Britain’s Industrial Future

Sarah Olney Excerpts

Tuesday 15th November 2022 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

The UK economy is simply not working for British people today and is not fit to face the challenges of tomorrow. After years of slow growth, low investment and declining productivity, the Government’s only plan for the economy is to hike taxes and cut public services. We have now lost count of the number of Conservative Chancellors who have pledged to kick-start the economy, but none of their grand ideas lasts long enough to have any tangible or long-lasting benefit. The latest iteration, the growth plan, barely survived a month but still managed to crash the economy. Meanwhile, the Government have allowed existing industries to fall into decline while failing to support the development of future technologies and to seize the opportunities of a green transition.

We are failing to keep up with our international partners: the UK is the only country in the G7 to have an economy that is smaller now than before the pandemic. Our trading position is weaker and industries across the board are facing chronic labour and skills shortages, but the Conservative Government simply have no plan. The Liberal Democrats believe that we need an innovation-led economy with a new ambitious industrial strategy that really works for everyone—one that provides well-paid jobs and opportunities at work; ensures that business serves the common good; and sustains strong communities and thriving places. None of that can be achieved without a proper plan that tackles the issues at the heart of poor economic performance.

Chronic workforce and skills shortages are a major barrier to economic growth. Time and again, workforce constraints are at the top of the list of concerns when I speak to businesses, from local high street firms to large City corporations. Without a skilled and active workforce, an economic plan is not worth the paper it is written on. We need to empower our workforce with the skills and protections that they need to support economic growth. The Liberal Democrats would invest in skills and support lifelong opportunities for retraining to allow workers to adjust to the fast-moving economy of the 21st century. We would also implement a national skills strategy for key sectors to help match skills and people.

We cannot pretend that Brexit has played no part in exacerbating current workforce shortages; thousands of vacancies across our healthcare, manufacturing and hospitality sectors could be filled by foreign nationals, but our current visa system is not fit for purpose. Potential workers face a frustratingly long and costly application process that turns many away. The Liberal Democrats propose to scrap the arbitrary salary thresholds in the current visa system to meet workforce demands in the short term. That would bring in vital labour to support British industry and sustain our economy. Yesterday, hundreds of businesses from the hospitality sector took to Parliament Square to demand action from the Government after warning that one third face closure in the coming year.

Any plan for our economy must focus on reducing barriers to trade, which is vital for economic growth. The Government have long promised to slash red tape and open UK businesses to international markets, but since Brexit, small and medium-sized enterprises that export to the EU have faced an onslaught of red tape and many have simply given up trying.

The Conservative’s flagship trade deal, the free trade agreement with Australia, will contribute just 0.08% to GDP, which is hardly a panacea to our trading woes. Yesterday, the former Environment Secretary, the right hon. Member for Camborne and Redruth (George Eustice), admitted that the deal is woefully inadequate. In his words,

“the best clause…is that final clause”,—[Official Report, 14 November 2022; Vol. 722, c. 425.]

because it allows the UK Government to terminate or renegotiate the deal in the first six months. The UK gave away far too much for far too little in return and caused irreparable damage to British farming—and for what? Saving face and meeting an arbitrary deadline of concluding negotiations before a G7 meeting is just another example of the Conservatives’ short-sighted and reckless approach to the economy.

The Government seem intent on making it increasingly difficult to trade with our largest trading partner of more than 450 million people across the EU. The Liberal Democrats would focus on rebuilding our trading relationship with our European neighbours to unlock the potential of British business.

Net zero could bring a wealth of economic benefits to the UK. We have a real opportunity to be a leader in green technology, but the Conservative Government are showing a complete lack of ambition. The Liberal Democrats would implement a bold green agenda to deliver on our climate commitments while supporting businesses to adapt and thrive. From new targets for zero carbon flight to new industrial strategies for hydrogen and power cabling, our plan proposes a major restructuring of the UK’s economic model. Meanwhile, the Government’s previous 10-point plan for a green industrial revolution has seemingly been kicked into the long grass, along with a whole host of manifesto commitments.

I urge the Minister to act on the concerns raised here today, and to implement a new industrial strategy that is aligned to our net zero goals. Only with a real plan for our economy can the UK turn its fortunes around and really unlock our potential for growth.