Oral Answers to Questions

Debate between Alison McGovern and Simon Clarke

Tuesday 15th March 2022 Commons Chamber

[Alison McGovern (Wirral South) (Lab)]

Just in case colleagues in the House did not quite hear the Chief Secretary, he admitted that kickstart has failed. It promised young people 250,000 jobs and got barely half of that. But it is worse than that. The National Audit Office said about kickstart that there was

“limited assurance over the quality of the work placements created by the scheme, or whether jobs created by employers would have existed anyway”.

So in relation to the failed kickstart scheme, what does the Chief Secretary make of the following economic expression: “dead weight loss”?

[Mr Clarke]

With respect to the hon. Lady, of whom I am a great admirer, that is an unfair characterisation of the success of the scheme. It clearly needs to be situated in the wider context. In fact, the British economy has performed much better than anyone expected when the scheme was set up. There are robust processes in place that make sure that we genuinely are adding additional value. So work coaches have to certify that the people on the scheme are eligible for it and would have been unlikely to find work without it. Employers need to demonstrate how the jobs created are additional. Finally, it is important to contrast this scheme with the last Labour Government’s future jobs fund, which reached its total far more slowly and was far less effective. This scheme has got 130,000 and rising young people into work. It has been a great success.

National Productivity

Debate between Alison McGovern and Simon Clarke

Wednesday 22nd January 2020 Westminster Hall

[Mr Clarke]

I am afraid the hon. Lady will have to wait for the publication of the consultation at the comprehensive spending review. The key point is that we want to make sure that this gives the Scottish Government meaningful control over key aspects of resources. She mentioned European funding in her remarks. The point I would submit is that that money was fundamentally UK money that was recycled back to this country, with conditions attached. We should be clear that we want to devolve control of that funding to the lowest possible level, and we will inevitably want to do so in a spirit of genuine concord with Holyrood.

The Government will set out further information about our plans here in an English devolution White Paper this year, which will outline our strategy to unleash the potential of our regions, level up powers and investment and give power to people and places across the country. Alongside that, we will publish a refreshed northern powerhouse strategy, building on the successes of the existing strategy in bringing together local leaders to address key barriers to productivity in the regions.

As the hon. Member for Islwyn (Chris Evans) said, productivity is not a concept that always commands headlines, but it goes to the heart of national prosperity. It is the best way to boost wages, improve living standards and enhance economic growth across the country, regionally as well as nationally. We are working hard to build a stronger and fairer economy—dealing with the deficit, helping people into work and cutting taxes for businesses and families. There are 3.7 million more people in work, and the hon. Member for Wirral South alluded to the record rate of women in employment, which is worth highlighting. More than 60% of the increase is in regions outside London and the south-east, but we need to go further and we need to be candid about the extent of the productivity challenge we face. Productivity growth slowed globally in the aftermath of 2008, but the slowdown has been particularly acute here. The Government are committed to tackling that challenge as we enter a new decade in which we are less under the shadow of the financial crisis and the impact on our public finances.

The key will be an ambitious programme of investment. Infrastructure is a key driver of productivity—it is not sufficient in itself, but it is an absolute good. It links people to jobs and products to markets and supports supply chains, encouraging domestic and international trade. It affects daily life: speeding up internet connectivity means less time staring at blank screens; improving roads and trains, which the hon. Member for Stalybridge and Hyde rightly mentioned, means less time stuck waiting to get to work and more time to play; decarbonisation means cleaner air for us all to breathe and more efficient energy. When the national infrastructure strategy is published alongside the Budget on 11 March, that will be a core moment in this piece. We will set out further details of our plan to invest £100 billion to transform our infrastructure and achieve a real step change. The strategy will set out our long-term ambitions across all areas of economic infrastructure, including transport, local growth, decarbonisation, digital infra-structure, and infrastructure finance and delivery.

Alongside that investment in our physical capital, it is essential to focus on and improve our human capital, as the hon. Member for Wirral South, whom I had the pleasure of serving alongside on the Treasury Committee, rightly said. I know that from my constituency. The hon. Member for Barnsley East (Stephanie Peacock) is right to say that talent is evenly spread across this country, but opportunity is not. We know that, which is why our recent manifesto pledged a national skills fund—I was briefed on it yesterday, and it is exciting, bold and visionary. We all know that it needs to happen, because there has been profound personal, human dislocation as part of our transition from one era of industrialisation to a new one. That has had uneven consequences across England, let alone across the UK. We will seek to give a leg up to people looking to get onto the career ladder, support those wanting to switch careers, and support growth by ensuring firms can get access to the skills they need.

The hon. Member for Stalybridge and Hyde referred to Be the Business. I had the pleasure of meeting it last week, and it is hugely impressive. I heard first-hand from several of the entrepreneurs it has helped about how targeted interventions and upskilling have helped them to be better business leaders. We need more of that to create a culture of entrepreneurship, which, as the hon. Member for Islwyn said, is not always common in all parts of the United Kingdom.

Increasing our productivity also means innovating. The hon. Member for Barnsley Central referred to the AMRC in Sheffield. That is precisely the kind of thing that we want to see more of. That is why we are committed to meeting our target of raising investment in research and development to 2.4% of GDP by 2027, ensuring that the UK remains at the cutting edge of science and technology. One of the great frustrations of recent decades is that the UK has so often come up with brilliant ideas but has not had the opportunity to build them out at scale. That needs to change. If we do that correctly, there is so much good that we can unlock and economic potential that we can unleash. We are increasing public spending on science and innovation by an additional £7 billion by 2021-22, which marks the biggest increase in 40 years.

The point that the hon. Member for Wirral South made about human capital, and in particular women, was well made, and I take it to heart. It is something I have been talking to my officials about. The Government are seized of the cost of childcare and the need to resolve fundamentally the problem we face with social care, which has so many spillover consequences for our health service and our economy, and we will be coming forward with proposals. Particularly on the social care piece, we genuinely welcome constructive engagement with the Opposition as we try to build a settlement that has lasting legitimacy. We want to do it right for successive generations, which will doubtless encompass Governments of both colours.

On female entrepreneurship, my predecessor—the current Secretary of State for Housing, Communities and Local Government—and I are working with Alison Rose to develop the Investing in Women code, which will help to pioneer work. We are looking to increase lending to female entrepreneurs to increase the possibilities. Clearly, if someone cannot even make the time to work because of competing priorities, that constrains them. I genuinely take the hon. Lady’s point to heart, and I will continue to work on it with officials.

[Alison McGovern]

Will the Minister make a commitment that the Treasury’s next productivity strategy, connected to the Budget or otherwise, will have a gender analysis of who does what work and for what remuneration?

--- Later in debate ---

[Mr Clarke]

It is best that we wait for a fiscal event to set out our targets in this area. The Government are clear that we need to increase trend growth. There is no doubt that we accept that challenge, which is thrown down quite legitimately. As we have now cleared the rubble from the 2008 crisis, we need to aspire to do more. I accept that in the spirit in which it is offered. It is right to challenge the Government and hold us to account on whether we can now put that vision into practice. There is always a lag when it comes to investment on the scale and of the nature that we are talking about, but we are doing things that I hope by the end of the Parliament will have made a demonstrable impact, in terms of changing our economic structure.

[Alison McGovern]

I apologise for testing your patience, Mr Paisley. Doubling the trend rate of growth would really return it only to pre-crash levels of growth. To repeat the questions that my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) just asked, what measure for the Government to be held to, specifically on productivity, will the Minister commit to?

[Mr Clarke]

That is simply not something that I am in a position to commit to on behalf of the Government today. As I said to the hon. Member for Stalybridge and Hyde, we are resolved to do more to increase growth in a way that will mean that, the next time we come to review these statistics at the start of a new Parliament, there is a new tone and a new level of ambition realised in the results. That is genuinely the Government’s commitment. We are particularly interested in ensuring that areas such as Merseyside, Teesside, Greater Manchester and South Yorkshire lead the charge and are not left behind.