UK Modern Industrial Strategy
Debate between Jonathan Reynolds and Charlie Maynard(1 week, 1 day ago)
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Madam Deputy Speaker (Ms Nusrat Ghani)
I call Select Committee Member Charlie Maynard.
Charlie Maynard (Witney) (LD)
The Secretary of State said,
“The UK has long been and will remain a champion of free trade”
—if only! It is not on the big stuff or the important stuff. Leaving the EU’s customs union and single market has reduced UK GDP by between 2% and 4%. The deal with India is good news, but according to the UK Government’s own estimate, it adds 0.1% in the long term—that is, 20 to 40 times smaller. UK exports are down 13% since the trading co-operation agreement took effect. That impacts people in my constituency and all hon. Members’ constituencies. When will the Government move faster to repair the enormous economic damage of a hard Brexit?
Jonathan Reynolds
I understand the point that the hon. Gentleman makes. This was the question that faced the nation at the time of the referendum. If a country leaves a single market and customs union, there will of course be economic consequences, particularly when there is the free movement of people, but that is the decision the country took. Let’s look to the future, not the past. We could have this argument forever. We would have a situation where the business uncertainty created by never fundamentally coming to a settlement on Brexit would in itself become as big a problem as the impact of leaving the single market that he talks about.
Of course, if we were in a customs union without being part of the EU, could a G7 economy subcontract that area of policy entirely to other countries and not have control of a key aspect of our economy? Honestly, I do not think that is reasonable. I appreciate the Liberal position is almost certainly to go back into the European Union—there is consistency there—but I say again that doing so would mean, for instance, denying us the benefits of the India trade deal and services access to India, the reduction of tariffs on agriculture, whisky and cars, and the benefits of the US agreement, which has saved tens of thousands of jobs.
Budget Resolutions
Debate between Jonathan Reynolds and Charlie Maynard(7 months, 3 weeks ago)
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Jonathan Reynolds
I have already given the right hon. Gentleman a go. I will make a little progress, and we will see whether he can do a better one next time.
The result was a protracted period of anaemic growth. Had our economy grown at the average rate of other OECD countries over this period, it would have been £171 billion larger. Imagine the difference that would have made to all of our communities and to today’s Budget debate. British firms, facing such uncertainty, have not seen investing domestically as a sufficiently attractive proposition. They have been reluctant to adopt new technology, to upskill their employees or to plough money into research and development. We have even heard that, in any given year, roughly 40% of UK firms choose not to invest at all. We want to change that for good. We want to give businesses certainty, confidence and stability so that they can make decisions for the long term.
That is why, at the Budget, the Chancellor reaffirmed our new modern industrial strategy. Invest 2035 will be a central pillar of our growth mission. The strategy will allow businesses to plan not just for the next 10 months, but for the next 10 years. It has already won the backing of Make UK, which has told us that businesses will no longer have to
“fear the constant chop and change in policy we have seen over the last decade.”
Instead, they can focus on the long term.
Our industrial strategy will create a strong pro-business environment, making it simpler and cheaper for companies to scale up and invest. It will unleash the potential of our high-productivity services and industries, because our recent economic history has taught us that we have to play to our strengths. Over the last 25 years, high-productivity sectors were responsible for roughly 60% of our economy’s entire productivity growth. Looking at the figures since 1990, over half of the UK economy’s GDP growth has come from just three sectors—information and communications technology, financial and professional services, and advanced manufacturing.
That is why our industrial strategy will channel support to eight key growth-driving sectors, those in which the UK services sector will excel both today and tomorrow—the services and industries that present the greatest opportunity for output and productivity growth over the long term.
Charlie Maynard (Witney) (LD)
How does that all gel with the fact that the OBR is saying that business investment will fall by 0.6%, as a share of GDP, by 2029? It sounds great, but it does not add up in the OBR’s eyes. Will the Minister please elaborate?
Jonathan Reynolds
We have a similar question. The Government’s wider pro-business changes cannot be modelled by the OBR, and we know that we have to prove them. There is simply no way that we will get to the higher business investment, the higher productivity growth and the stronger economic growth that we need in all parts of the country unless we are honest, robust and responsible with the public finances, as this Budget is and the previous Government were not. If the Budget does not set the trajectory for strong long-term public investment, to leverage in that degree of private investment, we will not have the foundations to succeed. I am so excited by this Budget because it gives us those strong foundations for the future.