Industrial Strategy: Local Growth

Lord Callanan Excerpts

Monday 26th April 2021 Lords Chamber

[Baroness Thornhill]

To ask Her Majesty’s Government what assessment they have made of the Annual Report by the Industrial Strategy Council, published on 23 March, which recommended the development of local strategies to deliver sustainable local growth.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

The work of the Industrial Strategy Council to date has been pivotal for the success of the industrial strategy. As we begin to transition into our plan for growth, the work of the council, including reflections in its annual report, will be taken into account. We are working with local enterprise partnerships, mayoral combined authorities and other local partners to build on the priorities identified through local industrial strategies. We will also address new issues which have arisen since their publication.

[Baroness Thornhill (LD)]

I thank the Minister for that reply. One wonders why, if it was so pivotal, the council is being disbanded. The report is critical of the Government’s proposed approach to levelling up, which it argues is over-reliant on big infrastructure projects and centrally controlled pots of funding spread far too thinly over too short a time. Does the Minister agree with significant historical and international research that such a centralised approach rarely works? Can he confirm whether the forthcoming, much awaited devolution White Paper will provide an opportunity to reverse this trend and provide a far more effective way forward?

[Lord Callanan (Con)]

We will continue to work on the levelling-up agenda, building on the strength of many places. We encourage those places to consider key sectors, assets and clusters that they want to support to foster their long-term growth ambitions, building on the strong evidence base and the brilliant work done to date by many places across the country.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, following on from that question, can I ask the Minister to set out the ways in which the innovation, productivity and wealth-creation capacity of sectors of the economy that are not the direct responsibility of BEIS, such as the creative industries, will be engaged at a local level in the delivery of the plan for growth?

[Lord Callanan (Con)]

I know that the noble Lord has been a long-term champion of the creative industries, and I agree with him. We recognise the importance of the creative sectors. In Build Back Better: Our Plan for Growth, creative industries are highlighted as one of the sectors that we expect to shape the UK’s economic future. Upgrading and creating new cultural and creative spaces represents a core element of the £4.8 billion levelling-up fund.

[Lord Goddard of Stockport (LD)]

The Industrial Strategy Council’s annual report points out that the Government’s plans

“are not yet a practical roadmap for delivering Net Zero, with several areas at present lacking the required scale to make progress at the required speed”.

Housing retrofit is one such area. Will the Government accept the recommendation of the House of Commons Environmental Audit Committee’s recent report on energy efficiency to open up the proposed £3.8 billion social housing upgrades? It is estimated that green home upgrades could support 77,000 jobs across the north alone. That is levelling up.

[Lord Callanan (Con)]

The noble Lord makes a good point. The £62 million social housing decarbonisation fund demonstrator is currently delivering 19 projects across England and Scotland. In the autumn 2020 spending review we committed a further £60 million towards funding the main elements of the social housing decarbonisation fund to ensure some early progress and, of course, we are still committed to the manifesto commitment of £3.8 billion for the funding total.

[Lord Forsyth of Drumlean (Con) [V]]

My Lords, the report by the Industrial Strategy Council, which was appointed by the Government and consists of a number of distinguished businesspeople, points out that, whether it is called an industrial strategy or a plan for growth, the basic premise is the same: a programme of supply-side policies to drive prosperity in and across the economy. Does my noble friend agree, and, if so, what are those supply-side policies?

[Lord Callanan (Con)]

In the new plan for growth that the noble Lord refers to, we have decided that the Industrial Strategy Council in its current form will no longer be needed to monitor and evaluate the impact of the industrial strategy. The Prime Minister and the Chancellor have convened a build back better business council to act as a sounding board and to provide help, advice and support on the way forward.

[Lord Aberdare (CB)]

My Lords, the ISC report urges the Government to develop a comprehensive and ambitious labour market strategy, co-ordinated across government, employers and the education sector. What plans do the Government have for such an overarching strategy and for overseeing how their various skills-related initiatives mesh together to deliver a skilled and resilient workforce across the UK as needed by the plan for growth, and to close the future skills gap highlighted by the ISC?

[Lord Callanan (Con)]

The noble Lord is right that skills are one of our key priorities for investment, along with infrastructure and innovation. The Prime Minister and the Cabinet Secretary have asked Sir Michael Barber to conduct a rapid review of government delivery, including in the skills system, to ensure that it remains focused, effective and efficient and to suggest how it could be strengthened.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, the Industrial Strategy Council’s most recent annual report suggested that, for levelling up to succeed, it needed to include consideration of devolution. How much thought have the Government given to further devolution in their industrial strategy? Will the Minister tell the House what progress has been made in convening the build back better business council and who will lead its work? Is it always the case that pivotal councils, such as the Industrial Strategy Council, get abolished?

[Lord Callanan (Con)]

Of course it is not always the case. Many councils do good work. We think that the local Industrial Strategy Council did some good work, but we are building on that, extending and taking it forward. The Build Back Better Council, to which the noble Lord refers, will take forward that work.

[Baroness Sheehan (LD)]

My Lords, why is the Industrial Strategy Council to be abolished? A number of other noble Lords have asked this question and I want to press the Minister on it. How do the Government intend to fill the gap that will be created to hold government Ministers to account on the plan for growth overall?

[Lord Callanan (Con)]

Many of the elements of the work of the Industrial Strategy Council have been superseded. There are now new challenges—we had the Covid epidemic. The Government, of course, are still being held to account in this House and elsewhere. The purpose of the Build Back Better Council will be to provide help and advice on the way forward.

[The Lord Bishop of Rochester]

My Lords, although I was once a voluntary sector member of a regional assembly, I do not hanker after a return to that particular bit of structure. However, are Her Majesty’s Government contemplating any new local structures as part of the response to the questions raised, or do they trust local authorities, executive mayors and existing bodies, such as the LEPs, to deliver on this agenda? I notice that the Minister did not mention local authorities in his original response.

[Lord Callanan (Con)]

That was not a deliberate omission. Local authorities are still key to the development and delivery of these strategies and policies, along with the LEPs, the mayoral combined authorities and, of course, local businesses themselves that need to be involved in the way forward.

[Lord Lucas (Con) [V]]

My Lords, I refer to the paragraph from Build Back Better headed “Changing the way we invest in places”. For a town such as Eastbourne, what will be the empowered local institution and with whom will it cohere and co-ordinate?

--- Later in debate ---

[Lord Callanan (Con)]

I refer the noble Lord to the answer I just gave to the right reverend Prelate. We will work with local enterprise partnerships, mayoral combined authorities and other local partners. The key to that is local businesses in areas such as Eastbourne, and we will look at the geography and structure of these partnerships going forward.

[The Earl of Clancarty (CB)]

My Lords, if developing skills across the country is to be part of the levelling-up agenda, will the Minister recognise the importance of design, which gets no mention at all in the Build Back Better plan? Does the Minister agree that education and design starting in schools will be crucial in developing creative ideas and innovation, one of the Government’s three pillars of growth?

[Lord Callanan (Con)]

I agree that design and innovation are going to be key and crucial. We have a history in this country of taking good design and innovation and then not developing them into viable products led by British businesses. That is something that we need to correct, and our forthcoming innovation strategy will address many of these issues.

[Lord Clark of Windermere (Lab) [V]]

My Lords, in the earlier report, the council said that we should keep the spotlight on places whose productivity levels and growth rates were well below the national average. I know that the Minister shares my view and agrees particularly with this recommendation. What are the Government are doing to try to bring this idea into reality?

[Lord Callanan (Con)]

I agree with the noble Lord that productivity will be key to our success going forward. He and I come from part of the UK that needs to expand its productivity and key to that will be developing the skills agenda, which I set out in the previous answer.

[The Lord Speaker (Lord Fowler)]

My Lords, all supplementary questions have been asked—a compliment to the Minister, who consistently manages to answer them all in the time allotted.