The Government’s Productivity Plan

Debate between Dan Poulter and Amanda Milling

Tuesday 28th February 2017 Commons Chamber

[Amanda Milling (Cannock Chase) (Con)]

It is a real pleasure to follow my hon. Friend the Member for Horsham (Jeremy Quin), with whom I sat on the joint Committee inquiry, and so many colleagues from the Business, Energy and Industrial Committee including: the hon. Member for Edinburgh West (Michelle Thomson) who, as ever, demonstrated she is a strong voice for Scotland on the Committee; our excellent Chair; and my hon. Friends the Members for Derby North (Amanda Solloway) and for Warwick and Leamington (Chris White).

Many Members have mentioned that the Government’s focus on productivity is very welcome. While many economic indicators are good—we have debated the fall in unemployment this afternoon—productivity remains stubbornly poor, and the word “stubbornly” has been mentioned several times this afternoon. If we are to ensure a sustainable economic recovery—one that is resilient to potential economic challenges—we really do need to address the issue of productivity. Let us be honest: that is not something new, and it is an issue that successive Governments of all political parties have struggled to tackle.

The Government’s focus on improving our productivity was first introduced with the publication of the productivity plan back in 2015. As other members of the Committee have outlined, we conducted an inquiry into the plan, and I want to pick up on a number of the points and concerns the Committee raised. One was about the lack of real focus—more specifically, the lack of measurable objectives—in the plan, and I want to come back to that. There was also the lack of a real plan in terms of implementation, milestones and timeframes. To be honest, there was a sense that, in some ways, the plan was a bit of a basket of different policies, rather than necessarily a strategic plan for the future. Some of those issues are relevant when we look at the industrial strategy—the Green Paper on it was published earlier this year.

I think it is fair to say—I am looking to the Chairman of the Committee for a nod at this point—that the fact that the Government response provided some measurable objectives was welcome. The Committee did not necessarily agree with all of them, but we were pleased that there were some measurements and metrics in there.

As everybody has mentioned this afternoon, the focus on productivity has been central to the Government’s energy since the new Prime Minister took office. She has been very clear that she wants to create an economy that works for everyone. A key part of delivering that will be developing this new, modern industrial strategy, and, as I said, we saw the publication of the Green Paper in January. I want to pull out something that was in the Secretary of State’s introduction to the industrial strategy Green Paper:

“the Government is committed to a modern industrial strategy. Its objective is to improve living standards and economic growth by increasing productivity and driving growth across the whole country.”

In short, the industrial strategy has productivity at its heart.

I am sorry to repeat the same point, but many Members have already mentioned that our productivity is poor, and we underperform compared with international counterparts—we are equal fifth with Canada among the G7 countries. Our productivity is 18 percentage points below the average for the rest of the G7. However, there is also a significant disparity regionally, and the Chairman of the Committee made the same point. As the Chancellor said in January:

“The challenge before us is to work out how to spread across the economy the best practice in productivity…so that all regions, and all corners and sectors of our economy, can share in this productivity performance and thus deliver the higher real wages and living standards that that implies.”—[Official Report, 24 January 2017; Vol. 620, c. 236.]

It has already been mentioned that London has the highest productivity of any region or country in the UK—let us be honest, that is not necessarily surprising. The only other region above the UK average in 2014 was the south-east.

What was really worrying to me, as a Staffordshire MP, was the position of the west midlands. We are the worst-performing English region. The question I have been asking myself is, why are the west midlands performing so poorly relative to other regions? More specifically, what do we need to do to address that? My hon. Friends the Members for Derby North and for Warwick and Leamington talked about some of the excellent manufacturing businesses we have in the west midlands. We have Jaguar Land Rover, JCB, Toyota and Rolls-Royce to name just a few. Is the issue the make-up of our businesses, or is it, as my hon. Friend the Member for Halesowen and Rowley Regis (James Morris) mentioned, transport? The M6 is not a million miles from my constituency.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

My hon. Friend makes a good point about transport connectivity, but does she agree that as well as road connectivity, rail and freight rail connectivity are particularly important? The Felixstowe to Nuneaton freight rail link is essential to ensure that freight and goods can get out through Felixstowe port, and improvements to the line are essential if we are to deliver the improved productivity in her region that she talks about.

[Amanda Milling]

I am grateful for my hon. Friend’s intervention, and some Members might hope that I do not start to talk about rail in too much detail, because I have spoken about it a lot in the House. My hon. Friend makes an incredibly important point, and one of the issues with the west coast main line is capacity in terms of not only passenger trains but freight trains. That is a key part of the transport infrastructure piece we need to look at. This is about road and rail, among other things.

One question I want to ask the Minister is: what is being done to look at the drivers of this regional disparity so that the different regions can understand what they need to do to address it?