be allocated by our scientific community, but with a particular regard to how we can make sure that clusters of excellence in research all around the country can benefit from the increased funding.
I commend the Secretary of State for his very positive statement. Does he agree that the tourism industry—worth £127 billion, 9% of GDP and vital to my constituents in the glorious sunshine coast of Clacton-on-Sea—should be at the forefront of any industrial strategy, as it is a powerful way forward out of recession and post-Brexit?
I do indeed. Many of us have had the pleasure of visiting Clacton and Frinton, whether as day-trippers or in some other capacity, in recent years and look forward to doing so again. My hon. Friend is absolutely right that tourism is a very important industry. The sector has in some cases been associated with lower levels of pay than other areas. Working with the sector, we want to see how we can invest in improvements in productivity, so it can be a much better paid sector than has been associated with it in the past.
Given the important chapter in “Industrial Strategy” about devolution, will the Secretary of State agree to meet the 17 council leaders in Yorkshire from all parties who are advocating a “one Yorkshire” devolution settlement, so they can work in partnership with the Government to deliver an effective industrial strategy for the county?
I would be delighted to do that. It is a mark of the strategy that it points to the success of decisions made locally and having clear local leadership. There have been, and continue to be, discussions in Yorkshire on the best arrangement, but I am very happy to meet the hon. Gentleman and his colleagues.
I welcome the strategy. Siemens, which has a pioneering digital factory in Congleton, is one of the companies that has led on the recent “Made Smarter” review. Does the Secretary of State agree with the principles behind the review, and that priority should be given to upskilling 1 million industrial workers to enable digital technologies to be successfully exploited, and so put the UK at the forefront of the fourth industrial revolution?
I do indeed, and I would like to put on the record my thanks to Professor Jürgen Maier, the head of Siemens in this country, and his team for producing that very important report. It is a good example of how digital technology affects almost every sector in the country. He has recommended a series of steps that we will implement in the months ahead and that will be of great benefit to the whole economy.
The Secretary of State will recognise that further education and apprenticeships are fundamental if towns such as Rochdale are to be part of the productivity change he wants to achieve. Will he, then, consider Greater Manchester’s long-held demand that the post-16 education and training budget be devolved to Greater Manchester?
Yes, the success of the devolution arrangements in driving forward local economies has been considerable, as the hon. Gentleman, being the former Mayor, knows, and we want to see more of it. He is right to draw attention to the particular challenge—but also opportunity—of having towns within city regions place a particular focus on how they can be helped to play a bigger role in the rise in productivity now being experienced with the success of some of these devolved arrangements.
I thank the Secretary of State for his statement and for including the fourth industrial revolution as one of the key drivers of his industrial strategy policies. Will he continue to support small and medium-sized enterprises such as Havant-based 3D printing business Dream 3D, which is already using new technologies to create new jobs and improve productivity?
I will indeed. I am grateful to my hon. Friend for his tireless work in chairing the all-party group on the fourth industrial revolution and promoting the importance of embracing the new technologies of the future. He is absolutely right that there is a big opportunity for small and medium-sized businesses in particular. We have succeeded in having some of our biggest firms comprehensively embrace new technology, and the strategy points out some areas in which we can work with small and medium-sized businesses to diffuse that across the economy more generally.
The key to any successful industrial policy must be low and competitive energy costs. Energy costs in the United States have halved, and the reductions in China and India have been similar, but ours have gone up. How will the Secretary of State change that damaging trend?
The industrial strategy is very clear and makes that precise point. We have a substantial report from Professor Dieter Helm, the energy economist, looking at how we can meet our carbon reduction commitments but at the minimum cost to consumers, whether they be domestic or industrial consumers. I hope that the hon. Gentleman will have a chance to look at the report, which we will be responding to shortly, because our ambition is as he describes: to minimise the energy costs facing businesses.
I particularly welcome the commitment in the document to local industrial strategies, especially the reference on page 226 to the Greater Grimsby project board, of which I am a member. It is a private sector-led board. Does my right hon. Friend agree that that is the best way forward for developing strategy, and will he commit to meeting the board in the not-too-distant future?
I was aware of it, and I am delighted that my hon. Friend asks this question. There is a big opportunity for Grimsby, Cleethorpes and the surrounding area to participate in the revival that this industrial strategy offers. The board, which involves the private sector and people with a big commitment to Grimsby and the area, is featured for the particular reason that its leadership is already achieving results, and we are very keen to push that forward.
The Secretary of State will be aware that the best ceramics in the world are made in Stoke-on-Trent. I am partially heartened to see, on page 224 of this illustrious document, a reference to its ceramics industry. However, the Secretary of State has previously been very supportive of a sector deal, and the industry was hoping that details of it would be included in the industrial strategy, but they are not there. May I press him on that? What support can the ceramics industry expect from the industrial strategy, and would he be willing to meet representatives of the British Ceramic Confederation to talk about what support we can secure now, rather than waiting for the next round of deals to be published?
I share the hon. Gentleman’s enthusiasm for Stoke-on-Trent and its leadership in ceramics. In fact, just last week I was talking to Laura Cohen, who leads the British Ceramics Confederation; and Abi Brown, the deputy leader of the city council, is a huge champion of the industry. As the hon. Gentleman pointed out, it features in the industrial strategy, and I think it is one of the sectors that have a stellar future. For instance, ceramics technologies can be applied to new uses in relation to medical and other devices. That is why the prospects of a sector deal are so exciting, and it has my full support and commitment.
I welcome my right hon. Friend’s statement. A number of Members on both sides of the House have mentioned the importance of collaboration. If the industrial strategy is to succeed, it will require cross-Government effort to deliver the five foundations of productivity. Will my right hon. Friend outline the measures that have been taken to ensure that the strategy is genuinely embedded across Whitehall Departments?
My hon. Friend has made an excellent point. Given that different industries are coming together—for example, the energy sector and the motor industry share an interest in battery storage—it makes no sense for the Government to operate in silos. Part of the purpose of the strategy is to ensure that Government policy in all the different Departments pulls in the same direction to support the industries of the future, to help them to create good jobs, and to improve the earning power of the country.
I find myself in the unusual position of agreeing with Lord Heseltine, who suggested that the best strategy for industry in the United Kingdom might be not to leave the European Union. However, we are where we are.
The aerospace sector has experienced some difficult times recently. A great many orders have gone abroad, particularly to the United States, with no reciprocation. What will the Secretary of State do to stand up for a sector in which we have a world-leading position, given that we do not have the relationship that we should have with some of our major partners?
We do stand up for the aerospace sector. It is one of the most successful sectors in terms of joint working, both with the firms in the sector and with the Government. We have a good record of working together. As for ensuring that we obtain orders in this country, there is a big role for us all to play in spelling out the benefits to other countries of products and services that are made in and provided from this country, and I hope the hon. Gentleman will join me in doing that.
My right hon. Friend is a great ally of Teesside, and there is so much in the strategy document that is welcome, whether it relates to steel or to the Heathrow northern logistics hub. However, I want to focus briefly on carbon capture and storage. The Teesside Collective is keen to make progress on it. When will we know how we can go about bidding for the £15 million of feed funding that we are seeking?
I am grateful to my hon. Friend for what he has said. I particularly commend the Mayor of Tees Valley, Ben Houchen, who was instrumental in, for instance, the proposals for the regeneration of former sites of special scientific interest that has been so well received on Teesside. I am aware that my hon. Friend initiated a successful Westminster Hall debate on this subject. As he knows, we want to get on with testing technology for carbon capture, utilisation and storage, and Teesside offers a particularly attractive environment for that because of the connections between the different users and suppliers in the area, but there needs to be a competition that can lead to an award. I know that my hon. Friend is proceeding with that, and I know that Teesside will be very well placed.
Page 218 of the White Paper shows that, after decades of economic misrule from Westminster, gross value added per hour worked in central London is 150% of the UK average, while in Wales it is only 81.4%. Therefore, a litmus test for the Secretary of State’s strategy should be how it tackles geographic productivity and wealth inequalities. What benchmarks is he using to determine success or failure in addressing those challenges?
The hon. Gentleman is right to raise the issue. The productivity challenge that we face is about disparities. We have some of the most productive people and places in the world, but we have other places that are behind that level. The relentless focus of the industrial strategy is therefore on how we can close that gap by raising the earning power of those who are following. He will see that Wales—its industries and training and education system—is a prime area of focus throughout the strategy. I was pleased to work with Ken Skates, the Minister in the Welsh Assembly Government, to co-ordinate our work precisely to close that gap.
I am sure the Secretary of State will agree that a key test for the industrial strategy will be how it spreads prosperity to all parts of the UK. Does he agree that a good way of doing that in Torbay would be to agree the bid for an institute of technology to be built in Paignton?
My hon. Friend makes another ingenious bid for the area. The history of technology in Torbay and the firms that have located there—I enjoyed meeting some of them on a visit with my hon. Friend a little while ago—provide particular reasons why it is an attractive location for such an institute.
To improve growth and prosperity in this country, we need to ensure fair transport investment in all parts of the country. I have just received a written ministerial answer showing that the disparity in investment between the south and the north has widened since 2012. What is the Secretary of State going to do to get the Department for Transport on board with his strategy?
When the hon. Lady studies the White Paper in detail, she will see that one of the proposals is to look at the dynamic effect of investments—how a transport investment can transform the prospects of an area. That can be taken into account, we propose, in making transport decisions in the future, which will be of benefit to her constituents.
I, too, welcome the drive to up productivity with its links to the clean growth strategy. Does my right hon. Friend agree that this approach to upping productivity is one of the best planks that we can put in place for continued prosperity and sustainability? Would he like to pay a visit to Taunton Deane, to look at the opportunities provided therein for some of the funding to come our way? We must not forget the south-west, and we have a great opportunity on our new Nexus business site.
I would be delighted to visit my hon. Friend’s constituency. As she points out, not just in this country but all around the world economies are becoming cleaner and greener, and if we can establish leadership in the research and development and, critically, the translation of those discoveries into industrial products and processes, we can benefit substantially. We are already doing that in the offshore wind industry and others. It is a world full of opportunities for more of that, and of course the south-west has a particular role to play in that.
The Secretary of State’s document rightly stresses the importance of transport infrastructure and digital infrastructure, yet when it comes to Scotland, his Government have just imposed a £600 million cut to the future rail investment programme and to date we have been underfunded in terms of superfast broadband. Will he confirm that Scotland’s funding from the £740 million digital infrastructure programme and the £400 million fund for electric vehicle charging will be allocated on need, which covers Scotland’s landmass and geography, and will not be based on arbitrary population or other measures?
Of course we recognise that, and I have made the point throughout our discussions this afternoon that every place requires a consideration of its particular challenges. The geography of Scotland means that different decisions will be appropriate there compared with more urban parts of England, for example. We completely recognise that, which is why we are setting out a localist approach to ensure that we make the right investments for the right places.
I congratulate the Secretary of State on the industrial strategy, and on announcing more investment in science and research than any Government have done in the past 40 years, particularly in advanced technologies such as quantum technologies. Anyone who wants to see gravity sensing need go no further than Chelmsford. Does he agree that investing not only in blue skies research but in near-to-market innovation is key to ensuring that bright ideas happen and stay in Britain?
I completely agree with my hon. Friend. Making new discoveries is something that we have a deserved reputation for, and we must not take that for granted. We must reinforce that success. Where we have been less successful, however, is in translating those discoveries into practice and, in particular, in creating manufacturing jobs here. That is why medical manufacturing has an important role to play in the life sciences sector deal, and I am thrilled that on the basis of that industrial strategy, major investments have been announced today from the American company MSD and the German company Qiagen, to reinforce the success of that important sector.
How many pages of the Secretary of State’s strategy deal with the immense value of tidal power? It is non-carbon, it is green, it is British, it is eternal in its duration and, unlike other renewables, it is entirely predictable. Will he temper his manic enthusiasm and optimism by reading the National Audit Office and the Public Accounts Committee reports on Hinkley Point, which say that it will cost us £30 billion in subsidies that will be paid for by the poorest consumers?
I am not going to temper my enthusiasm; quite the opposite, in fact. We have many opportunities in clean energy, with many breakthroughs in prospect. As was pointed out earlier, we have to ensure that the cost to consumers is taken into account, and that is the judgment that we need to make when it comes to projects such as the one the hon. Gentleman has just described.
The Secretary of State is welcome to come and talk industrial strategy in Worcestershire any time. Can he confirm that the industrial strategy is intended not to be a 254-page document that will sit on a shelf gathering dust but a deliberate statement of strategic intent and policy that will change over time? Will he tell me how it will be refreshed and changed?
My hon. Friend makes an important point. The purpose of the strategy is not just to inform the decisions taken by Government Departments—although it is important that they should be consistent with it—but to give confidence to investors so that they can predict the direction of policy. We have seen that today in the life sciences sector. It is important that the strategy is kept refreshed and up to date, and one of the proposals in the paper is to establish an industrial strategy council, which will be an independent body that can report to the House and others on progress and ensure that we are agile enough to keep up with developments in technology.
As the Secretary of State knows, the Vauxhall car plant in my constituency is facing a huge challenge for its survival, so the focus on the supply chain in the automotive sector, on page 202 of the strategy, is to be welcomed. In order to be a success, however, we will need more than good intentions. Will he tell us what financial incentives will be available to encourage suppliers to relocate to the UK?
Part of the sector deal with the automotive sector will do precisely what the hon. Gentleman suggests—that is, look at the supply chain and create opportunities, backed by the industry and the Government working together, to make it easier for suppliers, including small suppliers, to locate in this country. He is bang on the money: that is what was proposed by the sector and it has been agreed in the sector deal. That shows the value of this strategic approach, with the Government and the sector working together to address some of the known opportunities.
From speaking to businesses and investors, Brexit is of course driving some uncertainty, but when they speak frankly, they say that their greatest fear is a hard-left Labour Government and the investment-destroying, punitive taxation that would come with them. What role is played in the industrial strategy by low, simple taxes and by great incentives, such as the world-class research and development expenditure credits?
My hon. Friend makes an excellent point. Everyone should be seeking to build confidence in the UK economy. We make it clear in the industrial strategy that some of the UK economy’s strengths are that we are an attractive place for business to locate, which is why we are one of the biggest places for inward investment around the world, that we create more new businesses than any other country, that we are a competitive place with no sheltering for incumbents, and that we are a place of low taxes in which enterprise is rewarded. Those things are foundational to our success, and I cannot understand why any party would want to set itself against that.
The Secretary of State has already praised the wonderful ceramics industry, which has its home in Stoke-on-Trent, and the work done by the British Ceramic Confederation for the past two years on developing an industrial strategy. It is great to see a photo of my sector on page 224 of the White Paper, but we really need a strategy for Stoke-on-Trent, so will the Secretary of State meet me and my colleagues on the all-party parliamentary group for ceramics, which I chair, to discuss how we can move that forwards and develop what my constituency and city so desperately need?
I am always keen to meet people from the ceramics industry and from Stoke-on-Trent and the surrounding area. It is a fantastic industry for the future as well as the present—great strides are being made. It is an endorsement of the approach in the Green Paper of asking whether we should have sector deals that there was such an emphatic yes that some sectors, including ceramics, submitted their own proposals, and I am keen to take them forward.
I am sure that the Secretary of State is aware that I chair the all-party parliamentary group for the coalfield communities—if he was not, he is now—and the group has done significant work on trying to look at the regeneration of such communities. In relation to the White Paper, how does he intend to bring jobs and investment to those communities, which have suffered over successive generations in terms of job losses, economic growth and, indeed, health outcomes?
The hon. Gentleman makes an important point. The White Paper contains a substantial section on the importance of local places and the role they can play in reviving their economies. It looks in particular at establishing local industrial strategies that are not only about the big cities, but about smaller towns and communities. The strategy presents an opportunity to former coalfield communities and others to play a big role in helping to drive up their future prospects.