Oral Answers to Questions

Kevin Hollinrake Excerpts

Tuesday 31st January 2017 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

I am very happy to discuss the case in my own constituency with the hon. Gentleman, but the Pubs Code Adjudicator is doing a good job. His line of inquiry has received 435 inquiries to date and 121 referrals for arbitration, but I will discuss the problem with the hon. Gentleman.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The industrial strategy makes a clear commitment that future rounds of infrastructure investment will take into account the balance of spending per head as between different regions. On the basis that there is a 60% imbalance between London and the rest of the country at the moment, what balance would the Secretary of State like to see going ahead?

[Greg Clark]

I thank my hon. Friend for his contribution to the consultation. We are very clear that we need to see infrastructure investment in all parts of the country. It is one reason why we have created institutions such as Transport for the North to be able to take those decisions locally.

Corporate Governance

Kevin Hollinrake Excerpts

1st reading: House of Commons
Tuesday 29th November 2016 Commons Chamber

[Greg Clark]

In the consultation, we asked what the cut-off should be. Clearly, there is no intention to capture small businesses in the disclosure requirements that are more appropriate to large businesses. That is something that we will consider as part of the consultation, and I hope that my hon. Friend will contribute to it.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

May I first declare my interest as a non-executive chair of a listed public company before I offer warm support for these proposals? I also echo the comments of my hon. Friend the Member for South Suffolk (James Cartlidge) that employee share ownership schemes have had a transformative effect both in our workplace and on our business success. I ask the Secretary of State to look even closer at those schemes, with the aim of making them easier for businesses to implement.

[Greg Clark]

I will indeed. I am delighted that we have had two suggestions from my hon. Friends for this route. I will take them up, and take them seriously. I hope to make further statements to the House in the future.

Bill Presented

Access to Radiotherapy Bill

Presentation and First Reading (Standing Order No. 57)

Tim Farron presented a Bill to make provision to improve access to radiotherapy treatment in England; to define access in terms of the time that patients are required to travel to places providing treatment; to specify 45 minutes as the maximum time patients are to travel; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 24 March, and to be printed (Bill 102).

Oral Answers to Questions

Kevin Hollinrake Excerpts

Tuesday 8th November 2016 Commons Chamber

[Margot James]

I certainly agree with the hon. Gentleman that we need to invest more in support for SMEs, and that is precisely what we intend to do in my Department.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

14. What steps his Department is taking to support the growth of businesses in the north of England.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Our investments in the northern powerhouse continue to support the growth of businesses in the north and are helping to build an economy that works for all.

[Kevin Hollinrake]

Work on Yorkshire’s largest economic project—a potash mine on the North York Moors—and the drilling of the UK’s first shale gas well since 2011 are both planned to commence early in 2017, but much of the associated traffic will travel down a single lane of the A64. Will the Secretary of State agree to meet me and representatives from the Department for Transport and the Treasury to see how we can make sure we have the necessary infrastructure upgrades to support those key economic developments?

[Greg Clark]

It would be a pleasure to meet my hon. Friend. One of the reasons why we have created the local enterprise partnerships and the growth deals is to make sure that the investment in infrastructure can go alongside economic development, and that is a big step forward.

Hinkley Point C

Kevin Hollinrake Excerpts

Thursday 15th September 2016 Commons Chamber

[Greg Clark]

The contract is expressed in pounds. The construction risk is entirely with the investors.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I welcome the long-term investment in low-carbon energy and the creation of 25,000 jobs. Will the Secretary of State confirm EDF’s commitment to local jobs and to small and medium-sized businesses in the supply chain, such as James Fisher Nuclear in my constituency?

[Greg Clark]

I am sure that that firm will attest to that. The Somerset chamber of commerce was clear that the orders that had already been placed during the preparation of the site have been beneficial to the county.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Tuesday 13th September 2016 Commons Chamber

[Jesse Norman]

Actually, there is remarkably little sign that confidence in the sector is dropping. There is a recognition that those changes had to be made and the sector has responded remarkably resiliently. We must not forget that it has also been spreading expertise in solar internationally, which is another reason for thinking this is a real long-term success story.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I welcome the new ministerial team to their new roles. Kingspan, a significant employer in my constituency, has contacted me regarding concerns about the revaluation of business rates for cellphone rooftop solar. The result is a sixfold to eightfold increase in rates. Will my hon. Friend agree to meet me and representatives from the company to see how these effects can be mitigated?

Fourth Industrial Revolution

Kevin Hollinrake Excerpts

Thursday 8th September 2016 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

I join colleagues in thanking the hon. Member for Havant (Mr Mak) and my hon. Friend the Member for Hove (Peter Kyle) for all their work to secure the debate. I declare an interest: for three years, from 2009 and 2012, I worked at the World Economic Forum.

The subject of today’s debate was the subject of this year’s Davos meeting: the fourth industrial revolution, an industrial revolution that will be characterised by new forms of renewable energy and the exponential outward expansion of technological innovations, driven by the internet. It is a revolution that will take place as we face severe challenges to our economic future: seemingly ever-increasing inequality; the worst productivity crisis and trade deficit in our country’s history; greatly reduced job security; over-concentration on London as the predominant source of wealth and growth, at the expense of other regions; and over-reliance on the services industries, with manufacturing accounting for an unprecedentedly low share of GDP. Manufacturing is crucial to broadly shared wealth, but we have seen manufacturing as a share of GDP drop from over 30% 40 years ago to under 10% now. That lies at the heart of many of the difficulties—the unbalanced nature of the British economy.

In the aftermath of the EU referendum, each of those challenges is exacerbated by the uncertainty that our economy faces as we negotiate Brexit, given that we do not know what our trading relationship with our largest market will be, and likely will not know for some time. In that difficult context, the fourth industrial revolution, which will completely transform the way we live, will be a defining period for our economy. Will the technology at its heart, left unfettered, entrench the challenges we face, threatening jobs, driving inequality and reducing exportable products as the economy is further limited to services, and further place all the risks and insecurity of the economy on the worker; or will we use the fourth industrial revolution to transform and brighten our economic future for all our people? Can its fusion of digital technology, intelligence and connectivity shape a new economy, with new models of manufacturing, labour relations and skills development that create jobs, raise living standards and allow us to trade with the world in new ways?

Can creating this new economy help us realise our values in society and in our everyday lives?

The answer to those questions is what we make it. We must shape and lead the fourth industrial revolution so that it delivers the society and economy we want for people all across our country. That requires a Government with a vision of what a fourth industrial revolution must look like in order to deliver the outcomes we need and a Government who have an industrial strategy that helps us get there. It requires a Government who take action and take control of our future.

This will require a strategy and plan that rebuilds a new manufacturing sector based on the internet of things, and that creates world-leading products but also delivers a more sustainable form of labour relations. It will require us to take long-term decisions that back British ingenuity and ideas. It will require us matching or exceeding OECD levels of investment in research and development, which is the source of future growth and industry.

As part of this, we must continue Horizon 2020 funding, which does so much to catalyse university research and innovation and transform it into market products. The Government have currently promised to match Horizon funding until 2020, yet even in a fastest possible Brexit scenario that is only one year of matched funding. We must commit for much longer to give universities and innovators the confidence they need, especially in the face of Brexit-fuelled uncertainty, to develop the ideas and intellectual property that will inspire and drive our future in the fourth industrial revolution.

As well as providing this foundation for the catalysts of the fourth industrial revolution, Government must also protect its fruits: British IP, business, manufacturing and supply chains. We simply cannot afford to be hands-off and allow a world-class tech business such as ARM Holdings to be sold to the Japanese. We cannot run a successful, growing economy and secure the investment it needs if we allow our crown jewels to be sold off.

Just in the last year, I have seen the huge difference in impact between a hands-off approach to government and one that is active. The British steel industry, so important to my constituency, has been failed time again by our Government. The Government did not act to block the dumping of state-subsidised Chinese steel, when they could have done. The Government did not encourage investment or profitability by keeping a regressive business rates regime and uncompetitive energy prices. Yet when the Government and the state do step up to shape our future and provide a foundation for our success, British talent can deliver great results.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The hon. Gentleman mentioned the sale of ARM Holdings to SoftBank. Yesterday we saw the announcement of Micro Focus, a UK business, buying a significant business of Hewlett Packard. Does he think that we should be able to buy businesses internationally, but not be able to sell them internationally?

[Stephen Kinnock]

In my view, we need to reform the Companies Act, placing a clear national interest clause and a method of monitoring and executing that clause, so that we move away from situations such as we saw with Pfizer attempting to take AstraZeneca. I am very thankful that the previous Leader of the Opposition did a great job in preventing that from happening, but it is very ad hoc and we need a national strategy to protect our national assets, particularly where they play such a key role in the research and development that drives the entire economy, and indeed the fourth industrial revolution.

In Aberavon, we have a remarkable company called SPECIFIC that works to turn buildings into power stations. It is developing steel-based coatings for buildings—roofs, walls, glass and so on—which can generate and store their own electricity, and it works. We already have an industrial site in Port Talbot that has been generating all its heat through solar power like this for three years. All of this is done thanks to a partnership between business, universities, industry and, yes, the state. The SPECIFIC project is a living, breathing example of the fourth industrial revolution in action, and it required the proactive support of Government. Without the support of Innovate UK, the EU and the Welsh Assembly Government, this project would not have got off the ground. We will be able to make every region of the UK a leader in the fourth industrial revolution only if the Government see building launch pads for our people and businesses as part of their role, in order to allow them to succeed.

I close by quoting my old boss at the World Economic Forum, Professor Klaus Schwab. He said:

“In its most pessimistic, dehumanized form, the Fourth Industrial Revolution may indeed have the potential to ‘robotize’ humanity and thus to deprive us of our heart and soul. But as a complement to the best parts of human nature—creativity, empathy, stewardship—it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny.”

That is the prize of the fourth industrial revolution, but only if we make it so.

--- Later in debate ---

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is always a pleasure to speak with you in the Chair, Madam Deputy Speaker.

I congratulate my hon. Friend the Member for Havant (Mr Mak) on securing this very important debate and on his motion, which notes the importance of small and medium-sized businesses, the huge contribution they make and their expertise. The motion also calls on the Government to

“continue introducing and supporting policies that keep the UK at the forefront of this revolution”.

I wish to add to that, as I think we will need policies that support small businesses and let them take advantage of these opportunities in the future.

I welcome the opportunities that this industrial revolution will bring, but I have niggling concerns. I will always be a champion in this Chamber for small business, having set up my own business in 1992 and then several technology businesses later on, with varying degrees of success. Business is a huge opportunity for this nation and for individuals, and it can transform the lives of people right across this land, whatever their background. There is also an opportunity for the consumer here, of course, as this technology revolution in particular is transforming the way in which consumers shop and travel, and how they can socialise. We need to look at how some of these channels will be dominated by huge businesses and at the potential opportunities—or even the lack of opportunities, which I am most concerned about—within their supply chains for small business.

Let me touch briefly on the pipes that we need. My hon. Friend the Member for Wells (James Heappey) talked about ensuring that the country has the right infrastructure, and this is about mobile phone communication—not just 4G but 5G—and our broadband. We do not want a sticking-plaster approach, because we need to get fibre not just to cabinets, but right through to premises. Only 2% of premises in the UK have a fibre-to-the-premises connection, which is the futureproof solution that we need. In Spain, the figure is 60%. I have welcomed the Government’s £1.7 billion investment in this area in the past, particularly for rural areas, as it has made life much easier for many of my constituents and businesses. Nevertheless, I fear that we will hit the same bottlenecks in five and 10 years’ time unless we step up our investment.

[Jesse Norman]

Did my hon. Friend note the brilliant report on broadband that the Culture, Media and Sport Committee published in July, which highlighted the underinvestment by BT in the national broadband network that independent experts estimate to be in the region of hundreds of millions of pounds a year? That is directly attributable to the way in which BT’s investment policy is carried out, and it is to the detriment of shareholders.

[Kevin Hollinrake]

My hon. Friend hits on one of my favourite topics: the culture of corporate obfuscation that we get from BT and its willingness to underinvest to maximise profitability. We absolutely need to get BT to up its game. I agree with Ofcom, which says that one solution is to open up the ducts and poles to other operators. Perhaps in future, when there are bidding rounds for Government investment, local authorities or the delivery authorities should themselves be held responsible for ensuring that third-party operators—smaller operators—get access to those ducts and poles in the local areas for which money has been committed.

The Government are supporting small businesses and innovations in many ways. As the Minister mentioned, there has been a 38% increase in investment in Innovate UK since 2010. Research and development tax credits have a hugely beneficial effect on companies that want to invest in new technologies. The enterprise investment scheme has unlocked investor capital for new start-up businesses and made such businesses possible on the back of these tax concessions. I support the retention and perhaps expansion of the concessions to make sure that we get new businesses to take advantage of these opportunities.

The failure rate for high-tech businesses is very high, but investors will countenance that because the rewards are also very high. Investors know that it is almost a winner-takes-all bet. They know that if they get it right, they can land themselves with an Amazon, a Google, an Uber, an Apple, or even a Rightmove or a Zoopla. In many sectors, there is either no competition or competition from just one other body, which puts those businesses in a hugely advantageous position.

In some areas of technology, business inevitably wins, and the other thing that will inevitably win is the machine. I spent my summer holidays reading a very interesting book by Matt Richtel called “A Deadly Wandering”, which talks about the ability of machines to multi-task. Richtel talks about the cocktail party effect. He describes a person in a conversation at a cocktail party. He says that it is not possible for them to listen to another conversation if they are truly engaged in their own conversation, as they can only do one thing at a time. Apparently, they can recognise their name being mentioned, but that is about it. Computers, on the other hand, can do millions of things at the same time, and they can do them better. A new computer called AlphaGo was built to try to beat the world champion of the game Go. That is not just a game of logic, but a game of intuition, yet the computer beat the world champion Lee Sedol five times in a row. The computer hones its own skills. So machines will win and big business will win.

The biggest worry I have about some of the businesses that will win in the future is their ability to dominate the entire supply chain. Uber is a good example. When it first came along, we saw it as just something that connected people who wanted a taxi with people who were taxi drivers. Uber has been clear that in the future it wants to be the taxi driver as well. In fact, it does not want any taxi drivers; it will have autonomous vehicles, and will no doubt link up with huge car manufacturers. Toyota, Nissan and other companies are looking at this. Uber will be end to end, taking away small business opportunities from taxi drivers, delivery drivers and HGV drivers.

[Tom Tugendhat]

My hon. Friend is making a persuasive point. There will be a challenge to not only small businesses, but large businesses. After all, if someone can hail a cab for nothing at all, why would they own a car?

--- Later in debate ---

[Kevin Hollinrake]

There are huge challenges ahead.

The situation is similar with Amazon, of course. Small businesses used to engage on the Amazon platform. A small business driver would pick up goods and take them to their destination; in future that will be done by autonomous vehicles and drones. Amazon will completely dominate the supply chain, so where is a small business opportunity there?

In previous industrial revolutions, opportunities were created for small businesses—people repaired the looms and sold clothes to the people who had new well-paid jobs. I must disagree with the hon. Member for Inverclyde (Ronnie Cowan), who said that people had not benefited from the industrial revolution. Clearly living standards today are much higher than before the industrial revolution. Nevertheless, future opportunities for small businesses are a concern.

[James Heappey]

My hon. Friend is making an excellent speech. Does he agree that both for private residents and for businesses, if one of the characteristics of this industrial revolution is the pursuit of a zero marginal cost for energy, communications and transport, the reduction of those costs could give small businesses, large businesses and private citizens alike a great opportunity to enter a marketplace without those barriers to entry?

[Kevin Hollinrake]

My hon. Friend makes a good case. In California, people are experimenting with something called a digital dividend. The money that is being made is paid back to people in the form of a dividend for which they do not have to work, but work is important. We want the opportunities; we want the work. We do not want to be redundant, sitting at home while machines do all the work for us. We must make sure that we make the most of the opportunities.

These advantages are locked in, as are tax advantages. The businesses that dominate these technologies are multinational companies that know how to work their way through the system. They circumvent corporation tax and also, arguably, circumvent employment laws. They also circumvent existing businesses and supply chains.

I am not King Canute trying to hold back the tide—this is an inevitability. We cannot resist this change, but the House must develop policies that create a level playing field and also opportunities. We must ensure that our tax system is fit for purpose for the challenges ahead and as we deal with multinational corporations. We must also support the growth of other industries that may spring up on the back of new opportunities that will inevitably be created. We must make sure that we use the opportunities available to us to keep opportunities open for small business.