The Government’s Productivity Plan

James Morris Excerpts

Tuesday 28th February 2017 Commons Chamber

[Chris White]

I agree with my right hon. Friend about our automotive plants. However, I will not criticise Network Rail today because it has just announced that it will be installing lifts in my local railway stations, on which I congratulate it most profusely.

The Catapult network is a good example of what can be achieved through innovation. Some £15 of benefit is returned for every £1 of investment, and we should remember the advantages of the Catapult centres as we come towards the Budget. Some 69% of business R and D can be found in the manufacturing sector, which highlights its importance to the wider economy. The UK is also championing the idea of horizontal innovation, whereby intelligence and technologies can be shared across industries, which could have a significant impact on how sectors such as shipbuilding and construction could learn from the best practice of industries such as the automotive sector.

Through-life engineering services—TES—are increasingly on the agenda, with manufacturers going beyond production to retain responsibility for maintaining systems throughout a product’s life. I particularly commend Cranfield University for its work in that area, and I am pleased to co-chair the TES Council, which brings together industry leaders to discuss how best to develop such services. One area in which the UK leads its international counterparts is additive manufacturing, or 3D printing, which we can see at the high-value manufacturing technology centre in Ansty.

We are starting to see a recovery, but productivity in the services sector is outstripping that of the manufacturing sector. It is well documented that UK productivity is weak—stubbornly so, as the hon. Member for Hartlepool said. Job quality, whether through wages, skills and training or employment security, must continually improve for us to reverse poor productivity growth.

As a midlands MP, I take particular interest in the midlands engine initiative and look forward to the publication of the regional strategy—I hope that the Minister will shed more light on that. The midlands has a rich tradition of manufacturing and can be at the forefront of a manufacturing renaissance in this country. However, as has been noted, productivity in the west midlands has been consistently falling against the UK average. The midlands engine is a welcome initiative that can define our priorities and develop the skills we need in key industries such as the automotive sector on which we so heavily rely.

At today’s Treasury questions, I asked the Chancellor about the provision of an adequate energy supply as electric vehicles become more prevalent. Companies such as Jaguar Land Rover are developing technologies that will shape the future of the sector, but they cannot do so without the necessary infrastructure. Electric cars will be the future, and it is important that we provide the necessary power so that we can build their batteries in the vicinity of those car plants. That is the kind of joined-up approach that will be so important.

The final point of the 15 in the productivity plan emphasises rebalancing the economy and regional empowerment. London and the south-east contribute an enormous amount to the national economy, but economic growth should be powered from every corner of the UK.

[James Morris (Halesowen and Rowley Regis) (Con)]

My hon. Friend talks about the historical low productivity in the west midlands. Does he agree that the long-running under-investment in transport infrastructure, particularly in the road and rail network, is hampering the region’s strong underlying economic fundamentals on exports? We need a higher rate of investment in our infrastructure in the west midlands.

[Chris White]

I most certainly agree with my hon. Friend. We should be looking to the productivity plan and the industrial strategy, which address issues such as infrastructure. The West Midlands combined authority and our local enterprise partnerships should come together to think about how we address issues such as our transport infrastructure far more effectively.

By allowing for strong economic growth, investing in infrastructure will increase our productivity, whether in transport or digital services. As with all such initiatives, it is important that individuals feel part of regional and national growth. That can only be beneficial for job satisfaction, which in turn increases the likelihood of the productivity plan achieving its aims.

I particularly highlight the need for the plan to be measured against clearly defined objectives using metrics. A loose framework can give useful direction but lacks the necessary precise approach and timescales. Tying skills development to the productivity plan must also be a priority. Identifying the changing landscape of our economy and the skills required to keep pace with that change will be a phenomenal challenge. Encouraging greater uptake of science, technology, engineering and maths, for example, is key.

Productivity is clearly an issue that needs to be addressed urgently. I welcome the Government’s determination to put productivity at the heart of the industrial strategy and suggest that we must prioritise investment in R and D, as well as focusing on improving job quality. Embracing new technologies, such as through Industry 4.0, should be central to our approach.