Industrial Strategy

Peter Kyle Excerpts

Thursday 20th October 2016 Commons Chamber

[Peter Kyle (Hove) (Lab)]

It is good to serve under your chairmanship again, Mr Deputy Speaker. It is also good to follow the hon. Member for Wycombe (Mr Baker), because his was a very different speech from the one that I intend to make. I hope that the two will prove complementary in some way.

I begin by thanking the hon. Member for Warwick and Leamington (Chris White). It was good of him to initiate the debate, and very generous of him to invite me to co-sponsor it and accompany him to the Backbench Business Committee to make the pitch for it. It is extremely timely, and his opening speech served the tone of the ensuing discussion very well indeed.

“Industrial strategy” is a contested term, and one with which some Members on both sides of the House struggle, because almost every post-war Government who have tried to implement such a strategy have come up against one difficulty or another. However, I think it is quite simple if we focus on the strategy side of what needs to be delivered and what business needs. That is the bit that many businesses want the most, and it is the bit that the Government, in various different ways, have often failed to deliver.

“Strategy” means, quite simply, identifying with clarity where we are, spelling out with clarity where we want to go, and being aware of the bridge that links the two together. If the hon. Member for Bedford (Richard Fuller) were still in the Chamber, he would, I hope, have noticed that I did not use the words “long term”. In fact, it is always a mistake to spell out exactly how long a journey of this kind will take, because different parts of the strategy will take different periods of time.

Business needs clarity and consistency. I think the House will be informed if I give two examples from Governments—not just this Government but a previous one as well—that involve both clarity and consistency. Sadly, they are not good examples from which we can learn, but examples that we need to avoid in the future. I begin, unfortunately, with a contemporary example. In the past week, members of the Business, Energy and Industrial Strategy Committee have received a letter from the Secretary of State for BIS. I apologise to the Minister; I still call it BIS, because I think the new title, BEIS, sounds a bit like a kitchenware product. At the moment it seems be a gadget that does something with a wet lettuce, but we will see how it goes.

This is what the Secretary of State wrote in his letter about the industrial strategy that he will unfold and lead:

“Many of the key components of our industrial strategy will not be about particular industries or sectors, but will be cross-cutting. It will be relevant to people and businesses across the UK—for people as consumers and employees, and for businesses as investors and drivers of growth. It will also respond to and seize the opportunities presented by the transformations we are faced with in 2016—both domestically in our exit from the European Union, and in wider global trends.”

I am sorry, Minister, but that is a mission statement. It is not a strategy. It encompasses consumers and domestic, nationwide, international and global businesses. There will be a strategy for every aspect of business. Every business—from the self-employed right the way up—will be encompassed in one strategy. The Minister is nodding to say that it will be delivered; I think it will be wonderful, and I look forward to seeing how all that can be encompassed in one strategy. I support the notion of an industrial strategy, and I hope that it can be delivered. However, from that starting point, I start to have sympathy with the scepticism of the hon. Member for Bedford. I would never have imagined that.

I turn to the position of the last few Governments. The industrial partnership approach was introduced by Vince Cable in 2014 when he was Secretary of State. In 2014, his Department in the coalition Government introduced—I quote from the website at the time: “An industrial partnership” that

“brings together employers across an industry sector to lead the development of skills, with a focus on growth and competitiveness. There are currently 8 partnerships covering the aerospace, automotive, creative, nuclear, digital, energy & efficiency, science and tunnelling (construction) industries.”

It went on to say that all those partnerships would be

“funded up to March 2017”.

Unfortunately, the funding for that programme was cut in September 2015. Not six months after Vince Cable left office, the funding for the flagship industrial strategy of that time was cut.

Just last week, I received a response to a parliamentary question. The question was:

“To ask the Secretary of State for Business, Energy and Industrial Strategy, what role Industrial Partnerships will play in delivering the Government’s Industrial Strategy.”

The response was:

“The Department for Business, Energy and Industrial Strategy indicated that it will not be possible to answer this question within the usual time period.”

That non-answer says more than many of the real answers that I have had from the Department. It is not prepared to implement the strategy as we see it at the moment. We do not know what the strategy is, or how it will go forward. We do not even know whether any strands of previous strategies will be taken forward.

What does that mean to businesses on the frontline? In the past two years, we have had a clear sectoral approach to business strategy by one Secretary of State, but six months later it was changed by a Government who had no industrial strategy and refused to use the words “industrial strategy”. Now we have a Department with “Industrial Strategy” in the name. That is all over two years. Businesses are having to respond to that profound change in a rapid space of time.

[Mr Baker]

Along with anti-competitive market distortion, regime uncertainty is a problem. Exactly the phenomenon that the hon. Gentleman outlines causes businesses to make less profit than they otherwise would. I am sure that he would agree that it would be better if the Government did less.

[Peter Kyle]

I am sure the hon. Gentleman would agree that we would both want the Government to do more of the right things. So why do I not have a stab at spelling out what the right things are? There needs to be a focus on what businesses that create growth and quality jobs and generate tax want. What do they need in order to support their business? Many do not need any help from Government, but all are affected by Government policy in one way or another, because every business uses this country’s infrastructure, whether that be the internet, the roads or other transport networks. Government policy has an impact on businesses, whatever those businesses are. Getting the strategy right and listening to the voice of business as that infrastructure unfolds is at the core of how we can go forward.

What do businesses want from Government? The one thing that links all the things they want—we could go through many of the issues that are mentioned to us by businesses and industry groups that helpfully contact us, such as the EEF—is skills. It is good to have the Skills Minister here responding on behalf of a Department that—

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

Universities Minister.

[Peter Kyle]

I beg the Minister’s pardon. I apologise. I am grateful that the Minister is here. He is split between Departments and can perhaps answer on this cross-cutting part of his brief. Skills are the issue that one comes across from every business. Unfortunately, responsibility has moved from the Business Department to Education. Is it conceivable that that could mean that business will have a louder voice in the House as the skills agenda unfolds over time? I think it is inconceivable.

What can Government do that businesses cannot do? There are—and I hope this answers the point made by the hon. Member for Wycombe—some things Government can do that others cannot. How can the Government inspire, encourage or enable businesses of the future? First, through infrastructure. Secondly, let us look back to 2000, when Tony Blair and Bill Clinton, via video link, together announced the mapping of the human genome. That was achieved by two Governments working together on a scale that no individual business could match, and certainly never without a patent. All the innovation that has spread from that single gesture by two Governments has spawned many industries since in academia and the private sector—for instance, in pharmaceuticals—and medical advances.

Those are the types of things that businesses need to be looking to. Government can do those things as part of a strategy, and I look forward to the Minister responding accordingly.