European Union (Approvals) Bill

Lord Henley Excerpts

Committee: 1st sitting (Hansard): House of Lords
Monday 13th November 2017 Lords Chamber

Moved by

[Lord Henley]

That the order of commitment be discharged.

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

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.

Motion agreed.

Productivity

Lord Henley Excerpts

Tuesday 7th November 2017 Lords Chamber

[Baroness Wheatcroft]

To ask Her Majesty’s Government, in the light of the publication of the report by the Industrial Strategy Commission on 1 November, what steps they are taking to improve the country’s productivity.

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

My Lords, our Green Paper, published earlier this year, sets out how the industrial strategy will aim to maximise the UK’s earning power and productivity as we exit the EU and beyond. We are already taking major action to deliver our industrial strategy, including a £23 billion national productivity investment fund to drive improved productivity across the country. The White Paper, which will set out the plan for full and long-term delivery, is due to be published later this year.

[Baroness Wheatcroft (Con)]

I thank my noble friend for his reply and I greet the commission’s report with enthusiasm. It suggests that there should be long-term investment in infrastructure, skills and education, but it takes a long time for those sorts of investments to improve productivity and, in the meantime, as we heard from the CBI yesterday, companies are holding back on investment because of concerns over Brexit. Will my noble friend tell me what predictions they are making for productivity in the short term as we go through the Brexit process?

[Lord Henley]

My Lords, we, too, welcome the Industrial Strategy Commission’s report. It is an independent inquiry, a joint initiative by the University of Manchester and the Sheffield Political Economy Research Institute, and as my noble friend will be aware, my right honourable friend the Secretary of State spoke at its launch. As I made clear in my original Answer, we will be publishing the industrial strategy later this year—I hope it will be by the end of this month—and if my noble friend will be patient, I think that when we produce that strategy she will see much there. As she will be aware, we have already made some fairly considerable announcements about investment: I mentioned the £23 billion national productivity investment fund which is there to drive improved productivity across the country, an area we certainly want to address.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I welcome the noble Lord back to the Dispatch Box in what I think is his fifth role since 2010, which must be a record of some kind. I was glad to hear him welcome the final report of the Industrial Strategy Commission, which makes very interesting reading and covers very interesting areas. One of its key recommendations to the Government is that health and social care should be at the centre of the industrial strategy. That may sound counterintuitive, but it makes the point that using the Government’s purchasing power to promote innovation in that sector and to increase productivity would be a good thing. Does the noble Lord agree with that, and will it appear in the industrial strategy?

[Lord Henley]

Perhaps I may correct one of the noble Lord’s statistics: it is only my fourth department since 2010. It is important to get these things correct. I am glad that the noble Lord, like the Government, welcomes the report; we will certainly take note of it. As I said, we are waiting for the industrial strategy to come out later this month, and I am grateful that he makes it clear that there are matters other than government spending which are important here, particularly in dealing with questions of productivity. We want to make sure that all levers that are available to the Government can be made use of. He mentioned purchasing. We will certainly make that clear, and I hope that other departments will do their bit. He mentioned purchasing within the health service, but there are other things that the Government can do as well, in relation to deregulation and trade policy, as well as procurement, which he mentioned.

[Lord Fox (LD)]

My Lords, I, too, welcome the Minister back to the Dispatch Box. His immediate predecessor gave those of us who are impatient for the industrial strategy White Paper a preview a couple of weeks ago. In that preview he identified three particular strands that will address the productivity issue that this commission has highlighted so well. One of those was skills, and in that he particularly highlighted apprenticeships. I am sure that the Minister has not had much time yet, but he will have noticed that the latest statistics from the manufacturing organisation, the EEF, show a 61% fall in the number of registrations for apprenticeships in the last quarter. Does he agree that this is not just disappointing, it is awful? Can he explain what the Government are doing to improve their lamentable performance over the apprentice levy, which is causing this problem?

[Lord Henley]

My Lords, I am not going to go into detail now but I am grateful that the noble Lord went to the meeting that my predecessor held and listened there. I agree that the figures are disappointing but again, if he can be patient and wait for the launch of the industrial strategy he will see what we are doing and what we are bringing together from all parts of the Government in this area.

[Lord Howell of Guildford (Con)]

Does my noble friend agree that these productivity statistics can be a bit misleading? It has often been suggested that they fail to take full account of the impact of the digital revolution on production and economic activity. Does he also agree that the very high levels of employment that we are currently experiencing could in a sense be seen as a compensating asset in the overall low-productivity puzzle?

[Lord Henley]

My noble friend is right to stress that it is very difficult to measure productivity, but I think we all agree that our productivity levels are lower than those of a lot of other members of the G7 and that we want to do something about them. My noble friend is also right to say that there is the compensating factor—I am very grateful to him for underlining it—of record levels of employment in this country. We can be very proud of that.

[Lord Green of Deddington (CB)]

My Lords, among other matters, does the Minister consider that the availability of a virtually unlimited supply of hard-working and low-paid workers might be a disincentive to investment and therefore have some impact on productivity?

[Lord Henley]

Obviously the level of employees coming in from other countries has an influence on wages and employment in this country. The noble Lord is right to point that out.

[Lord Wallace of Saltaire (LD)]

My Lords, there is substantial evidence that a large number of companies are using the new apprentice levy to train people already employed, often in mid-executive positions, rather than going out and finding young people and training them up as new apprentices, which is what one understood the scheme was for. Are the Government going to look into that and do their best to persuade companies that they should be training young apprentices as the first priority?

[Lord Henley]

The noble Lord is right to point that out. It is anecdotal evidence at this stage, but it is something that we should certainly look at.

Manufacturing: Digital Technology

Lord Henley Excerpts

Thursday 2nd November 2017 Lords Chamber

[Lord Haskel]

To ask Her Majesty’s Government what is their response to the Made Smarter Review on the benefits of applying digital technology to the manufacturing industry, published on 30 October.

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

My Lords, Her Majesty’s Government welcome the Made Smarter report and thank Juergen Maier and the industry team for their work in outlining the huge potential that digitalisation offers to United Kingdom manufacturing. We look forward to working closely with industry to ensure that the United Kingdom can capitalise on the massive benefits of digital technology, which this report makes so clear, and realise its potential to be a global leader in the industrial digital technology revolution.

[Lord Haskel (Lab)]

My Lords, I am pleased that the Government welcome the report, as I do. As the report says, digitalisation can deliver a much-needed boost to our productivity. However, the report also points out that it is a disruptive technology for jobs and businesses. In implementing the report, what arrangements will the Government make for those who are displaced? Will there be a safety net? What procedures will the Government implement to ensure that people are not damaged by this?

[Lord Henley]

As the noble Lord will be aware, the report is quite big—246 pages. It was published on Monday. I arrived in the department on Monday, so I cannot claim to have read it from cover to cover at this point. No doubt he will criticise me for that, but I will start on it over the weekend. We recognise that this technology presents great challenges, including for raising productivity. The noble Lord is right to talk about the challenges of the fact that, in creating new, higher-paid and higher-skilled jobs, it creates a threat to other jobs—something we went through in the first Industrial Revolution when the spinning jenny and other things came in. It also creates opportunities for new jobs, which is what we want. I think he will accept that at this stage, with a 246-page report having been published only on Monday, it is a bit early for the Government to make any pronouncements on it.

[Baroness Smith of Basildon (Lab)]

My Lords, while the Government may not want to make pronouncements, I hope that the Minister will take the opportunity for a quiet weekend, and perhaps to snuggle up with a cup of cocoa and read the report. He mentioned the Industrial Revolution; he will be aware of the huge social unrest that followed it. While the report states the number of new jobs—a net gain of 175,000—jobs will change. Some people will lose their jobs; some will work shorter hours. The technology has to benefit those who are working, and not cause an increase in unemployment and reduce incomes. While I do not expect him to have read the report, will the Minister give some thought to how we ensure both that those people whose jobs change get the adequate training and support they need, and that those who lose employment get alternative employment so that we do not lose the income of those currently in work?

[Lord Henley]

I can only agree with everything the noble Baroness said, other than her comments on cocoa. I will read the report over the weekend. It is too early to say, but she will be aware that we have the industrial strategy coming out later this month. If she is a little patient, she will hear more from the department and my right honourable friend about what we plan to do, particularly on the challenges that these changes present to the United Kingdom and the Government—challenges that both she and her noble friend Lord Haskel have highlighted.

[Lord Palmer of Childs Hill (LD)]

The Minister talks about challenges. He has not had a chance to read the report, but does he agree that its proposals will be relevant only if manufacturing has access to a high-quality digital network, and that this will be even more critical when—if—Brexit happens? When will we have a meaningful and effective universal internet service? Without that service being universally available in the whole UK, we will not be able to compete internationally. Does the Minister agree?

[Lord Henley]

My Lords, again, I can only agree with the noble Lord. We are doing well. There is more to be done and he will hear more in due course. Again, if he is patient he will see the industrial strategy later this month.

[Lord West of Spithead (Lab)]

My Lords, there are huge benefits in digital technology, but I skimmed the review wearing the old hat I used to have on security. Sadly, this marvellous digital revolution opens up vulnerabilities. I could not see anything mentioning any concerns on that. We need to be very wary because it will often open up people to losing their identities and all sorts of things. We need to be very aware that, as well as all the benefits we get from digitalisation, there are some real risks. We need always to bear those in mind.

--- Later in debate ---

[Lord Henley]

Again, I can only agree with the noble Lord. I have not even got as far as skimming the report. I intend to take the advice of the noble Baroness and read it over the weekend. Any big changes that come to us can obviously be big threats to other fields. That is why my right honourable friend originally commissioned this report, welcomed it and thanked Professor Juergen Maier for producing it. We want to make the right response—not just of the Government, but of United Kingdom industry and the whole of the United Kingdom—in due course.

[Lord Broers (CB)]

My Lords, I am sure the Minster realises that, on the positive side, this will grow exports. If we do not have our products adequately defined in digital terms we will not compete internationally. It is essential that we drive this forward.

[Lord Henley]

My Lords, I can only say how much I agree with the noble Lord. We have to look at what digitalisation offers to us while also bearing in mind what the noble Lord, Lord West, said about threats. That is why we want to make the right response. I note what has been said.

[Lord Berkeley (Lab)]

My Lords, one of the real benefits of digitalisation is on the railways. As the Secretary of State recently said, we can get many more trains on the line more safely with digital signalling. The Minister’s predecessor will have recently received a report from the railways on digitalisation. Will he say something about how the finances for the railways will change so that there is enough investment in both the tracks and the cabs and locomotives, including freight, to make sure this happens quickly and safely? I declare an interest as chairman of the Rail Freight Group.

[Lord Henley]

I am grateful to the noble Lord for mentioning the railways. I will be heading back north again on the west coast main line. I know quite how good that is at the moment, but I have also been told just how much it could be improved with digitalisation of the signalling and what improvements we can see on that front. I look forward to improvements there over coming years. The noble Lord asked about finances for the railways. He would not expect me to make any response at this stage. I hope he will be patient and wait for what comes out of the industrial strategy later this month.