Economy: Growth

Lord Marland Excerpts

Thursday 6th December 2012 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)]

My Lords, this has been a magnificent debate and I am very grateful to the noble Lord, Lord Heseltine, for initiating it. It must have been wonderful for his grandchildren to witness this great debate.

When the thud of this arrived on my desk and the noble Lord gave us a briefing on it, the words of Caesar came to mind: “Veni, Vidi, Vici”. He came, he saw and he conquered, as he produced this excellent document. It is a capable landscape of the issues and problems that we all face. The most important thing is that it has answers. So often we criticise in society today but we do not have answers.

I will restrict my remarks in this very short time to a response to his document on behalf of the Government. I hope that noble Lords will forgive me for not dealing with their individual questions. I am sure that we can deal with those later. It is fair to say that the Government do not agree with everything the noble Lord said—it would be a rare world if we did—but I was much heartened when he said that the Chancellor's words yesterday were as much as he could have hoped for on the report.

Of course, a great deal of what the noble Lord wrote in this report is also happening within government. In particular, he wants to put in a test case in Birmingham where he is looking for a response for the Prime Minister. I have no intention of shooting the Prime Minister’s fox on this one because the noble Lord is waiting for him to reply, but I have a slight indication that he may be disposed to that as the right thing to do.

The noble Lord talked about a national growth strategy in this fine document, as did the noble Lords, Lord Wood and Lord Mandelson. It is absolutely fundamental that out of all of this we have a national growth strategy. That is what the Government are working to at the moment. Part of that strategy relies on the chambers. The report says that we should enhance the legal status of the chambers. The chambers are indeed at the heart of a British-led recovery. However, as the noble Lord, Lord Heseltine, remarks, the chambers themselves are in, at best, a pretty feeble state. They need boosting up. We will return in the spring to his comments on that with an official response, but clearly the direction of travel in boosting the chambers, which we are doing abroad at the moment, needs to happen very extensively in this country, because we have a serious breakdown at the moment.

Strategic relationship management was referred to. We have established 38 strategic relationship partnerships with big companies to lead ourselves out of the mess that we are in. Our ambition is to have 150 relationships by 2015. Rationalisation of trade associations is another issue. Having been the Minister for Intellectual Property and been on the receiving end as some 100 associations bombarded me with information in relation to intellectual property, I cannot help but agree with the noble Lord. That has of course to be led by the industry, but this gives a very helpful nudge.

The noble Lord refers to procurement strategy and procurement specialists within government. He is absolutely right. I was one of the five Ministers who were responsible, under Francis Maude, for renegotiating all government contracts and establishing strategic relationships and partnerships with government suppliers. That will be critical, not only for saving costs but in terms of building relationships. The Government’s commitment to 25% of government contracts going to small and medium-sized enterprises is absolutely key to helping the SMEs forward.

I am on the Civil Service reform board so am much taken by the reference the noble Lord makes to improving management information within government. We have to improve management information, which has not changed since the noble Lord, Lord Mandelson, was in government. We are still deluged by paper, which, in a modern world, should not be the case. There are communication issues within the Civil Service, but it is working hard to find a way forward with that, as indeed it is in commercialising the Civil Service, which is going to be critical to any reform.

A lot of the meat of what the noble Lord says relates to LEPs. I am glad that he feels that LEPs, working alongside stakeholders, are absolutely key to development through our regions. I do not think there is much argument in this House about that. The Government have committed £1.5 billion of funds which LEPs can apply to borrow. We have established 35 LEPs and a wave of city deals—28 already—which should increase employment by 175,000. A lot of work is going on there.

A number of noble Lords have referenced local government, while the noble Lord, Lord Wolfson, referred to planning and getting a much clearer path in that respect. That is very important, especially coming from a top entrepreneur like the noble Lord, who understands it as well as anybody. It is absolutely fundamental that we simplify some of the methods of local government.

On skills, I am a great fan of the UTCs, and we all pay huge tribute to the noble Lord, Lord Baker, for his part in devising them. I have had the privilege of working with him on a few things to do with UTCs and where they could be. They will be part of the regeneration in various areas. In addition to that, the Government have set up a number of skills training programmes and mentoring programmes, such as Get Mentoring, which has 15,000 mentors throughout the country supplying help to businesses starting up. It is all part of reducing that skills gap, as my noble friend Lord Heseltine suggested.

The noble Earl, Lord Lytton, referred to red tape. The one-in, one-out regulation reduction that we have has already saved £850 million of regulation costs to businesses. We must build on that, and we support the recommendations that the noble Lord has made.

In addition, the Government have adopted several key initiatives. We have set up the Green Investment Bank with £3 billion of funding. We have announced a business bank with £1 billion of new funding. We have set up catapults with an investment of £200 million to transform some of the new advanced technologies. We have set up the Business Finance Partnership. We have the Enterprise Capital Funds and the Funding for Lending scheme, as well as a whole raft of infrastructure projects that the Chancellor has announced not only recently but in the past two years. So the Government are trying their very best to force business and industry to respond to the challenges that the economy now faces.

Strategically, we have identified some of the economies that we want to back, such as advanced manufacturing in aerospace, motor and science. The Chancellor announced great support for science and technology yesterday in the Autumn Statement. We also want to support knowledge-intensive industries such as education, IT and business services—all key things in which we have tremendous skills. In addition, we want to enable some of the construction and energy companies to start rebuilding infrastructure.

At the heart of this is trade. Unless we start to trade as a nation, we will not have growth. Our initiatives for trade include investing more funds in UKTI, a department that I am proud to be involved with. We have reformed UKTI as a much more outward-facing unit than it has been. The Prime Minister has led several big trade delegations; there have been more than 280 missions this year alone through UKTI. We have had Export Week, we have had ExploreExport, and as of late I am pleased to have taken on the chairmanship of the Prime Minister’s trade envoys.

If there is one thing that I think sums up this debate and the admirable concerns of all noble Lords in this Chamber, which were echoed by the noble Lord, it is the notion that we are definitely all in this together. Through the trade envoys—which involve Labour, Liberal Democrat and Conservative Peers—and through our business ambassadors, we will be able to take the trade out to the world as UK plc. That is how we will get out of this mess—by all being in it together. I admire the words that the noble Lord used, because they are the icing on the cake on what I think is an excellent document and a good reference point for our Government.

House adjourned at 5.42 pm.