Government's Management of the Economy

Stephen Kinnock Excerpts

Tuesday 23rd February 2021 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab) [V]]

During this pandemic, we have seen the way in which business and the state are utterly interdependent, and yet for a decade the Conservatives have failed to recognise the potential and the desperate need for the Government and enterprise to work in partnership to drive growth, create jobs and wealth and foster the more long-termist, resilient and inclusive economy that our country so badly needs.

Take research and development. Our Government are failing to match the OECD average of investing 2% of GDP in R&D and are nowhere near their own target of investing 3%. In relative terms, the Governments of Germany and Japan invest twice as much in R&D, and in so doing, they unlock double the amount of private investment.

Take also the abject failure of the Government to buy British. Consecutive Governments have hidden disingenuously behind EU state aid and procurement rules, while other EU countries have got ahead. Today, the Leader of the Opposition has rightly called on the UK Government to buy more of the food they purchase from British farmers. Likewise, in my Aberavon constituency, we wonder why Whitehall Departments are still buying millions of pounds-worth of steel from other countries.

Recently, we have witnessed the results of a decade of Conservative failure. UK manufacturing has dropped below 9% of GDP, compared with around 30% in the 1970s. This is hurting communities and making us even more reliant on imports during the pandemic, not least on expensive PPE import deals, in some cases brokered by Conservative cronies who utterly failed to deliver. Our economy has become less resilient and less secure, which has had an adverse effect on national security and health. We have 57 critical national infrastructure supply chains that depend on China. The short-termist nature of our economy has meant that we have become the European capital for hostile foreign takeovers, which are rarely in the national interest, or in the interests of local communities.

The Government should welcome the shadow Chancellor’s excellent proposals for 100,000 new start-up loans for SMEs, to incentivise young businesses. We need to spread growth beyond London and the south-east. We need to incentivise long-term investment in business and workers over a get-rich-quick mentality, and we must recognise the key role that trade unions play in driving up productivity. We need to give everyone a chance to have a stake in our economy. It is time for the state, employers and workers to join forces as partners for a new kind of growth and to build a United Kingdom of purpose, patriotism and resilience.