Industrial Strategy

Kwasi Kwarteng Excerpts

Wednesday 18th April 2018 Commons Chamber

[Kwasi Kwarteng (Spelthorne) (Con)]

I am grateful to be called in this important debate. I thought that I was coming here to speak about industrial strategy, but having listening to the hon. Member for Salford and Eccles (Rebecca Long Bailey), I realise we are having just another general debate on the economy in which we hear the same old Labour rants, gloom-filled prophecies and denunciations of Government policy.

Industrial strategy is one of the most interesting areas of policy and government, so it is frankly disappointing to see the Labour party using it purely as a political football, with its spokesman giving a ranting speech that, in my many years in this House, I have heard far too often—it was very dispiriting. I am sorry to have to introduce my short speech in this way, but her speech was a real missed opportunity.

It is exciting that, for the first time in a long while, we actually have an industrial strategy. The House will remember that there was no such thing under the previous Labour Administration. There was no coherent, focused strategy between 1997 and 2010, and it was exciting when the Government made their announcement last year.

On the reach of the industrial strategy, it is right to start with research and development, which is central to our forward progress. It was remarkable that the Lady opposite did not once use the phrase “research and development”, as far as I remember, although I will check Hansard tomorrow. It is was surprising in such a debate that we did not hear anything about research and development from the Opposition.

Research and development is clearly a big part of the Government’s strategy, and there is a £4.7 billion fund for such investment. We are also trying to create a more favourable environment. From where I stand, corporation tax cuts, about which we have been very consistent over the past eight years, have been an important lever—the Lady opposite talked about levers.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

The hon. Lady.

[Kwasi Kwarteng]

Forgive me. I am pleased that the hon. Gentleman has picked me up on that.

It is right that we look at these measures in the round. Reductions in corporation tax from 28% towards 18% have been of huge benefit in trying to create a culture of entrepreneurship and in trying to create growth.

[Alan Brown]

The hon. Gentleman will be aware that the Government’s Red Book at the 2017 spring Budget predicted that cuts to corporation tax would cost the UK Treasury £24 billion. How does that equate to growth?

[Kwasi Kwarteng]

The hon. Gentleman talks about predictions, but let us look at the past. We have cut corporation tax in every single year since 2010, but revenues from that tax have gone up. That shows exactly that the Government’s strategy is right.

Let us consider ideas about investment in our people and their education. When I go around schools in my constituency, I am struck by the fact that everyone is talking about STEM subjects—science, technology, engineering and maths. These subjects are being fostered and encouraged by the Government. The message is very much going out, right through the educational establishment and across schools, and it is very encouraging that that is happening. In my constituency, a number of schools are looking in particular to increase STEM participation among female students, which is very exciting. All these things are part of an industrial strategy. All these things will make the country more prosperous and more productive—they will drive future productivity growth. The Government are to be commended for taking an unusually medium to long-term view of the UK economy. Far too often in this House, we sling insults, with lots of abuse and all that, and we are very focused on the short term. It is exciting that in this industrial strategy we can think in terms of the medium and longer term.

On that note, infrastructure spending is very dear to my heart, as the Member for Spelthorne. Heathrow—the “H” word—is something that this Parliament will have to decide on, hopefully in the next few months, but certainly in the next couple of years. I have always been clear about my support for the third runway—or rather, I should say, the expansion of Heathrow. That is vital to drive forward the economy, productivity growth and prosperity, so we will have to tackle that.

On the broad range of infrastructure issues, investment in human capital with regard to STEM subjects, and research and development—

[Norman Lamb (North Norfolk) (LD)]

I absolutely welcome the increased investment in research and development to which the hon. Gentleman refers, but does he agree that aiming to get to the OECD average in 10 years is not exactly ambitious for this country?

[Kwasi Kwarteng]

There are a huge number of ambitious initiatives in the industrial strategy. We are very good in this House—Opposition Members certainly are—at running the country down and pointing out shortfalls. However, as my hon. Friend the Member for Walsall North (Eddie Hughes) pointed out, we have some of the best universities in the world, and we have the best talent, as the Secretary of State mentioned. The trick, and the ambition, is to try to marry some of that talent with commercial productivity, and that is what the Government are trying to do. That is an exciting development. When we look at world-beating innovation and scientific research, we see that this country is right at the top of any list. We should celebrate that and try to improve on it, and I fully accept the remarks that have been made about that.

I am delighted that we are debating this issue because, as far as I can recall, it has been a very long time since we have talked about industrial strategy, certainly in this House. We are putting to bed a lot of the ghosts of the 1970s. I know that the Labour party does not necessarily want me to talk about the 1970s, but they were a disastrous era, when the so-called industrial strategy collapsed into a slightly absurd game of trying to pick winners and of backing industries that were totally failing. It is a real relief to hear a plan from the Secretary of State that moves away from some of those old ideas. Anyone who thinks we will drive innovation, R&D and talent by nationalising vast swathes of the British economy—anyone who thinks that is a viable option—deserves some sort of break or respite, because they are clearly not thinking particularly straight. I do not think it is right to confront this country with threats of nationalisation and confiscatory taxation. I do not think that helps the investment climate, and it is not a good form of industrial strategy. I am delighted that we are discussing this, and I look forward to contributions from Opposition Members that will be made in a more constructive spirit than the speech we heard just a few minutes ago.