Inclusive Society

Lord Mandelson Excerpts

Wednesday 14th April 2021 Grand Committee

[Lord Mandelson (Lab) [V]]

My Lords, I express many congratulations to my noble friend Lady Lister on this debate. Events test a country and this pandemic has revealed that we need to be far more resilient both as a society and as an economy. Resilience means the state and its services being capable of protecting people who are not self-made or self-sufficient, but we will not build that resilient, more equal society unless it is underpinned by a prosperous, resilient economy.

Successive UK Governments have sought to build a resilient economy by supporting high-growth, technology-led enterprise. My efforts were in 1998, with my White Paper Building the Knowledge Driven Economy, and then after I returned to the Government in 2008. Since then, the best expression of policy has been Greg Clark’s industrial strategy, with its focus on decarbonisation and clean growth, AI, the future of mobility and the benefits to health and ageing of bioscience and genomics. I regret the Government’s recent decision to jettison this strategy.

The simple point that I want to make today in my short contribution is this: technological change is not like the weather. It does not just happen around us. It can be supported and shaped through an innovation system that draws on public and private funding, major international research partnerships, helpful government regulation and the fostering by the Government of supply chains, individual entrepreneurship and business growth.

This was achieved in the recent development of the Covid vaccine, which was born out of necessity in a time of national crisis. The Government staffed up and invested in a portfolio of high-risk technology ventures through a taskforce led by a venture capitalist. It was based on substantial public funding of research, invention by Oxford University, nimble, accelerated regulation by the Government, manufacture by the private sector and then distribution by our own NHS. The successful vaccine rollout is the result.

One thing this was not was a model of pure capitalism. It demonstrated the power of public procurement and co-ordination across the board, inside government and across the public and private sectors. We should adapt this model, where government has a role, to similar market opportunities arising from the profound transitions under way, of digitalisation, AI and clean energy. Those transitions and the associated technological change will almost certainly require around 75% of the country’s workforce to be retrained and reskilled during the coming decade. Government should identify where it can act to ensure that innovation, investment and production—the whole supply chain—cohere in the United Kingdom and be willing to take some risks in doing this and to act at scale.

However, if we want the whole country to benefit, we need a clear focus on the geographical dimension. The Government talk about levelling up; they do not seem to realise that you cannot level up from the top down. Local foundations of growth and inclusiveness need local powers, people and money. I say just this: it requires coherence. My fear is that, with their short attention span, we will see instead a series of politically influenced, disjointed interventions by the Government that will fail to convince markets and investors and will not bring the deep and durable economic change the country needs. I hope that I am wrong, but where the Government have ideas, they need scaling. Where a policy is working, it needs continuity. The Government, as well as the Labour Party in its own thinking, have to approach this with vision and vigour, and to do so consistently.