Industrial Strategy

Earl of Lindsay Excerpts

Monday 8th January 2018 Lords Chamber

[The Earl of Lindsay (Con)]

My Lords, I welcome the publication of the White Paper and the Government’s commitment to boosting productivity and earning power across the UK.

As many noble Lords have mentioned, there are a number of positives, such as the strategy’s recognition of the importance of collaboration and partnerships and the Government’s increased commitment to R&D and innovative technologies.

Proposals to upgrade the United Kingdom’s infrastructure are another positive. I noted that my noble friend said in introducing the debate that high-quality infrastructure is vital, referring to digital and physical infrastructure. However, there is an important omission in the White Paper’s references to infrastructure. In drawing attention to this omission, I should declare an interest as chairman of the UK Accreditation Service and president of the Chartered Quality Institute.

One of the essential factors underpinning productivity, earning power, innovation and competitiveness is a framework of quality standards, accreditation, measurement and regulations which ensures that when businesses and consumers buy or receive something they get exactly what they expect. For standards, accreditation, measurement and regulations to be fully effective, they must be designed and implemented rigorously and consistently to give a high level of confidence in the outcome. The importance of achieving this consistent quality and rigour has led to the concept of a national quality infrastructure in the United Kingdom and, indeed, in a number of other leading economies.

A national quality infrastructure has four core components: standardisation, which creates the national and international standards that specify good practice in how products are made or services are provided; conformity assessment, which involves testing and certification to ensure that the quality, performance, reliability or safety of products and services meet the required specifications and standards; accreditation, which ensures that those who carry out conformity assessments such as testing, certification and inspection do so in a way that is competent, consistent and impartial; and finally and importantly, measurement, which ensures accuracy, validity and consistency.

A national quality infrastructure that commands confidence is vital to earning power, productivity, research, development and new technologies. Indeed a national quality infrastructure is vital for any industry and any modern economy. Furthermore, and of especial relevance as we prepare to leave the EU, a recognised national quality infrastructure also supports international trade and is an essential component of any free trade agreement; hence the use of national quality infrastructures to underpin WTO rules on eliminating technical barriers to trade through the acceptance of international standards and the mutual recognition of accredited conformity assessment results and regulatory equivalence.

The UK’s national quality infrastructure is largely delivered by four long-established and internationally respected institutions: the British Standards Institution, or BSI, which is the UK’s national standards body responsible for producing national and international standards; the National Physical Laboratory, or NPL, which is the UK’s national measurement institute; Regulatory Delivery, or RD, which is the part of the Department for Business, Energy and Industrial Strategy. that provides the regulatory and market surveillance infrastructure that enables businesses to export goods globally; and the United Kingdom Accreditation Service, which is the UK’s national accreditation body. As the UK’s national quality infrastructure, their combined contribution to productivity, earning power, industry and the economy should not be underestimated.

Independent research on the economic contribution of standards to the UK economy found that around 37% of UK productivity growth and 28% of annual UK GDP growth can be attributed to standards, the latter figure being equivalent to £8.2 billion per annum, and that standards also account for £6.1 billion of additional UK exports per annum. The benefits of accreditation to the UK economy are worth over £600 million in terms of those commercial benefits that can be measured against financial indicators, but this figure is probably closer to £1 billion per annum once unquantified trade and productivity benefits are taken into account.

In short, the wider benefits to the UK of our widely trusted and internationally respected national quality infrastructure include: improved business productivity and performance; increased domestic commercial activity; more innovation and faster commercialisation of innovation, creating new markets at home and abroad for UK businesses; better, safer, more sustainable and more tradeable products; increased competitiveness in international markets; reduced costs of international trade, and increased confidence on the part of non-UK investors in the United Kingdom market.

I therefore believe that the White Paper should have explicitly recognised the role of the United Kingdom’s quality infrastructure, and that my noble friend should have referred to not just a digital and physical infrastructure but to a digital, physical and quality infrastructure. Quality underpins confidence, confidence underpins investment and investment underpins productivity, growth, jobs, new technologies, exports and a lot more besides. A culture, commitment and reputation for quality, manifested through a robust national quality infrastructure, are essential to a successful industrial strategy and a successful economy. With this in mind, I urge the Government to ensure that the new independent industrial strategy council, which I welcome, includes among its membership an understanding of the vital role performed by the United Kingdom’s national quality infrastructure and the valuable contribution it can make in the future.