Industrial Strategy

Roger Mullin Excerpts

Thursday 20th October 2016 Commons Chamber

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

What a pleasure it is to follow my hon. Friend the Member for East Lothian (George Kerevan). As he was talking, I wrote down the following: “Until I read my hon. Friend’s book, I will remain in some sympathy with the hon. Member for Bedford (Richard Fuller) and my hon. Friend the Member for Aberdeen North (Kirsty Blackman).” One problem, as I see it, with nearly every other contribution, except that of my hon. Friend the Member for Edinburgh West (Michelle Thomson) is that no one has mentioned what, to me, is critical in anything that calls itself a strategy—namely, what its purpose is.

What is the purpose of this thing we call an industrial strategy? Since we all have our own ideas to share, I am assuming that at the end of the day its purpose would be to help propel economic growth to support people’s wellbeing. That assumption might not be shared by everyone in the Chamber—I do not know whether it is shared even by my hon. Friend the Member for East Lothian—but I will frame my few remarks around it.

I enjoyed the opening remarks of the hon. Member for Warwick and Leamington (Chris White). He led the debate with a bit of a historical review of past efforts at industrial strategies. He also pleaded for us to look to the future in our new context. In that historical light, I was also interested to hear the hon. Member for Wycombe (Mr Baker) indicate that he had read the works of Adam Smith. Since my constituency, Kirkcaldy and Cowdenbeath, is the home of Adam Smith, I feel compelled to venture a few thoughts to continue the hon. Gentleman’s education.

[Mr Baker]

Adam Smith was catastrophically wrong about the labour theory of value and has much to answer for, but I look forward to hearing the hon. Gentleman’s remarks.

--- Later in debate ---

[Roger Mullin]

I wish the hon. Gentleman would not mince his words—he should say it as he really feels it.

Where Smith has some relevance is in his argument that critical to growth was the division of labour in society, with specialisation—what we might call today the importance of having the education and skills that allow us to promote innovation and change. That is what spurs longer-term growth, and on that he was absolutely correct. That important need to drive forward with new technologies and new thinking is why it is utter madness that the Government pulled out of one of the biggest world-leading research projects, the carbon capture project in the north-east of Scotland. If ever there was an indicator of their turning their mind away from what is fundamental to long-term economic growth, it is that decision.

The other thing Adam Smith said that I completely approve of is that there is a role for state intervention. In particular, it is to ensure the kind of education that supports society economically as well as socially. We cannot leave education and skills to the marketplace. We have to make sure they are taken care of.

I was interested by the way in which Members talked about the importance of technology. It strikes me that historically, one of the problems we have had with funding is that we have plenty of people in our universities and the like who are able to come up with great technological ideas and innovations, but those innovations take many years to reach the marketplace. Private sector investment seems best when it is either at or near the marketplace. The problem, very often, has been the gap between the idea and bringing it to fruition. That is where the need for the role of the Scottish Investment Bank comes in, and I think that is what my hon. Friend the Member for East Lothian was hinting at when he talked about the valuable work of the Catapult centres. They can attract different forms of funding in a competitive way for things that may take time to reach the marketplace.

I was interested in the remarks made about the challenge that we face because of Brexit. The Government’s response, chaotic as it is, is driving down confidence. My hon. Friend the Member for Edinburgh West talked about the importance of confidence. That reminded me of what Keynes argued, which was that the principal determinant of the level of private investment is not the rate of interest nor even the level of aggregate demand, but the state of business confidence.

[Kelvin Hopkins]

I am listening with great interest to the hon. Gentleman. I always enjoy his speeches, I have to say. When it comes to the EU, however, does he not accept that confidence has been driven down by those who lost the argument and the vote, who are constantly saying that it will be terribly damaging and an economic disaster? In fact, as Ashoka Mody has said, it is actually proving to be quite beneficial.

[Roger Mullin]

I would take issue with the latter part of the hon. Gentleman’s observations. We were on the opposite side of the argument, but surely he would agree that the Government’s response to the vote has been utterly chaotic? We are no further forward four months later than we were at the time as to what the Government mean by Brexit and how they are going to take us there. That is doing nothing other than driving down confidence in business.

I do not want to take up too much time, but let me come on to one further important issue that was raised, which is in the general sphere of education. That is the importance of the post-study work visa. I would add to that the tier 1 entrepreneur visa. We need to encourage people from overseas to come to this country to help us drive up business investment and innovative ideas. I read an essay by a friend of mine, Professor David Simpson, a few weeks’ ago. He pointed out that one third of successful business start-ups in California between 1980 and 2000 were by people who had come from either India or China. At a time when we need, not least in Scotland, to attract the best minds to help to drive forward the economy, setting our face against that cannot be in anyone’s interest. It certainly cannot be in the interest of anything we might call an industrial strategy.