The Government’s Productivity Plan

Debate between Dan Poulter and Robert Jenrick

Tuesday 28th February 2017 Commons Chamber

[Robert Jenrick (Newark) (Con)]

It is a pleasure to speak in this debate. I congratulate the Chair of the Business, Energy and Industrial Strategy Committee and its other members, most of whom are here, on their success in pursuing tenaciously Philip Green. I have heard during the course of the debate that he is making a payment equivalent to four of his super-yachts, and that will be on the way as soon as possible. That shows that tenacious and persistent Select Committee questioning can yield results.

I do not intend to speak for long, having spoken in at least two similar debates on this topic over the past year or two. During that time, as a result of a management change, productivity plans have become industrial strategies, but I hope that most of the salient points will remain from the previous approach. The first point I want to make is one that my right hon. Friend the Member for Wokingham (John Redwood) and I made earlier: that we have to proceed with some caution before we are too blasé about the incredible job creation record of this Government and their predecessor. In my constituency, unemployment is now about 0.5%. The average wage in my town remains pretty low, at about £22,000 or £23,000 a year. Like other right hon. and hon. Members, I would like to see wages rise and none of my constituents stuck in poorly paid, low-skilled jobs. I want everyone to have not just the dignity and security of a job but the fulfilment of a career path to better-paid, better-skilled employment. However, we have to be careful before wishing away these jobs. One piece in this country’s productivity puzzle that is perfectly explicable is the fact that we have had extremely high levels of employment while some of our competitors have not. I am sure that none of us in this House would wish to replicate the levels of employment in countries in continental Europe such as France, Spain and Italy.

Immigration has certainly played a part in this. In my constituency, the fact of very high levels of migrants coming into my community has led to very little pressure on wages. Local employers I have met, particularly in the low-skilled or even unskilled areas of food production, agriculture and the care sector, have seen no demand on them to increase wages in the past five years or even more. That will of course change with Brexit. It will be a major challenge to my local economy, as to the whole country, to maintain this level of employment in those circumstances. Having said that, we obviously all share the objective of becoming a country in which people are not just employed, but well paid.

[Dr Poulter]

My hon. Friend makes some good points about productivity challenges and those of stagnating and low wages in certain sectors. I caution him, however, on the care sector, because workers from the EU and from further overseas fill those jobs. The care sector faces huge challenges in finding enough people to do that work, be they from overseas or from Britain, and, in the long term, the issue of wages is not going to be solved by Brexit.

[Robert Jenrick]

I apologise if I chose my words poorly, but the point that I was trying to make is that we need to exercise great caution, because two things have had an effect. The first is that high levels of immigration have meant that wages have been supressed, but as we leave the European Union we also need to ensure that people continue to do those jobs, whether they be in the care sector or, indeed, in the food production industry in my constituency. There is a challenge ahead for the Government not only to maintain employment levels, but to ensure that there is a better-paid workforce.

Secondly, as has already been said, a major contributor to our loss of, or stagnating, productivity in recent years has been the decline in the financial services sector since the financial crash of 2008. That has happened not just in London, but across the country, including Edinburgh in Scotland, Manchester and my own city of Nottingham, where the related company Experian is based. There are fewer jobs and less productivity. Nobody is a friend of investment bankers, but they are highly productive members of the economy and we need to be careful about how we accommodate the financial services sector post-Brexit. Personally, I am fairly optimistic about the future, given that those investment bankers and lawyers to whom I have spoken will not follow the entreaties of Mr Macron and move to France, with its sclerotic, socialist economy, any time soon.

We need to be careful, however, about how we proceed in tackling the productivity gap. I am particularly cautious about spending more money and getting the country into further debt. The national debt, of course, is £1.8 trillion and it is increasing at a rate of £5,000 per second. Levels of austerity have been grossly overstated: public spending has fallen by only 5% or 6% in real terms since 2010. Although it has fallen as a percentage of GDP, it remains a major problem, and I am particularly concerned that fewer and fewer right hon. and hon. Members even mention the debt and the deficit as part of our national dialogue. That needs to change, because the greatest threat to our economy and productivity is the debt we are leaving to future generations.

Oral Answers to Questions

Debate between Dan Poulter and Robert Jenrick

Tuesday 24th February 2015 Commons Chamber

[Dr Poulter]

I am very happy to meet the hon. Gentleman, but he will be aware that the move away from the historical funding formula towards a per head or capitation formula is a move in the right direction. If there are certain local concerns, I am very happy to meet him to discuss them.

[Robert Jenrick (Newark) (Con)]

May I commend the Government on raising the priority for dementia in their announcement last week? Will the Secretary of State and the Department of Health put all their resources behind towns such as Newark, which are trying to establish themselves as dementia-friendly towns and are working with shopkeepers, banks and the business community to make it easier for older people with dementia to lead fulfilling lives?