Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 13th March 2018 Commons Chamber

[Greg Clark]

My hon. Friend is a champion of this sector. The Under-Secretary, my hon. Friend the Member for Watford (Richard Harrington), has met the vice- president of Brookfield and expressed our continuing support for Springfields to have a future in providing fuel for plants in this country and overseas.

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

GKN was forged in our country’s first industrial revolution. It built the tanks used in the D-day landings, and its innovative battery technology will power our future economy. The Government’s industrial strategy identifies batteries as a key technology and manufacturing as a priority sector, yet the Secretary of State has nothing to say about the hostile takeover of that great firm. Why is it that all too often, as with Arm and Unilever, his industrial strategy seems to leave great British success stories less great or less British?

[Greg Clark]

I would have thought that the hon. Lady would have informed herself as to the responsibility of Ministers under the Enterprise Act 2002. That Act, which was passed under the previous Labour Government, states that Ministers can intervene only in mergers that raise public interest concerns on the grounds of national security, financial stability or media plurality. She should know that the Government’s corporate governance reforms have ensured that GKN had longer to prepare its defence, preventing the kind of smash and grab raid that Cadbury’s was subjected to under the previous Government, and that provision has been made for legally binding undertakings to be given in takeover bids. Those are intended to be used, and I would be surprised and disappointed if any bidder did not make their intentions clear, extensive and legally binding.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 30th January 2018 Commons Chamber

[Mr Speaker]

Order. May I gently remind colleagues that at topical questions progress is expected to be much quicker? We need short, sharp inquiries; people should not simply seek to bring into topicals what they would have asked had they been called—which they were not—in substantive questions. Pithy questions; pithy answers.

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

I shall try to be pithy, Mr Speaker.

GKN is a great British engineering company, forged in the first industrial revolution with strengths in defence, aerospace, automotive, batteries and the internet of things, which should place it at the heart of our future economy—high skills, high productivity and high wage—but the debt-driven hostile takeover threatens 6,000 UK workers, pension funds and the supply chain. The Secretary of State has said that he will not comment on individual cases, so may I ask him a general question? Does he believe that it is in the national interest for City investment houses to use debt to dismantle our industrial base?

[Greg Clark]

The hon. Lady understands the constraints that I have in any particular takeover. As a feature of our economy, it is very important that we have investment into our companies from those with the capital to do so. That is why we have a regime that limits the grounds for intervention, but there are certain grounds that I will have to consider during the time ahead.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 12th December 2017 Commons Chamber

[Greg Clark]

I do agree with that, and I commend my hon. Friend as the former life sciences Minister who saw before many people the opportunities of the strategic approach. I think he has been honoured this very week by the learned societies for his contribution to promoting science in Parliament, and I congratulate him on that. He is absolutely right that we need to build on these successes. The life sciences sector deal is a demonstration that a long-term strategy can have immediate benefits; we have had more than £1 billion of investment on the basis of the confidence that the sector has in the strategy we have set out.

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

With a few notable exceptions, I am sure we would all agree that technology has improved the productivity of this House, but the same is not true for our country: productivity has stagnated since 2010, and we produce 25% less in an hour than the Germans and French, crippling business and making us all poorer. Last week the Chancellor tried to blame disabled workers, but his own Budget fails to invest in science and productivity until 2021. Will the Secretary of State admit that the Chancellor’s ideological austerity, meaning we fail to invest in our engines of economic growth, is the real handicap here?

[Greg Clark]

I do not agree with the hon. Lady, and if she reads the industrial strategy she will see that the biggest increase in science and innovation investment for 40 years has been triggered by this. It is the right way to go, and it has been welcomed by all parties across the country. It would be helpful if the hon. Lady recognised that many other countries have benefited from a strong national commitment to improving investment in productivity, such as through science and innovation, and that gives confidence to overseas investors.

Draft Scotland Act 2016 (Onshore Petroleum) (Consequential Amendments) Regulations 2017

Chi Onwurah Excerpts

Tuesday 28th November 2017 General Committees

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

It is a great pleasure to serve under your chairmanship, Mrs Moon. I thank the Minister for introducing the draft order. She, and your, Mrs Moon, have set out the title of the statutory instrument so clearly that I do not feel the need to repeat it. For the benefit of the Whips, and those Members with pressing engagements, I shall start by saying that the Labour party does not oppose the statutory instrument.

As set out, the Scotland Act 2016 provides for a range of devolved powers to Scotland. As recommended by the Smith commission, it was agreed that powers related to onshore oil and gas licensing would be devolved to Scotland. That was set out in sections 47 to 49 of the 2016 Act. At the same time, as the Minister has already set out, all aspects of taxation of oil and gas receipts remain reserved. The statutory instrument makes minor amendments to existing tax legislation, such that the wording reflects the new powers over licensing granted to Scottish Ministers through the 2016 Act. I will not go into those amendments now; suffice it to say, they are minor, technical and uncontroversial changes.

The statutory instrument, once it becomes law, will devolve licensing power for petroleum exploration and development to Scottish Ministers. Will the Minister confirm that that includes fracking, in addition to other more conventional forms of drilling? If, as I believe, it does, the statutory instrument means that there will be no fracking in future in Scotland—at least as long as the present devolved SNP Administration remains in place—because the First Minister has said that her Government are opposed to it. Does the Minister agree and appreciate that there will be no fracking in Scotland as a result of the legislation, and does she have any views on the implications for England as a consequence? Specifically, has she had any discussions with companies that are looking to frack in England and Wales and that may have wished to expand their operations to Scotland? That would change the size of the fracking market in the United Kingdom. Those questions aside, I have no opposition to the statutory instrument.

Draft Renewables Obligation (Amendment) (Energy Intensive Industries) Order 2017

Chi Onwurah Excerpts

Thursday 23rd November 2017 General Committees

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

It is a great pleasure to serve under your chairmanship, Ms McDonagh. I start by thanking the Minister for bringing the draft order forward, and the Government for devoting attention to this important area—though not in as timely, transparent or logical a fashion as we would have desired.

For the benefit of the Whips and those Members with pressing engagements, I shall start by saying that the Labour party does not oppose this statutory instrument. We support the ends: the aim of lowering the cost of electricity for industries that use electricity intensively, where that cost is increased by green and social obligations. However, we have serious concerns about the means that the statutory instrument uses to lower those costs and regret that the Government are incapable of providing the support that energy-intensive industries merit.

Although energy costs account for 3% of UK business expenditure on average, there are sectors where that figure reaches 10%, including steel, cement, paper, ceramics, glass, chemical industries and others. They are referred to, as the Minister set out, as energy-intensive industries. Those industries play a crucial role in our economy, contributing more than £52 billion to our GDP and supporting 600,000 high-quality, skilled jobs. That is an important point, because our economy lacks high-quality, skilled, well-paid jobs.

Steel in particular has being crying out for support. It produces an economic output of £1.2 billion and employs 31,000 people, contributing 0.1% of the UK economy and 0.7% of manufacturing output. Let me emphasise again that those are high-quality, highly skilled jobs, which we wish to see retained and expanded in a productive economy.

The value that those industries bring to the UK economy in terms of jobs and economic output is therefore considerable. They are an important part of our manufacturing base and have a crucial role to play as part of any successful future industrial strategy. Energy-intensive industries are frequently foundation industries, producing materials that are an important part of supply chains for other industries in the UK. In an increasingly volatile world, we need strong foundation industries in Britain to ensure security in the supply of the materials on which our economy depends.

However, as we work towards a greener future and fulfil our international obligations to reduce carbon emissions, we need to develop manufacturing methods that are sustainable, including in their use of energy. That was what the renewables obligation, which was brought in by the last Labour Government in 2002, sought to achieve, by providing support drawn from energy bills for the development of renewable energy, and thus contributing to meeting the UK’s EU target to produce 15% of our energy from renewable sources by 2020 and our low-carbon goals. As the Minister set out, that system was superseded by a combination of the feed-in tariff for small-scale generators and contracts for difference for large-scale generators, but existing projects benefited from the renewables obligation and will continue to do so for a number of years.

This policy necessarily exposes companies in energy-intensive industries to higher electricity bills, to which they are more vulnerable than other electricity consumers. The costs are significant. For a business using 10 GW of electricity a year, we are talking about £215,000. As most energy-intensive industries operate in international markets, those costs place them at a competitive disadvantage, and increase the risk of investment leakage through businesses choosing instead to make investments in countries with less ambitious climate policies.

That would be disastrous for UK industry and for the security of our supply of foundation materials, as I have indicated. As the Minister hinted, it would also effectively export our carbon emissions: we would continue to use the same or greater amounts of steel, ceramics and other materials, but would have to import them from countries where environmental regulations are weaker. It is worth noting that even before the effect of the renewables levies, UK energy prices are high by global standards. UK prices were equal to industrialised country averages in 2010, but 40% higher than the average by 2015.

The order intends to address the continuing cost of the renewables obligation on energy-intensive industries. As the Minister set out, it will set up a regime whereby energy-intensive industries are exempt from 85% of the cost that would otherwise accrue to them as a consequence of the renewables obligation regime. It replaces a scheme set up in 2015 that provided for a rebate to go to companies operating in energy-intensive industries. That scheme was suspended in the summer of this year for reasons that the Government have still, even after the Minister’s speech, not made entirely clear. I would appreciate it if the Minister provided some more clarity on that point.

The new regime that will be established by the statutory instrument differs substantially from the scheme that was previously in operation, chiefly in so far as it exempts energy-intensive industries from renewables obligation costs, and places the cost of exemption on to other non-exempted energy users. It is quite literally robbing Peter to pay Paul.

[Claire Perry]

I want to clarify that, because I raised exactly the same question at the briefing. As I understand it, right now the funding for this obligation and for contracts for difference is basically paid for by taxpayers. It comes out of the BEIS budget. Taxpayers are also energy consumers, so this is simply a question of whether we take the money out of our taxes or directly from the companies. It seems to me that it is probably a much more efficient scheme to—

[Chi Onwurah]

indicated dissent.

[Claire Perry]

The hon. Lady shakes her head, but she and I both know that getting money out of the Government is complicated. If we want to help these industries, which she and I violently agree are critical to Britain, given the jobs within them, it seems to me far more streamlined and beneficial for them to work directly with their suppliers, rather than having to apply to BEIS and get money out of taxpayers, which is essentially coming out of our pockets.

[Chi Onwurah]

I thank the Minister for that intervention—it is always good to have a debate—but I disagree with her strongly. It should be difficult to get money out of the Government; that could be called accountability. The reason we have a Government is that they take decisions on behalf of the population—the citizens as a whole—that support the Government’s values and objectives. The Department for Business, Energy and Industrial Strategy should set out those objectives, including greater renewable energy and support for our foundation industries, in its industrial strategy, and be prepared to support them financially. Perhaps that is a key difference between my, and Labour’s, vision of Government and that of the hon. Lady. We believe that the Government and the public sector can make positive interventions in an entrepreneurial and innovative way to fulfil the ambitions and the potential of our industries and citizens.

[Claire Perry]

The hon. Lady is very smart; she really is one of the few intellectual thinkers. The Government do not have their own money. Government money comes from the same people who are paying the electricity bills. It is other people’s money. It comes in as taxes and we also pay our energy bills. She and I, and everybody in this room, contribute to Government funds. I am sorry, but this is a very important point. As a Government—

--- Later in debate ---

[Claire Perry]

I apologise profusely.

[Chi Onwurah]

Thank you, Ms McDonagh. I am glad to have inspired such passion in the Minister. You must allow me a brief response on the difference between taxation and energy bills. Taxation is decided by the Government, comes generally from the people—hopefully in a progressive way, where the greatest shoulders bear the greatest burden; not as it is under this Government—and is then redistributed. When it comes to energy bills, however, the people who are the poorest and coldest may bear the greatest burden. Ms McDonagh is looking at me as if I may be exhausting her patience, so let me move swiftly on.

The explanatory memorandum suggests that the legislation will cause real problems, specifically for small and medium-sized companies, which will see their bills increase substantially. The Minister made reference to consumers, and the increase that they will see. According to the explanatory memorandum, for small business energy users the increase is likely to be £160 per year, but for a medium-sized business energy user it is likely to be about £6,700 per year. To put that in context, the Business Energy monitor sets out that the average small business spends just over £2,000 per year on electricity, and the average medium-sized business spends £3,146 per year on electricity. The increase necessitated by the statutory instrument is huge—seemingly a tripling of electricity bills for medium-sized businesses. I hope that the Minister will say what the actual impact on businesses will be in percentage terms, and what discussions she has had with the Federation of Small Businesses, for example, to assess that impact. From a party that styles itself as the party of enterprise and the entrepreneur, this is alarming to say the least.

How did the Government arrive at such a drastically unfair solution to what should have been a reasonably simple exercise of updating or replacing the rebate system? In spring 2016, the Department for Business, Innovation and Skills consulted on a new scheme to replace the rebate scheme. The consultation ran for eight weeks and looked in detail at the plans to implement an exemption scheme, receiving 69 responses. I am unclear as to how, after consulting on the proposals, the Government arrived at this solution, which will hit the bills of ordinary energy customers, and particularly small and medium-sized enterprises. Are the Government happy that this exemption scheme will put costs up for small businesses—the backbone of our economy? Have they considered any other methods of ensuring that non-exempted customers do not have to bear the costs of the scheme in the way that has been set out?

It is worth noting that the effect of the statutory instrument is to replace an energy-intensive industries compensation scheme for the effects of the renewables obligation with an exemption scheme. That means that the Government will save the money that previously went out in compensation and require the equivalent of what they have saved to go on to customers’ bills instead. The additional costs on bills undoubtedly will need to be shown. Is it the Government’s intention simply to lump them in with green and social costs, or to account for them separately? Will the Minister also say how, where and whether the money that has been saved—as she set out—from the BEIS budget is being spent, or whether it is returning to the Exchequer?

The Minister mentioned that the timing of the new scheme is falling behind. The explanatory note published with the order states a firm intention that the exemptions should come in on 1 January. The Minister set out that that date will now be missed, with a four-month delay until 1 April, as I understand it. Why has that delay been allowed to happen, and what effect will that have on the finances of energy-intensive industries? It gets worse, because the Government intend to make the changes set out in the instrument alongside another statutory instrument, the Electricity Supplier Obligations (Amendment and Excluded Electricity) (Amendment) Regulations 2017.

[The Chair]

Thank goodness that is not what we are discussing today.

[Chi Onwurah]

Absolutely.

[Mr Richard Bacon (South Norfolk) (Con)]

Can you say that again?

[Chi Onwurah]

I could, but I will not. That legislation was laid in draft in March 2017 and was subject to a continuation motion in June, but I understand that it has not yet been formally debated and agreed. That statutory instrument contains a number of amendments to the 2015 legislation, in addition to those proposed in the order we are discussing. In particular, it includes a schedule specifying which industries are to be exempt, which the Minister mentioned.

It looks, on the face of it, as though the regime that is due to come into place as a result of the order will be uncertain in its extent, and hence difficult for companies to plan for, since there will remain unfinished business in terms of definition and other matters. Does the Minister accept that and does she think that that will affect the timetable for implementation further, with a possible delay beyond 1 April? Why were the draft regulations not laid simultaneously with the order we are debating, so that we could have enjoyed debating them both and so that the uncertainty could have been cleared up straightaway?

Yesterday’s Budget has thrown up a new flaw in the Government’s policy in this area, which I would argue demonstrates the lack of seriousness with which they are treating the task in hand of supporting our energy-intensive and foundation industries. In the updated levy control framework that was released yesterday, the Government committed to

“no new low carbon electricity levies until 2025.”

If I am not wrong, this statutory instrument seeks to implement just that—a new low carbon electricity levy. Will the Minister confirm that this is yet another example of the Government tying themselves in knots and U-turning on a policy before it is even brought into law?

In conclusion, our party does not support this system for the long term. If a Labour Government had been elected in June, we would not have done it in this way. We call on the Government to review the system with a view to returning to a rebate system, provided that we establish continuity of rebate and a stable environment for energy-intensive industries to work in. However, we recognise the urgent need to reinstate some form of cost-reduction scheme for the renewables obligation costs of energy-intensive industries. As such, although we have put on the record strongly and at some length our disagreement with several aspects of the statutory instrument, we will not oppose it.

[Claire Perry]

I will endeavour to be brief and less passionate. I thank the hon. Lady for her thoughtful response. I am delighted that we are in violent agreement about the need to support these incredibly valuable industries and the thousands of high-skilled, productive jobs for the people they employ across the UK.

I will clarify a couple of points. The current scheme has not been suspended—I am not quite sure where that came from. It continues until the exemption is introduced, which will now be in April, so the normal rules will apply.

The hon. Lady asked a sensible question about the impact of the order on small businesses. SMEs can apply as well; it is not a size test, but a measure of what percentage of a company’s gross value added is spent on energy.

[Chi Onwurah]

I thank the Minister for that clarification; it is an important point. SMEs can apply for the exemption but they would need to be in energy-intensive industries, as set out in the schedules to the 2015 order, which I understand will be updated. They may not know, as yet, whether they can apply for it. They may have a large bill without necessarily being in an energy-intensive industry.

[Claire Perry]

I am happy to clarify again. First, because the schedule of energy-intensive industries is already known—businesses already know if they are classified as in that sector—the test is whether they are energy-intensive users, regardless of their turnover. The measure is based on energy as a percentage of profits and labour costs. Businesses of all sizes can apply. Because the order effectively aligns the RO measures with the CfD measures, it is the same certification process. Based on the legislation that we introduced recently, businesses will already know and will be able to say, “We have the certification and we will take that to our suppliers.” There should be certainty out there among businesses as to whether they can apply. The hon. Lady and I have the same thinking: what happens if energy bills fluctuate wildly? My understanding is that when a business is certified as eligible, that certification lasts for five years, so that gives businesses a sense of certainty for their future cost planning.

On the hon. Lady’s point about additional costs, the overall impact is assessed at something like 0.5% of energy costs. I will write to her with the exact number. She is right that we want to ensure that there is no enormous uplift for businesses. As I tried to point out, one way of thinking about it is that businesses already pay a number of obligations to the state, such as corporate taxes and business rates. In effect, some of that money was coming back to them in the form of exemptions, but it was not coming back to all businesses. I think the fact that businesses that were not getting the money back will now see a bit going on their energy bills provides a more transparent system, as she said.

This is not a new levy; it is an application of the old scheme. The hon. Lady understands about business and she knows that it can be difficult for someone trying to manage their cash flow to have to apply to Government and wait for money that could take several months to come through. Simply having that money taken off their bills before they pay them has to be a better way for a small business owner or a financial manager to operate.

I am delighted that we have the Opposition’s support on this. It is an important measure to support some of our most strategic industries. I thank Committee members for their patience and support. We want to try to safeguard the competiveness of these industries. I therefore commend the draft order to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Renewables Obligation (Amendment) (Energy Intensive Industries) Order 2017.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 12th September 2017 Commons Chamber

[Greg Clark]

I have not seen the report. I will look at it, but I think it is mistaken. The challenge fund includes, for example, the Faraday challenge, which I launched at the University of Birmingham along with many industrialists and academics from across the west midlands. It is proposed that the west midlands should be at the heart of the challenge. Investment in driverless cars, and in satellites and space, is taking place throughout the country. One of the big features of the challenge fund is that it reaches every part of the country, and, indeed, every part of the United Kingdom.

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

With Brexit uncertainty mounting, inflation rising, growth faltering, business confidence at a six-year low, and the euro at a record high—[Interruption.] I am sorry, but that is the truth. Our economy therefore needs action from this Government, but instead it is groundhog day, with the same money announced over and over again, which makes it back to the future for our regions, with, as my hon. Friend the Member for West Bromwich West (Mr Bailey) indicated, the challenge fund money being shown by Sheffield Hallam research to impact only 1% of the economy, overwhelmingly in the south-east. So will the Secretary of State stop prevaricating, do the right thing and tell us right now what level of regional growth he expects the challenge fund to deliver? Or does he not even know what success looks like any longer?

[Greg Clark]

Talking of groundhog day, the hon. Lady talks complete nonsense. The industrial strategy challenge fund and the industrial strategy Green Paper have been widely welcomed in all parts of the country. After our exchanges, I will send the hon. Lady the support it has had from the north-east of England, of which she should be aware. This is something that has long been called for. I have listed the sectors that will benefit. As we are talking about manufacturing, in terms of her reflections on the state of confidence in the economy, the hon. Lady should know that the EEF last week reported record orders, record export orders, record employment and record investment intention. She should welcome that.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 27th June 2017 Commons Chamber

[Greg Clark]

I will indeed. As I said in an earlier answer, the importance of upgrading our skills education is vital in all parts of the country, including Torbay, and institutes of technology are a way of making sure that industries can benefit from the particular skills that they need.

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

Having abolished the regional development agencies, the Conservative party has refused to invest in growth for good jobs across the country. Ours is now the most unequal economy in western Europe. If every region produced at the same rate per head as London, we would all be one third richer, but instead working people have not had a pay rise for seven years. Will the Secretary of State commit himself to matching the specific proposals for investment for jobs that are laid out in Labour’s industrial strategy, or does his new-found largesse end at the shores of Ulster?

[Greg Clark]

Again, that was a disappointing response. The hon. Lady knows, and the leaders of her local councils know, how important initiatives such as the city deal and the growth deal have been in the north-east. If she looks around the country, she will see that, whereas in past years most jobs were created in London and the south-east, that situation has been transformed, and the north-east of England is one of the areas that have created jobs at a more rapid rate than anywhere else in the country. She should commend that development.

Intellectual Property (Unjustified Threats) Bill [Lords]

Chi Onwurah Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 21st March 2017 Commons Chamber

[Bill Esterson]

Amendments 1 and 3 are related to primary infringers and those who claim “to do”. Amendment 1 addresses the concern about the impact on those who claim to make a product and the potential for action to be taken against them. Amendment 3 defines “claims to do”.

We are dealing here with communication and threats. As the Bill stands, the onus is on a rights holder not to communicate with a party that claims to be a primary infringer of rights. The example that springs to mind is that of an own-label brand in a supermarket. Under the Bill, a manufacturer who believes that a product contravenes their rights may not communicate with the supermarket unless they are confident that there is no other way of finding out who the manufacturer really is. The problem is that smaller manufacturers wanting to challenge the bigger players may not have the expertise or access to expertise needed to comply with the provisions of the Bill. They do not have the staff, time or money to engage legal services or to search for the true identity of the manufacturer. The Minister said in Committee that if action were taken against a rights holder, they would be able to defend themselves in court. Now, that is entirely accurate in legal terms, but the problem is that smaller organisations lack the resources to be able to do so.

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

As I think I said.

[Bill Esterson]

As my hon. Friend may well have said in Committee.

The problem is one of imbalance. Our court system necessarily favours those who have the deepest pockets and the greatest resources, and that does not mean smaller businesses. Will smaller businesses risk winning or losing in court? Will they have the money to defend themselves against an action, or will they think it is worth defending their intellectual property in the first place? It will be for the courts to decide whether a rights holder could have found out who the primary infringer was. For smaller businesses, it could well be a tough choice as to whether they believe the court will back them when they say in court that they did not realise that they should not have contacted the apparent infringer.

If not through what I am proposing, and what my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) proposed in Committee, how does the Minister propose to ensure that there is a level playing field between protecting the rights holder, especially the smaller rights holder, and preventing unjustified threats, especially where the rights holder is the smaller party? How does he propose to guarantee smaller businesses the ability to operate on a level playing field? To be entirely fair to the Minister, I completely understand that that is the purpose of the whole Bill. My thanks go to the Law Commission for its work in delivering to such an objective. The Bill very much has in mind the need to balance protection and encouragement for innovators, entrepreneurs and investors with the need to ensure a fair market and to prevent unfair and exploitative competition. However, there appears to be a degree of ongoing potential for imbalance in the legislation regarding those who claim to be the manufacturer or the primary infringer, and the Minister’s answers in Committee did not go far enough to guarantee that smaller businesses will be protected.

Amendment 2 would address some further concerns of smaller businesses that lack the resources for legal advice and that may fall foul of the Bill’s narrow remit. The amendment addresses the problems where a rights holder challenges not just the primary infringement but secondary acts of infringement. The rights holder may wish to prevent future infringement or to comment on related infringements of a similar nature. The amendment would minimise the fallout from inadvertent infringements. The amendment would not penalise a rights holder for mentioning secondary infringements when such communication was about potential future infringements or similar current infringements. The Chartered Institute of Patent Attorneys raised the concern that future infringements are excluded as the Bill is now drafted.

It seems reasonable to ask an infringer to stop now and in the future, and not to carry out similar infringements, so amendment 2 also deals with the concern of smaller businesses that lack the resources or expertise to ensure that all their communications are strictly compliant with the Bill’s provisions. I agree with the Minister that rights holders ideally should get their communications right, and that is a large part of the thrust of the Bill, but my concern is that the lack of access to legal expertise for smaller businesses could be a real problem.

The Government’s Productivity Plan

Chi Onwurah Excerpts

Tuesday 28th February 2017 Commons Chamber

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

It is a real pleasure to speak in this debate and to follow so many excellent and well considered contributions. I must draw particular attention to the opening speech from my hon. Friend the Member for Hartlepool (Mr Wright), the Chair of the Business, Energy and Industrial Strategy Committee, who made almost all the points I intend to make but much more eloquently than I could ever hope to do. This is one occasion on which Newcastle will follow in Hartlepool’s train.

As many Members have said, productivity is a key subject. It is one of the most important challenges facing our economy, as the hon. Member for Warwick and Leamington (Chris White) emphasised. High productivity is correlated with high wages and high skill levels. If we want a high-wage, high-skill economy—as we on the Labour Benches certainly do—improving our productivity must be a key goal. However, under this Government our productivity has fallen consistently. We are now 30% behind Germany, the US and France—the widest gap since 1992. That was decades ago, when there was another Tory Government with a small majority. Since 2010, UK productivity has grown on average by just 0.4% a year. The OECD, the CBI, the Office for Budget Responsibility and the Bank of England have all expressed concern that continued low productivity growth is holding back our economy.

How can we improve our productivity? It is quite simple, in a way. We need to get more out of the same inputs, and that is about either people or technology. The economist Mariana Mazzucato has said that productivity comes from allowing people

“to work more efficiently, with state of the art training, technologically advanced machinery, an innovative division of labour, and harmonious capital-labour relations.”

First, let me discuss people. As the hon. Member for Horsham (Jeremy Quin) said—I entirely agree with him on this point—people are the key asset of our economy and businesses. However, this Government consider labour to be a commodity, and commodities are not productive. Imagine a worker sitting at her desk feeling disempowered, unvalued, and disfranchised. Of course her productivity will be lower. But empower her and give her a sense of agency and her productivity will rise. Skills are an essential part of empowering workers and improving their productivity, as emphasised by the hon. Members for Kirkcaldy and Cowdenbeath (Roger Mullin), for Derby North (Amanda Solloway), and for Aberdeen South (Callum McCaig).

However, the productivity plan that we are debating with the estimates committed nothing to skills other than a promise to fund Charlie Mayfield’s initiative to boost management skills to boost business—hardly an extensive investment. The BEIS Committee’s report criticised that lack of commitment and argued for a renewed focus on upskilling the workforce. Unfortunately, the Government do not seem to have taken that criticism on board. It has been 18 months since the productivity plan and six months since the BEIS Committee’s report, and last month’s industrial strategy Green Paper did not recognise the criticisms at all, simply promising £170 million for higher-level technical education when the Government have already cut the further education budget by 14% in real terms in the last financial year alone. That hardly remedies the inequality of esteem between further and higher education highlighted by the Committee, never mind going some way to deliver the high skills that we need to be competitive on the global scene.

In an era of technological change and when people are living and working longer, lifelong learning should be a key part of any Government strategy to upskill workers and improve national productivity. People no longer have one job for their entire career. We need to be able to upskill and respond to changing technological requirements. However, the productivity plan and the Green Paper—220 pages in total—contain only a smattering of references to adult learning and not one specific policy commitment.

The second significant factor in productivity is technology. There is both opportunity and threat in the technological transformation that we are undergoing. Analysis from the Centre for Economic Policy Research demonstrates that industrial robots and information technology can increase both wages and productivity. It also found that the increased use of robots raised countries’ average growth rates by about 0.4 percentage points between 1993 and 2007. It is clear that sustainable, long-term, smart growth requires significant investment in technology. The BEIS Committee report argued that

“if the Government is serious about productivity and competitiveness, it needs to commit to a total level of public and private R&D investment”

of 3% of GDP. Labour has committed to that target. Will the Government? In advance of the Budget, will the Minister say today that he is proud to commit to a 3% target?

As has been mentioned, output in Germany is 34% higher than in the UK. Germany’s R and D spend as a percentage of GDP has been at or near the 3% target for many years. In contrast, our spend has languished at barely half the 3% target. However, the productivity question is not just about the development of new technologies; we must ensure that businesses can use them and utilise the productivity benefits that they bring. That is crucial in sectors such as retail.

[Richard Fuller]

The hon. Lady has talked a lot about the targets for how much we invest in R and D, but does she appreciate that there are other points of view that say that it is about the way we account for our R and D investment? If we look at the type of investments that we make in the UK, we see that the comparison between us and other countries is much more favourable. It is not just about the quantum of our investments but about the returns on those investments.

[Chi Onwurah]

I agree with the hon. Gentleman that it is not only about what we invest but about the returns and where those returns go. For example, it is about how the public sector ensures that it reaps those returns.

We can use statistics in many different ways, and I will not attempt a battle of statistics here, but I hope the hon. Gentleman is not arguing that the UK is leading the world. However we account for it, the UK is not leading the world in investment in technology, science and R and D, which is where our future lies. We need greater investment in that. [Interruption.] I am not sure what the Minister is saying from a sedentary position, but I hope to be enlightened at some point.

Again, the Government’s industrial strategy has absolutely nothing to say about ensuring that sectors such as retail can take up technology. The Government chose to cherry-pick certain favoured sectors for backroom deals and failed to address the root cause of our productivity crisis, leaving the majority of British workers out in the cold.

Skills and technology are key to improving productivity, but we also need a strategic vision, which is notably absent from the Government’s productivity plan. As the hon. Member for Cannock Chase (Amanda Milling) highlighted, we need a plan and a strategy. When the Government’s industrial strategy came out, we saw that it had plenty of pillars but no vision. Adding the 10 pillars of the industrial strategy to the two pillars of the productivity plan results in 12 pillars and no vision. The Government are building pillars on hot air.

[Mr Stewart Jackson (Peterborough) (Con)]

As the hon. Lady has represented a north-east seat for seven years, surely she understands that part of the problem is over-reliance and overdependence on financial services, construction and Government expenditure, which are concentrated in the greater south-east. Her Government did next to nothing about that when in power.

[Chi Onwurah]

The hon. Gentleman fails to recognise the work of the regional development agencies, which his Government abolished and which contributed significantly to changing the industrial landscape. He appears to be arguing against the financial sector, the construction sector and Government spending, and we do need to diversify, but the Government can aid that process. He fails to recognise the role that an intelligent, smart Government can play in supporting smart, sustainable economic growth. So long as Government Members fail to recognise that, we will not see smart growth in this country.

[Mr Jackson]

I am a fair-minded and generous person, so I will agree that it was more successful in the north-east than in other regions, but several academic studies have found that, in the period up to 2010, the inequalities both between and within regions were not ameliorated in any respect by the regional strategy of the Labour Government.

[Chi Onwurah]

It is interesting that the hon. Gentleman likes to concentrate on the record of the last Labour Government, which was more than seven years ago, instead of looking at the record of this Government, of the institutions that they have or have not put in place and of their success or absolute lack of success either in addressing regional imbalances or in addressing the debt. They have succeeded in increasing national debt, while also not generating any smart, long-term growth. I would be reluctant to get up to praise that record.

Despite the Prime Minister’s rhetoric about a “new, active role” for the state in the economy, the average level of public investment in this Parliament is set to be 1.9% of GDP, which is lower than the level during the coalition’s austerity agenda and barely half of what it was under Labour. This Government are, in effect, reducing private sector investment and public sector investment at the same time, taking away the lifeblood that our economy needs. Austerity did not deliver smart growth, and austerity in all but name will not do so either. The Labour party has committed to investing £250 billion in capital expenditure over 10 years, as well as committing to a national investment bank and regional development banks. I ask the Minister to say how he will be able to change our productivity and deliver on smart growth without those things.

In conclusion, our country’s productivity problem will not solve itself. We need sustained, long-term investment in skills and technology. That will not be forthcoming unless the Government have a clear, strategic vision for the future. We need to mobilise both public and private actors, crowding in investment to boost skills and innovation, and tackle the root causes of our productivity crisis. Only by doing that can we create the high-wage, high-skill, high-productivity economy that this Government say they want, that the British people deserve and that only a Labour Government can deliver.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 31st January 2017 Commons Chamber

[Greg Clark]

The collaboration between scientists and those in the nuclear sector is one of the important aspects of the continued co-operation that we want and intend to see continue.

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

The Green Paper makes much of re-announcing the welcome increase in science spending which, following cuts of up to 50% over the last seven years, has finally returned it to the levels under the last Labour Government. Research and development funding, however, remains barely half the recommended 3% target that Labour has committed to. Does the Secretary of State agree that, given the impact of Brexit on UK science, the lack of any overarching vision and the focus on picking sector winners, rather than mobilising the whole—

[Mr Speaker]

Order. I am extremely grateful to the hon. Lady—[Interruption.] Order. I am sorry, but we have a lot to get through. The Front Benchers, on both sides, must be much more self-disciplined. It is not fair on Back Benchers.