Industrial Strategy

Stephen Kerr Excerpts

Wednesday 18th April 2018 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I always enjoy listening to the Secretary of State; I find him a courteous and well-mannered person who tries to put forward a positive view at all times. I find the same to be the case when I work with his team.

This long-awaited industrial strategy is welcome—it is good to see something—but it lacks the substance that we should see in a document that would make a meaningful difference for people, and it misses the mark on fairness and ambition. I hope to delight the hon. Member for Spelthorne (Kwasi Kwarteng), because along with my criticisms, of which I have many, I am going to try to be constructive and suggest some points that the Secretary of State might want to consider.

On inclusive growth, the Scottish National party has long argued that ideologically-driven measures not only are harmful to society, but actively hinder business development, growth and investment. Inclusive growth must be at the heart of any economic strategy, yet the Government continue their obsession with a failing austerity dogma, and nothing in the industrial strategy signals a change of direction. The Institute for Fiscal Studies has forecast that austerity could last until the mid-2020s, meaning that Scottish businesses, households and public services could ultimately face 15 years of austerity measures—and that amid the harsh realities of a hard Tory Brexit. The UK is facing the biggest increase in inequality since the 1980s, the worst wage stagnation in 70 years, which the IFS described as “dreadful”, and a huge increase in child poverty as a direct effect of tax and benefit reforms.

In the context of Brexit, the Global Future study was released just today. After looking into all four options available to the Prime Minister, it established that, in the long term, the amount available for spending on public services will fall. Under the so-called Norway option, there would be £262 million less a week. Under the Canada model, there would be £877 million less per week, while under a no-deal scenario, there would be £1.25 billion less per week. For the NHS, there would be 22% less funding available if there was a bespoke deal, and 9%, 31% and 44% less under each of the other options. Of course, it is not just about the public sector. As we have found from speaking to industry after industry and sector after sector, there are many concerns across the piece about the direction of the Brexit negotiations.

Unfortunately, the hon. Member for Glasgow North East (Mr Sweeney) is no longer in the Chamber, but I wish to reflect on what he said about Jack McConnell and the post-study work visa. I have a great deal of respect for Jack McConnell, who was and remains a far-sighted politician. He recognised that Scotland requires different measures when it comes to our immigration needs. For many decades, our problem has been one of emigration. We need people to come to Scotland. If we are to retain competitiveness and increase productivity, it is essential that Scotland’s immigration system is outward-looking and that it allows businesses to attract the necessary skills to boost growth and create jobs.

[Stephen Kerr (Stirling) (Con)]

Will the hon. Gentleman give way?

[Drew Hendry]

I will give way briefly in a second, but I am mindful of what Madam Deputy Speaker and Mr Deputy Speaker have said about the time available for the debate. I shall make a little progress first.

The ability to attract workers to Scotland is a vital component of how we strengthen our economic advancement and tackle demographic challenges. Over the next 10 years, some 90% of our population growth is projected to come from migration, and that will be directly affected by Brexit dogma.

[Stephen Kerr]

The hon. Gentleman is absolutely right that we need to attract people, new talent and high-end jobs to Scotland. I just do not know how the SNP Government wish to achieve that by having Scotland as the highest-taxed part of the United Kingdom.

[Drew Hendry]

Of course, in a discussion about the future of EU nationals, many of whom are very worried about their future, the hon. Gentleman tries to make a rather petty political point. What he should acknowledge is that Scotland is far from being a less attractive place. Thanks to the huge council tax hikes in England, which are the largest in 14 years—bills are up by some 5.1%—people are actually paying more tax in England than they are in Scotland.

There are roughly 181,000 EU nationals in Scotland. Half the welcome net increase in the Scottish population between 2000 and 2015 has come from people born in EU countries, yet the strategy overlooks the likely impact of immigration restrictions on UK industry. If there were a time to pause and think about the effects of immigration on people and industry, it should surely be this week, when we have seen the manifest failings of the UK Government’s current immigration strategy.

Some sectors in Scotland, such as the thriving food and drink sector, are particularly reliant on the employment of EU nationals. Many businesses across Scotland and the UK employ and rely on EU workers, but the UK Government’s regressive approach to immigration has failed to take proper account of that fact. It is simply not possible to replace straightforward access to the EU labour market with domestic recruitment, and replicating existing immigration rules for non-EU nationals would place significant and unnecessary costs and bureaucracy on business. As has been noted, we have had two very clear cases of people in my constituency of Inverness, Nairn, Badenoch and Strathspey who have been contributing to our local economy being booted out by the immigration policy of this Tory Government.

Let us now turn to the ambition of the industrial strategy. If we really want to deliver affordable energy and clean growth, it is astounding that the UK Government have failed properly to recognise renewable energy in the industrial strategy. The devastating predicted drop in renewable investment of 95% between 2017 and 2020 should be a wake-up call that urgent action should be taken to secure a thriving future for this dynamic sector. Of course, during that period, we have also seen the near decimation of the solar industry.

Scotland is proudly in the vanguard for the development of renewable energy projects and investment. The SNP Scottish Government have set out ambitious targets for a transition to a low-carbon economy. By contrast, the UK Government’s erratic energy approach and the UK’s decision to leave the European Union have created uncertainty in the sector. The UK Government have responsibility for the damaging effects that we have seen.

--- Later in debate ---

[Stephen Kerr (Stirling) (Con)]

I begin by referencing page 236 of the industrial strategy White Paper, which specifically mentions the Stirling and Clackmannanshire city region deal. I look forward to hearing—shortly, I hope—about the heads of agreement that have been reached with the Scottish Government and local authorities so that the deal can be brought to life.

The subject is fascinating and I am sorry that there is so little time to talk about the industrial strategy. I want to concentrate on one aspect that I think is critical to its execution. We cannot overestimate the role of the UK universities sector in the successful execution of any industrial strategy worthy of the name. It remains a jewel in the UK’s reputational crown. British universities are among the very best and people across the world aspire to attend them, such is the reputation of the quality of the education on offer.

Building close links between the universities and business is vital. Those links are the springboard for invention, innovation and new business creation. As a member of the Select Committee on Business, Energy and Industrial Strategy, I visited the University of Sheffield Advanced Manufacturing Research Centre, where the partnership between the university and Boeing has attracted the engagement of dozens of other business across the sector, solving problems and driving increases in productivity. That is a model for high-level collaboration between universities, academics and industry to enable the delivery of the industrial strategy. Sheffield has become a centre of excellence in design, machining, casting, welding, composites and so much more. It was inspiring to see how all that is being achieved. It gave a vision of what can be done when we put our minds to it.

We need to leverage the international excellence of UK universities to make the UK a global hub for ideation, invention, discovery, innovation and commercialisation.

Stirling University is the second largest employer in my constituency and we have welcomed some 2,600 overseas students who pay between £15,000 and £17,000 a year. Stirling University is therefore, to my mind, one of our great exporters. The Higher Education Policy Institute estimates that there is a £52 million net positive impact on Stirling from those students.

I recently visited the INTO international student facility at Stirling University where I met several of the international students. It came as no surprise to me that they had chosen to make Stirling their home because, 36 years ago, I did the same. However, I only came from Forfar, which, as my hon. Friend the Member for Angus (Kirstene Hair), who is not here, would doubtless attest, is still part of the United Kingdom.

We seem to make it too difficult for students to come here. We make people jump through hoops and undertake expensive and extensive screening and other requirements that very few other countries do. We are losing our market share in an expanding global market. The UK’s reputation as a university destination choice is not what it should be. Chinese students are going to Canada, the United States and Australia rather than here. Those countries have targets to attract international students, and we can learn from that.

Time is against me. My appeal to the Government is: make it easier for students. It is time for students to be taken out of the Government’s net immigration target. Student visas should be easier, not harder to obtain. We should build on the great strength of the UK universities sector as a path to executing the Government’s industrial strategy.