Industrial Policy and Manufacturing

Matt Hancock Excerpts

Thursday 22nd November 2012 Commons Chamber

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

Debates in this House are often described by those who speak in them as important, but there is something important about today’s debate: on this subject, cross-party unity matters. There has been clear unity across all three parties that have been represented in this debate. Almost everybody stuck to that tone, until a brief period at the end. I will not push the point about who got us into this mess and I will not ask under which Government the number of private sector jobs in the west midlands fell, because it is important, for substantive reasons, that there is a cross-party approach to industrial strategy. This debate has shown the passion of Members and of the Associate Parliamentary Manufacturing Group.

[Kelvin Hopkins]

I agree with the Minister that there should be cross-party consensus, provided that that consensus is on the right side. If everybody is wrong, we will drive ourselves further into difficulty.

[Matthew Hancock]

That is a profound point about the need to avoid groupthink, with which I profoundly agree.

My hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) argued that we need to identify the best. He was passionate about enterprise and I heard his message. He will know that I am a huge supporter of enterprise zones.

I enjoyed listening to the historical debate between the hon. Members for Luton North (Kelvin Hopkins) and for Coventry North West (Mr Robinson), who are continuing their debate as I speak.

My hon. Friend the Member for Aldershot (Sir Gerald Howarth) asked a series of questions and brought his huge experience to bear, especially in relation to defence. The defence growth partnership is a BIS-led cross-Government partnership, which the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), leads. On the specific point about R and D tax credits moving to above the line, the Treasury has consulted on that and is deciding on the detail. I am also grateful to my hon. Friend for helping me with the answer on the joint strike fighter, which I will come to in a moment.

Everybody in the House was struck by the fluent and impressive speech by the new hon. Member for Corby (Andrew Sawford). He described passionately his membership of the Co-operative party as well as the Labour party. My grandfather was part of the co-operative movement. The hon. Gentleman will no doubt want to contact my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), who takes a lead on such issues among Government Members.

The hon. Member for Corby advanced the argument for the living wage powerfully. He spoke of the need to ensure that domestic British people have the skills to take the jobs that are available. Although more than 1 million private sector jobs have been created under this Government, we still have a huge amount of work to do. As Under-Secretary of State for Skills, my prime motivation is to ensure that British people have the skills and ability to do whatever it takes to get the growing number of jobs available. The hon. Member for Corby spoke with great passion, and all those present in the debate will have clocked that—well, let me put it like this: the attitude he showed to the Chief Whip on the Opposition Front Bench, and his ability to ingratiate himself with her, shows that he may not be on the Back Benches for long.

An industrial policy is central to achieving the goal of growth and enterprise, and there is broad consensus on that from the CBI to the TUC, as well as across the House. The reason for that is simple. Any Government in a mature economy has an industrial policy—as the hon. Member for West Bromwich West (Mr Bailey) and my hon. Friend the Member for Stafford (Jeremy Lefroy) argued, a Government cannot choose not to have one. We have an industrial strategy but the question is whether we have it by default or design.

My hon. Friend the Member for Stafford praised the Dutch system, from which we have much to learn. In my few weeks in this job I have recognised and warmly welcomed the constructive approach taken by the hon. Member for West Bromwich West to chairing the Business, Innovation and Skills Committee. He argued for a cross-departmental approach, and the growth committee on which I sit is an important part of that. He also argued for a cross-party approach, and not only do I agree with that, but I think hon. Members have demonstrated such an approach today. In particular, I pay tribute to the hon. Gentleman’s realism and ability to accept failures on the part of all past Governments. As he said, manufacturing halved as a percentage of GDP, and the passionate argument about that and the history around it was also put forward by the right hon. Member for Oldham West and Royton (Mr Meacher).

Crucially, an industrial strategy looks both at and across sectors, and we must ensure that we allow for the challenge of sectors that are yet to be dreamed of. Let me touch on four cross-cutting themes, as well as on sectors such as the automotive industry, life sciences and aerospace, in which we are pushing rapidly ahead with the publication of individual papers.

[George Freeman]

On the point about convergence, does the Minister agree that one of the most exciting things in life sciences is the way that medical, food and clean environmental technologies are beginning to merge? I recently visited a plant in Norfolk that converts agricultural waste into fuel for powering Lotuses made in Norfolk. That is a powerful illustration of convergence.

[Matthew Hancock]

Yes indeed, and across supply chains too. As my hon. Friend the Member for Stroud (Neil Carmichael) powerfully said, it is vital that we bring whole supply chains together when thinking about the sectoral approach. There is no one-size-fits-all approach. Some sectors will do well on their own; others need a long-term strategic partnership. My hon. Friend the Member for Warwick and Leamington (Chris White) called for a document that brings things together in each sector, and that is happening.

[Huw Irranca-Davies]

Briefly, and on a genuinely cross-party consensual basis, will the Minister update the House on the point raised by my hon. Friend the Member for Corby (Andrew Sawford) about energy-intensive industries such as Tata Steel? Those vital employers and big economic generators have a massive impact on the supply chain, but they consistently say that they do not have a strategy that deals with their energy costs as well as everything else.

[Matthew Hancock]

The Government have an energy-intensive industries approach, and an energy Bill will soon be published that I hope will provide some long-term certainty.

Let me return to the four cross-cutting areas. The first is finance, and my hon. Friend the Member for Weaver Vale (Graham Evans) spoke fluently about the funding for lending scheme that lowers the cost of funding. The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) called for a business investment bank, which is happening, and the green investment bank is already operating and making loans.

Secondly, and close to my heart in the industrial strategy, are skills. The call went out for more employer focus on skills, and my hon. Friend the Member for Gloucester (Richard Graham) made a passionate case for apprenticeships. I strongly agree, and I urge all Members to engage with the employer ownership pilot that was published on Monday which is about looking ahead. For example, we know that with Crossrail, High Speed 2 and broadband, more tunnelling skills will be required in the future. We now have a pipeline for those tunnelling skills—a pipeline for pipelines.

As the hon. Member for Coventry North West discussed, the third thing we need is more intelligent procurement. This Government have a more intelligent approach to procurement, and I hope it will become more intelligent still. Crucially, our national infrastructure plan identifies 500 projects. Some £70 billion of future contracts have been planned and published across 13 different sectors. We are also trying to speed up procurement.

On technology, we have protected the science budget and are focusing on eight key technologies. Links to universities are vital. Catapult centres will accelerate that. My hon. Friend the Member for Aldershot spoke about Surrey satellites. That example should go out throughout the country. Turning links with universities into business reality is critical to our future success.

I commend the cross-party approach. I urge people to look at the fact that all three parties are coming together to promote the long-term industrial strategy we need, which I commend to the House.