Jeremy Quin
Main Page: Jeremy Quin (Conservative - Horsham)Trade, Exports, Innovation and Productivity
Jeremy Quin Excerpts(8 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Stewart Hosie (Dundee East) (SNP)
I beg to move,
That this House regrets the continuing lack of balance in the UK economy and the UK Government’s over-reliance on unsustainable consumer debt to support economic growth; notes in particular the UK’s poor export performance, which resulted in a trade deficit in goods of £123 billion in 2014; further notes the UK’s continuing poor productivity record and the lack of a credible long-term plan to improve it; and is deeply concerned by the UK Government’s change to Innovate UK funding of innovation from grants to loans, which this House believes will result in a deterioration of private sector research and development.
This is a serious debate, and it is appropriate that we have it today given the news published yesterday that UK industrial output has suffered its sharpest fall since 2013, and the further assessment that describes how real-terms earnings in the UK are still substantially lower than they were in 2009 and that even GDP growth over the past decade or so has been lower than that of Japan during its decade of stagflation. It is important that we recognise that the matters we are going to address are not short-term issues. This is not about a quick political hit; it is about trying to get to the root cause of a long-standing and systemic problem in the UK—the failure to address trade, exports, innovation and productivity, in total, over a prolonged period.
We have chosen to debate all these matters because they are linked. The debate is also, rightly, about the imbalance in the UK economy, because that is part of the equation. That imbalance, or, more accurately, those imbalances are recognised by this Government, but they cannot and will not be resolved, first, without the real political will to do so, and secondly, until the other areas that we are discussing are fully and properly addressed. The imbalances in the economy are not only between England and Scotland or London—a city previously described by a Minister as a black hole sucking resources and talents out of everywhere else in the UK—and the rest of the UK, but still, sadly, between manufacturing and services, businesses that export and those that do not, and companies that innovate and those that do not.
The impact of all this is most starkly seen in the balance of trade numbers. For the full year in 2014, the UK ran a balance of trade deficit of £93 billion. For the same year, the deficit in trade and goods was an extraordinary £123 billion—that is £123 billion in the red just in the trade in goods. The impact in GDP terms, as is well known and published by the Government, was negative, and unsurprisingly the summer Budget confirmed that it would remain negative in every single year of the forecast period in this Parliament through to 2020.
Jeremy Quin (Horsham) (Con)
The hon. Gentleman has referred to Japan. He will not have missed the fact that Europe has been in recession for much of the period in which our economy has been growing, and that has had an inevitable impact on our balance of trade with our biggest partners.
Bill Esterson
Of course, after the slowest recovery on record, growth is going to be the fastest in the world at some point, is it not? That comes as no surprise.
Bill Esterson
I am not going to give way too many times, because mine is the second Opposition party in this debate.
As was pointed out by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), the Government have failed in their own terms to eradicate the deficit. The Chancellor promised that it would be gone by last year, but the Government have borrowed more in five and a bit years, and had borrowed more before the election, than Labour did in its 13 years in office. So, in their own terms, they have failed.
If the Minister wants Opposition Members—from whichever party—and members of the public to be reassured that she is not just producing warm words on TTIP, she can exempt it from public services and we will then be sorted.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
I am delighted to be called so early in this important debate. I was particularly keen to catch your eye, Madam Deputy Speaker, because we have so few debates on exports, but I believe that if we are to grow our economy sustainably, we must increase our exports.
Given the importance of this debate, it is a great pity that our politics produces such negativity from all the Opposition parties. That is in total contrast to the Minister for Small Business, Industry and Enterprise, my right hon. Friend the Member for Broxtowe (Anna Soubry), who is positive and outward looking and produces good policies that the Government have been pursuing, both in the last Parliament and this one. I am passionate about exports. With my hon. Friend the Member for Newark (Robert Jenrick), I have the honour to chair the all-party trade and investment group dealing with exports. I want to see this country exporting more.
I just want to champion some of the Government’s achievements, which, unlike the Opposition parties, help exporters considerably. They have committed to cutting £10 billion of red tape in order to back British business and put resources into more productive use—and that is on top of the £10 billion we cut in the last Parliament. We have cut corporation tax to 20%—one of the lowest rates in the G7—and have an aspiration to cut it further. We are boosting skills and productivity by improving the quality of apprenticeships in England and increasing their number by 3 million in this Parliament, on top of the 3 million in the last Parliament. As my right hon. Friend the Minister has said, we are investing, up to 2021, £6.9 billion in UK research infrastructure and, in particular, protecting the science budget of £4.9 billion per annum. All that will help innovative companies in this country, as will building stronger links with emerging markets, especially China and India. I was therefore delighted to see the leaders of those countries—the most populous nations in the world—visit this country in the last year. And what successful visits they were.
My right hon. Friend the Business Secretary, launching the Government’s productivity plan, “Fixing the foundations: Creating a more prosperous nation”, said:
“Britain is home to some of the world’s most innovative and dynamic businesses, staffed by incredibly talented, hardworking individuals…And higher productivity means higher incomes. When productivity rises, standards of living rise too. So today I’m proud to publish ‘Fixing the foundations’. It’s our plan for productivity, and our blueprint for creating a more prosperous nation.”
Hon. Members on both sides of the House have commented on productivity, and it is true that we lag behind some of our major competitors. Many economists have puzzled over this, but I think the reason is simple. In the list of achievements I gave just now, I omitted the fact, which must be hugely welcome to all Members, that a record number of people are in work thanks to our flexible labour laws. In this country, 32 million people are in work—more than ever before—and that number is rising. I believe that, because more people are employed, some companies might not have invested as much as they might have done in labour-saving capital equipment, as has happened on the continent, where their labour laws are much more difficult and therefore they have higher unemployment. Greece, for example, has 50% youth unemployment. It is no wonder those countries have such problems, yet here, I am grateful to say, youth unemployment is dropping. It is a terrific achievement for this country.
Let us look at where trade is going around the world. In 2014, the UK’s exports of goods and services totalled £513 billion and its imports totalled £548 billion. The EU accounted for 45% of exports and 53% of imports, meaning the balance of trade with the EU is against us. In other words, we are importing more than we are exporting. There is no reason, therefore, not to look elsewhere in the world to see where we can export more. I commend that approach to the Minister. It is against a background of UKTI’s policy of increasing trade by 2020 to £1 trillion and the number of companies exporting by 100,000. There is no reason why we could not do much more.
UKTI has been transformed in the last few years. I was delighted to take one of my successful medium-sized companies to see the trade Minister, the right hon. Lord Maude, the other day to examine how we might get UKTI to do even more to encourage medium-sized businesses. The one in my constituency employs 45 people, exports to 40 countries around the world, makes it products in China and exports them directly to Australia, without their ever touching this country, and yet it remits its profits to this country and pays UK corporation tax. That is precisely the sort of medium-sized company we ought to encourage to export more.
That company told me there was too much emphasis on people in UKTI and not enough on the tradeshow access programme. Trade shows are a particularly important part of manufacturing businesses’ exporting programme. We need to encourage, via greater incentives from UKTI, such companies to go to these tradeshows, particularly where they have a record of success. At the end of my speech, I will make five or six suggestions to the Minister on how to encourage exporting, but one of them is to extend TAP from three to four years. As this company pointed out, the first year is about exploration and the second is about getting to know the customers, and only in the third year, if it is lucky, does a company begin to make a profit. It therefore needs an extension from three to four years. It is in its third year and about to be cut off just as it is becoming profitable, so it would be useful if we could give it a bit of extra help.
Jeremy Quin
I am delighted that my hon. Friend saw my constituency predecessor, Lord Maude, recently. We have a number of manufacturing firms in Horsham. Does my hon. Friend agree that such firms are now getting a better service from the Foreign Office and from our ambassadors abroad to help British exports? That should be put on record and welcomed.
Geoffrey Clifton-Brown
I am sorry to say that I only partially agree with my hon. Friend. I am not going to name the embassy in question, but a representative of the company I have been describing went to one of the nearer embassies to this country and was distinctly unimpressed by the trade representatives there. He described them as spotty youths who were just out of university. He felt that we needed people in our embassies and in UKTI who have a good track record in the private sector, and that we should incentivise such people. If they have had a good record in the private sector, it is likely that they would be successful in UKTI in helping companies to export.
There are approximately 1 million small and medium-sized companies in this country. UKTI helped 48,000 companies to export last year, but I suggest to the Minister that there is still much to be done. Far too many companies still do not understand what it means to export and do not understand the advantages of exporting. The figures are well known. Once a company has exported for the first time, its productivity goes up by 7%. So not only will its profits go up—one hopes that it will do profitable export business—but its productivity will go up as well because that activity sharpens the whole operation through dealing with an extra dimension. We could do much more, in collaboration with UKTI, with UK Export Finance and with the local enterprise partnerships. We should make them all come together much more closely.
Another suggestion I have for the Minister is that Innovation UK and UKTI could get much closer together so that some of our best seed-generated companies, including high-tech companies, could be encouraged to export right at the beginning of their existence rather than waiting until they are established. They should be encouraged to think about exporting as one of the first things they do.
Mr Iain Wright (Hartlepool) (Lab)
It is an honour and a privilege to follow the hon. Member for Cannock Chase (Amanda Milling), who is a valued fellow member of the Business, Innovation and Skills Committee and provides real insight and personal wisdom to our inquiries.
Unlike the hon. Lady, though, I do support the motion, because, to be frank, I agree with every single word of it. It gets to the heart of the worrying structural imbalances in our economy, including our reliance on consumer spending based on debt, at the expense of investment; our reliance on domestic consumption, at the expense of potential and growing international markets; the priority given to short-term value extraction, at the expense of long-term value creation; and our reliance on the service economy, at the expense of manufacturing, which can inject real innovation and productivity gains across the country, thereby raising living standards for all of us and all of our constituents.
In addition to the points raised by the Opposition motion, I would also like to mention the geographical imbalance in our economy. As a north-eastern MP, I am here in London for half the week and back in God’s own country for the remainder of it. The economies of London and the south-east are overheating, which is in turn putting pressure on infrastructure and housing supply in the capital, at the expense of sustainable economic growth elsewhere in the United Kingdom.
I welcome the motion’s focus on productivity. The BIS Committee’s first inquiry of this Parliament was on the Government’s productivity plan and we shall produce our report, I hope, shortly. I also welcome the motion’s reference to the change of research funding from grants to loans. As has been said, that is of deep concern because it could undermine our country’s competitiveness. Capital is global, and firms will see where they will get the best return. They could leverage in public sector investment as a result of their own private sector investment. This country could lose out on foreign direct investment. It is incredibly important that when we attract foreign direct investment into this country—to be frank, this and previous Governments have been very successful at that—we make sure that we remain at the cutting edge of doing so. The measure puts that at considerable risk.
Jeremy Quin
The hon. Gentleman will recognise that that is all part of a package, as is 20% corporation tax, which will be reduced further. I am sure he welcomes that.
Mr Wright
A good, competitive tax rate is vital. Global firms consider a dashboard of different metrics—including tax rates, regulation, flexibility in labour laws and capital allowances—in a holistic manner in order to decide where they are going to put their capital investment, the returns on which they might not get back for 10, 20 or 30 years. It is important not only that we have stability, but that we make sure that, if a particular firm is putting in investment, we address what the Government are doing. Other countries recognise that and ensure that there is a partnership, but I am worried that we do not have that.
George Kerevan (East Lothian) (SNP)
The last six years have seen an amazing deterioration in Britain’s external trading position. The purpose of this debate is simply to get on the record how bad it is and to encourage the Government to do something about it.
The Government’s default position is to say, “Well, there’s been a global recession” and, “Our biggest trading partner is in the EU so we were bound to lose some traction in the markets.” The point is that in the six years since the Government came to power, world exports have increased by 30%. The world market for sales has grown extensively. If we have lost market traction in that situation, what will we do if the global economy starts to contract overall?
Normally, when there is a recession in domestic demand, a country’s industry is forced to export. Strangely enough, therefore, the core eurozone countries that suffered the worst from the euro crisis have done well in exporting. They had nowhere else to go, so they had to export. Spain and Italy have doubled their exports since 2010. Ireland, which had a catastrophic fiscal implosion, is selling more in exports than ever before in its history.
The point that we are trying to make to the Government is that their insouciance and their pretence that everything is all right in the international sector belies the fact that in the six-year period when they should have been concentrating on turning around British exports, increasing them and grabbing a bigger market share, they have failed totally. They keep putting it off. They keep thinking, “Well, we’ll have another paper plan and it will get better.”
If we look at the numbers, which have been repeated in a number of speeches, in 2014—the last year for which we have the full figures—the UK current account deficit came to 5.1% of GDP. The hon. Member for Bedford (Richard Fuller) asked whether that mattered, but if a country runs a current account deficit, it has to fill it somehow. It has to either borrow foreign currency from other countries or sell its assets into the ownership of other countries. It is no surprise, therefore, that large chunks of British industry and the British property market are owned abroad. The Government’s obsession with trying to cure their own fiscal deficit has only resulted in the deficit being transferred to somebody else.
Everybody knows that when a country’s current account deficit hits something like 5% or more of its GDP, the warning signs flash up in marketplaces all over the world. It is unsustainable. If a country runs that for two, three or four years, a quarter of its GDP will be in hock. We cannot continue to do that. In normal circumstances, the UK has typically run a current account deficit, but at a tiny fraction of its GDP. In 2014, the UK’s current account deficit had the worst performance in peacetime. That is the problem that the Government simply refuse to recognise.
Far from our economy being rebalanced towards manufacturing in order to export more, the numbers on that are just as bad. Let us take the total production data for the UK and strip out the most important components. UK manufacturing output is now less in value than it was in 2000. During the last 16 years, Germany has managed to increase its manufacturing output by that definition by 22%. It would be reasonable to say that we are almost back to a second wave of deindustrialisation. A lot of that has happened since 2010, although it goes back a little further. In fact, UK manufacturing output is barely ahead of where it was in 1990, so we have had a generation of marking time.
Over the last six years there was no national emergency and something could have been done, but the Chancellor did not focus on rebalancing the economy as he said he would. In 2012, he belatedly came up with a target—he is good at making targets—to double exports by the end of the decade. That was a ridiculous promise then, as it is now. If Government Members would just say, “Okay, let’s lay that target aside and concentrate on the practical nuts and bolts of expanding our exports”, we might move forward, but as long as the Chancellor comes up with these fancy proposals and does not deliver, Opposition Members can reasonably say, “You are not serious.”
Jeremy Quin
What nuts and bolts does the hon. Gentleman think are missing from the Government’s package at the moment? He is long on rhetoric about the shape of our export performance—I can understand that—but the Government have done a huge amount to support those exporters, and we have been languishing in the depths of a European-wide recession.
George Kerevan
I take the hon. Gentleman’s general point. I do not gainsay a number of the micro-decisions that the Government have taken, but we are not seeing the wood for the trees. Let us understand why we cannot get more investment into the manufacturing industry, and why the whole tenor of the economy is anti-export. It goes to the heart of how the Chancellor has conceived his job. He tells us that we have growth, but where has that growth come from in the past six years? It has come from pumping up domestic consumption, not from investment or selling abroad. Where does that extra consumption come from? Does it come from wages? There has been some wage growth in the past few years, but in the most recent statistics, pay growth has slumped to its lowest rate in two years. The growth is coming not from pay but from borrowing.
Let us consider the latest consumer borrowing figures. We do not have to go back a long way—let’s look at what is happening now. Consumer borrowing on credit cards and overdrafts is expanding at its fastest rate since the financial crisis. Unsecured consumer credit was up by 8.3% in November—consumers borrowed an extra £1.5 billion of unsecured credit in November alone in the run-up to Christmas. While we are facing a potential rise in interest rates, we have merely returned to unsustainable consumer debt in order to carry growth forward into 2016. Yes, there has been growth, but it has come from borrowing. All that the Government have done is to transfer a fiscal deficit from the public sector to private individuals who are even less able to bear it.
Jeremy Quin
Does my hon. Friend, like me, welcome the fact that 2 million extra jobs have been created in this country, whereas—as we heard from the hon. Member for East Lothian (George Kerevan)—there are record levels of youth unemployment elsewhere in the European Union?
Kwasi Kwarteng
I take that intervention in the spirit in which it was made. My hon. Friend makes a very good point.
It is not right or fair to argue that our friends in the eurozone have succeeded where we have failed. Their success, in terms of the current account figures, is actually a measure of failure. It is a measure of the fact that their domestic demand was completely crushed by very tight fiscal consolidation measures. Notwithstanding the political rhetoric, we have avoided much of the very severe fiscal consolidation that those countries have experienced.
Jeremy Quin (Horsham) (Con)
It is a pleasure to follow the hon. Member for Livingston (Hannah Bardell), with her list of Scottish innovations. I had no idea that the overdraft was developed in Scotland, but one learns something new every day. I do not know what that great Scottish innovative thinker, Adam Smith, would have thought of her speech, but it was interesting none the less.
It was interesting to hear the tour d’horizon of the proposer, the hon. Member for Dundee East (Stewart Hosie), setting out what he thought was the root of the problems identified in the motion. In response to my intervention, he said that our problems were 50 years in coming. To go through the problems of the last 50 years might be pushing it in a 10-minute speech or in the much shorter contribution that I intend to make, Madam Deputy Speaker, but it is worth touching on some of those issues.
Over the past 50 years, we have seen the decline of empire, on which my hon. Friend the Member for Spelthorne (Kwasi Kwarteng) is an expert. We have seen our entry into the European Union and the rise of China, India, South Korea and eastern Europe, to name but a few. Of course, those huge macro changes have had an enormous impact on our manufacturing base, the shape of our economy and the pattern of our imports and exports. At the same time, there has been a revolution in the service sector across the world and in technology—two things in which this country is at the absolute forefront.
In proposing the motion, the hon. Member for Dundee East said he would not deny the numbers, and I know he would not. He dwelt, understandably on the circumstances, on the manufacturing figures for the last quarter. They are not a happy set of figures, and no Conservative Member would suggest they were. Equally undeniable is the fact that over the last year our economy grew by nearly 3%, making us the fastest growing economy in the G7. This year, the OECD forecasts that our growth will equal that of America at 2.5%—again, the fastest rate of growth in the G7.
To build on that success and to grow exports and innovation, we need thriving small companies and, of course, investment. That is why I have no doubt that Members on both sides of the House will be delighted by the record of smaller business creation under this Government, particularly the 300,000 that were created in 2014 alone. I am sure that those on both sides of the House would also be delighted to recognise that, with the general election safely out of the way last summer and a new Government established, investment by business grew 7% in the third quarter of 2015, compared with the same quarter in the year before.
Equally, as a result of that general election we have one of the lowest rates of corporation tax in the OECD at 20%. That is down from 28% under the Labour Government, and it is falling still further. In response to the hon. Member for Hartlepool (Mr Wright), I recognise that that is only part of a package, but it is important in bringing foreign direct investment to our country, and the Government should be congratulated on that. Another part of that package is the benefit of being—according to the World Bank—the sixth best place to do business in the world.
The motion addresses the rebalancing of the economy, and no one would underestimate the importance of manufacturing, or our disappointment with the recent figures to which the hon. Member for Dundee East referred. However, we can go to business districts in London, Manchester and Glasgow, and in just those areas we will find more tech start-ups than in the whole of some of our EU partner countries. The UK is rated second in the world for global innovation for a reason.
I commend and congratulate the Secretary of State on his paper, “Fixing the foundations”, which back in July tackled head on many of the issues raised in this debate. We have heard today that the paper was too short, but I do not think that British businesses want “War and Peace”; they want simple, workmanlike solutions, and that is what they are getting from the Government. I welcome the £7 billion of committed investment over the next five years in research infrastructure, the protected science budget, and the £14 billion benefit from R and D credits that is being provided to 14,000 companies. As the hon. Member for Dundee East was gracious enough to acknowledge, the £1.5 billion global challenge fund will also bring benefits. Those measures, combined with a Government who have a clear sense of economic purpose, imbed confidence.
One example of that confidence is found in my Horsham constituency, and I am delighted to announce the deal made last week between Novartis and the county council, and the creation of a new science park in the heart of our town.
On exports, the Government’s focus on the emerging markets is reaping dividends. Companies in my constituency say that a new generation of ambassadors is pushing our export drive. They have had that direct experience, and they are grateful for it.
The hon. Member for Hartlepool and my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) referred to UKTI and said that we are not yet all the way there. I think that is recognised across the House, and I look forward to the report on UKTI that the Business, Innovation and Skills Committee will produce. I know that Ministers on the Treasury Bench, and Lord Maude, are at the forefront of ensuring that UKTI is working its hardest for our exporters. The level of that support is witnessed in what the Prime Minister and Chancellor have been doing on their visits abroad, and in the visits of the Prime Minister of India and the Chinese Premier. Above all, it is witnessed in the 68% increase in exports to China from this country since 2010.
On exports, I counsel some caution, as I did earlier in the debate, because—as the hon. Member for East Antrim (Sammy Wilson) eloquently put it—we have real problems in exporting at a point when our economy is booming in relative terms, and when an extra 2 million people are in work and spending money, yet our main trading partners on the other side of the channel have been in recession. That will inevitably cause problems for our export record.
The hon. Member for Sefton Central (Bill Esterson) referred to our productivity, and it will not have escaped his attention, or that of other Opposition Members, that what the Government have done to tame the excesses of the City, and the sad consequences of what has been going on in the North sea and with oil prices recently—the hon. Member for Aberdeen South (Callum McCaig) spoke eloquently about that—has of course impacted on two of our highest value sectors, and that in turn has impacted on our productivity statistics. Given those two existential impacts, I hope that the whole House will congratulate the Government on the conditions that they continue to create to allow UK plc in general, and particularly its many new small businesses, to be productive, to export, and to flourish.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
I rise to speak in favour of the motion in my name and that of my SNP colleagues, and I declare an interest as vice-chair of the all-party group for trade and investment.
I thank all Members for their contributions to this interesting and varied debate, and I will try to mention everybody if time allows. The Minister spoke of a long-term economic plan and of caring and compassionate Conservatives, but those worn-out phrases mean nothing to poor and vulnerable people up and down this country who this Government have targeted in a relentless onslaught through austerity of choice, not necessity.
I agree with the hon. Member for Sefton Central (Bill Esterson) that the NHS should be exempt from TTIP, and we must always protect our public services. I agree with the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) on the importance of UKTI, but unfortunately the Chancellor slashed the budget for that in his autumn statement. My hon. Friend the Member for Aberdeen South (Callum McCaig) made an excellent speech about the bright future for our oil industry, but it requires help from the Government during what we hope will be a temporary downturn. He spoke of Aberdeen being a city of innovation that filed more applications for patents in 2014 than anywhere else, and he mentioned the importance of the Aberdeen city deal, and called on the Government to consider that quickly and favourably. He said, however, that the UK Government had taken a hatchet to one of the biggest global growing markets of the century: renewable energy. We should build on an industry that we can be proud of, and develop the skills we need—ambition, Mr Speaker.
I wholeheartedly agreed with the hon. Member for Cannock Chase (Amanda Milling) when she spoke about the need for investment. She quoted from the Treasury document, “Fixing the foundations”, but failed to mention that UK investment as a percentage of GDP has been well below the OECD average since 1960, only surfacing briefly in 1990, as per the graph on page 15. I was pleased to hear her support for the cut to air passenger duty, which the Scottish Government will introduce, and she suggested to the Minister that that measure be considered elsewhere.
The hon. Member for Hartlepool (Mr Wright), Chair of the Business, Innovation and Skills Committee, agreed with every word of our motion, and we are delighted to have that support. He went even further and spoke of the value of our relationship with the EU, and its importance for trade. He also referred to the “dire and woeful” performance of the Government, who are sleepwalking back to the old British model, which cannot be a model for sustainable and economic growth.
The hon. Member for Bedford (Richard Fuller) suggested that this country had consistently rejected socialism. Not in Scotland—just look at the SNP Benches. He also seemed to suggest—surely this must have been in jest—we have not gone bust so things must be okay. Such poverty of ambition. My hon. Friend the Member for East Lothian (George Kerevan) spoke of the success of Ireland’s export record, and said that although we should have been turning around our export performance, we have failed in that. As he said, given the current account deficit as it stands, all warning lights should be flashing brightly.
The hon. Member for Spelthorne (Kwasi Kwarteng) spoke of the challenges ahead and the diminished role of manufacturing. He sees that as part of the evolving nature of the British economy, but we should be looking to revive manufacturing, not making excuses for where it is just now.
We heard from my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who spoke fluently and with much passion about the digital economy. Innovation is indeed about imagination. He spoke of driverless car technology as an opportunity to connect people in a different way and how very important it is for women and girls to have the chance to seek opportunities in new areas of technology.
The hon. Member for Macclesfield (David Rutley) said that only one in five businesses in this country export, compared with one in four in Germany, and that there were deep-seated issues that needed to be addressed. He did say that good things come from Scotland—many thanks to him.
My hon. Friend the Member for Livingston (Hannah Bardell) spoke with passion, ambition and great intellect about productivity, innovation and investment with a focus on inequality, diversity and inclusiveness. It is worthy of note that not one Government Member spoke about tackling inequality. Investment in human capital is important, too. It is not just about paid employment but the contribution of others in different ways: as volunteers, carers and activists. Some may not fit, she said, into the Government’s view of what is productive, but that does not mean that everyone does not have something to offer.
The hon. Member for Horsham (Jeremy Quin) paid tribute to some of Scotland’s inventions, in particular the overdraft, which he had been unaware had been invented by a Scot. Well, thank goodness for that. What would the Government do without it?
The view of the hon. Member for East Antrim (Sammy Wilson) was that while we should not knock the economy, we should not be complacent about it either. He acknowledged that we have a problem with our balance of payments.
We then heard from the hon. Member for Gloucester (Richard Graham). He spoke, in his opening lines, about the doom and gloom of speeches. I was certain he was talking about his own colleagues, but he then directed his comments at SNP Members. Surely, there must be some mistake! He did, however, mention the Commonwealth games and highlighted their success, for which we are very grateful. He started to mention the financial contribution of the UK to the games. For those not in the Chamber at the time, the answer is: nil.
The hon. Member for West Bromwich West (Mr Bailey) spoke of the overstatement of the Government’s success, in particular in relation to zero-hours contracts, owing to the lack of productivity and the weak export performance. The hon. and learned Member for South East Cambridgeshire (Lucy Frazer) talked about expertise in universities, but failed to recognise that a smaller proportion of UK businesses intend to collaborate than is the case with our international competitors.
My hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin) delivered an excellent speech, in his own inimitable fashion, on science and innovation, and the need for investment in that respect. The hon. Member for Bexhill and Battle (Huw Merriman) spoke about the importance of high-speed rail, but did not go far enough to suggest that Scotland should have access to it. Why ever not?
My hon. Friend the Member for Edinburgh West (Michelle Thomson) spoke of the lack of a UK strategy and the comparison with the Scottish Government’s strategy, the benefits of which we can see in action. It is about attitude and ambition, she said. I could not agree more.
Scotland is the best place in Britain to do business. The SNP Government have delivered success for Scotland’s economy. The value of Scotland’s international exports has increased by about 40% from £20 billion to £27.9 billion. In each year since 2006, the Ernst & Young attractiveness survey has ranked Scotland in the top two regions outside of London for foreign direct investment in terms of number of projects secured. In the past six years, business research and development spending in Scotland has increased by 29% in real terms to £797.7 million, compared with just 3% in the UK in the same period. I appear to have lost the attention of some Government Members. I do hope I can regain it quickly.
The cornerstone of Scotland’s successful economy, of course, has been our membership of the European Union. Scotland’s EU membership has been a vibrant source of social, cultural and economic benefit for Scotland over the past 40 years. It is a vital export market, so why would the Tory Government take our country to the brink of leaving this successful partnership?
Jeremy Quin
As I understand it, about 17% of Scots exports go to the rest of the EU and about two-thirds go to the rest of the UK. I am sure the hon. Lady will be equally fond of retaining the better Union—better together.
Ms Ahmed-Sheikh
It actually works both ways. It is not just Scotland exporting to the rest of the UK; exports come up the other way too, but I thank the hon. Gentleman for his intervention none the less.
Scotland is ready to do business with the world, but this Government are giving the impression that we, along with the rest of UK, are closed for business. What message does it give to the world when our UK Government talk a good game about our commitment to the historic climate change agreement reached in Paris, but simultaneously pull the plug on millions of pounds of investment in our renewables industry through their actions on the renewables obligation? How badly is the reputation of Scotland’s world-class universities damaged in the international market to attract the brightest and best by a regressive position on post-study visas? We seem to be moving from one extreme to another, closing the doors to some and opening them to others in the name of trade at all costs, whether that is in relation to arms that may be being sold illegally or not ensuring that human rights are at the top of the agenda when we negotiate trade deals.