Industrial Strategy

Rebecca Long Bailey Excerpts

Monday 27th November 2017 Commons Chamber

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

I am pleased that the White Paper seems to acknowledge many of the fundamental problems faced by our economy, and give credit to the Secretary of State for adopting one of Labour’s policies to set national missions or “challenges”, as he likes to call them. But as I delve into the finer details of the paper, the aims of which may be well intentioned, it appears to be little more than a repackaging of existing policies and commitments.

The Office for Budget Responsibility figures contained in last week’s Budget were a damning assessment of the impact of seven years of Conservative austerity, with productivity, real wages, and GDP growth and GDP per capita revised down, but debt revised up. The Conservatives’ economic credibility has been shot to pieces, with people earning less than they did in 2007 until at least 2023. We have to go back to 1820, when George IV ascended the throne, before we find a time when productivity increased less than this over a 10-year period.

Today, I was full of hope—desperately hoping that the Government would press the reset button—but they have simply restated their plans for a £31 billion national productivity investment fund. As TUC analysis shows, this only raises investment to 2.9% of GDP, whereas the average for leading OECD industrial nations is 3.5 %. Labour even called on the Chancellor to use his Budget to level up regional investment in line with London, but only one—just one—of the named transport projects in the national productivity investment fund is in the north. The development of local industrial strategies is certainly welcome, but will the Secretary of State admit that they simply could not deliver the desired effects under the Government’s current investment plans?

The strategy restates the commitment to raise total research and development investment to 2.4% of GDP. This is moving in the right direction, but it is still behind world leaders and far less ambitious than Labour’s commitment to reaching 3% of GDP by 2030. The allocation of £725 million to the industrial strategy challenge fund is again welcome, but it seems to lack any real strategy. As Sheffield Hallam University recently found, the areas already identified by the fund

“account for little more than 1 per cent of the whole economy (by employment) and 10 per cent of UK manufacturing.”

Many of the policies focus on R and D spending in only a handful of specified sectors in which the UK already has a comparative advantage. This will do nothing to help the millions who work in large, low-wage, low-productivity sectors such as retail, hospitality and care, or people who do not live in the golden triangle made up of London, Cambridge and Oxford.

Finally, this industrial strategy fails to start from the bottom up. It is all well and good talking about leading the fourth industrial revolution, but this can only happen with a highly skilled, technology-savvy workforce. After seven years of Conservative Government, only 11% of students in England take IT at GCSE, and only 30% are at schools that provide it. That is certainly not laying the foundations for an economy of the future, and the amount of money for skills outlined today does not even begin to make up for the cuts inflicted on our education system since 2010. Indeed, the money allocated for the national retraining scheme amounts to only 6.6% of the funding slashed from the adult skills budget since 2010.

This industrial strategy may well be a start, but I fear that the Government have simply produced a public relations gimmick that is thin on detail, thin on investment and thin on ideas. I truly hope the Secretary of State will listen to my concerns as well as those from business and the trade union movement over the coming months, because we have one chance to reset our economy, and if we let this slip through our fingers, the people of Britain will never forgive us.

[Greg Clark]

I am grateful to the hon. Lady. When she has the time to read the Industrial Strategy White Paper we have published today, I hope that she will reflect on the substance, content and ambition of this strategy and that she will come out in support of it.

One thing that the hon. Lady should know, and that every Member of the House knows, is that for our country to prosper, we need a sound economy. The last time the Labour party was in government, we had the biggest financial crisis since the 1930s, racking up billions and billions of pounds of extra debt for our children and grandchildren to pay. As usual, the Labour party has not learned the lesson from that, because its proposal is to borrow an extra £250 billion. In attracting the confidence of the world to invest in this country, the hon. Lady needs to make sure that the economy is sound. In the prospectus that she puts forward, there is nothing that is capable of achieving that.

In the weeks ahead, I hope the hon. Lady will discover that, around the country—from north, south, east and west, and from business organisations to trade unions to our respected scientific institutions—there has been substantial collaboration, based on the Green Paper, which has resulted in some major changes. It is a strategy for the long term—it is right that it should be the strategy for the long term—but it is being backed up by investment now. In the Budget just last week, we saw the announcement of the biggest increase in investment in research and development in this country that there has ever been. The hon. Lady should welcome that because it is being welcomed throughout the country.

With our partners right across the United Kingdom, we will implement this industrial strategy. I hope, when the hon. Lady goes out and talks to businesses and leaders across the land, that she will find that there is great support for this approach and that she will join us in seeking to implement it and to provide the certainty we need in the years ahead.