Industrial Strategy

Tuesday 20th June 2023 Lords Chamber

Question

14:37

Tabled by

[Lord Allen of Kensington]

To ask His Majesty’s Government what is their industrial strategy.

[Lord Haskel (Lab)]

In the name of my noble friend Lord Allen, and with his permission, I beg leave to ask the Question standing in his name on the Order Paper

[The Minister of State, Department for Business and Trade (The Earl of Minto) (Con)]

The Government have set out an ambitious plan for growth and prosperity. Delivering economic growth in key sectors is a priority and the Chancellor has identified five growth sectors for the UK: digital technology; green industries; life sciences; advanced manufacturing; and creative industries. The Government have announced a £500 million per annum package of support for 20,000 research and development-intensive businesses and £650 million to support the UK’s life sciences sector.

[Lord Haskel (Lab)]

I thank the Minister, but we are still little the wiser about a strategy. The Prime Minister removed the words “industrial strategy” from the business department. As Chancellor, he scrapped the Government’s industrial strategy and the independent Industrial Strategy Council. Instead, we now get announcements, as now—soundbites instead of sound economics. Can the Minister say precisely when the Government will produce a much-needed comprehensive and co-ordinated industrial strategy? That will help business, industry and investors plan for the long term and, we hope, get some growth and progress back into the economy.

[The Earl of Minto (Con)]

My Lords, I think noble Lords will agree that this is a time for specialisation rather than a single, overarching, broad strategy. By targeting specifics, such as the five key growth sectors, we can be more effective and, in this age, more agile to respond to change.

[Lord Howell of Guildford (Con)]

My Lords, does my noble friend agree that a key component of a successful industrial strategy and growth is massive investment, both from foreign sources, on the scale we used to attract and are not attracting now, and of course from pension funds, which are managing trillions and are ready to invest? Does he agree that in the energy sector the attraction is going to be more to quick-build small modular reactors than to any large, rather out-of-date, massive giants which take years to build and are full of risks? Will he advise his friends, as a priority, to put all their efforts behind developing small nuclear reactors as part of our sensible energy strategy and our move to a decarbonised electric sector?

[The Earl of Minto (Con)]

I thank my noble friend for his comments and his question: indeed, I will. On the specific question of investment, the Government, along with Rolls-Royce, have invested over £300 million in small modular reactors. On inward investment—again, I agree that a massive amount of inward investment is always required—we have arrangements with the UAE, bringing in £5.9 billion, and Qatar, for £10 billion. We know about the Nissan/Envision billion-pound investment up in the north and Ford has put in nearly £400 million recently as well.

[Lord Fox (LD)]

My Lords, Make UK, the manufacturing organisation—it represents most of the countries’ manufacturers—issued an authoritative report on industrial strategy. Some 99% of respondents said that they believed that the UK should have an industrial strategy—which indicates that they do not think that the UK has one now. Will the Minister acknowledge that the very people who are going to deliver what he talks about have not heard what he thinks he has told them?

[The Earl of Minto (Con)]

My Lords, I understand exactly the point that is being made. Communication is critical to any successful enterprise, and there is no doubt that the change from a unified industrial strategy to one that is more targeted and focused is, at times, not the easiest message to get across. However, I believe that the five growth sectors for which the specific strategies have been written will be very effective.

[Lord Aberdare (CB)]

My Lords, an essential part of any industrial strategy is a strategy for addressing the skills needs on which it depends. When the Minister reads the Make UK report that the noble Lord, Lord Fox, has just referred to, he will find that it sets out a long-term vision for UK manufacturing and highlights the failure of current apprenticeships policy to support manufacturers in developing the talent pipeline they need. When will the Government respond to the barrage of demand from employers for a more flexible apprenticeship levy, with greater incentives to offer apprenticeships addressing skills and labour shortages?

[The Earl of Minto (Con)]

My Lords, I think the whole House agrees with that point, and I can assure the House that the whole question of the apprenticeship levy and the flexibility thereof is being looked at closely right now.

[Lord Woodley (Lab)]

My Lords, I have raised my serious concerns about the lack of industrial strategy for the automotive sectors, important as they are for our country. But I also pay tribute to the Government for supporting the Jaguar Land Rover battery plant that could easily have gone to Spain—well done. But does the Minister agree that this is small compared with the billions and trillions being set aside by the EU and the USA to encourage investment, particularly in battery gigaplants? What is our industrial strategy for this important sector, which, clearly, as I said last time, is genuinely at a tipping point?

[The Earl of Minto (Con)]

My Lords, I quite agree with the noble Lord about the success of the announcement from JLR. It is extremely important that we continue to invest in all sorts of technologies and advances. We are continuing to see investment into that sector. As for where the tipping point comes, I am not quite clear. But I will go back and write to the noble Lord with specifics.

[Lord Bellingham (Con)]

My Lords, is the Minister aware that only 15% of SMEs actually export? If that figure could be increased substantially, maybe to 20% or 25%, it would not only create a lot of jobs but help our balance of trade and be a crucial part of our industrial strategy.

[The Earl of Minto (Con)]

I entirely agree with my noble friend. I assure him and the whole House that the Department for Business and Trade is specifically making it easier for small and medium-sized enterprises to consider and go through the process that they fear is difficult—and in fact is not so difficult—to start exporting, to the benefit of all.

[Lord Anderson of Swansea (Lab)]

Do the Government agree that a continuation of steel production in the UK is vital to our industrial future? Therefore, does an industrial strategy include the investment at Port Talbot steelworks which Tata Steel is now wishing to make, without which there will be an enormous hole in employment in south Wales?

[The Earl of Minto (Con)]

The Government fully recognise the role that steel plays within the UK economy, and they are working with the industry on its decarbonisation options. It is a foundation industry, it is high-wage, and it is extremely important to this country for all sorts of reasons. On the specific issues with Port Talbot and Tata, there are ongoing negotiations, which I am sure the House will realise I cannot divulge. But we are closely involved with Tata, British Steel and Liberty.

[Baroness Hoey (Non-Afl)]

My Lords, an industrial strategy must be for the whole of the United Kingdom. How does the Minister think it will work in Northern Ireland, since so much in Northern Ireland is still under European Union rules and not British law?

[The Earl of Minto (Con)]

My Lords, there is a conference later this year on investment into Northern Ireland, which I am sure will prove a successful enterprise. Investment into Northern Ireland is critical; the difficulty we have had with extricating that part of the United Kingdom is well known.

[Baroness Chapman of Darlington (Lab)]

My Lords, Make UK says that the UK is

“the only leading nation in the world without a comprehensive, long-term industrial plan”.

The Government might be on slightly firmer ground on the UK storming ahead of other economies but a range of initiatives, as the Minister has referred to, is not a strategy. The Government are sitting on their hands and we are losing out to the US and the EU too often when they should be acting. They will have to grip this at some point. When will they?

[The Earl of Minto (Con)]

My Lords, the Atlantic declaration shows how closely we are working with our American colleagues. The value of trade with that nation is well known and there is no question that we will be able to grow that and continue working with it. The green deal industrial plan is being followed in the EU; I hope that we will get some breakthroughs in that area too.