Industrial Strategy

Jim Cunningham Excerpts

Thursday 20th October 2016 Commons Chamber

[Chris White (Warwick and Leamington) (Con)]

I beg to move,

That this House has considered industrial strategy.

May I thank what we call the BBCom for approving my application for this debate? Let me also thank the hon. Members for Hove (Peter Kyle), for Edinburgh West (Michelle Thomson) and for Hartlepool (Mr Wright) for supporting this debate. We often debate policy in this Chamber, but it is rare for us to debate the creation of a new Department and what it will in fact mean.

In my maiden speech, I referred to my constituency, Warwick and Leamington, as being at the centre of the country, both geographically and demographically. We have good schools, colleges and two highly respected universities on our doorstep. We have many businesses, which are household names, a skilled workforce and low unemployment. The constituency has a strong reputation in the technology sector, particularly in the video games industry, and the wider region has a heritage firmly based in manufacturing.

This month, on a visit to my constituency, I was pleased to see the site that will house a new factory for Vitsoe, the furniture manufacturer and exporter. It is on the very spot that was home to the Ford foundry until it sadly closed in 2007.

[Mr Jim Cunningham (Coventry South) (Lab)]

The hon. Gentleman’s constituency is next to mine, and he will know that Jaguar Land Rover has its main development plant in Coventry, probably employing around 5,000 to 6,000 employees. Equally, he will also know that the Chinese have put more investment into the black cab company, which is constructing a new site in Coventry. That gives us a good demonstration of some of the industries that have been created in the midlands.

[Chris White]

I welcome that intervention. The hon. Gentleman and I have attended some of those very interesting institutions and worked together at Warwick University, one of our leading international universities.

I am pleased that Tata has based its new technology centre in Leamington, which shows what effect inward investment can have on our constituencies and our country. Despite the collaboration—the links between our educational institutions and business, its location and its workforce—how much more could we do as a constituency and as a country if we had the strong foundations of an industrial strategy?

Since working in the automotive sector, I have always had a passion for manufacturing, not least as co-chair of the all-party manufacturing group. I am a member of the Business, Energy and Industrial Strategy Committee—I am pleased to see its Chairman, the hon. Member for Hartlepool (Mr Wright), in his seat—and we are currently taking evidence on this concept.

We have recently heard evidence from the right hon. Member for Tatton (Mr Osborne), the former Member for Twickenham and Lord Heseltine, who all assured us in their own different and special ways that we have had an industrial strategy all along. Perhaps they are right, but I would like to use this speech to say how I think an industrial strategy could be reformed to meet some of the present challenges that we face.

In the last Queen’s Speech debate, I spoke on industrial strategy. I remember that most of the other speakers spoke about sugar tax, an important issue at the time. I must admit that I was not entirely overwhelmed by the Government’s enthusiasm for what I was saying, so no one is more delighted than me to see the inclusion of the words “industrial strategy” in the name of a Department.

There has been a sense of scepticism about industrial strategy. [Interruption.] That was more warmth than I received for my remarks in the Queen’s Speech debate. Industrial strategy has been given negative connotations. Let us consider British economic performance, for example, in the post-war period. Britain’s relatively poor record between 1950 and 1979 has generally been blamed on the lack of competition, with traditional firms being unwilling to adopt technological or process advances. Wilson’s “white heat” of the scientific revolution was replaced by a heavy reliance on the financial sector. Neglect in the past has seen a weakening of our supply chains and a huge shortfall in the skills that a world-class industrial base requires to satisfy both demand and opportunity.

We need to have a strategy and structure in place, a need made even more urgent following the EU referendum. In addition, highly capital-intensive advanced manufacturing requires long-term planning. There is a burden on companies to invest in skills and equipment, and a burden on the state to help create stability for long-term decision making—macroeconomic, fiscal and regulatory.

For manufacturing to grow, an emphasis needs to be placed on encouraging investment and greater long-termism. Although initiatives such as the midlands engine and the northern powerhouse are laudable, they need to be supported by strong tangible policy, and that policy will be less effective if it is piecemeal. For example, capital allowances were popular with industry, but were discrete in their design. A coherent strategy can work for the midlands, the north and the south, driving growth, building economies and providing sustainable employment and the subsequent reduction in community and individual inequalities.

Any new industrial strategy must fit the times we live in, the domestic economy, the global marketplace and developing themes such as Industry 4.0. In September 1965, the then Secretary of State for Economic Affairs produced the national plan, which sought to cover

“all aspects of the country’s economic development for the next five years”.

The plan was more than 450 pages long and looked at everything from the running costs of schools to the future development of the electronics industry. The plan was comprehensive in scope, but our economy no longer operates under such a structure and the plan would have negative consequences if replicated today.

The lack of success of documents such as the national plan does not mean that there should not be a national industrial strategy now for the UK, or that there is not a case for a coherent document to be drafted by the Government, outlining the support that they intend to give the sector and Departments. In countries such as Germany, long seen as a model industrialised nation, there has been little need for the Government to pin down formal strategies or statements because this philosophy is so entrenched and embedded in all activity. In Britain, there has been a tradition of volunteerism when it comes to economic organisation.