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Manufacturing: Digital Technology

Volume 785: debated on Thursday 2 November 2017


Asked by

To ask Her Majesty’s Government what is their response to the Made Smarter Review on the benefits of applying digital technology to the manufacturing industry, published on 30 October.

My Lords, Her Majesty’s Government welcome the Made Smarter report and thank Juergen Maier and the industry team for their work in outlining the huge potential that digitalisation offers to United Kingdom manufacturing. We look forward to working closely with industry to ensure that the United Kingdom can capitalise on the massive benefits of digital technology, which this report makes so clear, and realise its potential to be a global leader in the industrial digital technology revolution.

My Lords, I am pleased that the Government welcome the report, as I do. As the report says, digitalisation can deliver a much-needed boost to our productivity. However, the report also points out that it is a disruptive technology for jobs and businesses. In implementing the report, what arrangements will the Government make for those who are displaced? Will there be a safety net? What procedures will the Government implement to ensure that people are not damaged by this?

As the noble Lord will be aware, the report is quite big—246 pages. It was published on Monday. I arrived in the department on Monday, so I cannot claim to have read it from cover to cover at this point. No doubt he will criticise me for that, but I will start on it over the weekend. We recognise that this technology presents great challenges, including for raising productivity. The noble Lord is right to talk about the challenges of the fact that, in creating new, higher-paid and higher-skilled jobs, it creates a threat to other jobs—something we went through in the first Industrial Revolution when the spinning jenny and other things came in. It also creates opportunities for new jobs, which is what we want. I think he will accept that at this stage, with a 246-page report having been published only on Monday, it is a bit early for the Government to make any pronouncements on it.

My Lords, while the Government may not want to make pronouncements, I hope that the Minister will take the opportunity for a quiet weekend, and perhaps to snuggle up with a cup of cocoa and read the report. He mentioned the Industrial Revolution; he will be aware of the huge social unrest that followed it. While the report states the number of new jobs—a net gain of 175,000—jobs will change. Some people will lose their jobs; some will work shorter hours. The technology has to benefit those who are working, and not cause an increase in unemployment and reduce incomes. While I do not expect him to have read the report, will the Minister give some thought to how we ensure both that those people whose jobs change get the adequate training and support they need, and that those who lose employment get alternative employment so that we do not lose the income of those currently in work?

I can only agree with everything the noble Baroness said, other than her comments on cocoa. I will read the report over the weekend. It is too early to say, but she will be aware that we have the industrial strategy coming out later this month. If she is a little patient, she will hear more from the department and my right honourable friend about what we plan to do, particularly on the challenges that these changes present to the United Kingdom and the Government—challenges that both she and her noble friend Lord Haskel have highlighted.

The Minister talks about challenges. He has not had a chance to read the report, but does he agree that its proposals will be relevant only if manufacturing has access to a high-quality digital network, and that this will be even more critical when—if—Brexit happens? When will we have a meaningful and effective universal internet service? Without that service being universally available in the whole UK, we will not be able to compete internationally. Does the Minister agree?

My Lords, again, I can only agree with the noble Lord. We are doing well. There is more to be done and he will hear more in due course. Again, if he is patient he will see the industrial strategy later this month.

My Lords, there are huge benefits in digital technology, but I skimmed the review wearing the old hat I used to have on security. Sadly, this marvellous digital revolution opens up vulnerabilities. I could not see anything mentioning any concerns on that. We need to be very wary because it will often open up people to losing their identities and all sorts of things. We need to be very aware that, as well as all the benefits we get from digitalisation, there are some real risks. We need always to bear those in mind.

Again, I can only agree with the noble Lord. I have not even got as far as skimming the report. I intend to take the advice of the noble Baroness and read it over the weekend. Any big changes that come to us can obviously be big threats to other fields. That is why my right honourable friend originally commissioned this report, welcomed it and thanked Professor Juergen Maier for producing it. We want to make the right response—not just of the Government, but of United Kingdom industry and the whole of the United Kingdom—in due course.

My Lords, I am sure the Minster realises that, on the positive side, this will grow exports. If we do not have our products adequately defined in digital terms we will not compete internationally. It is essential that we drive this forward.

My Lords, I can only say how much I agree with the noble Lord. We have to look at what digitalisation offers to us while also bearing in mind what the noble Lord, Lord West, said about threats. That is why we want to make the right response. I note what has been said.

My Lords, one of the real benefits of digitalisation is on the railways. As the Secretary of State recently said, we can get many more trains on the line more safely with digital signalling. The Minister’s predecessor will have recently received a report from the railways on digitalisation. Will he say something about how the finances for the railways will change so that there is enough investment in both the tracks and the cabs and locomotives, including freight, to make sure this happens quickly and safely? I declare an interest as chairman of the Rail Freight Group.

I am grateful to the noble Lord for mentioning the railways. I will be heading back north again on the west coast main line. I know quite how good that is at the moment, but I have also been told just how much it could be improved with digitalisation of the signalling and what improvements we can see on that front. I look forward to improvements there over coming years. The noble Lord asked about finances for the railways. He would not expect me to make any response at this stage. I hope he will be patient and wait for what comes out of the industrial strategy later this month.