Industry (Government Support)

Debate between Chi Onwurah and Nadhim Zahawi

Wednesday 16th June 2010 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

As my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) said at the beginning of the debate, we stand on the brink of a new industrial revolution.

Let me declare two interests. Newcastle was at the leading edge of the first, high-carbon industrial revolution, so we have an interest in seeing a resurgence of industry and manufacturing. As an engineer, I too want to see manufacturing and industrial resurgence. But it is not my interests that lead me. There are five global challenges that require a new industrial response.

First, population and economic growth across the world are stoking demand. Secondly, the global financial crisis has made it extremely important that we grow other sectors. Thirdly, climate change is making many of our ways of building and manufacturing things inefficient. Fourthly, the population of the western world is ageing. That is a good thing; it is good that people are living longer, but it requires different markets and goods— for example, more automotive goods. Finally, globalisation means global markets and global industries.

On the Opposition Benches, we believe that we need to grow our way out of the global financial crisis. The challenges I have enumerated give us many opportunities for growth in the UK, in the north-east in particular; for example, in renewable energies such as wind power, which is why the previous Government invested in NaREC—the New and Renewable Energy Centre—a world-class testing facility for wind turbines in Blyth. Sustainable transport provides another opportunity for growth, which is why the previous Government invested in it by giving grants to enable Nissan to build the electric car facility in the constituency of my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson).

Some months ago, I visited Newcastle university’s electrical engineering department, where I saw the world-leading research into electric motors that is taking place as a result of the previous Government’s increased funding for research and development. Another example relates to ageing with dignity, as promoted by the centre for ageing and vitality in Newcastle.

We stand at the brink of enormous industrial change and the potential for enormous industry growth. The Government have two possible responses. They can leave things to the market, get out of the way—such a well-loved phrase—and let the existing capital and goods markets figure everything out, or they can put in place the economic and active industrial policies that will support industry. The Government seem to have decided to do the former; or having listened to the words of the Secretary of State for Business, Innovation and Skills, I would say that they have decided to do the former while professing to do the latter. I want to say why that is not in this country’s or even the coalition Government’s interests.

As I have said, I am engineer by profession. I also spent three years getting an MBA to hone my business and management skills. I have worked in France, the US, Nigeria and the UK, as well as travelling extensively for my work. I have seen many different combinations of private and public sector involvement, including the raw entrepreneurship of Lagos street markets. Having listened to Conservative Members expressing their contempt for all regulation, including that on health and safety, I now understand that that is the kind of market economy that they want to bring to this country. I have also worked in the highly regulated labour markets of Germany. I have helped to build small businesses, to grow medium-sized ones and to expand multinationals. I have also helped to set up the framework for the public sector regulation of the telecommunications industry. So I know from bitter experience just how difficult it is to create the virtuous cycle of investment, innovation and job creation.

Let me tell hon. Members what I have found that works. The role of the private sector is crucial—it mobilises investment, creates jobs, innovates and takes risks—but the public sector is equally important. The right regulatory environment gives investors the confidence to invest and helps smaller companies to compete on a level playing field. By providing grants and incentives for innovation and investment and using the public sector procurement process intelligently, the public sector can help emergent industries to flourish. By directing funds to build the right infrastructure, the public sector helps ideas to become businesses. Conservative Members are right: the public sector does not create jobs, but it can provide the soil and fertiliser to enable them to grow. So we need active individuals, partnered by industrial activism. A proactive partnership between the public and private sectors is essential if the UK is to take a leading role in the world’s low-carbon future.

[Nadhim Zahawi]

I am pleased to see a fellow engineer on the Opposition Benches. I recall the hon. Lady not wishing to be here for the election of the Speaker and wanting to go back to play bingo in Newcastle. Is she proposing that the Government give further subsidies to the bingo industry in her constituency?

[Chi Onwurah]

I would thank the hon. Gentleman for his intervention if I could understand the line that he is drawing between bingo and the huge questions that we face. I support the bingo industry—I support all service industries—but he may not have followed today’s debate, which is about Government support for industry, particularly manufacturing and engineering industries. I would appreciate being able to stick to that subject for the rest of my contribution.

Labour’s industrial activism means that there are appropriate grants to support industry across the country. Under Labour, the regional development agency One NorthEast was able to take strategic regional decisions and support new technologies and the complex supply chains necessary to make them successful. I share the utter confusion of my hon. Friend the Member for Sedgefield (Phil Wilson) about Government policy with regard to the RDAs, which are to be abolished but allowed to re-grow in some form that is not entirely clear. That uncertainty is damaging jobs and industry in Newcastle and across the north-east, and I urge the coalition to provide clarity and send signals that a regional strategic decision-making authority will continue to exist.