Britain’s Industrial Future

Alan Brown Excerpts

Tuesday 15th November 2022 Commons Chamber

[Bill Esterson]

I am grateful to the hon. Gentleman for asking the question, because it reminds us all that the Conservative Government have cut the number of ships from 13 to eight—so I would be careful about claiming that as a great big success story—and they still have not made a decision on the Fleet Solid Support Ships.

With Labour, Britain can become a global leader in producing electric cars and in self-sufficiency in renewable electricity generation. Meanwhile, the Conservatives continue to drag their feet and retain the moratorium on onshore wind. When the Prime Minister was asked about onshore wind, he answered by talking about offshore wind. It is almost as if he did not understand the difference.

Onshore wind is one of the cheapest forms of energy, and we will double its capacity. We will treble solar and quadruple offshore wind production. We will support nuclear, tidal and hydrogen, because they are all part of a low-carbon future, but not least because Labour will be an active Government, willing to champion British industry and help to create the jobs and prosperity of the future.

Our plans for renewable electricity generation will mean cheaper bills for industry and households. They are being drawn up with business, informed by the evidence presented to us by employers and trade unions alike. Partnership, planning, investment and certainty: those are the elements industry needs to succeed. They are the foundations of the framework that industry will be able to rely on alongside a Labour Government.

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

On energy policy and lower energy bills, the shadow Minister mentioned nuclear power. Sizewell C nuclear power station is going to cost something like £30 billion in capital expenditure. The UK Government’s impact assessment, when the capital costs and finance and borrowing costs are taken into account, estimates that it will cost £63 billion. Does he really think that is a good way to spend money?

[Bill Esterson]

The way the Conservative Government reached the deal was not good value for money, and we certainly should not do that again, but nuclear is a key part of our transition to renewable electricity.

When I visit companies developing new technologies, they are excited by the prospects and the ideas they are developing. Whether on decarbonising air travel, installing insulation in millions of homes, as our energy efficiency plans will do, or our world-class defence companies delivering economic prosperity while keeping us safe, all the businesses I meet want to work with Government. They want a Government who offer stability and are a willing partner, who will lead the world in renewable technology, who will herald the vanguard of new electric vehicles and will supply the world with cutting-edge green steel.

The Conservatives have failed over the past 12 years. Their answer is to offer the slowest growth in the OECD over the next two years after crashing the economy. It does not have to be this way. Britain’s best years really can lie ahead. Britain really can be the best place to start and grow a business. The British Government really can be the partner to industry, ensuring that we make, buy and sell more in Britain. With our industrial strategy and our green prosperity plan, Labour will ensure that, together with business and the workforce, we really can deliver prosperity through partnership.

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[George Freeman]

My hon. Friend, as ever, makes a very interesting policy observation; as Minister for science, I will not accept it at the Dispatch Box, but I will raise it with the Ministers for industry and for energy.

[Alan Brown]

The Minister mentioned nuclear power. He heard what I said about costs earlier, but it is also reported that the Government are taking a 20% share in Sizewell C. Does that mean the Government are going to borrow £5 billion or £6 billion to pay for their 20% share of Sizewell C?

[George Freeman]

How interesting to hear the SNP take issue with—[Interruption.] The hon. Member asked the question, so I will answer it. We are determined to make sure that, unlike parties on the Opposition Benches, we invest properly in new nuclear in this country, so that we have a resilient, clean and secure energy system. If that means an active industrial strategy to ensure we are able to do it, we are doing it. It would be nice to hear the SNP Government in Scotland take a similar approach to their future and to nuclear in this country, which is vital for the next few years as we get through this global tightening in energy.

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

Interestingly, the Minister kept using the phrase “industrial strategy” without acknowledging that the previous BEIS Secretary actually ripped up and abandoned the UK Government’s industrial strategy. So there is not an industrial strategy; there is just a series of ad hoc announcements of money and targets that are arbitrary. We do not have a coherent strategy that links it all together.

I should start by welcoming today’s news of the confirmation of the £4.2 billion order for the five Type 26 frigates awarded to BAE Systems at Govan and Scotstoun. Those ships will now be built in the dry because BAE has been able to commit to the £200 million factory that was previously promised by the UK Government some way back. It is not the number of frigates that was originally promised, but there is no doubt that the announcement today is good news for the workers in Glasgow.

That good news is in contrast to a couple of stories and events from yesterday. In the Chamber, the former Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for Camborne and Redruth (George Eustice), let slip what many of us had been saying for long enough, which is that the Australia and New Zealand trade deals that the Government signed are utter rubbish. Also yesterday, Bloomberg ran a story confirming that Paris’s stock market has now exceeded London’s stock market in value. These matters are interlinked. It is a combination of Tory free market ideology and Brexit, of course, and we continually see proof of the harm of Brexit in the UK’s performance compared with G7 and G20 countries.

There was a big lack of talk of Brexit in the contribution of the shadow Minister, the hon. Member for Sefton Central (Bill Esterson). Despite what we know of the harms of Brexit, Labour now says it wants to make Brexit work. Free movement of people has gone, the Labour leader tells us. We have recruited too many people from overseas into the NHS, he tells us. But the reality is that, when Labour has such a lead in the polls, it should be offering bolder plans, such as rejoining the single market, and certainly allowing free movement of people so we can grow the economy again. Right now the Labour position seems to be, “We won’t be quite as bad as the Tories”. That is hardly ambitious.

We have to be realistic: if we want to increase skilled jobs and the workforce, while continuing to recruit for the service sector, the hospitality industry, the NHS and so on, we need inward migration. There may be a legitimate debate about the fact that too many people have exited the workforce for various reasons, but the reality is that we currently have record low numbers of people seeking work compared with vacancies, so clearly immigration is required, and free movement of people with the EU is the logical step to achieve that.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

My hon. Friend is making a powerful point. Of course, we need people to staff industries—in my constituency, hospitality is crying out for people and the health industry is crying out for people—and we used to be able to count on EU citizens, but there are not the people there to replace them. It is vital for a country such as Scotland to have a different approach from the one taken by this Government and this place over immigration. Our historical problem has been that we have suffered from emigration, rather than immigration, and we need people in Scotland.

[Alan Brown]

Absolutely. It is all about keeping that balance of population, growing the workforce, growing the skills base, helping our businesses grow and growing the tax base as well, which creates a fairer economy for all.

For too long in the UK, deindustrialisation was deemed acceptable as long as the financial City was booming in London, but that has been the wrong strategy for decades now. It has left coalfield areas such as my constituency struggling, not to mention the loss of industry and manufacturing in the main town of Kilmarnock and the Irvine valley. That has been replicated in industrial areas up and down the UK. The Tories have arguably now recognised this with the so-called levelling-up agenda, but that is a slogan that admits all those years of failure in terms of deindustrialisation. In reality, it was just a political strategy aimed at the red wall seats. The levelling-up agenda is so ad hoc that nobody can define what it means in terms of outputs and measures, and it opens the way for more political chicanery.

It is clear that Brexit has produced challenges for the automotive industry: additional paperwork; and rules of origin which will become more challenging for the industry as times goes on. According to the Society of Motor Manufacturers and Traders, despite recent increases in sales, 2022 is on course to be the weakest for car sales since 1982—a 40-year low in sales as we move into recession in the UK and have inflation at a 40-year high. On car manufacturing, while we know there have been global supply chain issues and long lead-in times for parts, the reality is that there has been a drop in output in the UK compared with the rest of Europe. Only Germany has suffered a bigger percentage decrease in manufacturing output.

On wider industrial strategies in car manufacturing and EVs, we must address the electric vehicle charging roll-out. The Government have a target of 300,000 charge points installed by 2030. That means that, each year from next year onwards, 31,000 charge points need to be installed; that is because only 34,000 have been installed to date. When we consider that the cumulative total installed at present needs to be installed nearly every year for seven years to hit the target, we realise the Government do not have a coherent strategy to achieve that.

I welcome that the battery car sales market share has increased and plug-in vehicles now account for over 21% of new sales, but we need to make sure the lack of infrastructure does not stall sales and output of such vehicles. In small, independent Norway, last year, EVs accounted for 65% of market share.

[Gavin Newlands]

Does my hon. Friend agree that, in Norway and in Scotland—which has twice as many rapid chargers per head as England, including London—it was public investment by the Government that got that going, leading to a better system of chargers? Then the private sector was brought in. That is the way to go, rather than starting private, as the UK Government did.

[Alan Brown]

I absolutely agree. The Minister challenged us earlier to welcome public-private investment partnerships; I hope the Minister who winds up will welcome that investment in Scotland and that Scotland and Norway have shown how it can be done.

On the bus manufacturing sector, again, unfortunately, we have had a complete UK Government failure. Just yesterday, The Times ran a story saying that only six low-emission buses out of the 4,000 promised by the previous Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), have entered service in England. Of the promised £3 billion bus fund, 40% still remains unallocated, and only 341 orders have been placed out of the 4,000. It is therefore clear that urgent intervention is required to get manufacturing in the UK up and running. Even worse than that, the first ZEBRA—zero emission bus regional areas—contract was awarded abroad, to China. There is no scope in the current tendering process to assess added value of UK content and community benefit, which would help UK manufacturing companies. That is a complete failure by the Department for Business, Energy and Industrial Strategy.

In contrast, the Scottish Government have led the way on this. Three hundred buses have been delivered under the Scottish ultra-low-emission bus scheme, and almost the same number has now been delivered through the Scottish zero-emission bus challenge fund. However, the reality is that companies such as Alexander Dennis need to see more orders via UK Government funding. If they are talking about an industrial strategy and promoting UK manufacturing, they need to do something to get these buses made by UK-based companies.

The motion refers to net zero and creating jobs. Net zero has to be the future if we are going to save the planet. It should be part of a just transition for the oil and gas industry. With the right support for emerging technologies such as tidal stream, Scotland in particular can be a manufacturing and technology exporter. Green hydrogen needs to be supported in a much bigger way, given investments being made elsewhere in Europe.

In 2020, renewable sources provided almost 100% of the equivalent gross electricity consumption in Scotland, and that was despite the UK Government effectively pulling the plug on onshore wind for a six-year period. Scotland currently has the largest deployment of grid-generating tidal stream turbines, and there is the potential of up to 11 GW of electricity to be generated from tidal stream. Scotland is also leading the way on floating offshore wind. In terms of fixed offshore wind, ScotWind has the potential to develop more than 20 GW of offshore wind in the coming years. With the size of the wind farms being developed, there really is a chance of establishing turbine manufacturing in Scotland, so it is critical that all the permissions are put in place.

However, in Scotland we also have the paradox that Westminster holds all the levers of power in terms of main energy policy. The auction process and procurement rules all lie with Westminster. The setting of the grid charging regime and the regulator lie with Westminster. Borrowing powers to invest lie with Westminster. The ability to pull funding or prioritise projects such as carbon capture and storage lie with Westminster. That is underlined by the disgraceful fact that funding was pulled from the Peterhead CCS project and that the Acorn project is still classed as a reserve project despite having been the most advanced and rounded project overall in terms of CCS clusters.

It is Westminster who can decide on a pricing mechanism for pumped storage hydro or not and, so far, they have ignored the calls to sit down and discuss a cap and floor mechanism for electricity generated by pumped storage hydro. It is Westminster who have control of the consenting rules and processes under the Electricity Act 1989 and are prioritising another £30 billion of capital spend for Sizewell C nuclear power station. It is Westminster who squandered £380 billion of oil and gas revenues.

Despite that—bizarrely—we have Unionists right now seeming to take glee from the fact that not as many jobs may have been created by the onshore wind sector as was originally hoped. That is as much as anything down to procurement processes, which for years the SNP has called to be changed to allow for local content. Right now, we have Unionist glee as they believe that, somehow, Scotland’s renewables potential has been overblown or overhyped by politicians. I assure them that it certainly has not. A report prepared by the Landfall Strategy Group illustrates that pursuing offshore wind and tidal resource alongside a green hydrogen strategy could create up to 400,000 jobs by 2050 and £34 billion in gross value added. That is the sort of ambition required, and that seems to be deliverable only through independence and the full levers of power.

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[Kevin Hollinrake]

The hon. Gentleman made some good points about the opportunities on Teesside. Carbon capture and storage and Net Zero Teesside represent a huge opportunity and something that is on the Government agenda. We are also looking into the life sciences sector in Teesside and the first large-scale lithium refinery in the country, with 1,000 jobs in construction—all these things are happening on Teesside. I recognise his point on the steel sector, but all this carbon capture and storage may well form part of the future for Teesside.

The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) made some interesting points about buying British. I think everyone in this House would agree on the need to buy British, but does he accept that, that as the trade and co-operation agreement and others open up EU markets to UK companies, we cannot on that basis expect to close our markets to EU countries, or to countries from around the world? We believe in international trade—[Interruption.] Well, I also believe in buying British. I share his enthusiasm for the Government’s £206 million investment in a UK Shipping Office for Reducing Emissions—the biggest Government investment ever in that sector.

Manufacturing has been at the heart of our economy for centuries—the shipbuilding, automotive and steel industries perhaps more than any others. In 2021, manufacturing contributed more than £205 billion gross value added to the UK economy, which is the fourth highest figure in Europe. Manufacturing, which is responsible for almost half of UK exports, has a vital role to play in driving innovation, job creation and productivity growth beyond the bounds of the M25. The hon. Member for Kilmarnock and Loudoun (Alan Brown) will be pleased to note that 95% of manufacturing jobs are outside London.

[Alan Brown]

Does the Minister accept that although we cannot necessarily stipulate to buy British, procurement can be managed by assessing community benefit and local content as part of quality assessments, so that it is not a case of price takes all? That is not happening with the Government’s bus procurement strategy, and it did not happen long enough in the CfD auctions, either. Is that not something that the Government need to address?

[Kevin Hollinrake]

The hon. Gentleman makes a fair point. Certainly, the Cabinet Office is looking at procurement strategy now, and nudges could be made. My point is that we cannot expect other markets to open their doors to our businesses if we close our doors to theirs.

From Sunderland to south Wales, industries are at the heart not just of our economy, but of our communities. Those industries are integral to our economic policy, and the Government are ensuring not just that they are alive and kicking, but that they prosper in the 21st century. Together, Government and business are laying the foundations for an economy that is fit for the future. By delivering the new infrastructure, industries, skills and jobs that we will need to meet the demands of the day, we can deliver a future for all that is more sustainable, secure and prosperous. Across the country, we are already seeing stories of success.

Let me begin with shipbuilding. The UK has always been and always will be a seafaring nation. Today, the shipbuilding industry supports 46,000 jobs in places such as Portsmouth and Rosyth, and adds £2.4 billion to the British economy. I am glad that the hon. Member for Kilmarnock and Loudoun welcomes today’s £4.2 billion order for five Type 26 frigates, which will be built in Glasgow.

Earlier this year, we refreshed our national shipbuilding strategy, unlocking more than £4 billion in investment for maritime firms from the Solent to the firth of Forth. We are improving access to finance by providing credit for UK ship buyers through a home shipbuilding credit guarantee scheme, and we are working closely, through the shipbuilding enterprise for growth, to raise the productivity and competitiveness of UK shipyards.

This is not just a story of success at sea; we are leading the way on land, too. We are the sixth largest automotive producer in Europe, and the sector is one of the engines driving forward our plans for green growth in every corner of the country. Last year, Nissan announced £1 billion in investment to create a world-first electric vehicle hub in Sunderland, safeguarding 6,200 existing jobs and creating more than 1,000 new ones. We know that there is some way to go, but this Government are committed to putting the pedal to the metal and doing all we can to accelerate our efforts.

Many Members quite rightly talked about steel. The Government recognise the challenging international economic environment in which the steel industry has to operate, including in relation to overcapacity. Above all else, we understand the vital role that steel occupies as a cornerstone of the UK economy, underpinning domestic industries and local communities. Over the past nine years, the Government have committed £800 million towards electricity costs through the energy intensive industries compensation scheme, on top of the energy bill relief scheme. Of course, we continue to consider what can be done to ensure that the steel industry is competitive, in fair terms, with other nations.

On critical and advanced materials, we are investing in the materials of the future. That is why we published in July our first ever critical minerals strategy, which sets out our plan to secure our supply chains. We are boosting our domestic capabilities in the production and processing of critical minerals, building a circular economy where they can be recovered, reused and recycled.

The story really could go on, but I think I have made my point. This country has a rich industrial history that goes back centuries. Our world now looks very different from the 18th century, but one thing remains the same: that particularly British spirit of innovation and enterprise. This Government can and will play their part so that no community or corner of this country is left behind.

Question put and agreed to.

Resolved,

That this House condemns the Government for its lack of policy on British industry including the steel, automotive and shipbuilding sectors; regrets that after 12 years of Conservative Government, the UK has the lowest levels of business investment in the G7; recognises the large number of high-quality jobs created by British industry, as well as its importance to achieving the UK’s net zero targets; calls on the Government to recognise the unique challenges and opportunities in each of these sectors; and therefore further calls on the Secretary of State for Business, Energy and Industrial Strategy to urgently bring forward plans to ensure these sectors are supported and to avert job losses that will have a devastating impact on communities and the wider economy.