UK Digital and Tech Industries

Jim Shannon Excerpts

Wednesday 18th April 2018 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairmanship, Ms McDonagh, and to speak in this debate. I congratulate the hon. Member for St Albans (Mrs Main) on securing this debate and on passionately setting out the issues that we all subscribe to and wish to speak about.

The UK’s digital tech industry turned over an estimated £170 billion in 2015 and is growing at twice the rate of the rest of the economy. It is key to boosting the UK’s wider economy, making a contribution of £97 billion in 2015. The hon. Lady clearly set out the situation in relation to the digital tech industry. She was confident on the way forward and Brexit. I will be equally confident, and I also want to say a wee bit about what we have done back home, which has been excellent for job creation and for boosting our local economy.

The digital tech industry generated a further 85,000 jobs between 2014 and 2015, going from 1.56 million jobs to 1.64 million. It is creating jobs at double the rate of the rest of the economy. That indicates how important the sector is. All the contributions so far have mentioned that, and I am sure those who follow will do the same. Since 2012, there has been a 13% increase in the advertised salaries of digital tech posts, compared with only a 4% rise in those of non-digital jobs. Tech investment in the UK reached £6.8 billion in 2016, which is more than two times higher than any other European country and significantly more than its closest rival, France, which secured some £2.4 billion of investment. That is about a third as much, which indicates the strength of our digital tech industry.

“Tech Nation 2017” shows that the average advertised salary for digital tech jobs has now reached just over £50,000 a year, compared with £35,000 for the average non-digital salary, making it 44% higher than the national average. Again, not only are we creating jobs; we are creating well-paid jobs. Along with the well-paid jobs we have to provide the quality employee as well.

As a Northern Ireland MP, I look to the Minister, who I know has a particular interest in this subject, not just because she is a Minister but because she has a personal interest. I am sure the replies to our queries and questions will be positive, as I am sure the shadow Minister will think of some similar things to say as well. Tech City UK’s “Tech Nation 2016” report found that the digital and tech sector in Northern Ireland was burgeoning, and outside of London and the south-east made the largest contribution to the regional economy.

[Mrs Main]

The real purpose of this debate is to show that although London is key in many eyes, it is not a bar to young people finding work because they can find such high-paid jobs in their own areas, and that is really exciting.

[Jim Shannon]

The hon. Lady is absolutely right. It is tremendously exciting. I discussed it with Invest Northern Ireland, which was given the task of finding new jobs. One of the things that it was able to describe—I will come to this shortly—was the quality of graduates that we have in Northern Ireland, which is one of the attractions of Northern Ireland. The hon. Lady is absolutely right that people do not have to go to London to get a big wage. They go for different reasons, whatever they may be, but people can have a job back home and they can stay there. That is what it makes it so exciting.

In the words of my party colleague, Simon Hamilton, in his role as Economy Minister:

“From the North West Science Park in Londonderry through to the Enterprise Zone in Coleraine and down to Newry, the home of some of our leading high-tech companies, with Belfast— Europe’s leading destination city for new software development projects—at its heart, bit by bit we are building a Northern Ireland-wide tech industry that we can be proud of.”

That is what we are doing in Northern Ireland, and that is what we hope to continue over the next period of time.

In Belfast and other cities in Northern Ireland, global tech names such as Citi and Allstate, working in the sector with Silicon Valley firms such as BDNA, are all recognisable. Each of us here will speak passionately about our own constituencies, as the hon. Member for York Central (Rachael Maskell) did, and as other Members will as well. As MPs we love our constituencies and want to do the best for them, so the opportunities need to be there. Not only is our highly skilled workforce attracting global investment, but we have indigenous tech firms such as Kainos, Novosco and First Derivatives growing in size and becoming global leaders in our region of Northern Ireland. We can be excited about what is happening across the whole of the United Kingdom of Great Britain and Northern Ireland. As I often say to my hon. Friends in the Scottish National party, “Better together”: all the four regions doing all the same things together day by day and making things better for everyone, and we should continue to do that.

It is clear that much of our attraction is the skills base supported by international-standard research facilities, such as the Centre for Secure Information Technologies at Queen’s and Ulster’s Intelligent Systems Research Centre: education and big business working together. We have done that very well through Queen’s University. The Minister might respond to that because that is a key factor to our moving forward. We will have the education, the big business, the opportunities, the quality of graduates and all those things together. We have a range of support and programmes in place, such as StartPlanet NI and Propel, aimed in particular at early stage and high potential technology-based start-ups. Perhaps most crucially, we have a fast developing ecosystem including the likes of Catalyst Inc., Digital DNA and Immersive Tech NI, which combine to create a vibrant tech community across Northern Ireland.

Northern Ireland is consistently the top-performing region of the UK in national exams at age 16 and 18. The fact is that we have the graduates. People want to stay and the technical and digital firms want to invest because the skills base is there. We have the highest percentage of qualified IT professionals in the UK and Ireland, with more than 77% holding a degree-level qualification. I say respectfully to all the other regions that Northern Ireland as a region is leading the way—from a small base of 1.8 million people, we are up there with London and other parts of the United Kingdom. Some 77% of high school graduates, post A-level, go on to further and higher education compared with the UK average of 71%.

Government, industry and academia have implemented collaborative initiatives in training and education, such as cyber and data analytics academies, to ensure that the workforce continues to meet the needs of the global ICT industry with competitive salary costs, low employee attrition rates and lower operating costs, including low property costs. All those things make it attractive to come to Northern Ireland. Labour and property costs for a 200-person software development centre in Belfast are 36% less than in Dublin, 44% less than in London and 58% less than in New York. It is clear that we are an attractive place to do business and we must sell that more globally.

I will conclude with this, Ms McDonagh. I am conscious of time and there are two others to follow me. I read an interesting article in the Belfast Telegraph in which David Crozier, part of the commercial team at CSIT, was quoted. I want to cite his comments because it is important to have them on the record. He said:

“Belfast has a strong hi-tech industry as it is and cyber security is a subsection of that so you have transferable skills in terms of software engineering roles that can transfer over into cyber security. We’re working towards a target of about 5,000 jobs by 2026.”

While other sectors are facing uncertainty following Brexit, Mr Crozier is bullish about its impact on cyber-security investment:

“It’s really high-value stuff, companies have a demand for it globally and to a certain extent that does make it”—

I use these words; I know the hon. Member for St Albans will be happy—

“Brexit proof."

We are looking forward to good times.

“It’s not going to have a detrimental effect for sure, it may actually lead to more demand if you see a hardening of UK national positions around trade tariffs and those sort of things that’s naturally going to drive investment into types of technologies to protect sensitive information, sensitive networks. It possibly produces even greater opportunity.”

An industry that is yet again embracing the opportunity Brexit presents, an industry that is able to compete globally, is an industry that we must invest heavily into, and the benefits will be deeply beneficial. Brexit-proof: what could be a better reason than that?

--- Later in debate ---

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

It is a pleasure to see you in the Chair, Ms McDonagh. I, too, congratulate the hon. Member for St Albans (Mrs Main) on securing the debate.

I recognise the enormous progress that many of us have celebrated this afternoon, but I want to sound a note of warning about becoming complacent. For all the progress that we have talked about in our constituencies and around the country, the truth is that, across the horizon, others are moving much faster. We have heard about some of the big technology firms that are troubling us from the west coast of the United States, but look east, to Alibaba, Tencent, and Baidu.

Look at the fact that China is now not only the country that invented paper currency, but will soon become the first cashless society, where everybody pays for everything on WeChat. That country is now backed by the biggest science spend on Earth. There are countries around the world moving much faster than us, and if we want to ensure that this great superpower of the steam age does not become an also-ran in the cyber age, the Government will need to make a number of important policy reforms and changes of direction, three of which I will touch on very quickly.

First, we have to ensure that the digital economy in this country has a much more robust foundation of trust. Trust is the foundation of trade; it always has been and always will be. However, as we have seen in the debate surrounding Cambridge Analytica and Facebook, that trust is evaporating very quickly, which is why we need a clear statement of principles and a clear Bill of digital or data rights for the 21st century.

The truth is that we are going into a period of rapid regulation and re-regulation. That is perfectly normal and sensible. There was not just one Factory Act during the course of the 19th century; there were 17. We regulated again and again as the technology and the economics of production changed. That is what we are about to do in this country, yet if we do not have a clear statement of principles, that regulation will be difficult for anybody, frankly, to anticipate.

It should not simply be about our rights as consumers; it should be, as the hon. Member for East Dunbartonshire (Jo Swinson) said, about basic equalities. In South Korea, they want to use wearable technology to increase life expectancy by three years. How do we ensure that those new privileges are not simply the preserve of those who can afford the technology? How do we ensure that we democratise both the protections that we need and the progress that we want to share? That is why a Bill of digital rights is so important.

It is important that the Government pick up on one crucial component of trust: the electronic ID system—a public choice for EID—that we currently lack. At the moment, public data is scattered between the Driver and Vehicle Licensing Agency, the Passport Office, the Department for Work and Pensions, Her Majesty’s Revenue and Customs, and the Government Gateway, which I see the Minister’s Department has now claimed. At the moment, that information is so disjointed that we cannot use it as citizens to create a secure public EID system, as they have done in Estonia. That has been the key to Estonia’s creation of 3,000 public e-services and 5,000 private e-services. It is the foundation of what is now the most advanced digital society on Earth. The Government need to put in place those important foundations of trust.

The second point is on infrastructure. It is not just here in the Houses of Parliament where the digital infrastructure is appalling. I do not know about you, Ms McDonagh, but I certainly cannot get a mobile signal in my office, on the fifth floor of Portcullis House, and I know that frustration is widely shared, but it is not just a problem here. In fact, the areas of this country that Brexit will hit hardest are those where download speeds are slowest. The parts of the country that will be hurt most by Brexit are therefore the least prepared to prosper in the new digital society that we are all so much looking forward to.

Other countries are racing ahead of us in terms of the targets that they are putting in place for broadband access. I was privileged to visit South Korea last week, where they have 60% fibre to the premises. What is it here in Britain? It is 3%. Not only do they have much greater penetration of fibre than we do, they have not one but three mobile networks delivering 100% broadband access, and they will commercialise 5G not in 2020, but this year. That is why the Government should be far more ambitious about universal service obligation for broadband access. We proposed 30 megabits per second, and proposed putting £1.6 billion behind that. The Government should be more ambitious than they are today. We will soon go to consultation on what it would take in terms of public investment to commercialise widespread 5G. We hope that the Government will look closely at our results.

[Jim Shannon]

Through the confidence and supply arrangement that the Democratic Unionist party made with the Conservative party, we secured £150 million for broadband to take us up to that level, so we can continue to be the leader in regions across the whole of the United Kingdom for economic development and delivery.

[Liam Byrne]

Well, lucky you! If the west midlands had enjoyed a per capita bung on the same level as Northern Ireland, an extra £600 million would be coming into my region; I know I am not the only one to look at the deal that the hon. Gentleman and his colleagues skilfully struck with some jealousy.

The final component is skills. My hon. Friends the Members for Bristol North West (Darren Jones) and for York Central (Rachael Maskell) made brilliant speeches about the importance of skills. I come from the city that is home to Soho House. Soho Manufactory was the first great factory, built in 1766. People have heard, of course, of James Watt, but many forget Matthew Boulton. It was Boulton who put together not only the best engineers in the world, but the best designers in the world. Where did he get them from? He brought engravers and artists from France, Germany and central Europe. That was the strength of the business; it married design brilliance and technical brilliance.

What do we have today, 250 years later? In Jaguar Land Rover, we have a company producing vehicles where the infotainment system is now worth more than the engine. Design brilliance and technical excellence need to go together, but design brilliance is being smashed out of the curriculum at the moment. I speak as a father of a boy going through his GCSEs, so I see it first-hand when I go home.

Young people are at the sharp end of the jobs risk of automation—that was confirmed by the International Monetary Fund yesterday, and by the OECD a week or two ago. However, as my hon. Friend the Member for Bristol North West mentioned, older workers are also crucial. By the age of 52, a working-class man in this country has paid £103,000 in national insurance. What happens if he loses his job? He gets sent down the job centre like everybody else, with no extra help, retraining or reskilling for the digital economy. Yet this is the country of the Open University, the Workers’ Educational Association, Unionlearn, and great education entrepreneurs such as Dr Sue Black and Martha Lane Fox. We should be bringing those players together to create a different kind of lifelong learning for the 21st century.

This is a nation of scientific genius. We have been burying our sovereigns with our scientists since we interred Isaac Newton over the road in Westminster abbey. We are the only country in the world that could make films about great scientists such as Turing and Hawking. We are the nation of the industrial revolution, but if we do not change course soon, this foundation of the industrial revolution will not be the leader in the fourth industrial revolution.