Trade, Exports, Innovation and Productivity

Drew Hendry Excerpts

Wednesday 13th January 2016 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I am delighted to follow the hon. Member for Spelthorne (Kwasi Kwarteng), particularly because he said this debate was about a bygone age. In talking about innovation, I intend to bring things a wee bit further up to date by talking about the situation not only today, tomorrow or in four years’ time, but in 10 or 20 years’ time. In doing so, I hope that a ray of light will fall upon the Government Benches and that the scales will fall and tip in favour of innovation.

The Government have underplayed innovation. It is about imagination, vision and determination—words often applied to leaders and leadership. We all agree that innovation is a good thing. I have heard many times people describe the digital economy as one of the key tenets of innovation. Members have talked about the opportunities throughout the nations of the UK for small and medium-sized enterprises to help us grow and develop the economy and about the contribution they already make across rural and urban areas. New technology is available to assist businesses here and now, including the opportunities offered by superfast computing. That involves wiring together many high-speed computers to perform in just minutes actions that would normally take days or even weeks, and companies can get hold of that technology. An example of its use would be rendering an animation for industry. That kind of technology is available now but its availability is limited because companies need to be able to connect to it.

The new levels of hand-held technology available to business and industry today can transform not only business and the economy but public services, allowing us to invest more in providing better services for people. When I was a boy, I used to watch a television programme on the BBC called “Tomorrow’s World”. It was about the things that were going to happen tomorrow, but things are moving faster now. The developments that we are talking about are already here. An example is driverless car technology, which could transform the way in which we use our roads. It could transform aspects of industry and of rural connectivity. Suddenly we have an opportunity to connect people in a different way, but that innovation is not being discussed enough by this Government or by Members of this House in general. These things are available to us here and now.

Let us imagine one side benefit of looking at these issues properly. There is an opportunity for driverless technology to be used across the nations of the UK. An individual road traffic fatality costs £1 million or more— leaving aside the tragic loss of human life—but we could avoid that kind of thing by deploying new technology. We might then start to see the benefits of embracing such technology.

Members might also have heard about the internet of things. It is a real thing. We are now connecting appliances, apparatus and machinery over great distances to enable them to operate automatically. Also, 3D printers are now able to do mind-boggling things that would not have been considered possible just a few years ago. We have the opportunity to revolutionise our cities through the proper embracing of smart city technology. We have a golden opportunity vastly to reduce emissions to help our position on carbon use.

New technologies can spur growth and create great benefits for the economy. They can revolutionise and democratise things for us, including teaching and learning, allowing greater access to the subjects that are currently available only to the few. They can grow high-quality jobs and provide opportunities for people who are still locked out. These include opportunities for our young people, for young girls and for women to get into industries that they have traditionally been unable to get into—such as science, engineering, technology and IT. As my hon. Friend the Member for Dundee East (Stewart Hosie) said earlier, these new technologies can provide opportunities for inclusive growth. In 2013, the digital economy was worth £11 billion in Scotland alone. That is a substantial business.

Entrepreneurs are already leveraging digital technologies to create successful businesses and significant economic impacts, but that number could be increased. This is especially true given that small businesses grow two or three times faster and create new jobs when they embrace new digital technologies. The hon. Member for Bedford (Richard Fuller), who is not in his place just now, talked about encouraging growth in small businesses. We can encourage such growth in rural areas and places that are difficult to get to by helping them to embrace digital technologies. With the aid of technology, small businesses can also go global from day one, reaching overseas markets and talented potential employees.

Those opportunities are there to be embraced, but let us consider some of the barriers that are being created by the UK Government. We heard again from my hon. Friend the Member for Dundee East about the head of the small business operation at KPMG saying that we are talking no longer about grants for innovation, but about loans. That is a barrier to success, although I will not repeat the many arguments that have been well made in this House on that already.

Barriers also arise from the technology that is available to people across the nations of the UK at the moment. I welcome a commitment to universal broadband, as that is a good thing and it should be embraced fully. What is being proposed by the UK Government at the moment, however, is at best—I am being very kind here—a bare minimum for the future. A speed of 10 megabits per second is technology from a bygone age now and it is not good enough for communities in the future, as we see particularly when we look in detail at the plans. A lot of the bridging is going to be done by satellite technology, which is good where there is nothing else, but it is affected by the weather; it has a high latency potential, it suffers from poor uploads; and, in general, people can get up to—that is the key term—only 6 megabits per second with it. That is what is being proposed for rural areas. The costs of satellite broadband also present a considerable barrier, as people are looking at £30 to £100 a month for these contracts in order to take advantage of it.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman is discussing businesses in rural areas. Does he agree that many small and medium-sized enterprises throughout the UK that have relocated from town and city centres to rural areas on a cost basis now find themselves disadvantaged, precisely on the broadband access grounds he talks about? That needs to be addressed by the Government.

[Drew Hendry]

I am very grateful for the hon. Gentleman’s intervention, as he hits on a key point. There is a vibrant, intelligent, work-ready employee base in rural areas, and people there are ready to take advantage of opportunities presented by employers. He rightly describes, however, what people may suddenly find when they move to a rural area, and I have some personal experience of this. When I was working in Windsor, lots of things were available to me by way of technology, but when I then moved to the highlands, I suddenly thought, “Ah, I might have made a mistake here.” I am glad to say that I did not make a mistake and we worked through it, although at some expense. Broadband access is a real barrier to people being able to set up businesses in rural areas. If the UK Government want to take a view for the future, they have to consider people across all parts of the regions of the nations of the UK and make sure that people in rural areas have the same opportunities to engage in business as those in urban areas.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Does my hon. Friend agree that we need not only a much higher specification for the universal broadband commitment, but provision of a better service level by broadband suppliers so that a customer gets what they know they are signing up to and so that once they have signed up they continue to get it? Customers sometimes suffer a drop-off when other people connect without even being aware of it or how they go about dealing with it. Robust service level agreement provisions must be put in place, too.

[Drew Hendry]

I thank my hon. Friend for that intervention, and I completely agree that the service level is important. I am pleased that the UK Government seem to have accepted that, and I believe they will be making sure that contracts are able to be changed or cancelled if the service does not live up to what was promised. I am also pleased that they have accepted my suggestion that that should also apply to mobile phone contracts, and let me give due notice now to the Minister that I will be chasing up on that shortly. I am grateful that they have accepted my point that mobile phone contracts should as quickly as possible come under the same terms.

I wish briefly to discuss mobile signals, because one opportunity for all the nations of the UK is for universal coverage to be undertaken properly in terms of forthcoming technology, specifically 5G. The 5G spectrum is due to be launched in around 2020. Now this is very important. We will hear Ministers and others say, “Oh, but it’s coming in the future. We can’t deal with it now because it is not yet real.” The same was said about the 4G spectrum when it was launched, and the same was also said about the 3G and 2G spectrums when they were launched, and yet the failures continue. It has been a failure for business and for people on 4G, 3G and 2G across the piece. There are still parts of the UK that do not have any mobile signal at all. Mobile telephone companies could have been challenged on that during the licensing regime. The UK Treasury has made billions of pounds out of these licences. It is not beyond the wit of the Government to look at those things and ensure that, in future, when the contracts come up and when they are applying the licences, they insist that there is full coverage not only for urban areas, but for rural areas as well. Not dealing with those issues leads to an enduring digital divide.

There is also a bigger threat to these isles from cyber-security failures than there is from nuclear threat, and yet we are not encouraging enough people, particularly young people, to get into the industry to ensure that we are in a position to put our defences in place. The living wage, which has been mentioned in this Chamber a few times today, actively disadvantages young people. It is an absolute scandal that we treat our young people with such contempt and that we do not encourage them to be part of the overall journey to economic success. Such encouragement should be given to all our people regardless of where they live in this country. They should feel involved and part of the culture. We need to stimulate, guide and help them to get involved in new technology and in other industries such as engineering and science. We need to ensure that they are involved in life sciences so that they can get jobs that will be more worth while to them and their families in the future. We need that competitive edge and to be able to innovate into the future. Such encouragement is particularly pertinent for young girls and women who, in the 21st century, still do not have the same opportunity to get into those industries. We need to work hard across the piece to innovate and to ensure that we challenge that behaviour.

In Scotland, the curriculum for excellence is encouraging young people from primary school through to secondary school to look at outcomes of education in the round. I am pleased to be part of the Highland Science Skills Academy, which is directly challenging the norm. It is working with private companies, Government agencies such as Highlands and Islands Enterprise, The Highland Council, the NHS and other bodies to encourage young people, particularly girls and young women, to understand and to be able to interact with these skills. It is that kind of innovation that we must put in place to ensure that we are embracing the digital economy and allowing people to take part in it.

I will finish on this point. People are embracing the digital economy, and they are using the technology now. They are grasping the opportunities in their business and they must have support. The world is moving ahead. There is a choice: we can follow or we can lead. I always remember the words, “Where are all those people going because I need to lead them?” I do not know where I heard them, but they remind me of the UK Government.

[David Rutley (Macclesfield) (Con)]

It is an honour to participate in this debate and to follow the great speeches of my hon. Friends the Member for Spelthorne (Kwasi Kwarteng) and for Bedford (Richard Fuller), who is a great friend. It is also an honour to follow the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who gave a thoughtful speech on innovation, and that is a fact. I had better inform the House that two very important exports from Macclesfield are helping his local economy. Two players from Macclesfield Town football club are now playing for Inverness Caledonian Thistle and helping them in the Scottish premier league—good luck to them.

This has been a very thoughtful and at times serious debate, with passionate speeches by Members on both sides of the House. I congratulate the hon. Member for Dundee East (Stewart Hosie), with whom I served briefly on the Treasury Committee. He is a very thoughtful Member and is right to raise the subject. We have benefited from the debate. I also welcome the contribution of my right hon. Friend the Minister for Small Business, Industry and Enterprise, who brought to the debate her characteristic robustness and energy, which are absolutely needed for the work required.

Our long-term economic plan for Britain is right and fair. It provides opportunities for this country’s businesses and individuals for the years ahead. Ministers are not only ensuring that we continue to get our public finances in order, but protecting frontline services through the way in which funding is allocated. We are, of course, taking no chances with our national security or, for that matter, our national economic security. We have a clear plan not only to make sure that Britain once again lives within its means, but to deliver an economy that generates more means within which to live. Those two sides of the same coin are very important.

In the summer Budget debate, I noted the importance of rebalancing our books after Labour’s spendthrift years; of rebalancing incentives in favour of work; and of rebalancing economic geography towards a northern powerhouse. It is interesting that the Conservative Government in London are as committed to decentralising power away from Downing Street as the Scottish National party is to centralising power to Bute House, whether it relates to the police, fire services or further education.

[Drew Hendry]

Does the hon. Gentleman agree that the Scottish Government have done a fantastic thing this week by supplying £500,000 to encourage local communities to partake in participatory budgeting, thereby allowing them to make their own decisions? That is a real example of decentralisation. Similarly, the first thing the SNP Government did was remove ring-fencing for councils, to allow them to make their own decisions.

[David Rutley]

I am pleased to hear that the SNP is rectifying its trend towards centralisation and I give it credit for doing so.