Northern Ireland Economy and Innovation: Government Support

Chi Onwurah Excerpts

Tuesday 29th October 2019 Westminster Hall

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure and an honour to serve under your chairpersonship, Dame Cheryl, and I congratulate the hon. Member for Belfast South (Emma Little Pengelly) on securing this debate. It is third time lucky for her, and also for the House, because the speech with which she opened this debate was passionate, well-informed, comprehensive, and very moving in parts. I, for one, learned a lot from it.

I am proud to represent the party that helped broker the Good Friday agreement, and the current Government’s cavalier approach to preserving that agreement in the Brexit negotiations worries me. As hon. Members have said, the Good Friday agreement is the foundation of peace and prosperity in Northern Ireland, as well as the Republic. The absence of the devolved Government in Stormont is another issue that many hon. Members have mentioned. Labour’s approach rests on increasing local, regional and national democracy, and the lack of resolution to that problem clearly undermines efforts to improve innovation and the economy of Northern Ireland.

I will begin by outlining Labour’s approach to industrial strategy and innovation. It is not a top-down approach; as my hon. Friend the Member for Ealing North (Stephen Pound) said, that is not the right approach. We aim to provide support for a devolved Administration and local councils to make decisions in support of their industry and their workers. We have talked a lot in recent months about the differences between Northern Ireland and the rest of the UK, but there are also many similarities, particularly with my home region, the north-east of England. As the hon. Member for Strangford (Jim Shannon) likes to point out every time he intervenes in one of my Adjournment debates, there are many similarities between our regions, particularly our economies and the investment in making and building things over the centuries. The hon. Member for Belfast South spoke movingly about that in the context of Northern Ireland, as well as the years of deindustrialisation and under-investment in infrastructure and education that have left Northern Ireland with some significant economic challenges.

The legendary Harland and Wolff shipyard was recently saved from collapse because workers staged a nine-week sit-in in protest to show that it was still viable, but those who took redundancy face an uncertain future. Wrightbus has also been mentioned—a company that had been operating since 1946, but which closed its doors in September, threatening 1,200 jobs. It was recently bought by the Bamford family after going into administration, although we still do not know what its workers’ fate will be, particularly as the Government propose a Brexit deal that would place trading barriers between that company and the rest of the UK. The right hon. Member for East Antrim (Sammy Wilson) and the hon. Member for Strangford emphasised the negative impact that would have.

[Ian Paisley]

The business that the hon. Lady has alluded to is in my constituency. It was a very significant employer, equivalent to about 60,000 jobs if it were based here in the mainland, and I am delighted that the Bamford family have invested in it. It is a new chapter for the industry, bringing hydro technology to Northern Ireland. Hopefully, as a result we will get the cleanest, greenest public transport in not only the UK but the world.

[Chi Onwurah]

I thank the hon. Gentleman for his intervention, and I will return to that example. However, my point is that this does not reflect a sound industrial strategy, precisely because the old company collapsed because of its UK customers moving to electric buses and the new company will be making electric buses. A serious industrial strategy would have a plan for transport that could have incentivised the company to move in that direction without the chaos of administration and the sale to a Tory donor, in order to achieve the same outcome. That sort of creative destruction might excite certain Government advisers, but it puts workers under severe stress and often results in employment under worse terms and conditions, as the former employees are in a weaker bargaining position.

That process of collapse and asset stripping is related to the problem of the financialisation of our economy. The last decade has seen the UK economy centred on London and the south-east of England, with a focus on financial services rather than producing things. As the economist Mariana Mazzucato argues, the financial sector has stopped resourcing the real economy. Instead of investing in companies that produce stuff, finance is financing finance. Financialisation changes the motors behind economic activity, giving investors with short-term interests more control over firms, and its legacies are low productivity and low pay. Labour is committed to changing that and putting innovation at the centre of our economy, using our world-class universities—such as Ulster University, and Queen’s University in the constituency of the hon. Member for Belfast South—as drivers of growth, rather than putting off scientific talent from across the world with cruel immigration policies.

Labour’s “innovation nation” mission would raise research and development to 3% of GDP—almost twice what it is now—using science and industry to benefit the whole country. We need to maintain our current centres of excellence, but must also ensure that every region can benefit from innovation and growth. That is why we are committed to putting technology and innovation at the heart of the lowest-paid and least productive sectors. The hon. Member for Belfast South spoke movingly of the need for social mobility in work, which requires increased productivity. We want to restart manufacturing, but we know that most jobs are in the service sector. Some 17% of people employed in Northern Ireland work in wholesale and retail, in the everyday economy. That is why we have plans to create a retail catapult to support those workers.

Much of our additional R&D spend would be drawn on by our industrial strategy missions, such as investing in carbon capture and storage as part of our commitment to decarbonise our economy, delivering hundreds of thousands of green jobs in the process. We propose a £250 billion national investment bank, made up of a network of regional development banks that would properly put regional needs first and restore regional decision making. Earlier this year, the Northern Ireland Chamber of Commerce said that 77% of service sector firms and 74% of manufacturers were having difficulty recruiting staff. Labour’s national education service will support reskilling, delivering education free at the point of demand from cradle to grave and ensuring that we have the skills that businesses need.

Although the DUP might have secured £200 million in next year’s Budget through its deal with the Government, recent weeks have shown how quickly the Government can change their mind. Labour’s £250 billion national transformation fund would invest in transport and digital infrastructure across the UK without preconditions.

Finally, I will turn to the topic of Brexit. In the 2014-20 block of EU funding, Northern Ireland was allocated a total of €3.5 billion—significantly more than the Government’s offer to the DUP. As we have rightly opposed the Government’s shambolic Brexit deal, we have to question whether that funding will even be delivered. Will the Minister commit to publishing an assessment of the impact on the Northern Irish economy of putting extra tariffs on trade between Northern Ireland and the rest of the UK, and making sure that that impact is not negative? Will he also follow Labour’s plan and commit to maintaining the EU levels of structural investment as a minimum? Finally, given the current trade tariffs on EU exports after the row over subsidies to Airbus, what commitment will he give to aerospace workers in Northern Ireland?