Education and Local Government

Debate between David Davis and Clive Betts

Tuesday 14th January 2020 Commons Chamber

[Mr Davis]

I will come directly to the hon. Gentleman’s question later in my speech. He is exactly right in one respect: that is a contributory factor for productivity. But he should not look just at the past 10 years if he wants to comment about our infrastructure. The most used phrase by George Osborne when he was Chancellor was to say, while pointing at Gordon Brown, that he never mended the roof when the sun was shining. That is exactly what happened through those Labour years: profligate spending—poor spending, inadequate spending —that nevertheless did not provide the services that we needed.

Now, what has been the effect of that change in productivity? What is the size of the impact? Had productivity continued at the level it had been for the previous 60 years, had we not had the financial collapse, which happened largely under the watch of the Labour Government and the earlier Clinton Administration in the US, then wages, income and the economy would have been about 22% bigger than they are today. The tax take would have been higher, the deficit would have been easier to pay off, austerity would have been more manageable and shorter. All those things stemmed not just from the crash, but from the damage to our ability to recover from the crash as productivity was allowed to collapse. This dramatic and apparently permanent reduction in productivity has had spectacular consequences across the whole of society and the entire economy, and that is what we have to solve.

The productivity problem is a universal problem. No productivity means no progress. How do we deal with that? The answers include education, skills, training, research and investment, and of course, as the hon. Member for Weaver Vale (Mike Amesbury) rightly said, infrastructure. If we are to reset our economy and our society, we must be unflinching in our analysis and in the critique of our own past as well as those of the other parties.

[Mr Betts]

The right hon. Gentleman denigrates the efforts, policies and achievements of the previous Labour Government on productivity. Will he therefore explain why productivity went up by over 2% under that Labour Government on a consistent basis? Since 2010, however, productivity has hardly risen at all.

[Mr Davis]

Productivity had been at that level for 60 years. It is not difficult to keep things the same as they were before; the really hard thing is to smash productivity down from 2.3% to 0.5%, which is what the hon. Gentleman’s Government did.

If we are to reset the economy, let us look at what we got wrong, as well as at what Labour got wrong. Take research. The past 30 years, under Governments of all persuasions, have seen the UK decline from one the most research-intensive economies to one of the least. In the past decade, China has overtaken us, and South Korea now spends three times as much as we do. The Queen’s Speech committed to establishing the UK as a world leader in science with greater investment—so far so good. In my view, we need to do even more than that in quantitative terms. In the short term, we need to double the amount of research spend not just by the Government, but by the private sector. In the longer run, we need to treble that joint expenditure, and I stress that it should be joint expenditure. We should also address the things that we have not been so good at. It is easy to put money into genetics, artificial intelligence, self-driving cars or IT—the things we are historically world leaders in—but we should also try to ensure that that money goes where it will make a big difference by improving the things that we have not been so good at.

Historically, we have not been so good at what is called translational research. That means taking a good idea from the laboratory and making a great product, which leads to a great company, which leads to more and more jobs, more wealth creation, more tax and the rest of it. We would do well to build on some of the great institutions that we currently have. The University of Sheffield Advanced Manufacturing Research Centre, which is essentially an aviation-based operation, is doing fantastic, world-class, world-beating work. We should do similar things with the Warwick Manufacturing Group. There is a great deal of work to do to encourage those operations and build on them. Maybe we should even look to build a Massachusetts Institute of Technology of the north, because that is the sort of thing that we should be considering if we are to fix our economy.

I have some sympathy with one area of Opposition Members’ comments, which is the university underpinning of the research and the response to the Augar report. I know Philip Augar very well, and I spoke to him about his review before the report. If anything, it pulled its punches. The truth is that the university tuition fees and loans scheme invented and implemented by the Blair Government and carried on by us has failed. It has done a bad job. It has delivered poor-quality education, high levels of expectations and low levels of outcome. It has landed young people—some are now middle-aged—with liabilities for almost their entire lives, putting a cap on their aspirations. It has not delivered what it was intended to deliver, which was people paying for their component, not the public advantage component. It does not work that way. It has encouraged all sorts of perverse consequences and behaviours in our universities, so we must deal with it. I would argue to the Secretary of State for Education—I know that this is wider and much bigger than just the Department for Education—that he and his colleagues should be radical and brave.