The Economy and Work

Part of Debate on the Address – in the House of Commons at 2:09 pm on 26th May 2016.

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Photo of George Howarth George Howarth Labour, Knowsley 2:09 pm, 26th May 2016

I begin by thanking the Chancellor for the £5 million he earmarked in the Budget for Shakespeare North. May I press him a little further and ask him to waive the VAT on the construction costs?

I want to talk today about the link between poverty, economic progress and education. Before doing so, however, I should perhaps say a word about my position on the EU referendum. In the previous referendum, in 1975, I chaired the “Huyton says no” campaign. That merry band of naysayers was a fairly eclectic group consisting of Labour party Young Socialists, the Communist party of Great Britain and two Tories who ran a ballroom dancing academy. Fortunately, the people of Huyton sensibly listened to our local MP at the time, Harold Wilson, and voted to stay in.

The argument that I want to advance today takes its inspiration—fittingly, in the centenary year of his birth—from Harold Wilson’s “white heat of technology” speech. Key to his argument in 1963 was that we needed to adapt to changing economic realities by embracing the challenges presented in science and technology. It also included an element about the importance of education as a pathway out of poverty. My argument is that we now face a similar challenge. How do we compete in a rapidly changing global economy? Do we, as some international corporations would suggest, adopt zero-hours contracts and other insecure forms of employment, or do we incentivise innovation and educate and train our workforce to take advantage of the opportunities that innovation creates? The first option is, in my view, a self-defeating race to the bottom.

However, we have to face up to some uncomfortable truths, one of which is the decline in manufacturing in the UK. In 1972, 32% of the UK’s GDP came from manufacturing. By 1997, that percentage was down to 14.5%, and by 2013 it had dropped further to 10.4%. The economic levers available to the Chancellor and the Government need to be remorselessly focused on creating incentives for innovation, using not only the taxation system but the export guarantee system and everything else available to ensure that the opportunities that exist in the world are brought within the reach of our country.

We also need to talk about education. We have serious problems with education in Knowsley. I do not want to go into too much detail, but we have a serious problem of under-attainment at GCSE level.