Productivity

Tom Blenkinsop Excerpts

Wednesday 17th June 2015 Commons Chamber

[Greg Hands]

My hon. Friend is right that the previous Labour Government had a dreadful record on manufacturing, and that is one of the key challenges—this reads through to productivity—facing us this Parliament.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

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[Chris Leslie]

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[Tom Blenkinsop]

I am the Member for Middlesbrough South and East Cleveland. I welcome the Minister to his new role. Of course, in the past five years, under the coalition Government, manufacturing shrank by 1%. In terms of productivity, the north-east is probably the lead region in the country, mainly because of its chemical and pharmaceutical sectors, but they have seen the largest slump over the past five years, due mainly to the lack of investment. Does he agree that one problem is that the Government imposed the unilateral carbon floor price tax on energy-intensive industries, and did not the Chancellor promise to bring in a compensation mechanism? Will he speak about that, because it would not pre-empt the Chancellor’s emergency Budget in July?

[Greg Hands]

I thank the hon. Gentleman for that series of questions, but his use of statistics was highly selective. I am sure he will join me in celebrating the fact that the two regions in which employment is rising the fastest are the north-west and the north-east. Of all regions, the north-east leads the way in export growth. I am sure he will also join me in welcoming the fall of 1,518 in unemployment in his constituency under the last Government—again, just shy of a 50% fall.

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[Michelle Thomson]

I thank the hon. Gentleman for his intervention, but he is, quite frankly, wrong. I shall also cover that point later in my speech.

The sad fact is that the recent growth in UK GDP has been driven not by increased productivity and not by a focus on increased investment levels or high-value sectors. Instead, it has been delivered with zero-hours contracts, often paying the minimum wage and with low employee engagement. That is not the way to power a modern 21st-century advanced economy. We see the results of this poor performance in our manufacturing sector. Previously, manufacturing accounted for some 30% of total GDP—a position shared with many of our European neighbours. However, a lack of investment and a focus on the City of London have resulted in a manufacturing percentage of GDP that is now barely into double figures.

With only a limited set of powers, the Scottish Government have set out an ambitious strategy to increase Scotland’s productivity and, as a result, Scotland’s economy has seen sustained growth over recent years, with record numbers of people in employment. Female participation in the labour market has increased, and Scotland’s female employment has reached a record high. Including more women in the workforce is a powerful driver to increased productivity and encourages a balanced and inclusive economy. The Scottish Government’s plans to expand the provision of free childcare will encourage more parents into work, too. It is worthy of note that between 2007—the year of the SNP’s election to Holyrood—and 2013, the largest relative rise in productivity of any region or nation in the UK was in Scotland.

This debate must fundamentally be about ambition, which is something that the SNP has for Scotland in droves, but our ambition is for much more than simply a return to pre-recession levels of economic performance. Allow me to highlight some key areas that the Scottish Government’s economic strategy—a real long-term economic plan—promotes.

[Tom Blenkinsop]

The hon. Lady is making a very good speech. She will note that, in the last three years of the coalition Government, imports of Chinese steel have risen by 40%. Does she think it was helpful that the Scottish Executive awarded a contract for the firth of Forth bridge to a Chinese company instead of using British steel?

[Michelle Thomson]

I thank the hon. Gentleman for his comment, but I would point out that that we did not make the steel in Scotland and that it was a decision of the Scottish Government, not the Scottish Executive.

I was about to highlight some key areas that the Scottish Government’s economic strategy promotes. They include internationalisation, which helps firms to compete in international markets, to increase exports, to make Scotland a preferred location for inward investment and—most importantly from my business perspective—to promote Scotland as the brand of “We are outward looking, we are ambitious and we are open for business”. The plan also promotes investment in our infrastructure, transport, technology and digital connectivity.