[Siobhain McDonagh in the Chair]
I beg to move,
That this House has considered the future of the UK digital and tech industries.
It is a pleasure to serve under your chairmanship, Ms McDonagh. This is an important debate on a sector of the economy that has been incredibly vital for this country and will become even more important in future. The UK’s history as a global leader in technological and digital innovation is well known. From the invention of the telephone by Alexander Graham Bell in the 1800s, and the creation of the television by John Logie Baird in the 1920s, to the relatively recent introduction of the world wide web in 1989 by Tim Berners-Lee, the UK has always been at the forefront of technological advancement for the rest of the world. Today we continue to see incredible innovation and growth across the country, which puts the UK at the forefront of global technological advancement.
The turnover of digital and tech business in the UK has reached £170 billion. That is an increase of £30 billion over the past five years alone. We should recognise that the digital sector is creating jobs twice as fast as the non-digital sector. It is important to note that this is not just a London-centric industry, as many seem to think it might be. We have seen incredible growth in this sector all across the UK. There are digital clusters thriving in Belfast, Edinburgh, Glasgow, Newcastle, Cardiff and many other places in the UK. In mentioning all those regions, I thought that people from them might feel urged to jump up and say so. [Interruption.] The hon. Member for Strangford (Jim Shannon) will save his ammunition for later. We should welcome the huge growth in the number of individuals setting up businesses online, many from their own homes.
One of the many benefits of the digital industry is to take advantage of the opportunities for business and trade that exist online: the ability for people across the country, and the world, to be connected at just the press of a button. The aim of my speech is to push the Government for assurances that, alongside the recent digital strategy, we will continue to invest and encourage this sector of the economy to grow and, crucially, strive to be world leaders in this industry—tech UK.
Imagination Technologies in my constituency is at the cutting edge of this exciting sector. I visited its offices a couple of weeks ago and witnessed at first hand some of its fascinating, advanced work on computer chips and artificial intelligence. As I am sure the Minister knows, Imagination was recently acquired by Canyon Bridge, a US venture capital firm, for close to $1 billion. That is $1 billion of confidence invested in the UK. It is the largest such investment in UK tech since the referendum, so “Project Fear” should be well and truly dead. That was a huge investment of confidence in my constituency.
I am sure that the Minister will welcome that investment and the massive vote of confidence in the UK tech industry, and I hope that she will visit Imagination to see for herself this jewel in the tech crown. I extended that invitation to the Prime Minister at lunchtime, and she thought it a bit of a deviation from her way to Carlisle. To save her from that deviation, I will say today that the Minister will be more than welcome to my constituency to see what the world can learn from St Albans.
There has been so much good news coming out of the tech industry in recent years and months. The UK ranked in the top three in KPMG’s 2018 global technology innovation report. The report detailed the record level of venture capital investment into UK tech firms, which totals $4 billion. That is more investment than the combined amounts in Germany, France, Spain and Ireland. The UK is mopping up more of that vital investment than those four countries combined. KPMG’s report also highlighted the strength not just in large tech firm investment and growth in the UK, but in the investment going into emerging UK tech firms. However, we cannot rest on our laurels. We must see the UK emerge as the No. 1 location for global tech innovation in the near future—not just in the top three, but No. 1.
Does my hon. Friend agree that it is remarkable and commendable that 99.8% of all new digital firms are small and medium-sized enterprises, and that this is a reflection of the organic strength in this space in the UK?
I absolutely agree. We are having to look to a model where the great big factories and industries of the past are not necessarily going to be the voice of the future. Many of these companies are set up in people’s bedrooms. Mark Zuckerberg might have a few issues of his own at the moment but, as he said, who would have thought three geeks in a bedroom would set up a company that would become so big? That is the future. Many of these companies start off small and then grow. That growth is part of the success, but also part of the issue that I want the Minister to address.
Funding Circle, a FinTech company founded in the UK, is another great example of success in the UK tech sector. Established in 2010, Funding Circle is now the world’s largest lending platform for small businesses and has offices across Europe and in the United States. In such a short space of time it has come to be a global leader. Lending from Funding Circle loans has supported the creation of approximately 80,000 jobs in the UK. It is a wonderful example of the thriving FinTech industry that we now have.
Across Europe, the UK is leading the way. The latest European digital city index ranked London as No. 1 for supporting digital entrepreneurs. The UK is also No. 1 across Europe for inward investment into the digital sector. We should be incredibly proud of that. As we look to the future, the Government must do everything they can to support the continued growth of this industry. That includes listening to its concerns and planning for potential regulation.
The hon. Lady is painting a very rosy picture of the current situation. I suspect that she will soon move on to some of the challenges. As a representative of a city that is a well-known tech hub, I will just ask: does she agree that many of the people who work in the tech sector come from other countries, particularly European Union countries, and that it is important that the Government bring forward their proposals on migration and immigration as soon as possible so that we get some certainty for the future?
I do agree with the hon. Gentleman about getting certainty on migration. Other companies I have spoken to recently say that they want to be able to bring in the brightest and the best. I absolutely understand that. Interestingly, many of the brightest and the best who are coming in, including Dr Li, who has taken over as the chief executive of Imagination Technologies, are from outside the European Union. Many are saying to me that they want a level playing field on the ability to bring in the brightest and the best, and not just because someone happens to have a blue passport. It is important that we recognise that this is a global industry with global resources that may wish to come to the UK.
I agree with the hon. Gentleman that we need to get our immigration strategy fit for purpose, but we also need to ensure that we have people in our own country who are entering the tech industry. Another company I visited in St Albans said that it was bringing in many highly qualified technicians. It had not employed a single person from the UK in the past three years. Why? Because it could not get them; they are in such demand. There are issues we need to address with ensuring that we are growing home talent for the future, as well as those around immigration. It is a double-sided issue that we need to be looking at.
These are some of the key priorities being raised by firms and trade associations in the industry. First, there is the adequacy agreement with the European Union as part of our future trading relationship. I do think that the future is rosy and bright, but no future, wherever we were, would not have its issues. The adequacy agreement is being asked for, and I would like the Minister’s views on that. The free flow of data between the UK and the rest of the EU is extremely important to both sides during the negotiations. It is so clearly in everyone’s interests for the flow of data to be unhindered, so that needs to be prioritised. I am sure it is being, but I would like to hear more about it from the Minister.
The implementation of the general data protection regulation in May and the Government’s commitment to the framework is encouraging and must help the case for the adequacy agreement to be reached. I would also be pleased to hear what further work the Government are doing to ensure that the adequacy agreement will be reached as we leave the European Union. There will be serious concern among the tech industry if it is not battened down as an agreement that everyone has confidence in when we leave.
Secondly, companies stress the importance of access to talent for their industry, which goes back to what the hon. Member for Cambridge (Daniel Zeichner) said. Of the 1.64 million jobs in the digital sector, about half a million are done by foreign-born employees. That means that half a million people are importing, so to speak, their talent into the UK tech industry. Even so, the industry demands more talent, which comes in through the tier 2 visa route, to support growing businesses that are looking for particular skills.
Many companies, including those in my constituency, report being extremely limited when trying to recruit talent from non-EU countries. This is a golden opportunity, despite Brexit being given a bad press—I hate the phrase “despite Brexit”—for us to craft an immigration policy that will not leave highly skilled jobs unfilled because of the difficulty of recruiting talented individuals from around the world.
As we leave the European Union, we will be able to set our own immigration policy, with fuller control over who can come into the country to work. The Government must ensure that any future immigration policy is agile and flexible to allow that international talent to come to the country and support growing industries, such as the tech sector. I would be glad to hear what preparations the Department has made to ensure that the tech sector can access that international talent after we leave the EU. Given that there are many small businesses in the tech sector, I would like to ensure that there is a conduit for their voices and concerns in future.
Finally, our education system is crucial to the future success of our tech and digital sectors. With the best will in the world, the brightest and best talent comes and wants to work in the UK tech sector, but I would also like our young people to want to join it—not to say it is not for them. It is important to welcome foreign talent, but we must grow our own.
Policy Exchange reported that 65% of today’s students will end up working in jobs that do not even exist yet—that is 65% of future jobs that we cannot even imagine. By 2022, 500,000 highly skilled workers will be needed to fill digital roles, which is three times the number of UK computer science graduates in the past 10 years. That shows the amount of upskilling we have to do and the need to make tech a sector that our young people go into. That huge mismatch must be addressed.
Educators must provide children and young adults in the UK with the skills and training needed for the jobs of the future. We need a curriculum fit for the future, access to teaching staff to inspire our young people, and careers guidance that narrows the gender gap. Women and girls can and do flourish in the tech industry, but we need greater encouragement. When I visited Imagination Technologies, I asked a lady there how many women go into that sort of industry and she said, “Not enough.” It is not enough.
I am encouraged by recent Government announcements about the digital strategy and the Department for Education’s announcement that a further £177 million will go into maths education, which is a crucial STEM subject for the jobs of the future. However, we need to do more to encourage our brightest and best to enter the world of teaching. Teaching is at the core; to get young people enthused and motivated, we must get the teachers in. There are some difficulties in recruiting teachers for certain subjects, and I would like to see a strategy to address that.
When I met Dr Li, the new chief executive of Imagination Technologies, he spoke about the significant support the industry receives in China. Rather cleverly, I said that we are in the top three, but China is No. 1. I will give hon. Members some reasons why—to say that the state is helping is to put it mildly. To promote talent in the industry and, crucially, to retain it, the Chinese Government provide subsidies for teaching tech subjects and offer financial incentives around pay and housing for those working in the sector. Although I am not advocating that approach, it shows that our competitors are determined to win the global tech race. They will not export their talent to other countries if they can possibly help it.
We need to ensure that tech UK is heading for the winning line, but with that exciting world of opportunity comes a dark side. Online security and safety are extremely important issues for the industry to deal with. The protection of the personal data that is being used by online companies is a current issue. For people to have confidence in the programs and applications they use, they need to know that their personal data is secure. I hope that the Government will continue to put pressure on companies to safeguard user data, and to consider how we can future-proof personal security and police industry behaviour.
UK businesses are increasingly subjected to cyber-security threats, which is another topical issue. A recent report by the National Cyber Security Centre found that more and more businesses are being threatened with data breaches, ransomware and cloud theft. Unfortunately, the criminals of this world—the malcontents and ne’er-do-wells—are one step ahead of the game. What are we doing to ensure that we are getting ahead of the game in cyber-security?
The growth of the internet of things, in which many household devices and other objects are interconnected, presents a worrying openness to hackers, as many of those devices lack even the most basic security defences. Some hon. Members will have seen the horrific case of a driverless car being hacked into. The idea that the machines could suddenly take over is horrific, but of course it is not the machines; it is the hackers behind the machines. The exploitation of data in attempts to influence other countries’ elections is another current topic.
As we migrate more of our lives into the digital world, we need to ensure that rogue companies and rogue states are prevented from corrupt or sinister behaviour. I hope that the Minister will touch on what the Government are doing to strengthen our cyber-security and to increase public awareness about safety in a high-tech world.
The industry has incredible potential. Some recent technological advancements are staggering and the UK is proudly at the forefront of that success. On my visit to Imagination Technologies, it was inspiring to hear from those in the industry about how technology will improve our lives in future. The ability for artificial intelligence and the internet of things to combine to assist with healthcare and care for the elderly is especially exciting. Wearable tech will enable the user to be notified of potential health irregularities and will be able to alert medical services when a user’s condition requires it. AI will also be able to help elderly people who need assistance with basic tasks, although there will never be a substitute for interaction with people.
To conclude, tech can improve our future lives in many ways: not just through healthcare or social connectivity, but by making everything in our lives easier. Tech UK is the future for us all. This country has an incredibly exciting digital industry and global Britain should strive to be not just in the top three, but No. 1.
It is a pleasure to serve under your chairwomanship, Ms McDonagh. When I mention my constituency of York, hopefully hon. Members think about the city walls, the minster, the Vikings—
They are all on my list. I am glad hon. Members think about them, because we in York have a fantastic history, but York is also the UNESCO city of media arts. It is part of the Creative Cities Network and hosts the Mediale festival. It leads our country in the digital creative sector and has created the first guild of media arts—the first guild for 700 years. It is also home to the digital signalling centre, which is at the heart of the next generation of rail.
The film industry is on our doorstep with Screen Yorkshire. The British film industry is the UK’s fastest growing sector, and Yorkshire leads the way. Our university is at the heart of that.
On the issue of the hon. Lady’s constituency and elsewhere in the UK, does she agree that one of the potential beauties of the tech industry is that it is not confined to the UK’s economic hotspots, such as the urban conurbations of London, Belfast, Edinburgh and Cardiff? It offers advantages to urban and rural areas, provided that the connectivity is there and the demand to promote the industry is met by the Government.
The hon. Gentleman is absolutely right. The digital and technological industries break boundaries in many ways, not least by providing alternative forms of employment. They certainly do not have any rules about where they are located. It is a 24/7 industry, so it includes individuals in their own homes and small businesses with global impacts. It is an exciting sector to be involved in.
The University of York is also at the cutting edge of digital technology and has its own digital creative labs, which I had the real pleasure of visiting earlier this year. I should say that I am on an apprenticeship with much of this, and I am learning: they are at the heart of the video-gaming industry, which has its home in York. Many businesses—start-up businesses, new companies, small tech companies—surround our city. We have 250 such businesses in York alone, and all that activity is building into the future of our economy, as we search for a new identity in a new era.
What also really excites me is that old is blending with new, as we move forward in our city. The new gives new opportunities. At the heart of our city, we have the biggest brownfield site in Europe, waiting for businesses to land. Rich heritage surrounds where people live. I say to any digital tech or digital creative company, “Come and see if your future is in York, and you will be most welcome to make it your home and make it your own”.
As I have said, I am on a bit of an apprenticeship in this industry and I thank the Industry and Parliament Trust for giving me the opportunity to explore this sector—to have placements across the sector and to learn more about the cutting edge that the industry is providing our economy and our nation.
I have learned that our gaming industry is one of the fastest growing in the world because of the skills base that we are able to provide. The potential is huge if we really embrace that wider economic opportunity. In York itself, we are seeing how this industry—both alone and standing alongside other industries—is so cross-cutting and how the skills acquired around video-gaming can then be applied right across the curriculum. Education is certainly at the forefront of that. I saw programmes that provided individualisation of tutoring. For instance, I undertook a French course; I will not say how I got on. Such programmes can track an individual’s learning, taking them back over their weaknesses, improving their skills and ensuring that they are the best that they can be at that particular skill.
I also saw how the Yorkshire Museum has embraced virtual reality, to take visitors into a Viking village and enable them to experience life in that settlement. I saw 3D modelling technologies, pioneered in the games industry, that now help companies such as Rolls-Royce to design better engines. I saw artificial intelligence—machine learning—and how that work is advancing and the technology is progressing. This is in my city, this is in our country and we must be so proud of that.
The academic world around this work is so strong. Along with other cities, York hosts the Intelligent Games and Game Intelligence—IGGI, for short—programme, which hosts 60 PhD students. An absolutely global standard is being set around academia and looking at the future technologies that will drive our country’s engine forward. Gaming will be really important to us, and not just for the sake of playing games; there is also the application of the skills that many people working in the industry will go on to develop.
What is going on before us—spread across the country, including in my city—is a quiet revolution that is transforming all our lives, with massive opportunities for the future of our country and my city. However, there are some issues that I want to talk about today. First of all, there is skills. We have good skills in our country, but we need some changes. The narrowing of the curriculum is not helping, particularly with regard to the digital creative sector. The arts have been downgraded and yet they could really be at the forefront. I ask the Minister to go back and have a look at that and make sure that the creative subjects are at the heart of our curriculum, too: it is when the technical and the creative join that we see this explosion of opportunity coming to our economy.
There are also the tech skills of kids to consider. We narrow people into boxes around a traditional learning curriculum, which is fit for a different era. We need to ensure that our children are embracing the new technologies of the future, because children are doing so elsewhere in the world and we really need to ensure now that we embed digital and technical skills right into the heart of our curriculum.
In the 19th century, it was the marriage of design and engineering brilliance in York that ensured it was the centre of the railway industry. Does my hon. Friend take inspiration from that?
My right hon. Friend makes an absolutely excellent point, because that is our heritage—how we drove our economy forward through the Victorian years. We have that opportunity again today. The digital signalling centre in our city—the rail operating centre, or ROC, as it is called—is now at the heart of how trains are driven. They will not be driven in the cab of a train any more; the digital tech sector is now driving forward, so it is like having a train set in front of a screen. That is completely radicalising the way that our country works. It is cutting-edge, 21st-century technology, and we have to see more of it in the future.
As I was saying, whether someone studies history, literature, medicine or maths, the digital and technical industries will play a vital role in their future. Just last week, I had the opportunity to take a tour of another York University department—the archaeological department. Archaeology digs into the past, but I also saw how the department is using technology to provide access to artefacts, by displaying them in a unique way, so that people can explore them and manipulate them on screen, to connect with artefacts dug up all over the world. They are put into context and it is possible to understand the history surrounding them: the experience was mind-blowing. That is because through technology the past has met the future, and there are very exciting opportunities in that regard.
The tech industry will also provide the breakthrough for telehealth, which will improve all our health. Again, I was exposed to some of those opportunities when I looked around the University of York, but so much more can be done, even when it comes to issues such as our mental health. We are massively struggling for resources in our health sector, including in mental health, so to have technology that can support us—technology can work against us, but also support us—and improve our wellbeing, we must embrace that technology as we move forward. It is so important that we consider the scope of where this technology is leading us and understand why the investment in our schools and education is so important.
I turn to research and innovation. We are talking about a very disparate sector, with lots of different companies scattered around. They do not have the capacity to build up much resource to get funding for research. We need to find a breakthrough on research, so that companies can network, to come together and draw down research funding, because we have a real future in this area, not least in the field of artificial intelligence, where we can really drive that technology forward. Of course, such technology is not about replacing humans; it is partly about doing things quicker, but also about pioneering breakthroughs in how we work. However, we need support for that.
I want the technology to have a social impact as well. York itself is brilliant in every stretch of the imagination, but it is also a very divided city. Some of the most deprived areas in the country are in my city and we are seeing exclusion being built in around it. I ask the Minister to consider whether the digital and tech sectors can be used to reduce the inequality in our country, not only through opportunities and skills but through the outcomes that the sector can bring. For me, that will be the win-win of the sector.
Finally, I want to say that the arts enrich all of us. In closing, I want to talk about Mediale 2018. Will the Minister meet me to discuss it? It will run from 27 September to 6 October, and it will be the nation’s creative digital festival. It is a platform for innovative art and technology, showing what can be done in this modern age, providing art to everyone as an enhancing experience. Mediale will be a springboard for this sector of our economy and how the arts are projected across our country, blending the old and the new. I am sure the Minister will want to ensure that the sector has a major footprint not only in York, but in the whole nation.
It is a pleasure to serve under your chairwomanship, Ms McDonagh. I am grateful to my hon. Friend the Member for St Albans (Mrs Main) for calling this important debate. I will talk briefly, but first I want to put in context the importance of the digital sector to our country’s economic output. We must bear in mind that the digital industries make up 4% of all employment and 7% of economic output, which is remarkable and represents remarkable growth in recent times.
One successful growth story is UKCloud, a very large company in my constituency. Just a few years ago, it was a start-up of six people. Under the amazing leadership of Simon Hansford, it has grown to now employ nearly 200 people. This month, it will take on another 50 employees. It has been remarkably successful, and it represents some of the recent explosive growth we have seen across the sector. As the name would suggest, UKCloud is a cloud storage business. It has successfully delivered cloud solutions for: central Government, including the Cabinet Office, the Home Office, the Ministry of Defence and other bodies of Government such as the Driver and Vehicle Licensing Agency and Her Majesty’s Revenue and Customs; many local authorities; health organisations; and other private businesses.
UKCloud’s unique offer is that it can scale up and compete with large multinationals. The offer is extremely cost-effective, so it can punch above its weight. That has come about as a direct result of the Government’s drive to open up cloud procurement through G-Cloud. I am sure the Minister will agree in her closing remarks that that has been a commendable success in encouraging British small and medium-sized enterprises to get into that space, punch above their weight and compete with the large multinationals.
Another significant thing about UKCloud is that it has a very important offer when it comes to national security. This year it is establishing a high-assurance cloud platform, which will basically be a secret facility known as UKCloudX. It will enable the Government to fulfil an important intelligence function, which is the ability to share intelligence across a number of different Government bodies and achieve the doctrinal intent of fusion. It is all very well when different intelligence agencies or bodies have information and intelligence, but unless they can share and fuse it in a highly secret manner, the intelligence cannot achieve its best effect in support of our national security.
UKCloudX is an important development, which has a direct impact on our national security at the highest level. I am delighted that that work will be taking place in Farnborough this year. No one in this room needs reminding of the importance of this country’s having a cutting-edge approach to the handling of intelligence and data, given the recent domestic challenges we have faced with our national security in Manchester with the atrocity just a year ago and the recent developments in Salisbury. UKCloud is playing an important role in our national security.
The other important aspect is data sovereignty. Due to recent developments, especially with regard to Facebook, which has already been mentioned today, the importance of the secure handling of data is clear to us all. Whether it is Government data or the personal data of citizens, the way that is handled and the total control we need to have over that to guarantee security are of the utmost importance. Data sovereignty should be a strand that runs through the Government’s approach to the industry as a whole, but particularly when it comes to the procurement of cloud storage facilities. I would be grateful for the Minister’s reassurance that when the Government consider procuring future cloud storage for their work, they will guard against any tendency to prefer US hyperscale offers—the big US providers—and instead prefer British SMEs, which not only offer 100% data sovereignty, but also offer the immediate economic benefit of the jobs and growth we have discussed today. I commend the Government for their attitude in terms of the G-Cloud, which has been a great success, but I would welcome the Minister’s reassurance on preferring UK SMEs in procurement.
Various invitations have been mentioned today. The Minister would not forgive me if I sat down without warmly extending an invitation to her to visit Farnborough and UKCloud. It is extremely convenient, being just off junction 4 of the M3. I am sure we can provide a very good lunch. I know she does not need that kind of incentive, however, because her commitment to her brief is such that she will want to see things at first hand. On that note, I conclude my remarks.
It is a pleasure to serve under your chairmanship, Ms McDonagh, and to speak in this debate. I congratulate the hon. Member for St Albans (Mrs Main) on securing this debate and on passionately setting out the issues that we all subscribe to and wish to speak about.
The UK’s digital tech industry turned over an estimated £170 billion in 2015 and is growing at twice the rate of the rest of the economy. It is key to boosting the UK’s wider economy, making a contribution of £97 billion in 2015. The hon. Lady clearly set out the situation in relation to the digital tech industry. She was confident on the way forward and Brexit. I will be equally confident, and I also want to say a wee bit about what we have done back home, which has been excellent for job creation and for boosting our local economy.
The digital tech industry generated a further 85,000 jobs between 2014 and 2015, going from 1.56 million jobs to 1.64 million. It is creating jobs at double the rate of the rest of the economy. That indicates how important the sector is. All the contributions so far have mentioned that, and I am sure those who follow will do the same. Since 2012, there has been a 13% increase in the advertised salaries of digital tech posts, compared with only a 4% rise in those of non-digital jobs. Tech investment in the UK reached £6.8 billion in 2016, which is more than two times higher than any other European country and significantly more than its closest rival, France, which secured some £2.4 billion of investment. That is about a third as much, which indicates the strength of our digital tech industry.
“Tech Nation 2017” shows that the average advertised salary for digital tech jobs has now reached just over £50,000 a year, compared with £35,000 for the average non-digital salary, making it 44% higher than the national average. Again, not only are we creating jobs; we are creating well-paid jobs. Along with the well-paid jobs we have to provide the quality employee as well.
As a Northern Ireland MP, I look to the Minister, who I know has a particular interest in this subject, not just because she is a Minister but because she has a personal interest. I am sure the replies to our queries and questions will be positive, as I am sure the shadow Minister will think of some similar things to say as well. Tech City UK’s “Tech Nation 2016” report found that the digital and tech sector in Northern Ireland was burgeoning, and outside of London and the south-east made the largest contribution to the regional economy.
The real purpose of this debate is to show that although London is key in many eyes, it is not a bar to young people finding work because they can find such high-paid jobs in their own areas, and that is really exciting.
The hon. Lady is absolutely right. It is tremendously exciting. I discussed it with Invest Northern Ireland, which was given the task of finding new jobs. One of the things that it was able to describe—I will come to this shortly—was the quality of graduates that we have in Northern Ireland, which is one of the attractions of Northern Ireland. The hon. Lady is absolutely right that people do not have to go to London to get a big wage. They go for different reasons, whatever they may be, but people can have a job back home and they can stay there. That is what it makes it so exciting.
In the words of my party colleague, Simon Hamilton, in his role as Economy Minister:
“From the North West Science Park in Londonderry through to the Enterprise Zone in Coleraine and down to Newry, the home of some of our leading high-tech companies, with Belfast— Europe’s leading destination city for new software development projects—at its heart, bit by bit we are building a Northern Ireland-wide tech industry that we can be proud of.”
That is what we are doing in Northern Ireland, and that is what we hope to continue over the next period of time.
In Belfast and other cities in Northern Ireland, global tech names such as Citi and Allstate, working in the sector with Silicon Valley firms such as BDNA, are all recognisable. Each of us here will speak passionately about our own constituencies, as the hon. Member for York Central (Rachael Maskell) did, and as other Members will as well. As MPs we love our constituencies and want to do the best for them, so the opportunities need to be there. Not only is our highly skilled workforce attracting global investment, but we have indigenous tech firms such as Kainos, Novosco and First Derivatives growing in size and becoming global leaders in our region of Northern Ireland. We can be excited about what is happening across the whole of the United Kingdom of Great Britain and Northern Ireland. As I often say to my hon. Friends in the Scottish National party, “Better together”: all the four regions doing all the same things together day by day and making things better for everyone, and we should continue to do that.
It is clear that much of our attraction is the skills base supported by international-standard research facilities, such as the Centre for Secure Information Technologies at Queen’s and Ulster’s Intelligent Systems Research Centre: education and big business working together. We have done that very well through Queen’s University. The Minister might respond to that because that is a key factor to our moving forward. We will have the education, the big business, the opportunities, the quality of graduates and all those things together. We have a range of support and programmes in place, such as StartPlanet NI and Propel, aimed in particular at early stage and high potential technology-based start-ups. Perhaps most crucially, we have a fast developing ecosystem including the likes of Catalyst Inc., Digital DNA and Immersive Tech NI, which combine to create a vibrant tech community across Northern Ireland.
Northern Ireland is consistently the top-performing region of the UK in national exams at age 16 and 18. The fact is that we have the graduates. People want to stay and the technical and digital firms want to invest because the skills base is there. We have the highest percentage of qualified IT professionals in the UK and Ireland, with more than 77% holding a degree-level qualification. I say respectfully to all the other regions that Northern Ireland as a region is leading the way—from a small base of 1.8 million people, we are up there with London and other parts of the United Kingdom. Some 77% of high school graduates, post A-level, go on to further and higher education compared with the UK average of 71%.
Government, industry and academia have implemented collaborative initiatives in training and education, such as cyber and data analytics academies, to ensure that the workforce continues to meet the needs of the global ICT industry with competitive salary costs, low employee attrition rates and lower operating costs, including low property costs. All those things make it attractive to come to Northern Ireland. Labour and property costs for a 200-person software development centre in Belfast are 36% less than in Dublin, 44% less than in London and 58% less than in New York. It is clear that we are an attractive place to do business and we must sell that more globally.
I will conclude with this, Ms McDonagh. I am conscious of time and there are two others to follow me. I read an interesting article in the Belfast Telegraph in which David Crozier, part of the commercial team at CSIT, was quoted. I want to cite his comments because it is important to have them on the record. He said:
“Belfast has a strong hi-tech industry as it is and cyber security is a subsection of that so you have transferable skills in terms of software engineering roles that can transfer over into cyber security. We’re working towards a target of about 5,000 jobs by 2026.”
While other sectors are facing uncertainty following Brexit, Mr Crozier is bullish about its impact on cyber-security investment:
“It’s really high-value stuff, companies have a demand for it globally and to a certain extent that does make it”—
I use these words; I know the hon. Member for St Albans will be happy—
We are looking forward to good times.
“It’s not going to have a detrimental effect for sure, it may actually lead to more demand if you see a hardening of UK national positions around trade tariffs and those sort of things that’s naturally going to drive investment into types of technologies to protect sensitive information, sensitive networks. It possibly produces even greater opportunity.”
An industry that is yet again embracing the opportunity Brexit presents, an industry that is able to compete globally, is an industry that we must invest heavily into, and the benefits will be deeply beneficial. Brexit-proof: what could be a better reason than that?
It is my absolute pleasure to serve under your chairpersonship today, Ms McDonagh. I congratulate the hon. Member for St Albans (Mrs Main) on securing this debate. I declare my interest, as set out in the Register of Members’ Financial Interests.
The United Kingdom punches above its weight in the global digital marketplace, with £170 billon of turnover and £7 billion of tech investment—twice the amount of any other country in the European Union. However, as we have heard, this is not just about profits; it is also about good-quality jobs, with the average advertised salary for a digital job 44% higher than for a non-digital average. That benefit is shared by an enormous 1.6 million workers in the UK’s digital sector, and it is a benefit shared by those seeking work, either young people or those in retraining, to get access to higher pay and higher quality jobs.
Such jobs are good, but much more needs to be done both on gender equality and class inequality in the technology and digital sectors, with many start-up businesses pioneered by those with the safety net of a family who can provide for them when inevitable failures occur. I do not criticise them for having that safety net, but the stark reality in my constituency of Bristol North West is that I have some of the most affluent and some of the most economically deprived suburbs in the city right next door to each other. Many of the young people have fantastic ideas but are not confident enough to take on the risk to try them. We need to try to find solutions to ensure that there is an equality of access to the opportunities and excitement of the digital market.
As we have seen recently, there are still gender inequality issues in some aspects of the technology and digital marketplace, so gender bias is as important an issue in this space as it is in others. I absolutely agree with the comments made today about the digital skills needed for young people. It is also important to show why the basics around science, maths and English can lead to such exciting jobs so that young people can see what they are aiming for and understand why getting that maths GCSE, which they might find slightly boring at the time, is a really exciting route through to some fantastic jobs. It is also about reskilling. An example that I gave in the House in the debate on autonomous vehicles was about when all of our taxis become driverless taxis and we have a load of taxi drivers who will need to find new work. This is not just about young people; it is about reskilling older people to access the marketplace.
On the whole, the Bristol and Bath region does really well. We have £8 billion of digital turnover. We had 87% growth from 2011 to 2015, which now accounts for 35,000 jobs in our region in the west of England. That is an enormous part of our economy. I will take this opportunity to pay tribute to the likes of the Engine Shed, TechSPARK, Business West and others in Bristol who have been pioneering for many years.
One key aspect of driving the regional presence is access to finance. That has been one of our problems in Bristol, which it has been getting better at. However, start-ups that want to scale up and get financial backing through serious funding and other avenues still need to come and have a presence in London. The networking that they need to do is in London. The people who have done this and know how to do it are in London. In my view, we need Government action to take that knowledge and experience out to the regions so that companies are able not only to start up in incubator spaces, but to scale up their businesses in the region.
That is why our industrial strategy is important, and why significant efforts should be made not just in relation to the vast productivity gains that digitisation can make, and not just in the digital economy, but in standard industries and public services. There is also a need to continue to push the benefit out to the regions, creating incentives and environments that allow digital businesses to start and be staffed. Opportunities to work in those businesses are important, given the skills deficit outside London and the major conurbations. That cannot just mean DFLs—“down from Londons.” Bristol is pleased to welcome, on average, 80 families a week from London. It causes a bit of an issue with house prices, but apart from that they are very welcome. But we must remember that young people born and raised in Bristol, and especially in Bristol North West, need access to those jobs too.
There is no denying that London benefits from being the digital capital of Europe. That position is put at risk by the Government’s approach to Brexit. Our access to talent from across the European Union, the attractiveness of London and other parts of England as a place to call home, our access to capital through our dominance in financial services, and the regulatory harmony and access to the European single market that come with being able to sell digital goods and services to one of the largest trading blocs in the world, are all potentially being thrown to the wind by the Brexit strategy, which is a great shame. The digital single market that the European Union is pushing is part of that situation. It will take time to resolve, but it will be a lost opportunity if we do not have access to it, through at least maintaining our position in the single market and customs union.
On the disagreeable basis that we leave the European Union entirely, we must turn our minds to maintaining Britain’s digital strength in a global digital marketplace post Brexit. In many other areas of industry, such as law, which was my profession before I became a politician, Britain has a reputation around the world for playing a fair game, with clear rules and enforcement. That is a British brand that is trusted and reliable. Britain is renowned as a country that people want to come to in order to do business and reduce risk—and, as I said, to get access to the European Union. We should seek to build that recognition in our digital marketplace too. Our historic geopolitical position between the United States and the European Union will be relevant to the digital market. As we have seen from the Senate hearings on Cambridge Analytica and Facebook, United States legislators are now looking to the European Union to see how to regulate technology and digital business.
That is an area where British MEPs and British commissioners and staff have played an important role in defining such things as the general data protection regulation, the network and information security directive, and components of the digital single market. In building that trusted global brand as the best country in which to start and run digital businesses, we now need to be much clearer about how we will apply the old rules in the new, modern digital world—how we will protect consumers who are buying goods and services that are digital.
We have made good progress, in the Consumer Rights Act 2015 and the implementation of European legislation such as the digital content directive, but there is more to do, not least with respect to making citizens and consumers aware of what is happening, and their rights, and how we regulate dominant companies in uncompetitive marketplaces. In the old world of utilities there are regulators to ensure consumer fairness. In the new world of the ownership and control of data Ofcom plays an enforcement role, but what is the competition role in that space? That is something we need to talk about more. We also need to deal with how we guarantee old civil liberties in a modern setting, including the role of the state and public services, the use of big data, and ensuring the cyber-security that we have heard about today.
That is why yesterday I was thrilled to kick off a scoping event, here at the House of Commons, on a new parliamentary commission on technology ethics, building on the work of colleagues in the other place—the report of the Lords Select Committee on Artificial Intelligence came out this week and it is very good. The Minister’s new data ethics body in the Department for Digital, Culture, Media and Sport is excitedly anticipated. Also there are issues such as the control, security and monetisation—with patient consent—of assets such as NHS data sets, as identified by Sir John Bell in the life sciences industrial strategy as new ways of funding public services.
Working with the hon. Member for North East Derbyshire (Lee Rowley), my Conservative co-chair of the all-party parliamentary group on data analytics—the parliamentary internet, communications and technology forum—and others, we shall engage with all stakeholders externally, and with the Minister and her Department, to create an environment in the United Kingdom that is good for digital businesses and consumers in the digital world, and hopefully a beacon for best practice around the world. There is a balance to get right, between the vast opportunities that come with driverless vehicles, the internet of things and digital public services, and the risks. It will be important to build trust with consumers and citizens, partners around the world, and businesses, to create a digital economy in the UK that we can all be proud of.
It is a pleasure to serve under your chairmanship, Ms McDonagh. I congratulate the hon. Member for St Albans (Mrs Main) on securing this important debate.
A couple of months ago I was in this Chamber debating ethics and artificial intelligence, and I suggested a code of ethics for people working in data, perhaps to be named the Lovelace code of ethics. I was delighted, two months later, to see that the Nuffield Foundation recently set up an Ada Lovelace Institute to look into data ethics. That is a think-tank with £5 million of investment, so I have new respect for the power and reach of Westminster Hall debates.
I was also delighted to see the House of Lords report on artificial intelligence on Monday. It is right for Parliament to discuss those new technological frontiers. In fact, they should be at the forefront of our debates. I want to touch briefly on data, accountability, skills and inequality. There is a huge issue about who owns our data. The new general data protection regulation is welcome in helping to give consumers control. When I was Consumer Affairs Minister, a fledgling project called “midata” was all about the principle that people’s data should be their own; if they wanted it from companies, they should be able to get access to it in a machine-readable format, so that it could be used for their benefit.
The world has obviously moved on somewhat in five years, and that was a fledgling effort, but the issue of data as currency will become more important in years to come. The Consumer Rights Act 2015 recognised that data could be treated as consideration: if someone had exchanged their data to get a product, they should still have some consumer rights and protections, for example if the product damaged their equipment. The business models that we are talking about in the tech sector require a greater level of consumer choice and transparency about the transaction that people make when they hand over data. The current model is one where people give their data away willy-nilly for free services, often with little control for the individual. In the future, initiatives such as private data accounts could be a mechanism giving people more control over their data. I am interested not just in whether the public sector can monetise large data sets, but in whether individuals might be in a position to have their own data monetised much more explicitly.
As for accountability, there have been all sorts of scandals, from fake news to online abuse, and the polarisation of debate coming from social media companies. Yet Facebook is only 13 years old, and Twitter, Snapchat and Instagram are all younger, so perhaps it is no surprise that innovation has outstripped regulation in that area. However, those platforms are changing much about society and need to be held to account. Many of those companies have huge monopoly power, and the network effect makes that almost automatic and inevitable for new platforms that are set up, but I do not think the Competition and Markets Authority has yet grappled sufficiently with the issues. The European Commission is perhaps one of the few organisations to have been able properly to stand up to those corporate giants, whether on tax, data issues or competition.
We need to do more about skills, in schools and through retraining. I agree with the hon. Member for Bristol North West (Darren Jones) about diversity in the technology workforce and that situation leading to bizarre decisions, because it is even less representative than most other sectors. I also agree about constraints on skilled workers coming to the UK. That is a problem that I fear will get worse after Brexit. We have just seen the cap for tier 2 visas for skilled workers from outside the European Economic Area and Switzerland reached for an unprecedented fourth month in a row. Until last December, that quota had been reached only once. There is concern about whether companies in the UK can get the skills they need. I declare an interest as a very minor shareholder of a data start-up, Clear Returns, on whose board I served while I was out of Parliament. I can attest, from that experience, to how difficult it is for tech companies to get access to the skills of data scientists and analysts that they need.
Finally—I am conscious of the time, Ms McDonagh—I want to speak about inequality. Inequality in technological skills needs to be addressed, as does inequality in access to broadband in different parts of the country. I am still astonished that a new development in my constituency, which was built in the last few years in Woodilee, does not have adequate broadband. That was entirely predictable, and I have written to Ministers about it. There is also a wider issue of the huge opportunities that technology provides for solving problems in society, and the real risk that that will entrench existing inequalities, particularly economic ones. If we do not do something about it, those with capital to invest in tech companies will be those who reap the rewards. Instead, we should be using automation to take drudgery out of jobs and strenuous heavy lifting out of the care sector, so that we leave more time for humanity and for those job areas to which we as individuals can contribute with creativity and higher skills.
We must also allow people to build more relationships outside work. Given the way that taxation works with the larger, global tech companies, and the way that the benefits will be accrued, I fear that we could risk driving serious increases in inequality, and that those who lose out by losing their jobs will not be compensated in appropriate ways. That risks division in wider society more generally.
I know that we have little time in this debate, so I will bring my remarks to a close, but I hope I have flagged up some key issues that the House will return to when discussing these matters, which I hope we will do more often in future.
I will now call the Front-Bench speakers. If they each speak for eight or nine minutes, that will allow Mrs Main some time to sum up the debate.
It is a great pleasure to serve under your chairship, Ms McDonagh.
I must congratulate the hon. Member for St Albans (Mrs Main) on three things. First, I congratulate her on securing a debate on this important topic. The hon. Member for East Dunbartonshire (Jo Swinson) is right to say that we do not speak enough about this issue, and we need a lot more discussion about the sector in this place. Secondly, I am pleased that the hon. Member for St Albans began her history of creative thinking in the UK by mentioning two Scotsmen: Alexander Graham Bell and John Logie Baird. Thirdly, I congratulate her on securing a debate on the future of the digital and tech industries while Cambridge Analytica and its various chums are busy whirling away, trying to pretend that there is nothing to see, and Mr Zuckerberg is singing “je ne regrette rien”. I am in awe of that forward planning, and I congratulate her most heartily on that.
The hon. Lady mentioned the spread of digital clusters around the UK. I welcome that, and it was excellent to hear about various cities, such as York, that contain those important clusters. There is still a considerable concentration of elements of the sector in London and the south of England, however, and I hope that is noted by the Minister and the continuing pull to that area resisted; the substantial benefits of this industry must be shared around the nations and regions of the UK. We boast tremendous talent, and opportunities need to follow.
The hon. Lady also mentioned the importance of the free flow of data between the UK and Europe in the forthcoming negotiations, the express desire of companies in the tech sector for access to international talent, and the part that the immigration system must play in that. Topically, she also mentioned cyber-security and education—a few Members have said how essential it is for STEM subjects to be pushed to the forefront, and I commend the Scottish Government for their STEM strategy, which is now starting to reap some benefits.
The hon. Member for York Central (Rachael Maskell) made a tremendous contribution and mentioned many things that I did not know about York. I knew some of them—I have been there—but the fact that it is UNESCO city of media arts was news to me. She spoke at length about many exciting developments in her constituency. For me, however, the most important part of her contribution was her talk of that essential marrying of creative arts and technology.
I once sat on the board of Creative Edinburgh, an umbrella organisation for creative industries in Edinburgh, and that point was made time and again: one cannot have a computer game, for example, that people want to play if the story is boring. The contribution of writers is essential, and creative thinking is so important in those industries. We must remember that and be clear that neglecting the arts is very short-sighted when trying to push the sector forward. The hon. Lady also touched on telehealth and the importance of inclusiveness in the development of the tech sector, and I entirely agree.
The hon. Member for Aldershot (Leo Docherty)—he is no longer in his place—reminded us of the explosion of growth in this sector, and it still staggers me when I reflect on that. I hate to age myself, but to someone whose house possessed only a small black and white TV for most of their formative years, the sort of digitech on offer today is still a little mind blowing. He emphasised the importance of security, particularly with cloud storage facilities, which is certainly worth noting.
The hon. Member for Strangford (Jim Shannon) gave his constituency an impressive plug, as always, and mentioned the high quality and pay of the jobs on offer in this sector. I recently visited two cyber-security firms in my constituency. They moved there not simply because of the lower living costs that the hon. Gentleman mentioned, but because of access to high-quality graduates from Edinburgh’s variety of universities, and in particular the informatics centre at Edinburgh University. They also spoke about the shortage of qualified graduates across the UK, and the fact that as a result, salaries in the sector are higher than average and conditions are excellent. We must make more of that to our young people when they are choosing what professions they wish to enter.
The hon. Member for Bristol North West (Darren Jones) spoke about the extra support needed for equality of access, which is important, and about the equality of opportunity that must be made available to everyone. He also mentioned STEM subjects, and reminded us of the importance of reskilling employees—the Scottish Affairs Committee also considered that in some depth in our most recent inquiry into future work practices in Scotland. The hon. Member for East Dunbartonshire mentioned the transactional nature of data, which was extremely interesting, and raised the possibility of private data accounts, which is certainly worth considering. She also spoke of innovation outstripping regulation.
Let me return to my important point about Cambridge Analytica, Mr Zuckerberg, and so on. It is natural that people’s suspicions rise when they hear of potentially nefarious deeds and the questionable morals of companies operating in that sector, but we must take time to remember that good things also come from the digital and tech sector, and that they outweigh the bad. Even the bad lads have done many good things: Facebook helps to keep families and friends in touch across oceans and continents, for example, and it is one of the few things for which I do not have to ask my daughters for advice on how it works.
Youngsters are, of course, far ahead of the game when it comes to dealing with new technology—that has been the case since a woman invented the wheel—and we look to them for much of what we understand about how the sector will develop. I often worry that many younger folk do not appreciate how often they are the product rather than the consumer in the virtual world, and I am concerned that many do not appreciate the dangers of sharing too much of their lives online. Why would they? They are young, and I suppose they can get old and cynical in their own time.
The public alarm often raised about how our youngsters interact with IT is that too often they are closeted in their bedrooms playing games on the computer. Adults previously worried about TV, rock music, radio—in my father’s case, his father worried about him listening to jazz—and, for all we know, books. Although we should take such concerns on board, it should not make us believe that video or computer games—I will focus on them, although I am not always certain of the terminology —are, in and of themselves, bad or corrupting. Scotland has a vibrant computer gaming industry, and my constituency boasts not only creative incubators and tech centres for digitech companies, but a number of people employed in the computer gaming industry. We can be sure that they have been in frequent touch.
The creativity involved in making a game is intensive. It is no longer just the classic “space invaders”, and it involves multi-disciplinary working. Someone writes that music, someone creates those images, someone programmes the game, and someone writes the storylines, as I mentioned. That is an industry that grew itself. It has simply moved too fast over the years for the Government to catch up. Government can at times be quite glacial; the IT sector is the river rapids.
I had imagined, before I found out more about the industry, the average “gamer”, as I have heard players are called, to be a child, adolescent, teenager or—at most—a young adult. In fact, it is common for all those whippersnappers under 50 to be gamers, and not even uncommon for crumbling MPs such as many of us to be engrossed by such games. We all have a stake now that gaming is a cultural norm. I have been told that the phenomenon is almost global. The opportunities are immense, and it is time for the Government to catch up with the industry.
Video games tax relief has helped to advance some parts of the sector, but it has given an advantage to the larger studios at the expense of smaller and more innovative ones, which have closed in recent years. I would like to see that reversed. It is perhaps time to look at expanding the tax relief and offering upfront funding, even in the form of loans, to help games development. I encourage the Minister to address some of those points in her response.
It is a pleasure to see you in the Chair, Ms McDonagh. I, too, congratulate the hon. Member for St Albans (Mrs Main) on securing the debate.
I recognise the enormous progress that many of us have celebrated this afternoon, but I want to sound a note of warning about becoming complacent. For all the progress that we have talked about in our constituencies and around the country, the truth is that, across the horizon, others are moving much faster. We have heard about some of the big technology firms that are troubling us from the west coast of the United States, but look east, to Alibaba, Tencent, and Baidu.
Look at the fact that China is now not only the country that invented paper currency, but will soon become the first cashless society, where everybody pays for everything on WeChat. That country is now backed by the biggest science spend on Earth. There are countries around the world moving much faster than us, and if we want to ensure that this great superpower of the steam age does not become an also-ran in the cyber age, the Government will need to make a number of important policy reforms and changes of direction, three of which I will touch on very quickly.
First, we have to ensure that the digital economy in this country has a much more robust foundation of trust. Trust is the foundation of trade; it always has been and always will be. However, as we have seen in the debate surrounding Cambridge Analytica and Facebook, that trust is evaporating very quickly, which is why we need a clear statement of principles and a clear Bill of digital or data rights for the 21st century.
The truth is that we are going into a period of rapid regulation and re-regulation. That is perfectly normal and sensible. There was not just one Factory Act during the course of the 19th century; there were 17. We regulated again and again as the technology and the economics of production changed. That is what we are about to do in this country, yet if we do not have a clear statement of principles, that regulation will be difficult for anybody, frankly, to anticipate.
It should not simply be about our rights as consumers; it should be, as the hon. Member for East Dunbartonshire (Jo Swinson) said, about basic equalities. In South Korea, they want to use wearable technology to increase life expectancy by three years. How do we ensure that those new privileges are not simply the preserve of those who can afford the technology? How do we ensure that we democratise both the protections that we need and the progress that we want to share? That is why a Bill of digital rights is so important.
It is important that the Government pick up on one crucial component of trust: the electronic ID system—a public choice for EID—that we currently lack. At the moment, public data is scattered between the Driver and Vehicle Licensing Agency, the Passport Office, the Department for Work and Pensions, Her Majesty’s Revenue and Customs, and the Government Gateway, which I see the Minister’s Department has now claimed. At the moment, that information is so disjointed that we cannot use it as citizens to create a secure public EID system, as they have done in Estonia. That has been the key to Estonia’s creation of 3,000 public e-services and 5,000 private e-services. It is the foundation of what is now the most advanced digital society on Earth. The Government need to put in place those important foundations of trust.
The second point is on infrastructure. It is not just here in the Houses of Parliament where the digital infrastructure is appalling. I do not know about you, Ms McDonagh, but I certainly cannot get a mobile signal in my office, on the fifth floor of Portcullis House, and I know that frustration is widely shared, but it is not just a problem here. In fact, the areas of this country that Brexit will hit hardest are those where download speeds are slowest. The parts of the country that will be hurt most by Brexit are therefore the least prepared to prosper in the new digital society that we are all so much looking forward to.
Other countries are racing ahead of us in terms of the targets that they are putting in place for broadband access. I was privileged to visit South Korea last week, where they have 60% fibre to the premises. What is it here in Britain? It is 3%. Not only do they have much greater penetration of fibre than we do, they have not one but three mobile networks delivering 100% broadband access, and they will commercialise 5G not in 2020, but this year. That is why the Government should be far more ambitious about universal service obligation for broadband access. We proposed 30 megabits per second, and proposed putting £1.6 billion behind that. The Government should be more ambitious than they are today. We will soon go to consultation on what it would take in terms of public investment to commercialise widespread 5G. We hope that the Government will look closely at our results.
Through the confidence and supply arrangement that the Democratic Unionist party made with the Conservative party, we secured £150 million for broadband to take us up to that level, so we can continue to be the leader in regions across the whole of the United Kingdom for economic development and delivery.
Well, lucky you! If the west midlands had enjoyed a per capita bung on the same level as Northern Ireland, an extra £600 million would be coming into my region; I know I am not the only one to look at the deal that the hon. Gentleman and his colleagues skilfully struck with some jealousy.
The final component is skills. My hon. Friends the Members for Bristol North West (Darren Jones) and for York Central (Rachael Maskell) made brilliant speeches about the importance of skills. I come from the city that is home to Soho House. Soho Manufactory was the first great factory, built in 1766. People have heard, of course, of James Watt, but many forget Matthew Boulton. It was Boulton who put together not only the best engineers in the world, but the best designers in the world. Where did he get them from? He brought engravers and artists from France, Germany and central Europe. That was the strength of the business; it married design brilliance and technical brilliance.
What do we have today, 250 years later? In Jaguar Land Rover, we have a company producing vehicles where the infotainment system is now worth more than the engine. Design brilliance and technical excellence need to go together, but design brilliance is being smashed out of the curriculum at the moment. I speak as a father of a boy going through his GCSEs, so I see it first-hand when I go home.
Young people are at the sharp end of the jobs risk of automation—that was confirmed by the International Monetary Fund yesterday, and by the OECD a week or two ago. However, as my hon. Friend the Member for Bristol North West mentioned, older workers are also crucial. By the age of 52, a working-class man in this country has paid £103,000 in national insurance. What happens if he loses his job? He gets sent down the job centre like everybody else, with no extra help, retraining or reskilling for the digital economy. Yet this is the country of the Open University, the Workers’ Educational Association, Unionlearn, and great education entrepreneurs such as Dr Sue Black and Martha Lane Fox. We should be bringing those players together to create a different kind of lifelong learning for the 21st century.
This is a nation of scientific genius. We have been burying our sovereigns with our scientists since we interred Isaac Newton over the road in Westminster abbey. We are the only country in the world that could make films about great scientists such as Turing and Hawking. We are the nation of the industrial revolution, but if we do not change course soon, this foundation of the industrial revolution will not be the leader in the fourth industrial revolution.
It is a great pleasure to serve under your chairmanship, Ms McDonagh. I congratulate my hon. Friend the Member for St Albans (Mrs Main) on securing this debate and on her interesting, comprehensive and inspiring speech. The impact of the digital and tech industries on the UK economy is a vast subject. I will try to respond to as many points as possible.
We heard from many Members about the staggering growth and exciting opportunities that the sector offers our country. The digital economy here is growing 32% faster than the wider economy. I took note of the statistics that my hon. Friend quoted about her constituency. St Albans has access to more than 400,000 digital and tech jobs in and around the surrounding areas and clusters. She mentioned Imagination Technologies in Kings Langley. I am delighted to accept her invitation to visit it to learn more about that exciting new company.
In March 2017 we published our digital strategy, which set out the key pillars of a healthy ecosystem for technology. The foundations can be met when we achieve nationwide access to world-class digital infrastructure. Although London is the capital of European tech investment, almost 70% of that investment is in regional clusters outside London. I find that an encouraging statistic.
In the Budget, we unlocked more than £20 billion of capital funding for digital enterprises through the enterprise investment scheme and the British Business Bank. I very much take on board the point, raised by the hon. Member for Bristol North West (Darren Jones), that it has been easier for start-ups or scale-ups to raise capital if they are located in London. We want to build on that for the regions, so that SMEs no longer have to keep coming to London to raise capital. We announced a further £4.7 billion for the national productivity investment fund, which will benefit the sector, and £75 million of investment to take forward recommendations following the independent review on artificial intelligence and the artificial intelligence grand challenge, which was announced in the industrial strategy.
Several Members mentioned the huge importance of data ethics. The hon. Member for East Dunbartonshire (Jo Swinson) mentioned the debate that she secured a few months ago. I hope the newly announced centre for data ethics and innovation will have discussions with the Nuffield Foundation and will benefit from its Ada Lovelace centre for ethics. Such measures are vital to ensure public trust, which, as the shadow Minister said, is a vital plank of success.
A number of hon. Members mentioned cyber-security and safety. The safety of our citizens and businesses is absolutely crucial. There is an increasing number of risks, which can have damaging implications, as we live and operate online. The digital charter aims to increase public confidence and trust in new technologies and create the best possible basis on which the digital economy can thrive.
Our work on keeping the UK’s cyber-space safe is clear. As we stated in the “Internet Safety Strategy” Green Paper, what is unacceptable offline should be unacceptable online. I look forward to bringing forward the response to that consultation in the next month or two. All users should be empowered to manage online risks and stay safe. Technology companies have a responsibility to their users. We fully understand that it is vital to have strong data protection laws and appropriate safeguards in that area to enable businesses to operate across international borders, as well as empowering citizens with full control over their personal data.
Several hon. Members mentioned digital skills, which are crucial, particularly as we approach Brexit. We need to build a digital economy that works for everyone, and we can do that only if we equip people with the skills that are needed. We are not only looking at training and skills in schools and among the older population, but we want to maintain our position as a go-to country for new talent, so we announced a doubling of the number of tier 1 exceptional talent visas last year. We have introduced an entitlement for adults who lack basic digital skills to enable them to undertake fully funded basic digital skills training from 2020.
I was struck by the statistic about salary levels that the hon. Member for Bristol North West offered. He said that in the digital sector people can expect to be paid 44% more than the average for other employment. We want to open that up. The hon. Member for York Central (Rachael Maskell) also made the point that the tech and digital sector can be a great force for social mobility, but only if we ensure that everybody has access to skills training.
Hon. Members talked about young people. We have a big commitment in schools, and we have the benefit of corporate support for our programme of education. The hon. Member for Strangford (Jim Shannon) talked about the importance of bringing together companies, civil society and everyone with an interest in promoting tech education and improving the technology curriculum. We now have coding classes for children as young as five, with the support of wider society.
Accelerating the growth of the digital tech sector across the country is important. We are supporting 40,000 entrepreneurs and up to 4,000 start-ups as they scale up their businesses. As Tech City UK becomes Tech Nation, we will deliver support in 11 cities across the UK, including Belfast, Cardiff and Newcastle. Our digital skills partnership is central to the skills provision across the whole of the UK.
Several hon. Members were kind enough to invite me to their constituencies. I do not know whether it is rude to say that I am going where I have not been invited, but I am actually going to York. As the hon. Member for York Central said, it is also known for fibre. TalkTalk is investing hugely in connecting fibre to premises in the whole of the city of York. A very interesting piece in the Financial Times just this morning said that York is taking the lead in piloting the use of digital technology to map traffic congestion in realtime, so that traffic signals can be adjusted to improve the flow of traffic, with all the additional benefits that that brings. I was interested to hear about the digital creative labs there and about the importance of the gaming industry, which is absolutely crucial. That industry engages young people, so it has a double advantage. I shall endeavour to visit it while I am there.
My hon. Friend the Member for Aldershot (Leo Docherty) talked about procurement opportunities for UK SMEs, which are very important. In some respects, it will be difficult to secure a preference for UK SMEs in contracting. It will depend on the final terms of our relationship with the EU when we leave, and on any new trade deals that we are successful in negotiating. With that proviso, I certainly share his desire to see better opportunities for SMEs in procurement.
The constituency of my hon. Friend the Member for St Albans is at the centre of a great number of exciting developments in technology, and it is terrific that she is taking the lead in her constituency and making her contribution to the rest of the UK’s development. The Government are committed to making Britain a world leader in the digital and technology sector.
It is fantastic that so many colleagues made excellent contributions this afternoon. I apologise for running over slightly.
I am delighted that the Minister is coming to St Albans. I shall be ruffling through the diary with Imagination Technologies. This debate was so valuable because, apart from the odd barb here and there, everybody was in agreement. I completely agree with the shadow Minister—I do not usually say such things—that broadband access is vital; it absolutely needs to be rolled out. We have to lose the concept that everything is London-centric. I am delighted that this is the way forward. This is the world of the future. I am pleased that so many colleagues took part in the debate. I thought their speeches were excellent. The hon. Member for York Central (Rachael Maskell) talked about learning online. We will have to have some new excuses to replace “The dog ate my homework” in a digital world.
Question put and agreed to.
That this House has considered the future of the UK digital and tech industries.