Britain’s Industrial Future

George Freeman Excerpts

Tuesday 15th November 2022 Commons Chamber

[The Minister of State, Department for Business, Energy and Industrial Strategy (George Freeman)]

It is a great pleasure to serve in this debate and to have my first outing at the Dispatch Box as the returned Minister for science research, innovation and technology at the Department for Business, Energy and Industrial Strategy—a name written proudly on the side of the building—in order to refute the litany of woe and failure that those on the Opposition Benches love to reel out, to paint a picture of a British economy that the businesses around this country would recognise and understand, and to set out in some detail the plans we have to support not only the industries of today, but the industries of tomorrow, for which this country is leading in creating the framework globally.

I look forward to a good debate, not least about the depression of the Opposition’s motion, which says very little about their own positive plans to develop an industrial sector for the 21st century, but simply looks to print a cheap leaflet for distribution on the doorstep. We can do better than that, and I hope that we will this afternoon.

As Minister for science, research and innovation in technology, my mission is to make the strategic shift in this country’s economy. The Labour party, in its long period in office, seemed to delight in—I remember the “Deputy Prime Minister” saying he was profoundly relaxed—all the deregulation in the City, the move to a service economy and deindustrialisation. This Government are absolutely committed to taking the crash of 2007-8 under the Labour Government, the difficult fiscal situation afterwards, the pandemic and the emergency in Ukraine as the wake-up call that they are to invest more in our industries of tomorrow and today, to develop our industrial resilience, to support the R&D for tomorrow’s sectors, and to support our leadership in net zero. I would like to think that the Labour party would celebrate that. The truth is that British industry is leading the way in net zero in this country, and that is something we should be proud of. I will come to the detail of that in due course.

[Grahame Morris (Easington) (Lab)]

Will the Minister give way?

[George Freeman]

I will make some progress in my opening remarks and then I will give way to the hon. Gentleman.

In my specific role and portfolio, my job is to support the industries of tomorrow. In life sciences, I set out with the then Minister the first 10-year life science strategy in this country. We launched the genomics programme, NHS digital and accelerated access, and we laid a lot of the foundations for this country’s success in the pandemic. Last year, we launched a 10-year space strategy for commercial leadership in the space sector, and we are now in the process of implementing it.

We have set out a 10-year plan for fusion, and we are investing, through the UK Atomic Energy Authority, in the ground-breaking technology at the Culham Centre for Fusion Energy. We announced this summer that we are moving that to Nottinghamshire and creating the world’s first industrial deployment of fusion technology at commercial scale over the next 10 to 15 years.

We are setting out a quantum strategy. On Friday, I was with the quantum industry, which is applauding us; we are No. 1 in Europe in the quantum industry and investment. That is a partnership between big companies—Toshiba, BT, BAE Systems and many others—and our very fertile ecosystem of small companies and universities. Similarly, I was proud, as the then Minister, to launch the UK’s first industrial strategy for agri-tech.

Forgive me, then, if I do not take any lectures from the Labour party on the lack of an industrial strategy. Far from it, the former Member for Hartlepool and “Deputy Prime Minister” paid tribute to the Conservative party, to me, the then Chancellor and the then Minister, David Willets—who is now in the other place—for leading the thinking on a modern industrial strategy for a modern economy.

In truth, in the last few years that work has inevitably been interrupted, first by the pandemic—I am proud that the Conservative party put in £400 billion of business support for industry—and secondly by Ukraine, which has been a wake-up call to the world about the resilience of industrial supply chains. We have worked head and shoulders in the last year to beef up those industrial supply chains to protect British industry from that vulnerability, and we continue to do so.

[Grahame Morris]

rose—

[Alex Cunningham (Stockton North) (Lab)]

rose—

[George Freeman]

Let me finish this point.

Thirdly, the tightening of the global energy markets has hit many energy-intensive industries hard. We have announced £25 billion of support for the next six months. That is far from the doom and gloom of the motion, which, for anyone who reads it, paints a picture of this Government having no strategy or policy for industry, which is complete rubbish.

[Grahame Morris]

I am grateful to the Minister for giving way on doom and gloom. There was a mention earlier of fleet solid support ships, which we on this side of the House have argued for many years should be built here for strategic reasons, with steel manufactured here.

May I ask about rail and the home of the railways in the north-east? In my constituency, Vivarail—a world-beating, self-charging all-electric train manufacturer—is starved of Government support and investment. It could be a beacon for the future, so why is it not on the Minister’s list of shining examples?

--- Later in debate ---

[George Freeman]

The reason it was not on the list is that I was listing all the industries of tomorrow. I will come to the specific points he makes. The biggest customer for steel in this country is our rail sector, and we are proud that the UK rail industry, into which we are pouring an unprecedented level of investment, is a major user of British steel. I will come to the steel industry in a moment.

The motion paints a picture of doom and gloom and the collapse of manufacturing. It is time to put that stale old Labour trope to bed. The UK is still the ninth biggest manufacturing country in the world. Manufacturing this year contributed £205 billion in gross value added to the UK economy. We are the fourth largest manufacturing economy in Europe, supporting almost 2.5 million jobs.

Under the last Labour Government, manufacturing jobs had been haemorrhaging. We stopped that in 2010 and, through major investment of the sort that I just set out, we have turned around this country’s manufacturing sector, which is now much more advanced. Again, I am surprised that Labour Members are not congratulating us on that. Manufacturing jobs were collapsing in this country, but 84% of manufacturing now takes place throughout the country, outside London, not just in the old industrial belt, but in the space economy in Cornwall and in Glasgow—I thought that Scottish National party Members would cheer that. There is the north Wales energy corridor, the south Wales compound semiconductor cluster and the Warwick robotics cluster. Our manufacturing economy is highly advanced, highly competitive and decentralised.

[Grahame Morris]

rose—

[George Freeman]

I will come to steel, shipbuilding and automotive shortly. I had not mentioned the hon. Gentleman’s rail point because I was highlighting the industries of tomorrow.

[Stephen Kinnock (Aberavon) (Lab)]

Does the Minister know how many tonnes of British steel there are in a single wind turbine, onshore or offshore, in our country?

[George Freeman]

I do not have that figure at my fingertips, but I have a funny feeling that the hon. Gentleman does. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) will respond on that later.

[Paul Howell (Sedgefield) (Con)]

The Minister has talked about the space and science-led businesses around the country. On the north-east, in response to the hon. Member for Easington (Grahame Morris), we should not forget the tremendous things that are happening at NETPark in Sedgefield.

[George Freeman]

Indeed, fantastic things are happening at NETPark. One would think that the Labour party, which dominated County Durham politics for decades and seemed to indulge in the poverty up there, would celebrate the phenomenal turnaround in the north-east. It is one of our leading manufacturing regions. NETPark is home to Kromek and Newcastle is home to QuantuMDX. That is a great story of British manufacturing driving an advanced economy in the areas that were blighted by painful deindustrialisation. I am proud that the Conservative party is in the vanguard of that.

[Alex Cunningham]

There is no doubt that we have new manufacturing to celebrate in the north-east, but Teesside’s steel industry is a shadow of its former self. It has a few hundred jobs, instead of the many thousands that existed a few years ago, before the Government abandoned us. Does the Minister agree that we should invest in Teesside steel now and use its product for the new industry jobs that we are promised?

[George Freeman]

That brings me to steel, and the hon. Gentleman makes an important point. There has been real pressure on the steel industry in the past 15 to 20 years. Global economic conditions are hugely challenging for all domestic steel sectors. There has been massive overcapacity, unfair overseas subsidies and steel dumping. The real issue is that global steel production has more than doubled since 1995 and China is by far the biggest contributor to that growth. In 1995, China accounted for 13% of the world’s steel production. By 2019, that had risen to 53%. There has been a phenomenal change in the global steel market.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I have been in this place 10 years today and I have worked with my local steel company since I was first elected. It has consistently raised the same issues with me: competitive electricity prices for the green steel it produces and ensuring that the industries of the future, particularly green industries, use UK steel. What exactly have the Government done to ensure that prices are competitive and that UK steel is used in those green industries? They have not done enough.

[George Freeman]

The hon. Gentleman makes an important point about the challenge. We have done a lot—let me share that with him.

[Stephen Doughty]

On the specific point.

[George Freeman]

I will deal with the specific point. Our ongoing support for the steel industry this year includes more than £800 million in relief for electricity costs, in addition to the energy bills relief scheme. The sector can apply for help with all sorts of energy efficiency, with decarbonisation and low-carbon infrastructure. More than £1 billion is available in competitive funding for the industry in that sector alone.

[Several hon. Members rose—]

[George Freeman]

Let me just deal with this point.

We are investing more than £600 billion to transform our country’s infrastructure—roads, rail, broadband and more—and we plan to procure 8.5 million tonnes of steel as part of that over the next decade; the hon. Member for Cardiff South and Penarth (Stephen Doughty) touched on procurement. We published an updated steel pipeline in June 2020, to help the industry plan ahead. The value of UK steel procured by the Government for major public projects in 2021, which I checked before coming to the debate, was £268 million—an increase of £160 million from the previous year. The steel procurement taskforce, which we set up as a joint working group between Government and the steel industry, published seven recommendations in February this year, and those are being implemented through updating the Cabinet Office procurement policy note. As the hon. Member will see—he asked a good question—we are taking serious steps on procurement.

In 2021, the Secretary of State for Defence acquired specialist steel producer Sheffield Forgemasters, with £400 million of investment over the next 10 years, and Sheffield Forgemasters is working with other companies, including Rolls-Royce and the Canadian company General Fusion, on the development of nuclear power generation. In March this year, we successfully secured an expansive removal of US section 232 tariffs on UK steel and aluminium products, which means that UK steel and aluminium exports to the US can return to levels not seen since before 2018. We have also extended our steel safeguard measures for a further two years. I simply do not accept, and I do not think anyone listening to the debate would say, that the Government have done nothing and are doing nothing on procurement. It is simply not true.

[Andy McDonald (Middlesbrough) (Lab)]

I am grateful to the Minister for giving way. I have heard what he has to say, but what does he say to the people of Teesside about his Government’s inaction in 2015? The Italian Government intervened at the Ilva plant in Taranto and came to the rescue of 25,000 workers. The French did the same in Florange, but this Government did absolutely nothing to protect our core industries at Redcar—and we have not forgotten it.

[George Freeman]

I would point out that last week, Green Lithium announced the UK’s first large-scale merchant lithium refinery and the first such refinery in Europe, to be built in Teesport, supported by the automotive transformation fund.

[John Penrose]

I want to ask the Minister the same question that I asked the hon. Member for Sefton Central (Bill Esterson) about a potential solution to the problems of high electricity costs faced by energy-intensive industries such as steel, which we have been hearing about from Opposition Members. Would a carbon border adjustment mechanism, which the Government have already consulted on and committed to in principle, help to level the playing field between British energy costs and those abroad, therefore making British heavy industry—particularly energy-intensive industries—far more competitive on the international stage?

[George Freeman]

My hon. Friend, as ever, makes a very interesting policy observation; as Minister for science, I will not accept it at the Dispatch Box, but I will raise it with the Ministers for industry and for energy.

[Alan Brown]

The Minister mentioned nuclear power. He heard what I said about costs earlier, but it is also reported that the Government are taking a 20% share in Sizewell C. Does that mean the Government are going to borrow £5 billion or £6 billion to pay for their 20% share of Sizewell C?

[George Freeman]

How interesting to hear the SNP take issue with—[Interruption.] The hon. Member asked the question, so I will answer it. We are determined to make sure that, unlike parties on the Opposition Benches, we invest properly in new nuclear in this country, so that we have a resilient, clean and secure energy system. If that means an active industrial strategy to ensure we are able to do it, we are doing it. It would be nice to hear the SNP Government in Scotland take a similar approach to their future and to nuclear in this country, which is vital for the next few years as we get through this global tightening in energy.

[Peter Grant (Glenrothes) (SNP)]

Will the Minister give way?

[George Freeman]

No, I shall make some progress on this point about the automotive sector, which is also mentioned in the motion. The UK’s auto sector is hugely competitive globally. It is export-focused and has a very strong research and development base. In the last 20 to 30 years, it has transformed from what it was in the 1970s to a highly competitive and technologically advanced R&D-based sector. It is also in the vanguard of the transition to net zero, and the UK is well placed to seize those opportunities because of the Government’s efforts, as we are pursuing an active industrial strategy for net zero in industry.

The automotive-related manufacturing sector is worth £58 billion to the economy and typically invests around £3 billion each year in R&D—£3 billion in R&D from the sector alone. There are 155,000 people employed in automotive manufacturing in the UK in 2021. That is 6% of total UK manufacturing. [Interruption.] Opposition Members may laugh about the success of the British automotive sector, but this is a tribute to business and industry adaptability and the Government’s partnership in setting out a framework for the net zero transition.

Decarbonising transport is already starting to create thousands of jobs in green industries. The production of net zero road transport vehicles is on track to support the development of 72,000 jobs worth up to £9 billion to the economy. The Government have proven loud and clear that we can deliver a green transition and growth—something that all Opposition parties bitterly insisted was not possible.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

The Minister talks about the decarbonisation of transport. Of the 4,000 buses that the former Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), promised nearly three years ago, how many are currently on the road in England?

[George Freeman]

I will have to check the exact number. I am surprised that the hon. Gentleman did not mention Aberdeen’s leadership. With our support, Aberdeen is a hydrogen hub and there has been the creation of hydrogen hubs in Teesside, Harwich and all around the country. We are investing in another industry of tomorrow—green and blue hydrogen. His question is revealing. The motion suggests that the Government are doing nothing at all about hydrogen, but far from it. We are investing in the infrastructure for the hydrogen of tomorrow.

[John Redwood]

Is there a danger that the UK could end diesel and petrol vehicle production too early compared with competitors—before we have a large electric car industry up and running? Would that not be bad news for our industry?

--- Later in debate ---

[George Freeman]

My right hon. Friend makes an important point about ensuring that, as we lead on the delivery of the net zero automotive sector, we get the balance right, so that we are not unrealistically expecting consumers to make the transition too fast or, indeed, undermining our leadership in that sector. That is a fine balance that the Government are committed to striking. We are determined to lead the way in demonstrating green growth in pursuit of net zero, but we want to ensure that we capture the industrial leadership in that sector.

In the automotive sector, we have again made significant investments. We have invested more than £1.2 billion to support innovative projects through the Advanced Propulsion Centre. The projects that it has funded have helped to create more than 50,000 jobs and save 277 million tonnes of carbon dioxide. Last month, we announced a record £200 million for the Faraday battery challenge. We have worked closely with Nissan and just announced a £1 billion investment to create a north of England electric vehicle hub in Sunderland that will safeguard 6,500 jobs. There have been investments of £227 million in Ford in Halewood, more than £100 million in Stellantis at the Vauxhall plant in Ellesmere Port, and £2.5 billion in Bentley—those are major investments from an industry that is growing in this country with Government support. It would have been nice to hear the Opposition at least pay tribute to some of that success.

In the EV supply chain, we are actively investing in pursuit of our industrial strategy for green growth. The active travel fund has supported that £1 billion electric vehicle hub. We have also supported Pensana’s £145 million investment in East Yorkshire. Through the ATF, we recently supported a £60 million investment to develop hydrogen technologies with Johnson Matthey. Far from the Government abandoning our commitment to industry, we are doubling down on our commitment to help the existing industries of today to make the transition, and to support the industries of tomorrow.

The shipbuilding industry in this country, which Opposition Members suggest has been decimated, actually employs 42,500 people and is worth £2.8 billion. It is a major sector. Naval orders through the Government remain an important driver of its prosperity. In 2020, the Ministry of Defence spent £3.8 billion on shipbuilding and repair, which directly supported 22,000 jobs around the economy. Over the last decade, we have seen once great names in shipbuilding, such as Harland & Wolff, struggle, which puts that heritage at risk. Under the ownership of InfraStrata, however, Harland & Wolff is now strong again; that resurgence is part of a general trend of global consolidation in the industry.

We have seen how the symbiosis between MOD, naval and commercial buildings brings improved competitiveness, as businesses such as Cammell Laird deliver large commercial vessels alongside the Royal Fleet Auxiliary commitments. I am proud, as the Minister for Science, that the royal research ship Sir David Attenborough is one of the ships that has been built of British steel. The commissioning and delivery of the new aircraft carriers has been a massive shot in the arm. At the same time, we have seen big advances in key technologies, such as aluminium hull design and the application of robots for automated welding. That programme is also driving technological leadership. In 2019, ship boat repair maintenance was worth £2.6 billion to the economy.

I do not think it is fair to suggest, as the motion does, that this Government have neither an interest in industry nor a policy for industry, and that we are abandoning industry—far from it. Not only are we helping our key industries deal with massive global challenges—the pandemic and the energy crisis—but we are actively pursuing an industrial strategy for the industries of tomorrow, and that is actively supporting clusters all around the country to drive levelling up and opportunity. It would be nice to hear the Opposition parties at least pay some tribute to the success of that private-public partnership and to the success and resilience of British industry.

[Several hon. Members rose—]