Industrial Strategy

Lord McNicol of West Kilbride Excerpts

Thursday 1st February 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, I thank my noble friend Lord Watson of Wyre Forest, not just for securing this debate, but for a fantastic introduction. He is absolutely right. As we have heard from across your Lordships’ House, the case for a new industrial strategy, one that works in partnership with business, unions and government, is overwhelming.

I too congratulate the noble Lord, Lord Rosenfield, on his maiden speech. I agree with him that there is huge opportunity across the UK, not just in London and the south-east, to develop an industrial strategy. I echo his warm words about Alistair Darling, a mutual friend of many of us on this side, and his family. I thank him for that. I hope he enjoys his many years in your Lordships’ House.

We are a country full of talented people and businesses, with ingenuity and ideas in every town and city, but we cannot meet our vast challenges alone, as individuals or businesses. It requires a national focus and effort that has been sorely lacking over recent years. We have some key economic strengths across the UK: our world-class universities, our thriving life sciences sector—as the noble Lord, Lord Kakkar, who is not in his place, talked about—advanced manufacturing clusters, creative industries, and many more.

Yet, despite our enormous potential, the UK is set to have the lowest growth in the G7, having suffered years of low investment relative to our neighbours. Our productivity levels remain stubbornly low and, as a result, workers have seen no growth in real pay since 2010, leaving families exposed to the current cost of living crisis. A country such as Britain should not be looking at a future of low growth and poor productivity. The defining mission of the next Labour Government will be to restore that growth.

A co-ordinated, cross-sectoral approach, with policy consistency so that businesses and individuals can make long-term decisions and invest, is vital. The emphasis must lie on unpacking and refining an industrial strategy within a comprehensive framework, as the title of this debate sets out. This Government said that they would achieve their plan through a focus on policies across three core pillars of growth: infrastructure, skills and innovation. These Benches agree, but it is time to transit from words into action. If we have the opportunity to serve and govern after the next election, we will foster community collaboration to drive positive change across Britain’s industrial landscape.

An industrial strategy can play a crucial role in supporting the broader fabric of British society. Under the coalition Government, Vince Cable continued some of the work that new Labour had put in motion, but this was jettisoned after the 2015 general election. As my noble friend Lady Donaghy said, in 2017 Theresa May’s Government published an industrial strategy and established the Industrial Strategy Council. However, since 2019 there has been little serious attempt at any industrial strategy; the 2017 industrial strategy was set aside and the council disbanded. The challenges and opportunities ahead make it essential that Labour reverses this inconsistency and pursues a serious and strategic approach. Our lack of progress as a nation has encountered serious challenges, with the impact of Brexit in particular serving as a major obstacle.

At the core of implementing Labour’s industrial plans is a commitment to make Brexit work by re-establishing connection and engagement with the EU to support UK industry. The last Labour Government’s early intervention in renewable energy technologies supported large-scale renewable electricity generation and led to the expansion of wind-generated power. Labour’s cultivation of the life sciences sector when we were last in government was crucial to ensuring that it is now one of the leading industries. Just two days ago, the Labour Front Bench launched a new plan for the future of life sciences. This underscores the urgency of re-evaluating our industrial strategy to foster sustainable growth.

Jonathan Reynolds, Labour’s shadow Secretary of State, when presenting Labour’s industrial strategy, said that fostering collaboration with small businesses and adopting a national government approach representing smaller and larger businesses is critical. Such inclusive measures can contribute to a more comprehensive and effective approach to advancing the nation’s industrial landscape. Labour will provide policy consistency by placing an industrial strategy council on a statutory footing. This would help to end the farce of long-term plans that do not survive the political cycle, as we have heard, and which make it difficult for businesses to take strategic decisions about their future direction. It would instead offer the certainty needed to increase investment in British business, people and places.

Labour has based its industrial strategy on four missions: delivering clean power by 2030; harnessing data for public good; caring for the future; and building a more resilient economy. Collaborating with organisations such as the British Business Bank can effectively support entrepreneurs and business owners. Addressing disparities by strategically targeting areas in need of industrialisation, such as empty high streets, can play a key role. This includes investing in areas to transform them, with thriving businesses and creative, vibrant communities. In creating an industrial strategy for Britain, considering environmental outcomes is paramount, as my noble friend Lord Davies and a number of other noble Lords have said. We are currently facing one of the worst G7 economic growth rates. The Labour Party aims not only to revitalise the industry but to prioritise climate change and environmental concerns.

The war in Ukraine has driven up energy prices, leaving the UK set to have the highest inflation in the G7. As part of our mission, we plan to boost offshore wind capacity by investing in key ports on the Forth, Tay, Humber and in the north-east of Scotland. This commitment to clean power not only aligns with environmental goals but has the potential to create well-paid nationwide jobs. As we have heard a few times this afternoon, Labour’s commitment on the UK’s broader digital economy underscores our focus on fostering collaboration and inclusivity.

The lack of resilience in the economy can have widespread consequences. The current cost of living crisis highlights the importance of developing more resilient supply chains to mitigate the impact of such challenges on industry and the lives of individuals. Our nations need a Government who can provide certainty and clarity. Achieving prosperity through partnership is key to our economic revival. I look forward to the Minister’s response.