Industrial Strategy

Debate between Stephen Hammond and Kelvin Hopkins

Thursday 20th October 2016 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

It is a pleasure to follow the Chair of the Select Committee, the hon. Member for Hartlepool (Mr Wright). For a long time, the words “industrial strategy” struck fear into the heart, and raised the hackles, of many on the right of the political spectrum. Those words called to mind the era of excessive government intervention and anti-market philosophy, with the Government picking winners—usually winners that were declining—deciding on nationally strategic industries, and pursuing anti-competitive practices and industrial relations policies that stifled competition.

[Kelvin Hopkins (Luton North) (Lab)]

When it comes to industry, the most interventionist Government in Europe is Germany. It is also the most successful economy in Europe.

[Stephen Hammond]

That very much depends on how we define intervention; we might come on to that later in the debate.

To meet the challenges of the 21st century, especially in post-Brexit Britain, industrial strategy should be about four things: the Government creating the ecosystem or the environment in which industry can succeed and in which national productivity—a huge challenge—can be increased; ensuring that our country has the skills that it needs; ensuring access to finance; and boosting and promoting industries of competitive and comparative advantage.

When we talk about the ecosystem or environment, we almost inevitably talk about infrastructure. One of the achievements of the previous Government was that even in a time when we had to pay down the deficit, infrastructure was reckoned to be the key factor for economic growth. Public sector support has, rightly, been provided for all sorts of developments over the past few years, most notably in transport, energy, housing and broadband communications. The National Infrastructure Commission, which made it possible to look across sectors and move away from the previous silo approach, has had a great impact.

As the hon. Member for Hartlepool pointed out, an urgent priority for the Government has to be a consideration of not only how we strategically assess, but how we deliver. That is partly about smart procurement and making the Government an intelligent client. Our inability over the years to specify design has meant that costs have inevitably increased, so the cost base and project management costs have been much higher than they would otherwise have been. The Treasury optimism bias or risk quotient, depending on what one calls it, has had to be increased throughout. By driving into the Infrastructure and Projects Authority some of the skills needed for the delivery of smart procurement, we will be able to reduce costs and make projects more attractive and fundable.

We need to get the private sector much more involved than it has been so far. If we travel anywhere else in the world, we will use roads and bridges that are privately owned and run, and the fact that they are privately owned and run does not make them any less useful. A commitment to infrastructure must be a cornerstone of any modern industrial strategy, so I gently say to the Minister that I hope he will push his colleagues for the appointment of a new Minister for infrastructure, preferably with some responsibility for industrial strategy, and preferably a Member of this House rather than the other place.

Our departure from the European Union will give us a couple of fortuitous possibilities in what some of us think will be a difficult time. The EU procurement rules are some of the most onerous and bureaucratic anywhere in the world. Getting rid of them from our procurement system will undoubtedly help small industry and the supply chain. State aid has been a way of thwarting, as well as supporting, a lot of investment, and we will no longer have to abide by all the state aid rules. I hope that the Minister will say later that he accepts that challenge.

Inter-City Rail Investment

Debate between Stephen Hammond and Kelvin Hopkins

Thursday 9th January 2014 Commons Chamber

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

It is an honour to address the debate this afternoon. I congratulate the hon. Member for Redcar (Ian Swales) on securing the debate and on the way he conducted it. His speech was interesting and thoughtful, and he proved by his journey time calculations and recalculations that he can do mathematics.

We heard some fascinating contributions from a number of other Members. The three Members from the south-west were united across the political divide in wanting to see improvements to train services in the south-west, particularly the three-hour train to Plymouth. I remember campaigning in the city, along with the hon. Member for Plymouth, Moor View (Alison Seabeck), back in 2007. The failure of investment about which she complained has not happened only under this Government. I can, of course, bring her good news. She quoted a fare of £271. Should she choose to travel tomorrow morning, there is a return fare of £92, so one needs to be careful about saying that only one fare is available.

I heard the pleas of my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) about Mayflower 2020 in Plymouth. I do not know whether he will see President Christie turning up there. He invited me to come to a meeting, and I would be delighted to do so. I follow his lark in saying that I hope he is here for rather longer than just for 2015, and I am sure he will be.

I say to the hon. Member for St Austell and Newquay (Stephen Gilbert) that I can only imagine how frustrating it must be to go back to the constituency in the middle of the night to find that the film has been lost. The prospect of corresponding with him fills me with unbounded joy. I look forward to receiving and acting on his suggestions none the less.

The two Members representing Brighton shared a moment of political unity. I certainly hear their pleas. I can confirm that the Department received a draft in December of the report to which Baroness Kramer referred—the London to south coast rail study, which was carried out by Network Rail—and I expect to see a final version within the next couple of months.

I can bring some good news to my hon. Friend the Member for Brighton, Kemptown (Simon Kirby) on the basis that Thameslink will see 116 new trains of eight and 12 cars coming into operation, which will directly benefit his constituents. I am delighted to tell him that when he opens his post tomorrow morning, he will find a letter from me accepting his challenge to come and travel on the early morning train. I very much look forward to doing that.

I was not entirely surprised to hear the contribution of the hon. Member for Luton North (Kelvin Hopkins). He and I have enjoyed sparring over issues for the last few years. I listened with interest to his comments about the Birmingham Snow Hill line, and I am sure that he will want to raise his point about it with us again.

I understand the call of my hon. Friend the Member for Cleethorpes (Martin Vickers) for more initiative and private sector innovation in franchising. I hope that, through the direct award and the new refranchising process, we will be able to deliver that for him.

I enjoyed the contribution from the hon. Member for Edinburgh East (Sheila Gilmore), although I had obviously heard it before in previous debates of this nature. The simple fact is that the east coast main line is the worst-performing of the long-distance franchises. Its passenger satisfaction figure may be up, but it is still six points behind the figure for the west coast main line.

We heard a wide range of contributions today, and I am grateful to Members for taking the time to be here. The debate has shown how valuable the railways are to our country, and to communities throughout it.

[Kelvin Hopkins]

Will the Minister give way?

[Stephen Hammond]

I am sorry, but I do not have time.

As for what was said by the hon. Member for Nottingham South (Lilian Greenwood), let us have some honesty in this debate. When Labour was in office it crashed the economy, and gas and council tax bills doubled. Had her party been in office today, the average fare would have risen by 11% rather than 3.1%. Moreover, in 13 years, we saw just 9 miles of electrification. Just as we are dealing with the economic mess that was left behind by the last Government, we are determined to deal with the massive infrastructure deficit that we inherited. [Interruption.]

Oral Answers to Questions

Debate between Stephen Hammond and Kelvin Hopkins

Thursday 7th November 2013 Commons Chamber

[Stephen Hammond]

My hon. Friend is right. We have consistently made the point that we are not only investing in High Speed 2 but that we are investing £37 billion in improvements across the network. He is right to pick out that example, which illustrates exactly what the Government have been saying—that capacity is being added across the network.

[Kelvin Hopkins (Luton North) (Lab)]

The Minister will be aware that 80% of freight in Britain goes by road, both cross-channel and within Britain, and that serious modal shift from road to rail cannot take place until the railways are capable of taking lorry trailers on trains. Will he look seriously at schemes for investing in rail freight capacity capable of taking lorries on trains?

[Stephen Hammond]

The hon. Gentleman is aware, of course, that there has been a huge increase of some 60% in rail freight over the past 10 years. The capacity that is being added will add the prospect and the potential for extra rail freight and extra transference from road to rail. If there are serious schemes, we will look at them, but they would have to justify the economic business case and provide better value than the capacity that we are adding, which will allow that transfer from road to rail.

National Insurance Contributions Bill

Debate between Stephen Hammond and Kelvin Hopkins

Thursday 13th January 2011 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

I did not have the benefit of sitting on the Committee, although I did attend Second Reading and I think that I made a short intervention on the Minister.

I will make a short contribution in response to the new clause. I listened carefully to the Opposition spokesman’s speech, and to his closing remark that this is a sensible case that the Minister should accept. I ask the Minister to think carefully about the case that has been put to him. First, the full impact of the policy will inevitably not be shown after the first or second year. With such policies, there can be a significant cumulative effect, which is what the Government are looking for.

Secondly, it has been estimated that the scheme will have considerable benefits. The Opposition spokesman did not query the basis of the estimates made by the Government and outside bodies on the impact of the holiday. We have a pretty good assessment of its impact, so the Government should consider whether the annual report would add to that.

Thirdly, I ask the Minister to consider that the policy is temporary. Although it is a recurring cost, it is only for three years. Were the policy extant for a longer period, the Opposition spokesman’s arguments might have more basis.

Fourthly, the Opposition spokesman made the point several times to the Minister that he could table questions. He did not say whether he thought an annual report would be cheaper than that. If he wanted to do so, he should have given a cost analysis. I fear that the proposal is an expensive way of getting at the information that he wants, and probably does not cover everything.

Finally, when the panoply of talent on the Conservative Front Bench was not as great, I spent four years as an Opposition spokesman. I spoke on various measures that, like the Bill, were extant for the life of the Parliament, such as the Concessionary Bus Travel Act 2007. I made similar requests for annual reports and, time after time, Ministers told me that such proposals would be costly and serve no purpose; that they would of course keep the scheme under review; and that there was transparency through other sources of information available to me. Therefore, before the Minister is tempted by the beguiling words of the Opposition spokesman on transparency and the need to review the policy, I ask him gently to remember that, freed from the responsibility of Government, the Opposition are not accepting the arguments that they made in government.

[Kelvin Hopkins]

I welcome what was said by my right hon. Friend the Member for Delyn (Mr Hanson), and support strongly new clause 1 and amendments 5 and 6.

In the context of the current economic situation and the level of the cuts being imposed by the Government, the Bill is a relatively small reflationary measure. It is a supply-side measure, rather than the direct reflationary measure of additional spending that I would like to see. If I was in government and had £1 billion to spend—I would love that opportunity, but am unlikely to get it, at least in the short term—I would not spend it in this way. We could, for example, increase capital spending programmes in sectors such as construction and restore school building programmes; £1 billion would sustain a much larger capital programme as a measure of revenue support, so that is the direction in which I would go.

[Stephen Hammond]

I am interested to hear the hon. Gentleman’s argument. Has he noticed the latest academic evidence on the size of the public expenditure multiplier? It suggests that in an open economy, the actual size of the multiplier is something like 0.1%.

[Kelvin Hopkins]

I have not seen that academic work, but I will be interested to read it in due course. I remain fairly convinced that spending capital funds on school building actually generates a lot of employment, certainly in my area. The cuts in school spending programmes will have a damaging effect on local employment in Luton. We can debate that in another economic seminar, perhaps, and we shall see. Nevertheless, the measures in the Bill pale into insignificance compared with the overall level of cuts that will be imposed. Some have suggested that the VAT rise alone will cause 250,000 jobs to be lost, which is a staggering figure and surprised me greatly.

In Committee, the Exchequer Secretary leapt on the fact that I was giving lukewarm support to a measure of tax relief, which is not normally my politics. However, it was lukewarm—I said that the Opposition had decided to acquiesce in what the Government were proposing, but that our Front Benchers had tabled substantial amendments. I still believe that tax reliefs are the wrong way to go. They tend not to be as reflationary as direct spending on jobs, particularly in areas where manual workers on relatively low wages tend to spend all their money, which is then circulated in the economy, causing the multiplier effect that the hon. Member for Wimbledon (Stephen Hammond) mentioned. Tax reliefs tend to go at least partly, and sometimes substantially, into savings and have less of a reflationary effect, so I prefer direct spending to help job creation.

The Chartered Institute of Personnel and Development has suggested that there might be as many as 900,000 job losses in the private sector, which is a vast number. Added to the nearly half a million jobs being lost directly through public expenditure cuts, we are talking about 1.5 million jobs being lost. The Bill will go only a tiny way towards countering those massive losses. Indeed, the effect of those job losses, added to the 2.5 million people already unemployed, means that nearly 4 million people will be unemployed, which is a staggering figure. That will be deflationary, because people will become frightened of losing their jobs and stop spending in the shops.

[Stephen Hammond]

I wonder whether the hon. Gentleman would like to clarify the number of private sector job losses that he has just mentioned. Actually, we have seen in the past two quarters—the evidence from the following quarter is the same—that the private sector is creating jobs.

[Kelvin Hopkins]

I thank the hon. Gentleman for that intervention, which gives me the opportunity to say what I have said many times in recent weeks and months. We are still benefiting from the pre-election reflation of the Labour Government. To save the economy from a massive depression, and perhaps from sliding into serious long-term deflation, Labour sharply reflated the economy, and it was absolutely right to do so. We are still benefiting from that, because of the time lag effect in economics.