Britain’s Industrial Future

Kevin Hollinrake Excerpts

Tuesday 15th November 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)]

I must pass on the apologies of the Secretary of State for not being able to attend the debate, due to a Cobra meeting.

I thank all hon. Members who have contributed to the debate. Listening to the contributions, I cannot help but feel that reports of the death of British industry have been greatly exaggerated—that is probably not what the speakers meant, but that is definitely how it sounded.

From the aftermath of the global financial crisis to the coronavirus pandemic and, more recently, damaging disruption to worldwide supply chains, there is no doubt that global economic turmoil in the past 12 years has presented significant challenges for manufacturing in the UK. Nevertheless, to the shadow Minister’s point on slow growth, it is good to note that the UK has grown at about the same pace as the United States since 2010, and faster than Germany since 2016. It is important to have the facts. In the same period, we have come to understand the scale of the climate change challenge and the transformation that will be required in every element of our economy.

I will first touch on some of the contributions from both sides of the House. It is fair to say that there were some valuable contributions on both sides, although I probably have more in common with the comments from the Conservative side of the House. My right hon. Friend the Member for Wokingham (John Redwood) talked about making sure that we have a fair and level playing field in competition with overseas markets. Our “Steel Lady”, my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft), rightly said that steel’s future was part of the solution for net zero, rather than part of the problem. My hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) talked about the 9,000 high-skilled, well-paid jobs created by this Conservative Government.

My hon. Friend the Member for Sedgefield (Paul Howell) talked about the green hydrogen opportunities on Teesside. My hon. Friend the Member for Heywood and Middleton (Chris Clarkson) talked about the £407 billion committed by this Government to saving jobs and businesses during the pandemic. My hon. Friend the Member for Milton Keynes South (Iain Stewart) talked about place-based solutions to growth, which I entirely agree with.

My hon. Friend the Member for Guildford (Angela Richardson) talked about the opportunities in the space and satellite sector. My hon. Friend the Member for Peterborough (Paul Bristow) talked about investing in British talent, in students and workers, which I also agree with.

[Alex Cunningham]

This is my second opportunity to welcome the Minister to his position, this time at the Dispatch Box. He heard me talk about carbon capture and storage. George Osborne wheeched away £1 billion overnight from the project several years ago. Can the Minister guarantee that the same is not going to happen to the carbon capture industry this time?

[Kevin Hollinrake]

The hon. Gentleman made some good points about the opportunities on Teesside. Carbon capture and storage and Net Zero Teesside represent a huge opportunity and something that is on the Government agenda. We are also looking into the life sciences sector in Teesside and the first large-scale lithium refinery in the country, with 1,000 jobs in construction—all these things are happening on Teesside. I recognise his point on the steel sector, but all this carbon capture and storage may well form part of the future for Teesside.

The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) made some interesting points about buying British. I think everyone in this House would agree on the need to buy British, but does he accept that, that as the trade and co-operation agreement and others open up EU markets to UK companies, we cannot on that basis expect to close our markets to EU countries, or to countries from around the world? We believe in international trade—[Interruption.] Well, I also believe in buying British. I share his enthusiasm for the Government’s £206 million investment in a UK Shipping Office for Reducing Emissions—the biggest Government investment ever in that sector.

Manufacturing has been at the heart of our economy for centuries—the shipbuilding, automotive and steel industries perhaps more than any others. In 2021, manufacturing contributed more than £205 billion gross value added to the UK economy, which is the fourth highest figure in Europe. Manufacturing, which is responsible for almost half of UK exports, has a vital role to play in driving innovation, job creation and productivity growth beyond the bounds of the M25. The hon. Member for Kilmarnock and Loudoun (Alan Brown) will be pleased to note that 95% of manufacturing jobs are outside London.

[Alan Brown]

Does the Minister accept that although we cannot necessarily stipulate to buy British, procurement can be managed by assessing community benefit and local content as part of quality assessments, so that it is not a case of price takes all? That is not happening with the Government’s bus procurement strategy, and it did not happen long enough in the CfD auctions, either. Is that not something that the Government need to address?

[Kevin Hollinrake]

The hon. Gentleman makes a fair point. Certainly, the Cabinet Office is looking at procurement strategy now, and nudges could be made. My point is that we cannot expect other markets to open their doors to our businesses if we close our doors to theirs.

From Sunderland to south Wales, industries are at the heart not just of our economy, but of our communities. Those industries are integral to our economic policy, and the Government are ensuring not just that they are alive and kicking, but that they prosper in the 21st century. Together, Government and business are laying the foundations for an economy that is fit for the future. By delivering the new infrastructure, industries, skills and jobs that we will need to meet the demands of the day, we can deliver a future for all that is more sustainable, secure and prosperous. Across the country, we are already seeing stories of success.

Let me begin with shipbuilding. The UK has always been and always will be a seafaring nation. Today, the shipbuilding industry supports 46,000 jobs in places such as Portsmouth and Rosyth, and adds £2.4 billion to the British economy. I am glad that the hon. Member for Kilmarnock and Loudoun welcomes today’s £4.2 billion order for five Type 26 frigates, which will be built in Glasgow.

Earlier this year, we refreshed our national shipbuilding strategy, unlocking more than £4 billion in investment for maritime firms from the Solent to the firth of Forth. We are improving access to finance by providing credit for UK ship buyers through a home shipbuilding credit guarantee scheme, and we are working closely, through the shipbuilding enterprise for growth, to raise the productivity and competitiveness of UK shipyards.

This is not just a story of success at sea; we are leading the way on land, too. We are the sixth largest automotive producer in Europe, and the sector is one of the engines driving forward our plans for green growth in every corner of the country. Last year, Nissan announced £1 billion in investment to create a world-first electric vehicle hub in Sunderland, safeguarding 6,200 existing jobs and creating more than 1,000 new ones. We know that there is some way to go, but this Government are committed to putting the pedal to the metal and doing all we can to accelerate our efforts.

Many Members quite rightly talked about steel. The Government recognise the challenging international economic environment in which the steel industry has to operate, including in relation to overcapacity. Above all else, we understand the vital role that steel occupies as a cornerstone of the UK economy, underpinning domestic industries and local communities. Over the past nine years, the Government have committed £800 million towards electricity costs through the energy intensive industries compensation scheme, on top of the energy bill relief scheme. Of course, we continue to consider what can be done to ensure that the steel industry is competitive, in fair terms, with other nations.

On critical and advanced materials, we are investing in the materials of the future. That is why we published in July our first ever critical minerals strategy, which sets out our plan to secure our supply chains. We are boosting our domestic capabilities in the production and processing of critical minerals, building a circular economy where they can be recovered, reused and recycled.

The story really could go on, but I think I have made my point. This country has a rich industrial history that goes back centuries. Our world now looks very different from the 18th century, but one thing remains the same: that particularly British spirit of innovation and enterprise. This Government can and will play their part so that no community or corner of this country is left behind.

Question put and agreed to.

Resolved,

That this House condemns the Government for its lack of policy on British industry including the steel, automotive and shipbuilding sectors; regrets that after 12 years of Conservative Government, the UK has the lowest levels of business investment in the G7; recognises the large number of high-quality jobs created by British industry, as well as its importance to achieving the UK’s net zero targets; calls on the Government to recognise the unique challenges and opportunities in each of these sectors; and therefore further calls on the Secretary of State for Business, Energy and Industrial Strategy to urgently bring forward plans to ensure these sectors are supported and to avert job losses that will have a devastating impact on communities and the wider economy.