Industrial Strategy

Alan Brown Excerpts

Wednesday 18th April 2018 Commons Chamber

[Greg Clark]

We are getting better at it. Most colleagues will have experience of their local universities and others, and most research universities have active programmes to spin out discoveries and reap the benefits. Again, through the industrial strategy challenge fund, funding is available on a match basis to universities to pursue that implementation of good ideas. My hon. Friend is absolutely right.

Let us take the future of mobility. The hon. Member for Coventry South (Mr Cunningham) and I have had many conversations about this country’s reputation not only for the efficient manufacture of vehicles—that is a proud record—but for innovation, whether in the west midlands or the world-beating cluster of Formula 1 businesses around Oxfordshire and Northamptonshire. The world comes to the UK for the next generation of technologies. Forty-year veterans of the automotive industry say that this is the most exciting time in their career, when not only the powertrain but the way in which vehicles navigate is undergoing a revolution. Around the world, there is increasing demand for that set of technologies and we have a strong capability in them. Again, setting a grand challenge is crucial.

We have set the Faraday challenge to be a world leader in the development and application of new battery technology. It is already attracting great interest around the world, and the hon. Member for Coventry South will know that the national battery manufacturing development facility will be located in Warwickshire at the heart of our cluster there.

On the ageing society, whether in Glasgow and Edinburgh or Cambridge, we have some of the best researchers in the world looking at medical breakthroughs that will be in increasing demand around the world. I make it clear that now and long into the future, we will invest in the facilities and the people to make us the place to come to research new innovations. As Members from Scotland will know, the Glasgow city deal had a big medical component to build on our success there.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Clearly, medical innovation and continued investment are welcome, but when dealing with an ageing population and workforce, we need not just innovation but immigration. We need immigration in the healthcare sector to support an ageing population. Does the Secretary of State agree that the Government should review their immigration policy, especially tier 2 visas, which are putting a block on experienced healthcare workers coming to the UK?

[Greg Clark]

As the hon. Gentleman knows—the industrial strategy is clear about it—we benefit from the contribution of workers, scientists and engineers from all over the world. There is no successful future for an economy that does not engage with the world. That means that we should be open to talent from around the world. We need to make sure, as every responsible nation does, that we have an orderly system for managing immigration from around the world. That is what we are achieving and what we will continue to achieve. It is very clear, on every page of the strategy, that this is a vision for an international Britain, rather than one that is moving towards a kind of national self-sufficiency.

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[Kwasi Kwarteng]

Forgive me. I am pleased that the hon. Gentleman has picked me up on that.

It is right that we look at these measures in the round. Reductions in corporation tax from 28% towards 18% have been of huge benefit in trying to create a culture of entrepreneurship and in trying to create growth.

[Alan Brown]

The hon. Gentleman will be aware that the Government’s Red Book at the 2017 spring Budget predicted that cuts to corporation tax would cost the UK Treasury £24 billion. How does that equate to growth?

[Kwasi Kwarteng]

The hon. Gentleman talks about predictions, but let us look at the past. We have cut corporation tax in every single year since 2010, but revenues from that tax have gone up. That shows exactly that the Government’s strategy is right.

Let us consider ideas about investment in our people and their education. When I go around schools in my constituency, I am struck by the fact that everyone is talking about STEM subjects—science, technology, engineering and maths. These subjects are being fostered and encouraged by the Government. The message is very much going out, right through the educational establishment and across schools, and it is very encouraging that that is happening. In my constituency, a number of schools are looking in particular to increase STEM participation among female students, which is very exciting. All these things are part of an industrial strategy. All these things will make the country more prosperous and more productive—they will drive future productivity growth. The Government are to be commended for taking an unusually medium to long-term view of the UK economy. Far too often in this House, we sling insults, with lots of abuse and all that, and we are very focused on the short term. It is exciting that in this industrial strategy we can think in terms of the medium and longer term.

On that note, infrastructure spending is very dear to my heart, as the Member for Spelthorne. Heathrow—the “H” word—is something that this Parliament will have to decide on, hopefully in the next few months, but certainly in the next couple of years. I have always been clear about my support for the third runway—or rather, I should say, the expansion of Heathrow. That is vital to drive forward the economy, productivity growth and prosperity, so we will have to tackle that.

On the broad range of infrastructure issues, investment in human capital with regard to STEM subjects, and research and development—

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[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The Secretary of State, in his opening remarks, made several mentions of UK success in terms of Nobel prize winners, so I just want to remind the House that Kilmarnock Academy, in my constituency, is one of the few schools in the UK that has educated two Nobel prize winners.

I welcome the publication of the industrial strategy and the fact that the original consultation document recognised some of the failings in UK industry, particularly on productivity. However, the strategy has a glaring omission regarding the challenges—Brexit. The industrial strategy seems to pretend that Brexit is not happening, even though the UK Government’s own analysis shows it will have an impact on the UK economy. We need to know what is going to happen to R&D collaboration and to R&D funding, and we need to take action to mitigate any impact.

We also need to know what is going to happen to other funding streams, such as European regional development fund moneys. In my constituency, industrial engineering units are constructed with the aid of the ERDF moneys. What is going to plug that gap in future? What are the UK Government going to do to provide that assistance to the areas that need that development money? I welcome the industrial strategy’s principles, including the sector deals, but as my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said, the Scottish Government need to be involved and properly consulted on them. They were not consulted on the advanced life sciences sector deal. If they were properly consulted, I am sure we would already have an oil and gas sector deal.

Let us look at what the UK Government have done in recent years to support the oil and gas industry. In the spring 2016 Budget, they reduced the supplementary charge to 10%. That was welcome, but the £1 billion that that cost the Treasury was only a third of the inheritance tax giveaway to millionaires. That shows the Government’s real priorities. In the spring 2017 Budget, there was a paragraph promising another discussion paper. We are still awaiting the appointment of an oil and gas ambassador. In the November 2017 Budget, the transferable tax history mechanism was a welcome measure for the oil and gas industry, but it is predicted to bring an extra £70 million into the Treasury, so it is hardly a concession; it is actually a positive move. Actions are always stronger than words, and so far the UK Government have failed to provide the broad shoulders that we were told about. In the same period, they pulled £1.5 billion from the carbon capture and storage scheme in Peterhead.

Another innovative and possibly world-leading energy project is the proposed renewable energy plant at Grangemouth to replace the existing end-of-life gas turbine station. The new proposals include biomass, which means the project needs access to renewable heat incentive funding and contract for difference funding. Right now, however, the UK Government are seeking to cap the RHI funding available to any scheme at 250 GWh, which would make the project completely unviable. I urge the Secretary of State to do everything he can to make sure that the project goes ahead.

The industrial strategy rightly highlights offshore wind development via the Catapult, which is welcome. With onshore wind currently at £57.50 per MWh, we clearly need to continue in this direction, because that provides much better value for money than Hinkley, at £92.50 per MWh. I repeat the plea for onshore wind projects to be allowed to bid in future CfD auctions. That would reinvigorate the industry and provide a boost to engineering and fabrication companies throughout the UK.

Another sector deal that I welcome is the one for the construction industry, which will provide high-paid jobs, but, as I highlighted earlier, the £24 billion giveaway in corporation tax would be better used in the construction industry and would double the money available for the national productivity investment fund over this Parliament. I have one more plea: we really need to see the Ayrshire growth deal happen.