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I beg to move,
That this House
acknowledges that the UK is in a strong economic position to take advantage of the Fourth Industrial Revolution;
welcomes the view of the World Economic Forum that fusing physical, digital and biological technologies can promote further economic growth;
notes that small and medium-sized businesses across the country contribute invaluable expertise and market leadership;
and calls upon the Government to continue introducing and supporting policies that keep the UK at the forefront of this revolution in the future.
I thank Peter Kyle and other Members across the House for supporting my application for the debate, and the Backbench Business Committee for giving me the opportunity to bring the motion before the House. I believe that this is the first time that the topic has been debated in the Chamber.
Two hundred and fifty years ago, the world’s first industrial revolution began here in Britain. New engines driven by coal and steam made manufactured goods and allowed them to be transported across the country on new railways, roads, bridges and viaducts, heralding a new era of British industrial strength.
Now, 250 years later, after two further industrial ages, driven first by electricity and then by electronics and the internet, we stand on the cusp of a new, fourth, industrial revolution. Since the turn of the century, we have witnessed an unprecedented fusion of technologies that blurs the traditional boundaries between the physical, digital and biological spheres. This fourth industrial revolution is now accelerating, characterised by an exponential increase in automation, digital connectivity and technological innovation. Breakthroughs and new products in fields such as artificial intelligence, advanced robotics, the internet of things, driverless cars, drones, 3D printing and nanotechnology, to name but a few, have captured the imagination of the public and the attention of policymakers.
This revolution offers significant economic growth and productivity advantages to the countries that seize those corresponding opportunities, as well as new jobs, lower prices, more competition and greater product choice for consumers. These technological advances will also disrupt almost every industry in every country and pose profound economic, political and social challenges, especially to countries and communities that are unprepared or unresponsive.
At the global level, the World Economic Forum has taken the lead in exploring this issue. Indeed, the 4IR, as it has become known, was the theme at its annual meeting this year in Davos. At a national level, however, we in this House have a key role to play by leading the debate, understanding the opportunities and challenges, and making the 4IR a success for Britain. The fact that we have a new Government Department and new Minister recently in place, and a new industrial strategy, makes today’s debate all the more timely and relevant.
My view on the issue is clear. Britain is in a global race for economic success and we must actively seize the opportunities presented by the 4IR to drive economic growth, proactively shaping and harnessing the technological and social changes that it brings for the nation’s benefit. Britain can and should develop an early economic comparative advantage to become a world leader in the new 4IR global economy, but to do this, we must take a proactive, free market approach to policy formulation, and prepare for the impact of disruptive technologies, not just react to them. Put simply, we must make mastering the new 4IR a key part of the Government’s industrial strategy. Just as Britain launched the first industrial revolution 250 years ago, it can and must lead the new 4IR in this new century.
To understand the scale of the innovation that is taking place on a practical level, we should consider for a moment some of the new products and services that are already transforming the way we live and work. The 4IR’s key technological advances are pervasive digital connectivity, widespread automation, and advanced computer software based on machine learning and artificial intelligence techniques. All these give rise to a range of economically disruptive products and services, including driverless vehicles, robotic manufacturing and 3D printing. This shift from the simple digitisation of information that is so characteristic of the third industrial revolution to a fusion of technologies that will help businesses, streamline production, lower costs and deliver new products is truly revolutionary.
Well done to my hon. Friend and county colleague for securing the debate. I recognise the technologies that he said underpinned the fourth industrial revolution, but does he agree that other technologies will revolutionise our lives, not least synthetic biology, in which we are a world leader? Will he support me in encouraging the Government and the Minister to revive the vigour that is needed for the eight great technologies policy, which the Government adopted not four years ago?
I thank my hon. Friend for his intervention. I know that he has a long record of passionate activity in this field. I certainly support him in his aims, and look forward to working with him on that. I will mention those technologies later in my speech. What he said reflects the transition from the digitisation of information to the real fusion of technologies, whether biological, physical or digital. For example, it is already conceivable that entire factories could become automated, requiring only a constant supply of energy and raw materials in order to operate 24 hours a day. That certainly affects the biotech sector as well.
Similarly, the 4IR is already blurring the lines between manufacturing and the service sector as networked products make life easier for consumers. For example, smart boilers that monitor themselves to detect faults, call an engineer and even pre-order spare parts are already making their way into the consumer market.
This fast-moving and innovative environment to which my hon. Friend Kit Malthouse referred also presents opportunities for Britain’s small and medium-sized enterprises, which are often the most nimble when it comes to job creation and launching new products. An excellent example comes from my Havant constituency, where local start-up Dream 3D is getting a head start in the 4IR economy by selling 3D printers and providing training about how to use them. The founder James Preen and his growing team have seized the opportunities presented by the 4IR to create new jobs in a new industry, selling new products and generating new wealth.
I give praise to my hon. Friend for securing this extremely important debate. I suspect that we will come back to this subject many times in the coming decades, if not centuries.
Does my hon. Friend agree that one of the important things that we in the House need to begin to think about is a change to patent law? The UK has the principle that the first to file secures the rights. On that point about SMEs, does he agree that “first to invent” is surely the best way for securing a patent? If there is a wait for the first to file, we give an advantage to large companies that can afford to file many patents.
Order. Mr Tugendhat, interventions are meant to be short. If you want to make a speech, I will put you on the list, but keep interventions short.
My hon. Friend Tom Tugendhat makes a strong case. A strong legal regime, especially in respect of intellectual property, is certainly key to making Britain a world leader in the 4IR. I thank him for making that point, which is one that Dream 3D, the business in my constituency, is very well aware of. Its success has been predicated on protecting the work that it has produced. It is no surprise that its clients already include Rolls-Royce, Land Rover and Pinewood Studios. That said, larger businesses of the sort that my hon. Friend also mentioned can bring scale and expertise to innovative processes. Havant-based defence contractor Lockheed Martin, for example, has used its big data expertise to develop a new system called Mailmark that helps Royal Mail to track parcels more efficiently as the e-commerce economy grows.
It is clear that by embracing these new disruptive 4IR technologies, we can create new jobs, deliver new services and generate new economic growth. It is also clear that the countries that are best able to take advantage of the 4IR are those with nimble free market economies, low taxes and a competitive regulatory environment. I hope that the Minister, who I congratulate on his appointment, will confirm that the Government will continue to focus on pro-enterprise policies that will make Britain a world leader when it comes to starting and growing a business, particularly in the new 4IR economy.
I can offer three suggestions as the Minister and his new colleagues develop our new industrial strategy. First, the economic benefits of the 4IR must be shared throughout the country and not just concentrated in London or the south-east. Regional investment funds for 4IR technologies should therefore be made available to promote regional hubs that will stimulate growth and innovation outside the M25. I see local enterprise partnerships as key partners and potential funders in this process.
Secondly, Government should use their procurement power to buy British when it comes to 4IR products. Advanced economies such as Israel already play a key role in helping new sectors to develop, and our Government should do the same. Finally, Britain must continue to invest in its digital infrastructure, which is as essential today for our future economy as railways were in the age of steam. This should include a new phase of the fibre optic broadband rollout and 5G mobile internet. I commend those suggestions to the Minister, and draw his attention to a forthcoming report from the Institute of Economic Affairs and the Free Enterprise group of Conservative MPs, which will set out more.
We should be clear that, while the 4IR will certainly bring economic benefits, it will also cause societal challenges, but by shaping the way in which the 4IR evolves, we can tackle these issues head on. For example, as automation increasingly substitutes for human labour, the displacement of workers by machines could result in short-term unemployment, especially in low-skill or low-wage sectors of the economy. The Government certainly have a role to play in dampening the downside effects of the 4IR, principally by bridging the gap between short-term unemployment and long-term prosperity, primarily through welfare, education and training policies.
We should be clear that the technology that I have talked about and the disruption that it may bring is not an external force over which we have no control. All of us in this House have a duty to be responsible and to help guide its evolution, so while Britain must grasp the opportunities of the 4IR, we must also shape and direct it to reflect a future and economy that involves our common objectives and shared values.
As the fourth industrial revolution gathers pace, we in Britain should embrace it, encourage its growth, harness its benefits and shape its evolution. We must act now to ensure that our political and economic structures are fit for purpose. From continued investment in digital infrastructure to reform of our welfare and education policies, the Government have a key role to play. At the same time, we must address the 4IR’s shortcomings, making sure that no one is left behind as we reshape our economy and society. This new industrial revolution must consist not of changes that happen to us, but changes that work for us all.
Throughout our history, Britain has adopted a pro-innovation approach to technological developments from farming mechanisation to domestic labour-saving devices. We have never allowed fears about the future to stunt our economic or social progress. We soon realised, for example, the folly of requiring early cars to be preceded by a man carrying a red flag, and we must adopt the same forward thinking, pro-innovation approach when it comes to the 4IR because here in Britain we reach for the future rather than just yearn for the past.
Just as before, the new wave of technological change can bring about substantial benefits from greater productivity, new jobs and lower production costs, to more choice for consumers through new goods and services. I hope that the Government will take that proactive and positive approach by placing the fourth industrial revolution at the heart of its new industrial strategy. In doing so, we can usher in a new manufacturing renaissance, launch a new industrial era built on high-quality innovation and, above all, give Britain the head start it deserves in the global race for success.
Order. May I suggest to Members that they speak for up to 10 minutes? Let us try and ensure that everybody gets the same amount of time.
Being called second to speak in a debate is a new experience for me; it feels like going to the airport and being upgraded.
I am grateful to Mr Mak for including me in the discussion that led to this debate and for allowing me to second the motion, which is a privilege. He spoke brilliantly. As we listened to him, we realised how exciting and exhilarating the idea of a fourth industrial revolution is.
There is one aspect of this revolution that should have every decision maker in our economy on high alert: the rapidity with which it is occurring. The fourth industrial revolution will sweep through our economy in a matter of years, rather than the centuries it took the previous industrial revolutions to unfold. Sadly, we have been fed a diet of automated cars and drones to deliver our groceries, which to those of us of a certain age has a certain “Tomorrow’s World” feeling about it. The truth is that this revolution is already under way. Consumers are already controlling their home heating and security with their mobile phones. People’s hand-held devices are controlling real-world events via the cloud. That is happening today, but we have barely crossed the start line in this race.
Microsoft alone is investing £5 billion in capital expenses worldwide to build data centre infrastructure, which gives us an idea of the scale of the transformation that is yet to come. Advances in nanotechnology, 3D printing and renewable energy are opening up a multiplicity of opportunities for medical, academic and industrial research. Our universities are rising to the challenge. Next year, for example, the University of Sussex will open a new £10 million centre for computing, robotic electronics and mechatronics. I would welcome an intervention from the hon. Member for Havant to tell me what “mechatronics” means; perhaps we can visit the University of Sussex and discover that together.
Although many of these new trends will be powerful enough to break through regardless of market conditions, there are several barriers that will need to be dealt with. The private sector will need to tackle the threat of data security. Cyber threats pose a real-world problem to those who have been affected by them and a psychological barrier to those who have not. The private sector must also invest in management skills to ensure that their businesses can be effectively led through this change. They must put aside the territorial needs of their business to ensure that the technologies work across platforms and geographical areas.
There are challenges that Governments must be active in supporting our economy to overcome. One is the infrastructure for the future economy—the internet. Internet speeds are increasing, but consumers and commerce will need reliability as well as speed. The biggest challenge that we must overcome is that of making sure that the next generation is equipped with the skills to contribute collectively to our economy of the future and personally thrive in it. There is a danger that the rate of change in our economy will not be matched by the ability to produce and retain the skills that are needed.
I am a supporter of the Government’s apprenticeship levy, but it is being rolled out too fast to ensure that the benefits reach all parts of our economy. Nowhere is that more acute than in the technology sector. Here, post-16 training is too late. Training needs to happen before 16, and preferably from primary school upwards, if we are to develop the programming skills and high levels of creative thinking that are needed by cutting-edge technology firms. Forcing large technology companies to pay for post-16 skills development could have the perverse effect of forcing them to divert funding away from pre-16 investment in schools and to end up recruiting from abroad.
The key goal is to equip our students and young people with the social, creative and academic skills that they will need in a fast-evolving economy. To date, this has not been achieved. I agree with the former Tory Minister, Lord Baker, when he says that the back-to-basics approach to the curriculum is preventing the social and creative development that we need. In a report for the Edge Foundation, which he chairs, he says:
“The government’s White Paper has a firm commitment for students to focus on seven academic subjects at GCSE – English language, English literature, maths, two sciences, a modern or ancient language, geography or history, plus probably a third science. This is word-for-word the curriculum laid down by the Education Act of 1904, though it added three subjects – drawing, cooking for girls, and carpentry or metalwork for boys.”
The report goes on to say:
“We should not go back to a 19th century diet of academic subjects for all. All young people should make and do things as part of a broad and balanced curriculum.”
Emotional intelligence will be as important to the future economy of our country as academic intelligence has been in the past. According to the Manufacturers Organisation, the EEF, staff skills are the No. 1 need of manufacturers. It is important to remember that the fourth industrial revolution is not only about the digital; it is also about manufacturing. Britain must have confidence as we move into this next stage of our economic life, and accept that we have the same potential to “make things” as we did in the first industrial revolution.
It was 30 years ago today that Margaret Thatcher opened the Nissan factory in Sunderland. [Hon. Members: “Hear, hear.”] I pause to allow those on the Government Benches to celebrate. Back then, people thought our automotive industry was on its last legs. Now we know that it is one of the most advanced and successful in the world. Thirty years ago car doors closed with a loud clunk; today they do so with a soft click. That is because of the huge effort and expense that go into innovation and material design in our country and explains why this part of our economy can and must work in tandem with, not apart from, the revolution that is unfolding.
The manufacturing sector will contribute to and benefit from the fourth industrial revolution. It has a lot to offer and a lot to gain. The progress made by Jaguar Land Rover and Nissan since the 1980s shows what can be achieved in Britain’s foundation industries, including the use of metals and materials. This has the potential to benefit our new economy massively. From steel to ceramics, coatings and Graphene, this £200 billion sector has the potential to provide the innovation and materials that are strong and light enough to make the robotic dreams of tomorrow a reality. I sense my hon. Friend Ruth Smeeth twitching at the mention of ceramics, and I will be listening out for her contribution shortly.
However, this sector is omitted from the Government’s catapult centres, even though the potential for them to integrate with the technology sector is enormous. I hope the Minister will listen to the voices in this sector and play an active part in bridging any gaps there may be between the manufacturing and the technological sectors of the fourth industrial revolution. The benefits to this sector from the unfolding revolution are clear. Supply chains and production lines will move towards a system with end-to-end autonomous decision making by machines, continuous demand sensing, and better use of resources. In short, there will be less error, more efficiency and higher productivity.
Finally, I move to the other end of our economy, because this revolution will impact on the self-employed as well as the tech giants and the manufacturers. Between 2000 and 2015, the number of British people working alone rose by 73%. The largest growth has been in the service sector, primarily supplying education, health and business services. The fourth industrial revolution will transform these people’s connection, virtualisation, and cloud computing experiences. Huge power that has been available only to large companies and public sector departments will now be readily available to individuals. One person with the right skills and imagination will have the power and capacity to make a transformational impact in the economy of the future.
The challenge that we face is to make sure that this power is available to everyone from whatever background. I do not believe that entrepreneurial spirit was a gift to the middle classes; I believe it was a gift to humanity. But unless we equip every young person with the right skills, many will find the door to modern life and all its wonders slammed in their face. The time to ensure that that does not happen is now.
May I, too, start by congratulating my hon. Friend Mr Mak on securing this important debate? May I also say how delighted I am to follow Peter Kyle? I thank him, as a colleague on the Business, Innovation and Skills Committee, for yet another excellent contribution.
Industry 4.0—we all call it different things—is an extremely dynamic prospect and something that the UK must fully embrace in the years to come. I do not know whether we can talk about centuries to come, as my hon. Friend did earlier, but I know what he was trying to say. As the co-chair of the all-party group on manufacturing, I appreciate the importance of raising awareness of this topic, and this debate gives us a great opportunity to do so.
In my intervention in business questions this morning, I was pleased to be encouraged by the Leader of the House to raise the issue of industrial strategy with the Backbench Business Committee, and I hope my hon. Friend will join me in making that application.
Using technology to aid production is clearly not a new idea, but the advancement of digital and machinery in the last decade has brought to light the concept of this industrial revolution. The first saw the Victorians rapidly improving their wealth and their economic outlook, and we must not underestimate the ability of state-of-the-art systems to change and have a similar impact on the way we do things now. A particular point to stress is that other nations are advancing on this issue, and that is why we must keep up. Countries such as Japan and Germany are already understanding the benefits of these technologies, and we cannot allow them to have this window to themselves.
Through-life engineering services are one way in which we can help innovation to flourish in the UK. The aims of TES are to improve the availability, predictability and reliability of complex engineering products, to deliver the lowest possible whole-life cost. This is an area where we can take the lead. I recently spoke at the launch of the new TES national strategy, and such a focus on improving the design of systems is an important way forward.
More broadly, we need to act now to compete internationally. The adoption of cyber-physical systems that are able to collect data, provide insights and be used on a large scale in heavy industries is vital for the UK manufacturing sector moving forward. Machines using self-optimisation and self-configuration allow complex tasks to be completed in a way that dramatically increases cost efficiencies and delivers better quality.
The potential is obviously immense. Businesses will be able to streamline production, reduce waste, conduct rapid prototyping, exploit new business models and dynamically engage with customers in real time. A European Parliament briefing paper estimates that improvements in efficiencies of between 6% and 8% can be achieved and that, in Germany alone, industry 4.0 will add 1% of GDP to the economy.
One of the recurring themes from meetings of the all-party group is the need to plug the skills gap. As mentioned in the group’s submission to the Business, Innovation and Skills Committee’s inquiry into the productivity plan, the current level of skills in the UK is inadequate for the future success of manufacturing. Satisfying this need for high-level skills is vital for productivity and can be done in a number of ways. Firms need to invest in increasing capacity, and the flow of talented individuals into the workforce must be continuous, with apprenticeships a notable factor in making that difference. Industry 4.0 and its associated benefits are a way of speeding up that process and improving the outlook in terms of our skills shortage. I hope the Government can enhance their support in that regard.
The backing of the UK catapult centres is proving extremely successful. The Digital Economy Bill, which seeks to improve our digital infrastructure, is an encouraging indication of the Government’s commitment, but we should continue to look at all possibilities to secure the UK’s role as a leading research nation. Investment in R and D will encourage new production in the UK, as well as further reshoring. R and D tax credits have been a major boost, particularly for small and medium-sized enterprises.
Another recurring theme in discussing the future of manufacturing is the reshoring of production and the significant impact this has on the sector and the national economy as a whole. In enhancing our efforts, an increase in intelligent automation can be a significant driver of economic growth. With such a significant change, new business models should be analysed, and the adoption of the concept of industry 4.0 fully considered. The significant investment needed may hinder small and medium-sized businesses in the medium term, considering the high level of funding needed to pursue such systems.
There are also issues of data protection. With such technologies, the large volume of data used in production will obviously be sensitive. If competitors were to access the information gathered by smart machinery, profits could be squeezed. It is therefore imperative that legislation around data protection is tight before businesses can be confident about changing their business models.
To name just one more challenge that I see in the digitisation of the market, there is a concern that our talent pool will lack the necessary skills to operate machinery encompassed by the concept of industry 4.0. It is generally accepted that there is a shortage of experts in information and communications technology, and that may be more pronounced in terms of the need for cyber-security and the transfer of big data.
If we are to push forward with industry 4.0, we need to ensure that the whole system, including education and apprenticeships, works in harmony to provide the necessary skills. The industrial strategy is particularly relevant in that respect.
It is therefore clear that we have an incredible opportunity to rapidly advance manufacturing in the UK, and this debate is an excellent way of kick-starting the discussion around how we go about embracing these new technologies and how we overcome the challenges involved in doing so.
It is impossible to be from Inverclyde and not to reference the lessons of history when talking about how we can best implement new technologies in our economy. I hope other Members will forgive me for indulging in a short history lesson, but without Greenock-born James Watt we would not be talking about a first industrial revolution, never mind a fourth.
Many Members will be aware that Inverclyde was once a world leader in technological innovation. For hundreds of years we led the way in shipbuilding innovation, with ships such as the Port Glasgow-built PS Comet, which operated the first commercially successful steamboat service in Europe. That technological innovation created thousands of jobs and led to a massive increase in manufacturing production.
Throughout the 19th and 20th centuries Inverclyde’s shipyards remained world-leading innovators, building the advanced warships of the day and the most cost-effective merchant vessels, which expanded our influence in the world. It was an imperfect industry, but people could take pride in their work, and we can declare without hesitation that this was an integral part of Scotland’s story as a nation.
In the 1980s the UK Government withdrew public funding for shipbuilding. The subsequent collapse of the industry meant that, by 1986, Greenock and Port Glasgow’s male unemployment rate had risen to 26%. The UK Government told us the private sector would create jobs where publicly supported industries had failed. I will concede they were partially correct about that—a McDonald’s restaurant is now situated where the walls of the Scott Lithgow shipyard once stood.
In 1988 Margaret Thatcher visited Greenock’s IBM plant to highlight how we would transition to new industries and lead the way in an electronics revolution. However, the revolution has been short-lived, and IBM will permanently end its involvement with the Spango Valley site in Greenock later this month. The first three industrial revolutions brought success to Inverclyde, yet they ultimately ended with periods of rapid decline. These eras created wealth for factory owners and multinational technology companies, but too often the workers were left to pick up the pieces when these industries ended. As a result, Inverclyde now suffers from a high rate of depopulation, and the remaining local businesses and public services are struggling to survive under the long shadow of those historical failures.
The point of that history lesson is this: Inverclyde shows us that technological innovation will never reach its full potential if it lacks a social conscience. The motion before us states that
“the UK is a in a strong economic position to take advantage of the Fourth Industrial Revolution”.
In my constituency, we have not yet resolved the issues arising from the decline of the previous technological ages. Undoubtedly the fourth industrial revolution can be part of the solution, as long as constituencies such as mine receive adequate levels of support; otherwise, this innovation will only reinforce inequality as the more developed parts of the economy continue to benefit the most from rapid technological advances. The UK Government have an obligation to offer more assistance to Inverclyde, given their catastrophic failures of the past. The Government took extraordinary measures to destroy industry in Inverclyde; I would now like them to take extraordinary measures to help us take advantage of the fourth industrial revolution.
Renewable energy will be a major component of Scotland’s future technological innovation. Inverclyde would be well placed to take advantage of these developments. Inverclyde is one of the few areas with the geography to utilise nearly all forms of renewable energy. We have a coastline and can therefore contribute to tidal power, and we have enough rural space and hills to facilitate wind farms. The burns that run off those hills can power hydro schemes, as they did in the past, and while solar will never fulfil all our requirements, it could be a valuable contributor. Further, we are already a producer of biomass fuels, and wood chips produced in Inverclyde are being used all over Scotland. Inverclyde has a large amount of unused industrial land, and these sites could be centres of manufacturing once again, while our port facilities mean that we are able easily to export the completed products to their required destinations. Every renewables business that we establish would result in associated benefits for suppliers and other local businesses.
While I welcome the UK Government’s decision to bring industry strategy back on to the policy-making agenda, I fear they will not prioritise the needs of constituencies such as Inverclyde. Where the UK Government do have power, we are witnessing a lack of vision. Renewables could transform Inverclyde, yet policy decisions made here in London are stifling the industry’s potential. The UK Government have shown a complete lack of foresight in withdrawing much of the financial support that was available for the renewables sector, so not only are the UK Government the chief architect of a social and economic disaster in the west of Scotland, but they are actively damaging industries that could make the area vibrant once again. The fourth industrial revolution promises us so much—“smart” manufacturing, increasingly integrated technologies, and even white goods and household appliances that connect to the internet—but what my constituents are really asking for is employment: not low-level, poorly paid jobs, but skilled, high-value employment that will boost other businesses and educational institutions in the area.
The industrial revolution failed to lift the landed poor out of poverty. It created vast amounts of wealth, but increasingly that wealth is being accumulated in a smaller and smaller section of society. I want the UK Government to demonstrate two things: first, how they plan on driving forward the fourth industrial revolution; and secondly, how this technology will be used to benefit the social and economic situation of everyone in society. With an astute eye for the future, the fourth industrial revolution could lead to a period of unrivalled prosperity for this country, but without the Government’s stewardship, these new technologies will only reinforce social, gender and regional inequalities.
The hon. Gentleman was not in the Chamber yesterday afternoon when I spoke in the climate change debate, so I thought I would inform him that through employing some of these new technologies, Guy’s and St Thomas’ NHS Foundation Trust in London has been able to install in a hospital a combined heat and power system that saves it £2 million a year on its operating costs. It has done that not through Government promotion but because the technology is there and it has sought to adopt it, and it is doing immediate good for that public service.
I have wonderful examples of the same thing in my own constituency. Biomass fuel heating is a fantastic innovation if used properly. At the same time, the Government are reducing tariffs on various sorts of wind energy and solar power. It is part of the whole mix if we are going to get this right.
I want to see a fairer and more prosperous society that has employment and opportunities for our young people. Without this sense of progress and social justice, technological advancement will only work against those that need the most assistance. It is time for the UK Government to show how their industrial strategy will benefit working people—and if they are unwilling to do so, transfer the powers to Scotland and let us get on with the job.
Speaking twice in 25 hours is a record for me, and I am grateful for the opportunity. I congratulate my hon. Friend Mr Mak, who has secured a worthwhile debate and opened it brilliantly. I apologise for being late, but I was working on the Energy and Climate Change Committee’s paper on renewable heat and transport targets, which will be released this evening. I commend it to the House: it is probably one of the most insightful Select Committee reports that Members will read all year. Indeed, all of our Committee’s reports are insightful.
In summing up yesterday’s debate, the Minister used some fantastic theatrical references, which I hope will become a tradition of his summing-up speeches. He has an encyclopaedic knowledge of the theatre, so we look forward to that. Today, I present, to use my own theatrical reference, the second part of my play in two parts, in which I will talk about the energy opportunities provided by the collision of emerging technologies and our existing energy infrastructure.
There is some dispute over whether this is the third or fourth industrial revolution. A book by Professor Jeremy Rifkin has become a bit of a bible for me, as I have sought to develop my thinking on how energy policy might evolve. He thinks that this is the third industrial revolution, but none the less it is an excellent read that very much pulls in the same direction as those who are advocating the fourth industrial revolution.
Ministers will already have looked in great detail at the National Infrastructure Commission’s “Smart Power” report, which is a fantastic publication setting out how we can harness all these wonderful technologies as we digitise the energy system. The reality, as the report observes, is that we could save £8 billion a year for the UK economy if we digitise our energy system and harness those technologies. That figure represents not just immediate savings on our energy bills, but gains in productivity.
“a smart energy revolution across the country with consumption adjustments reflecting when energy is cheapest”.
The idea that we have to change our consumption habits to meet a changing energy market sounds like a nightmare to most people, but the reality is that we already have many of the technologies in our homes. Most major white goods manufacturers are producing smart appliances already: they are in our shops and, probably unknowingly, we already have them in our homes. Through the internet of things, they will all start to speak to one another to make sure that they operate at the most efficient and cost-effective time. They also report faults, so people will not have to carry on for years with a fridge that uses more power than it should, because it will already have flagged up its fault to whoever manufactured it. These are exciting times and the technologies already exist. It is not, in my view, going to be a case of opting into them, because manufacturers are building them as standard and they will increasingly do so.
The Government face a challenge in preparing our homes, businesses and society for the internet of things from an energy perspective, so I will give my thoughts on our system preparedness before moving on to examples of where we are already seeing the huge economic advantages.
As Ministers know only too well, the smart meter programme is the keystone in achieving the digitisation of our energy system, and I know that they will be keen to push on with that roll-out at best speed. Everything that we seek to do in bringing technological innovation into the energy space depends on those smart meters being in place to digitise the system. Similarly, on the way in which our grid is put together, we want all our generational capacity—from the smallest to the largest—to be able to speak in real time about what it is producing, so that we can have a more dynamic generation system. We also need to sort out the regulatory framework for storage, because at the moment people have, in effect, to pay for their energy twice: first when it is generated, and secondly when it is released from storage. Surely, that cannot continue for much longer.
We also have to make sure that our distribution networks—the substations in our communities—are capable of dealing with more dynamic demand and clustered demand, particularly overnight, when people might be taking advantage of cheap energy to charge cars, run the washing machine and tumble dryer, and heat immersion tanks. None of that will happen automatically without the Government paving the way. Thereafter, however, I am sure that these technologies will find their place in the market by themselves. They will make life better, and people will buy them as a result. The Government do not need to encourage people every year or so to change their mobile phone, because people just want to have the latest technology at their disposal. I am sure that that will be the case in this area if the Government create the right regulatory framework with energy policy.
I turn to storage. The price of storage has already come down from $3,000 per kWh to about $200 today, and it will come down even more quickly still. We saw over the summer reports about the Tesla Panasonic factory in Colorado, the construction of which is being accelerated quite rapidly given the increase in demand. These are exciting times, because storage is the key to flattening the energy supply curve and unlocking the real potential of renewables.
The real technological wizardry, however, is demand-side response. That may be a combination of words that many in the Chamber have not heard before, but it needs to be at the forefront of the way in which we discuss energy. Flattening the supply curve through the availability of storage deals with only half the problem; flattening the demand curve through demand-side management is equally important.
I have been hugely impressed as I have become enthused about DSR, and as I have gone around various companies that are delivering it, by the scale of the savings that it is bringing to businesses. Marriott hotels have signed up to a DSR contract that saves them hundreds of thousands of dollars a year. Workers at Aggregate Industries’ bitumen plants used to just turn up in the morning and fire up the boilers to get the bitumen tanks up to heat. They would operate over the course of the day, and then they would be switched off. Aggregate Industries now employs technologies that allow it to say, “Our tolerance is that we need to keep these tanks at a certain temperature, and provided that they are at that temperature, we can release energy back to the grid.” It does so, and it gets money for nothing as a result. By employing those technologies, it can sell back energy that it does not need, which it would otherwise just have paid for and wasted. That creates a huge saving.
Similarly, refrigeration is a massive cost for supermarkets and the food industry in general. Sainsbury’s has employed demand-side response, and the store in my constituency in Street, Somerset has released 20 kW of capacity back to the grid simply from DSR. That is extraordinary.
The other area that I want to touch on was the electrification of the transport system. I had to check very carefully with the Clerk of the Energy and Climate Change Committee about when I would find myself in contempt of Parliament, but I understand that if I draw on the evidence rather than on the report itself, it is fine. This is a hugely exciting opportunity for us to employ electric cars and electric haulage systems in the UK. The problem is that I am not sure that we yet have the infrastructure in place to support them, and I am not sure that we have the right fiscal structure to support them either.
I tried to buy an electric car over the summer, and sadly I found that their range was probably not quite enough to allow me to do my duties around my rural Somerset constituency. They are getting there, however, and we just need to incentivise the acceleration of the technology, so that we get beyond the 100-mile range to a range of 200 or 300 miles. If that happens, I think that people will, all of a sudden, go for electric cars quite quickly. All the incentives that the Government have in place—the £4,500 that they contribute towards the car and the contribution they make towards a charging point at the buyer’s home—are fantastic. The Government’s emphasis on establishing a charging infrastructure at motorway service stations and on main roads is also fantastic, but we really need to grow the infrastructure much more if people are to buy the cars and make the saving that we hope they will. The argument is that electric cars will make us more productive as well, particularly when we go beyond merely electric cars to electric autonomous cars, and we find that we can move around our towns and cities much more freely.
Interestingly, in the United States, Coca-Cola has employed hydrogen-electric hybrid vehicles for its entire fleet, and it has made a 20% reduction on its fuel costs. It made that huge saving by employing those technologies and electrifying its transport fleet, which is very exciting. We should look across at that and realise that this is not just something that people do if they are green and they want to be environmentally sensitive. It is something that an individual or a business can do if they want to reduce their operating costs—technology colliding with energy generation and energy consumption to make us more efficient and more cost-effective, and to make all our operating costs that bit cheaper.
Mr Deputy Speaker, you encouraged us to keep within 10 minutes, so I will summarise, rather than go into the many more examples that I am itching to provide. The bottom line is that, while we will focus very much on our digital infrastructure with broadband and 5G mobile phones and we will worry very much about the preparedness of our airports and air routes, as well as of our roads and rail, the energy infrastructure is just as important. In my view, alongside the broadband and mobile phone networks, the three sets of infrastructure of telecoms, broadband and energy will drive the fourth—or third—industrial revolution and allow us to harness all these fantastic technologies. We should seek to do so not just because we are seeking to arrest climate change, but because it is cost-effective, makes business sense, will increase productivity and, ultimately, will be great for our economy.
I am proud to represent the greatest city of the first industrial revolution. [Interruption.] I thought I was going to get away with that. In Stoke-on-Trent, we pioneered the modern ceramics industry, as visionaries such as Josiah Wedgwood and Thomas Minton transformed the very landscape, with the pot banks and factories of a world-conquering industry. The clay and coal beneath our feet fuelled a vast, dynamic economy and funded the great civic buildings and canal networks that still stand in testament to that industry. With last week’s news that Churchill China is planning to invest in new jobs and machinery in the city, building on the additional investment at Steelite, that legacy is very much alive to this day.
For my city and my constituents, who have worked the clay for generations, the path to prosperity lies in the renewal of British industry and in the creation of a prosperous, balanced economy that utilises all of our country’s strengths—our creativity, technical acumen and the knowledge gained from hundreds of years of craftsmanship. Advances in modern technology and material engineering present an opportunity to rebuild a local economy and to celebrate a city far too often overlooked. As my hon. Friend the Member for Hove mentioned, such new horizons are already visible in the ceramics industry, in which advances in material transformation mean that ceramic technology could and should be utilised in new and extraordinary ways, from bone transplants and hip replacements to mobile transmitters and energy conductors. Trials have even been done on lightweight ceramic body armour to protect the next generation of British armed forces.
We now need to make these ambitions a reality for my constituents, and to lay the groundwork for a truly 21st-century ceramics industry in the city that has led it since the 19th century. Plans for a new hub for materials research in the city—the applied materials research and innovation centre—are already under way, supported by the Massachusetts Institute of Technology, Imperial College London and Cambridge University, which demonstrates that Stoke-on-Trent and the UK really are leading the way.
This revolution has the potential to unleash extraordinary economic growth and to improve our quality of life greatly, and we must seize this opportunity to create an economy that works for everyone. We must harness these new technologies to breathe new life into traditional industries and lead a renaissance in British manufacturing. Let us be clear that this, and no less than this, is required. The fourth industrial revolution has the power to drive our country and our communities forward to a brave new world of scientific discovery, material comfort and sustained economic growth.
I wish, however, to sound a note of caution to those who assume that greater prosperity and opportunity are a foregone conclusion. We should not fear change, but we must support our communities to adapt to new industries and new opportunities, because with great change can come great upheaval and economies can develop and adapt in ways we cannot always predict. There can be unforeseen consequences from an economic boom pursued without care. The true mark of a strong economy is that it allows each of us to live comfortably and well, without hunger or want. Losing sight of that aim results in ever greater disparities in wealth and opportunity, to the detriment of us all. Progress may be inevitable, but prosperity is not. Our own actions will determine whether the promise of this fourth industrial revolution is realised, and whether its opportunities will be accessible to the many or the few.
The fourth industrial revolution needs to be guided in such a way as to provide equality of opportunity and balanced regional investment. Communities such as mine in the post-industrial regions, long neglected by successive Governments and lacking the resources to retrain and upskill our workforce, could be hit hardest if we get that wrong. The challenge we face is not only to capitalise on the new technologies but to ensure that the rewards are distributed equitably and that everyone has the chance to get ahead. That is why we need a Government who provide businesses, workers and entrepreneurs with the support they need.
For Stoke-on-Trent, that means a coherent industrial strategy that plays to our strengths in ceramic manufacturing and engineering, and supports us to develop the associated industries that any successful city regeneration is built on. During my first year in Parliament, I have been working with local employers, businesses and universities to do just that. Supported by the Staffordshire chamber of commerce, we are working to develop a clear industrial strategy for our city, with a set of achievable goals to improve our infrastructure, tackle our skills shortages and secure the inward investment that we desperately need.
Throughout our city, there is recognition that a piecemeal approach to economic renewal is not enough. We need a long-term plan that sets out to tackle the particular obstacles we face. That means overcoming the challenges in skills and education and offering greater opportunities for our young people, not just in traditional trades but in digital technology, coding and advanced materials. I welcome the Government’s decision to lift the age cap on apprenticeships to allow more people to learn new skills and trades, but we must also work to open people’s eyes to the many new industries that are being thrown open by the digital revolution.
We also need a fresh commitment to lifelong learning, so that people can learn new skills throughout their lives and adapt to an ever more fluid labour market. So much potential is wasted because people are not being granted the opportunity to develop themselves throughout their working lives.
Cities such as Stoke-on-Trent also need investment in the critical infrastructure needed to grow our local economy, whether that be transport links or superfast broadband. Projects such as the ceramic valley enterprise zone are a very welcome boost, but I fear that they are not sufficient in isolation to deliver a strong local economy. A full infrastructure evaluation of our northern and midland cities would show that the Government are committed to building an economy that works for every nation and region, and help to put flesh on the bones of the so-called northern powerhouse. We need an industrial strategy that supports businesses that want to expand or to invest in new technologies—especially new ceramic technology—and supports R and D into those new technologies, as we saw with the breakthrough in graphene technology at Manchester University.
Britain can and must lead the way in this revolution, but we must also ensure that opportunity and rewards are spread fairly. We must understand that the faster our society changes, the more people are at risk of being left behind. By investing now in skills and infrastructure to give everyone the chance to excel, we can overcome those challenges. That is why I urge the Government not to sit back and let events take their course but to invest in the skills, training and infrastructure that we need right now, right across the country, to ensure that everyone has the chance to fulfil their potential. We need to ensure that the opportunities presented by the fourth industrial revolution are open to all, not just a few. We need a commitment from the Government that they will invest in skills and education—in particular, in adult education—so that those whose jobs are at risk can find new, better and better-paid employment in new industries, and we need a genuine industrial strategy that supports the manufacturing and technology industries the length and breadth of our country.
According to the World Economic Forum, the fourth industrial revolution is characterised by a range of new technologies that are fusing the physical, digital and biological worlds. As my hon. Friend reminded us, it has, they say, the potential to transform and to integrate products and services to reshape radically the way in which things are made, the factories in which we make them, and the ever more personal and customised uses to which they are put. This can take many forms, be they new web applications, micro robots, peer-to-peer services, advanced manufacturing, personalised medicines and cyber-medical technologies. They, in turn, can be leveraged by big data, and better and more widespread digital connectivity.
I want to speak briefly about what I think the fourth industrial revolution is or might be, why it matters and what the UK is doing to promote these developments. Let me start by saying that I am quite sceptical about the language of the fourth industrial revolution. I share some of the scepticism of my hon. Friend James Heappey. Voltaire once rather sardonically remarked that the Holy Roman empire was neither holy nor Roman nor an empire. I worry that the fourth industrial revolution is neither the fourth nor particularly industrial, and not a revolution.
The natures and causes of the original industrial revolution are still, may I remind the House, rather contested. Was it the result of access to coal and high thermic value coal in particular? Was it the result of spreading trade? Was it the result of the bourgeois virtues of thrift and hard work, of tolerance and openness to other countries, or of science and technology? These are still contested matters among historians. What we can say is that it was based on steam, and that something like 150 years later there was one based on electricity.
Where does that leave us now? I think we need to go to the fons et origo, the foundation of all economic discussion: Adam Smith. I was particularly glad that Ronnie Cowan highlighted the importance of Glasgow, since Smith was Glasgow University’s greatest professor at a time when it was, along with other Scottish universities, one of the greatest universities in the world. Smith was wise on many fronts. He was, alongside David Hume, a Unionist above all. He said:
“The Union was a measure from which infinite good has been derived” to Scotland. He was wise in economics, by pointing to the importance of the division of labour. He pointed out in particular that the capacity for specialisation was limited by the size of the market. He said that we did not get porters in villages. These days we might say that we do not get Uber in towns—the market simply is not big enough.
I would suggest that change today has been powered by the same things it has always been powered by: bigger markets; technological innovation; better materials and access to materials; and, above all, the human appetite for risk and the questing nature of the human imagination. It was one my predecessors, Lord Willetts, who pointed out the eight technologies on which the previous Government founded their industrial strategy, ranging from satellites to agri-science. I think that that marks a better approach to thinking about these issues than talking airily in terms of revolutions.
There is a contrary view, which has been very well articulated by Robert Gordon in his book “The Rise and Fall of American Growth”. He argued that there was a golden century of innovation between 1870 and 1970, a time of genuine transformation through innovative technologies. As John Kay has said, someone who was born when Benjamin Disraeli was Prime Minister and lived to see Edward Heath would have witnessed horse-drawn transport give way to cars and aircraft, medical services that were non-existent replaced by cures for infectious diseases, as well as the introduction of electric light, indoor plumbing and colour television. Each of them was a transformative technology. Paul Volcker has pointed out that the greatest technological change of the past few decades in finance has been the ATM. Anyone who knows anything about finance has a great deal of sympathy with that viewpoint.
These technologies reshape. Gordon’s suggestion is that the capacity for transformative innovation has slowed. We have upgrades but we do not have the same life-transforming breakthroughs—breakthroughs such as the washing machine, which even more perhaps than the internet has shaped people’s lives—and the result is low growth and low productivity. I do not share that pessimism; for me, the things that matter are imagination, energy, the capacity for risk and the ability to work.
At this point, I should declare an interest by mentioning two projects with which I have been associated. One is the New Model in Technology & Engineering, which will be the first wholly new university for three decades. It will be based in Hereford, and is creating a curriculum along the lines of liberal engineering, tying the liberal imagination of the arts and sciences to the engineering discipline required to create genuine innovation. Its approach will be problem-based rather than curricular, and students will be taught in three-week blocks rather than attending specific lectures. There will be a 46-week curriculum. The university has links with Olin College in America, and with the universities of Warwick and Bristol in this country. It is not just a very important local institution in embryo, but a potentially national—disruptively national—institution in higher education, and I think that it will do an enormous amount to assist the technologies about which we have talked today.
The other project is, if anything, even more personal. It is a not-for-profit car that my father has designed—a flat-pack vehicle. Even you, Mr Deputy Speaker, with your astonishing breadth of understanding and knowledge, may be surprised to learn that the vehicle can be assembled by three people in a day. It costs a third of the price of a luxury 4x4, and it carries three times the weight. Its target price is under £20,000. It is astonishingly simple, and, of course, achieving such simplicity requires terrific design and terrific engineering. What the project shows is that great innovation does not require high technology; it can come through simplification, or a sense of the possibility that simplification can change manufacturing processes. This is a vehicle that has potentially revolutionary implications for developing countries.
Let me now deal with our own situation more widely. My hon. Friend the Member for Havant rightly highlighted the importance of policies that support enterprise, as did Ruth Smeeth, and I very much share that view, but manufacturing companies in this country are overwhelmingly employers of 50 people or fewer, and those small firms account for more than 50% of manufacturing employment. Small and medium-sized enterprises will be the lifeblood of change over the next few decades, as they are today, because they are versatile in their manufacturing and light on their feet. They are also able to respond quickly as customers demand more customised, bespoke and niche products, using new materials and revolutionary production techniques such as 3D printing, intelligent machines and sophisticated computer design.
I hope that Members are already aware of Innovate UK, which brings together entrepreneurs and innovators with great ideas. It runs funding competitions to identify the strongest opportunities, and connects with the best partners to get their products market-ready, be they digital or solid-state. The High Value Manufacturing catapult, enabled by Innovate UK, helps small manufacturers to adopt and use those technologies. In its first five years of operation, about £300 million has been invested in high-value manufacturing by that means. Over the past year, the HVM Catapult has worked with more than 1,650 private sector clients on more than 1,300 projects and 1,800 small and medium-sized enterprise engagements. It has the right equipment to support the adoption of advanced technologies. Its use of virtual modelling enables businesses to understand what technology could do for them, and to plan and remove risks. Through Innovate UK, we are supporting the £9 million CityVerve internet of things smart city demonstrator in Manchester. The Future Cities catapult is collaborating with Microsoft and Guide Dogs for the Blind to develop tools to make moving through cities easier and more enjoyable for partially sighted people.
Those are just some of the very interesting collaborations that this model of support between the private and public sectors is operating and offering. It is a virtuous circle, and the Government want it to be replicated many times. We need to increase awareness of and access to these catapults. We need to increase the number of catapults so that more small businesses can test out how to transform what they do and open up new market opportunities.
I cannot help but make the observation that only someone who has never shopped at Ikea would ever think it was possible to buy a flat-pack car and assemble it in a day.
Catapult centres are a fantastic idea. Does the Minister think there is merit in linking them more to some of the industrial materials, products and services that are being developed in parts of the heartlands that my hon. Friend Ruth Smeeth mentioned?
I very much take the point. There is only one way to think of this flat-pack car: it is the product of three years’ development by the former chief designer at McLaren. That is the only way one could get a vehicle that would meet the criteria set out by the hon. Gentleman. On the issue of linking to industry, he is right. One of the things that is interesting about catapults is that they have proved to be quite flexible. There is no reason why that flexibility, as they grow in number and extend themselves, cannot be used to create even closer links. As he knows, there is what Lord Willetts used to call a “valley of death” between research and development. The tie-in to employers in education and to businesses in development is vital to stop that problem.
I thank colleagues and congratulate them on the debate, which has been extremely wise and intelligent. The Government want to be at the forefront of the changes that are being discussed here—the dramatic transformations in the landscape of our industry and commerce. We want to lead this revolution—whether it be the third or the fourth—as we led the first, and we plan to do so through the new Department for Business, Energy and Industrial Strategy and the industrial strategy, which will be unveiled in the next few months.
I join colleagues in thanking Mr Mak and my hon. Friend Peter Kyle for all their work to secure the debate. I declare an interest: for three years, from 2009 and 2012, I worked at the World Economic Forum.
The subject of today’s debate was the subject of this year’s Davos meeting: the fourth industrial revolution, an industrial revolution that will be characterised by new forms of renewable energy and the exponential outward expansion of technological innovations, driven by the internet. It is a revolution that will take place as we face severe challenges to our economic future: seemingly ever-increasing inequality; the worst productivity crisis and trade deficit in our country’s history; greatly reduced job security; over-concentration on London as the predominant source of wealth and growth, at the expense of other regions; and over-reliance on the services industries, with manufacturing accounting for an unprecedentedly low share of GDP. Manufacturing is crucial to broadly shared wealth, but we have seen manufacturing as a share of GDP drop from over 30% 40 years ago to under 10% now. That lies at the heart of many of the difficulties—the unbalanced nature of the British economy.
In the aftermath of the EU referendum, each of those challenges is exacerbated by the uncertainty that our economy faces as we negotiate Brexit, given that we do not know what our trading relationship with our largest market will be, and likely will not know for some time. In that difficult context, the fourth industrial revolution, which will completely transform the way we live, will be a defining period for our economy. Will the technology at its heart, left unfettered, entrench the challenges we face, threatening jobs, driving inequality and reducing exportable products as the economy is further limited to services, and further place all the risks and insecurity of the economy on the worker; or will we use the fourth industrial revolution to transform and brighten our economic future for all our people? Can its fusion of digital technology, intelligence and connectivity shape a new economy, with new models of manufacturing, labour relations and skills development that create jobs, raise living standards and allow us to trade with the world in new ways?
Can creating this new economy help us realise our values in society and in our everyday lives?
The answer to those questions is what we make it. We must shape and lead the fourth industrial revolution so that it delivers the society and economy we want for people all across our country. That requires a Government with a vision of what a fourth industrial revolution must look like in order to deliver the outcomes we need and a Government who have an industrial strategy that helps us get there. It requires a Government who take action and take control of our future.
This will require a strategy and plan that rebuilds a new manufacturing sector based on the internet of things, and that creates world-leading products but also delivers a more sustainable form of labour relations. It will require us to take long-term decisions that back British ingenuity and ideas. It will require us matching or exceeding OECD levels of investment in research and development, which is the source of future growth and industry.
As part of this, we must continue Horizon 2020 funding, which does so much to catalyse university research and innovation and transform it into market products. The Government have currently promised to match Horizon funding until 2020, yet even in a fastest possible Brexit scenario that is only one year of matched funding. We must commit for much longer to give universities and innovators the confidence they need, especially in the face of Brexit-fuelled uncertainty, to develop the ideas and intellectual property that will inspire and drive our future in the fourth industrial revolution.
As well as providing this foundation for the catalysts of the fourth industrial revolution, Government must also protect its fruits: British IP, business, manufacturing and supply chains. We simply cannot afford to be hands-off and allow a world-class tech business such as ARM Holdings to be sold to the Japanese. We cannot run a successful, growing economy and secure the investment it needs if we allow our crown jewels to be sold off.
Just in the last year, I have seen the huge difference in impact between a hands-off approach to government and one that is active. The British steel industry, so important to my constituency, has been failed time again by our Government. The Government did not act to block the dumping of state-subsidised Chinese steel, when they could have done. The Government did not encourage investment or profitability by keeping a regressive business rates regime and uncompetitive energy prices. Yet when the Government and the state do step up to shape our future and provide a foundation for our success, British talent can deliver great results.
In my view, we need to reform the Companies Act, placing a clear national interest clause and a method of monitoring and executing that clause, so that we move away from situations such as we saw with Pfizer attempting to take AstraZeneca. I am very thankful that the previous Leader of the Opposition did a great job in preventing that from happening, but it is very ad hoc and we need a national strategy to protect our national assets, particularly where they play such a key role in the research and development that drives the entire economy, and indeed the fourth industrial revolution.
In Aberavon, we have a remarkable company called SPECIFIC that works to turn buildings into power stations. It is developing steel-based coatings for buildings—roofs, walls, glass and so on—which can generate and store their own electricity, and it works. We already have an industrial site in Port Talbot that has been generating all its heat through solar power like this for three years. All of this is done thanks to a partnership between business, universities, industry and, yes, the state. The SPECIFIC project is a living, breathing example of the fourth industrial revolution in action, and it required the proactive support of Government. Without the support of Innovate UK, the EU and the Welsh Assembly Government, this project would not have got off the ground. We will be able to make every region of the UK a leader in the fourth industrial revolution only if the Government see building launch pads for our people and businesses as part of their role, in order to allow them to succeed.
I close by quoting my old boss at the World Economic Forum, Professor Klaus Schwab. He said:
“In its most pessimistic, dehumanized form, the Fourth Industrial Revolution may indeed have the potential to ‘robotize’ humanity and thus to deprive us of our heart and soul. But as a complement to the best parts of human nature—creativity, empathy, stewardship—it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny.”
That is the prize of the fourth industrial revolution, but only if we make it so.
Vielen Dank, Madam Deputy Speaker. I am delighted to be here and I thank you very much for making time for me to speak. I had intended to make only a brief comment, but the conversation this afternoon has inspired me to speak for a little longer. Many elements have been touched on, some of which took the theme from Voltaire that the Minister raised, and many of them are Panglossian. There is, however, a darker side to the fourth industrial revolution, and it relates to the element of protection.
I want to cover two areas of protection. The first is a legal one that will be obvious to many Members of the House, and it relates to the nature of patent law. The point of a patent is to do what Newton told us he did—namely, to stand on the shoulders of giants. It is to allow people to create ideas, to enjoy a monopoly on them for a brief period and to allow others, through knowing that secret, to build on it, thereby benefiting the whole of society. Patents are really important, and they will therefore be extraordinarily important in inspiring this next phase, the fourth industrial revolution. However, they will work only if they inspire those people who are actually coming up with the ideas to continue to do so.
The current system of patent law, not only in the UK but, sadly, in the United States, Europe and many other parts of the world, states that we will guarantee that monopoly for whatever the period is—it is usually about 20 years around the world—to the first person who hires a lawyer, goes to the patent office and registers his or her claim, thereby guaranteeing their rights for the future. I am afraid, however, that that is an error, and it is one that many countries make. We have done this because it sounds logical. It sounds sensible that the first person to register their claim should be the one to benefit, but it should be the first person to invent who benefits.
This might sound as though I am being casuistic. What is the difference, after all, between invention and filing, when all the inventor has to do is to hire a lawyer? Well, that is easy if you are a large company that has lawyers on tap and can afford these procedures. But what about the small companies? What about Google, when it started out in a garage a number of years ago? What about Apple, which started out in a garage 30-odd years ago? What about a small company such as Sir Torquil Norman’s vehicle company? Such companies come up with many ideas, but they do not know which will be of any value so they do not invest in the legal protection that their ideas deserve.
Instead, those small companies start talking about an idea to people who understand the industry and to potential investors. They try to attract interest in their idea. In doing so, without even thinking about it, they put their own rights at risk, because if someone else takes that idea and registers it, it is then theirs. The fact that the small company came up with it a day, a month, a year or 10 years beforehand—and can even prove that it did so—does not guarantee its claim. It is, after all, the first to file who gets the patent, not the first to invent. Given that we are now discussing technology that can be invented, as pointed out by Peter Kyle, by those under-16—let alone by older apprentices—it is important to remember that their rights should not be diminished simply because they do not understand the finer points of patent law. I urge Her Majesty’s Government to look hard to see how we can adjust the law to protect all.
My second point is one that I wish I did not have to touch on and one on which this Government have rightly already done much: the protection of our nation’s right to develop ideas and not have them stolen by foreign companies or Governments or by those who simply seek to use commercial espionage—or state espionage—for commercial gain. I am pleased to see that the Government have already gone some way on this matter, but I urge them to go further.
The position that GCHQ holds today in the UK is essential, but it is not the position that it has held for the past 100 years. Over the past century, GCHQ has quite rightly guaranteed the signals intelligence of Her Majesty’s Government. It has protected our communications to our armed forces, our embassies and our friends. It has perhaps done something to ensure that we know a little bit about what is going on elsewhere. Now, however, GCHQ’s role is different or, rather, has expanded.
It would be right today not to think of GCHQ as an intelligence agency in the traditional sense, but rather more like the Royal Navy between the 18th and 20th centuries. Today, it is GCHQ that guarantees the economic routes of communication in exactly the same way as our battleships once did while guarding the strait of Malacca, ensuring that the coast of Africa was free of pirates, and keeping the Mediterranean free for trade from all nations. Today, those sea lanes are electronic highways and those ships are concrete and based in Cheltenham. The sailors, who are now coders, are no less essential to our economic future. As we talk about this fourth industrial revolution, it is vital to remember that we must think about the protection of ideas in all senses both legal and, sadly, through intelligence.
It is a pleasure to speak today in this interesting and far-reaching debate that was brought forward by the hon. Members for Havant (Mr Mak) and for Hove (Peter Kyle). The debate is fundamentally about technological change.
There is a proud industrial past across my constituency. In fact, the town of Bo’ness can justifiably claim to be the birthplace of the first industrial revolution—I suspect that many other constituencies are staking such a claim today.
The hon. Gentleman has just claimed to be the representative of the birthplace of British industry, but I must confess that I am the representative of the birthplace of British industry. I hope that he will agree.
I thank the hon. Lady for proving my point.
James Watt, who hailed from Greenock in the constituency of my hon. Friend Ronnie Cowan, constructed his first steam engine for Dr John Roebuck of Kinneil in 1768, and the rest as they say is history.
My constituency has not been a stranger to the changes brought about by subsequent industrial revolutions—or to decline. Indeed, much of the 20th century was marked by the demise of heavy industry and the loss of jobs. For many people, the name Bathgate still to this day conjures images of large-scale closures at British Leyland in 1984 and more recently at Motorola in 2001. We must learn from those experiences and ensure that the legacy of the coming revolution is not another round of job losses and increased inequality.
With that in mind, let me say that I welcome the UK Government’s decision to put industrial strategy back on the policy-making agenda. I also support the introduction of programmes that assist businesses in delivering greater economic growth. That said, I am concerned by the uncertainty caused by the UK’s decision to leave the EU, which affects firms’ planning for key investment decisions. Any such delays may weaken an industrial strategy.
In Scotland, the SNP Government have put forward ambitious policies, such as the action plan for manufacturing, to fully realise Scotland’s manufacturing potential, encouraging innovation and skills development, while promoting inclusive growth. As industries evolve, so, too, must the firms that support them. One good example from my constituency is Sibbald Limited, at Blackridge, a firm that has continued to move with the times and is one of the leading providers of training in the construction sector in the country—indeed, it provides construction industry and plant training worldwide. As the fourth revolution develops and processes become increasingly sophisticated, specialist training becomes ever more crucial.
When I grew up as child in West Lothian, not all that long ago, the landscape was littered with shale bings and scenes of industrial decay. What is now being achieved technologically was the stuff of sci-fi shows such as “Star Trek”, which is 50 years old today; there will be a free screening of “The Wrath of Khan” in Linlithgow on Saturday, with Linlithgow being the future birth place of Scotty. The growth of phone apps and world interconnectivity take things to an entirely new level, with personally tailored solutions designed to fit individual user needs. One such modern solution has been developed by another local firm, Silent Seminars in Grangemouth, which has an assistive listening system technology. When that was used during the Edinburgh Hogmanay party last year, it was the first time this tailored service solution had been used at an outdoor music event in the UK, and it allows people with hearing impairments, who may not usually be able to attend live concerts and such, to enjoy shared social experiences with their partners, friends and families.
I am fairly certain that we have arrived at the early stages of the fourth industrial revolution, but large parts of the world have still to experience the second industrial revolution; about 1.3 billion people still lack access to electricity. One thing is certain: we will be in the thick of this revolution for decades to come, and the pace of change will be like nothing before. Where society ends up is anyone’s guess. We need to ensure that such a pace of technological advances reduces, and not magnifies, social and gender inequalities, both locally and globally. Indeed, a long-term comprehensive strategy must be developed to tackle that.
It is predicted that we are witnessing an internet of things, and it is suggested that 30 billion devices or more, covering all aspects of our lives, will be connected to the internet by 2020. This, in turn, will be opening up an unprecedented level of remote control management. Unlike James Watt, whose work at Bo’ness required the nearby Gil Burn to provide a plentiful supply of water, today’s engineers will be able to work remotely, but let us make sure people are not isolated and left behind. We live in exciting times, filled with many challenges and opportunities, so let us make the most of them.
It is always a pleasure to speak with you in the Chair, Madam Deputy Speaker.
I congratulate my hon. Friend Mr Mak on securing this very important debate and on his motion, which notes the importance of small and medium-sized businesses, the huge contribution they make and their expertise. The motion also calls on the Government to
“continue introducing and supporting policies that keep the UK at the forefront of this revolution”.
I wish to add to that, as I think we will need policies that support small businesses and let them take advantage of these opportunities in the future.
I welcome the opportunities that this industrial revolution will bring, but I have niggling concerns. I will always be a champion in this Chamber for small business, having set up my own business in 1992 and then several technology businesses later on, with varying degrees of success. Business is a huge opportunity for this nation and for individuals, and it can transform the lives of people right across this land, whatever their background. There is also an opportunity for the consumer here, of course, as this technology revolution in particular is transforming the way in which consumers shop and travel, and how they can socialise. We need to look at how some of these channels will be dominated by huge businesses and at the potential opportunities—or even the lack of opportunities, which I am most concerned about—within their supply chains for small business.
Let me touch briefly on the pipes that we need. My hon. Friend James Heappey talked about ensuring that the country has the right infrastructure, and this is about mobile phone communication—not just 4G but 5G—and our broadband. We do not want a sticking-plaster approach, because we need to get fibre not just to cabinets, but right through to premises. Only 2% of premises in the UK have a fibre-to-the-premises connection, which is the futureproof solution that we need. In Spain, the figure is 60%. I have welcomed the Government’s £1.7 billion investment in this area in the past, particularly for rural areas, as it has made life much easier for many of my constituents and businesses. Nevertheless, I fear that we will hit the same bottlenecks in five and 10 years’ time unless we step up our investment.
Did my hon. Friend note the brilliant report on broadband that the Culture, Media and Sport Committee published in July, which highlighted the underinvestment by BT in the national broadband network that independent experts estimate to be in the region of hundreds of millions of pounds a year? That is directly attributable to the way in which BT’s investment policy is carried out, and it is to the detriment of shareholders.
My hon. Friend hits on one of my favourite topics: the culture of corporate obfuscation that we get from BT and its willingness to underinvest to maximise profitability. We absolutely need to get BT to up its game. I agree with Ofcom, which says that one solution is to open up the ducts and poles to other operators. Perhaps in future, when there are bidding rounds for Government investment, local authorities or the delivery authorities should themselves be held responsible for ensuring that third-party operators—smaller operators—get access to those ducts and poles in the local areas for which money has been committed.
The Government are supporting small businesses and innovations in many ways. As the Minister mentioned, there has been a 38% increase in investment in Innovate UK since 2010. Research and development tax credits have a hugely beneficial effect on companies that want to invest in new technologies. The enterprise investment scheme has unlocked investor capital for new start-up businesses and made such businesses possible on the back of these tax concessions. I support the retention and perhaps expansion of the concessions to make sure that we get new businesses to take advantage of these opportunities.
The failure rate for high-tech businesses is very high, but investors will countenance that because the rewards are also very high. Investors know that it is almost a winner-takes-all bet. They know that if they get it right, they can land themselves with an Amazon, a Google, an Uber, an Apple, or even a Rightmove or a Zoopla. In many sectors, there is either no competition or competition from just one other body, which puts those businesses in a hugely advantageous position.
In some areas of technology, business inevitably wins, and the other thing that will inevitably win is the machine. I spent my summer holidays reading a very interesting book by Matt Richtel called “A Deadly Wandering”, which talks about the ability of machines to multi-task. Richtel talks about the cocktail party effect. He describes a person in a conversation at a cocktail party. He says that it is not possible for them to listen to another conversation if they are truly engaged in their own conversation, as they can only do one thing at once. Apparently, they can recognise their name being mentioned, but that is about it. Computers, on the other hand, can do millions of things at the same time, and they can do them better. A new computer called AlphaGo was built to try to beat the world champion of the game Go. That is not just a game of logic, but a game of intuition, yet the computer beat the world champion Lee Sedol five times in a row. The computer hones its own skills. So machines will win and big business will win.
The biggest worry I have about some of the businesses that will win in the future is their ability to dominate the entire supply chain. Uber is a good example. When it first came along, we saw it as just something that connected people who wanted a taxi with people who were taxi drivers. Uber has been clear that in the future it wants to be the taxi driver as well. In fact, it does not want any taxi drivers; it will have autonomous vehicles, and will no doubt link up with huge car manufacturers. Toyota, Nissan and other companies are looking at this. Uber will be end to end, taking away small business opportunities from taxi drivers, delivery drivers and HGV drivers.
My hon. Friend is making a persuasive point. There will be a challenge to not only small businesses, but large businesses. After all, if someone can hail a cab for nothing at all, why would they own a car?
There are huge challenges ahead.
The situation is similar with Amazon, of course. Small businesses used to engage on the Amazon platform. A small business driver would pick up goods and take them to their destination; in future that will done by autonomous vehicles and drones. Amazon will completely dominate the supply chain, so where is a small business opportunity there?
In previous industrial revolutions, opportunities were created for small businesses—people repaired the looms and sold clothes to the people who had new well-paid jobs. I must disagree with Ronnie Cowan, who said that people had not benefited from the industrial revolution. Clearly living standards today are much higher than before the industrial revolution. Nevertheless, future opportunities for small businesses are a concern.
My hon. Friend is making an excellent speech. Does he agree that both for private residents and for businesses, if one of the characteristics of this industrial revolution is the pursuit of a zero marginal cost for energy, communications and transport, the reduction of those costs could give small businesses, large businesses and private citizens alike a great opportunity to enter a marketplace without those barriers to entry?
My hon. Friend makes a good case. In California, people are experimenting with something called a digital dividend. The money that is being made is paid back to people in the form of a dividend for which they do not have to work, but work is important. We want the opportunities; we want the work. We do not want to be redundant, sitting at home while machines do all the work for us. We must make sure that we make the most of the opportunities.
These advantages are locked in, as are tax advantages. The businesses that dominate these technologies are multinational companies that know how to work their way through the system. They circumvent corporation tax and also, arguably, circumvent employment laws. They also circumvent existing businesses and supply chains.
I am not King Canute trying to hold back the tide—this is an inevitability. We cannot resist this change, but the House must develop policies that create a level playing field and also opportunities. We must ensure that our tax system is fit for purpose for the challenges ahead and as we deal with multinational corporations. We must also support the growth of other industries that may spring up on the back of new opportunities that will inevitably be created. We must make sure that we use the opportunities available to us to keep opportunities open for small business.
I congratulate Mr Mak and my hon. Friend Peter Kyle on securing an important debate that has been very informative so far. I hope that it is a subject to which we will return many times in the future.
Before I talk a little about the future, I want to talk a little about the past. The title of this debate, “The Fourth Industrial Revolution”, evokes images of previous industrial revolutions, and of course the first, which began—whereabouts exactly has been the subject of some debate today. It has been romanticised. We should not forget the child labour, the decline in life expectancy, the exploitation and the unsafe practices that were all huge features of the early years of the industrial revolution. I am not suggesting for a minute that we are going to return to the days of the poorhouse, but history should act as a warning that change of the magnitude we saw in the first industrial revolution is not all positive, and we should be considering now how best to mitigate the negative impacts that a fourth industrial revolution may bring.
For as long as there have been technological innovations to ease the burden of physical labour, there have been dire warnings about the impact on jobs. Although the short-term impact of early automation was severe enough to lead to the Luddite riots of the early 1800s, in the main the dire predictions of what people such as John Maynard Keynes termed “technological unemployment” have proved to be unfounded. In the long run, technological innovation has always delivered more employment opportunities to the economy than it has taken away, but these processes have created winners as well as losers in the short term.
I for one am not prepared to take a chance that things will sort themselves out in 30 or 40 years. Unlike previous waves of industrial progress, this new wave of automation threatens jobs across the entire spectrum at a pace that is unprecedented and may well be impossible to keep up with. Studies by analysts such as Deloitte have predicted that 2.1 million jobs in wholesale and retail have a high chance of being automated in the next 20 years, and another 1.5 million jobs could be replaced in transport and storage in the same period. These sectors have seen considerable growth in the past few decades, but that now looks as though it could be dramatically reversed.
These predictions refer to the next 20 years, but change in some sectors will happen more quickly. For some, it has started already. There are plenty of examples, as we have heard in the debate today. We have also heard about trials by companies where the movement of all goods in a warehouse is performed by robots. We hear of driverless cars and of drones making deliveries, and in supermarkets the number of automated checkouts continues to increase.
The hon. Gentleman’s points are well made, but does he recognise that automation has lowered costs, which for so many of our constituents has been a blessing? The cost of television sets, food and any number of items in the home has dropped dramatically, meaning that people can enjoy so many more benefits of modern living than would have been possible even 50 years ago.
Of course automation has increased people’s ability to purchase high-spec goods and has led to higher living standards and greater comfort, but we have to remember that to buy those goods, people need an income. That is where my concerns lie.
Not only are jobs at risk in retail and logistics, but the professions are in trouble as well. A raft of new legal tools has been launched which automate functions that were once the preserve of clerks and paralegals. Further analysis by Deloitte has shown that the UK has already lost 31,000 jobs in the legal sector to automation, with a further 114,000 jobs set to go in the next 20 years. One futurist predicts that accountancy and law will go from being respectable, well-paid professions to barely existing in a generation. Although many will no doubt view a reduction in the number of lawyers as a good thing, it is difficult to see how there will be anything other than a loss of skilled professional jobs over the coming decades, which will limit opportunity for future generations.
This is in line with some economists’ predictions of an increasing polarisation in the job market, with the gap between high-skilled and high-wage jobs and everyone else continuing to grow. This is a trend that we are already seeing, and it is likely to accelerate as a result of automation and the development of artificial intelligence. Now that we have a pretty good idea of what is coming down the track, it is time for an honest appraisal of whether enough new opportunities can be created to bridge what could be a gaping chasm in the job market, and how we prepare our children for what will be a markedly different economy from that of today.
These are questions that need to be answered sooner rather than later if we are to avoid unemployment rates that would make the 1980s seem like a golden age. I am sure some will say that that is a rather dramatic statement, but I fear that unless we start to ask ourselves some fundamental questions about how we organise our society, we risk the creation of an unbalanced and unsustainable economy where the majority will face a struggle just to survive, and the insecurity that many feel today will become chronic.
The rise in zero-hours contracts, which we have heard about again today, is another example of the increasing casualisation and disposability of the workforce. What about pensions? How will people save for their old age if the insecurity of their whole working life is such that they cannot be sure they will earn enough to put food on the table each week? Not having the certainty or sufficiency of income to enable people to plan for the future is only storing up problems for us all in the long term. I agree with my hon. Friend Ruth Smeeth who said that there need to be clear regional strategies for investment if we are not to risk an unequal distribution of revolution and investment in our industries.
There are many ways these challenges could be tackled. In many ways, the availability of technology has already allowed us to change the way we work. We have seen a seeping of family life into work activity—the blurring of the lines between home and work life has already occurred. That could be a positive development, allowing people to work more flexibly, although there is a tendency at the moment for it to become a more convenient way of extending the working week. We are also going to see an increase in the flexibility of employment arrangements, as well as flexibility in the way we actually work. That will not necessarily be a good thing; it can lead to more exploitation, and I want this place to be challenging that exploitation now, rather than years down the line. A good start would be for the Government to start looking at implementing the Deane review on self-employment.
There are many ways we can look at this issue. A universal income has been talked about. We can reduce the number of working hours. We can change the way we view the world of work. This should be seen as a great opportunity to liberate people from their workplaces. Doing more of the same is not the way ahead for this country. I know that politicians tend to think in terms of four and five-year cycles, but if we can look beyond that, articulate a vision of what a fair and prosperous society would look like and then actually deliver that, we will have shown leadership that our country will benefit from for decades come.
There has been a bit of debate about where the first industrial revolution originated, so I thought I would take the opportunity to talk briefly about my constituency and why I consider it the birthplace of the first industrial revolution—I am never one to miss an opportunity to talk about Telford. It was in fact in Coalbrookedale, in my constituency, where the father of the first industrial revolution—the ironmaster Abraham Darby—developed the first blast furnace in 1709, using coke as his fuel, and the furnace is still there today, forming a key part of the Ironbridge Gorge industrial heritage museum. That was a major innovation, securing a transition to a new manufacturing process enabling the production of iron by a means we would today call smart manufacturing—of course, iron was the raw material on which the industrial revolution was built. Other revolutionary innovators, such as Thomas Telford, a civil engineer and architect of the local canals, bridges, railways and churches, followed in the ironmaster’s footsteps.
Today, Telford is a symbol of innovation and change, energy and optimism, and it is once again undergoing a revolution—once again leading the way with cutting-edge technology and advanced manufacturing. Today, we have Enterprise Telford, an innovative initiative that is successfully securing inward investment to a corridor of advanced technology and smart manufacturing processes. At the heart of Enterprise Telford is T54, a flagship site situated on the M54, just 12 miles from Jaguar Land Rover, in the west midlands. This site is successfully securing inward international investment. The Canadian-owned giant Magna’s subsidiary Cosma recently confirmed it would be investing in a high-tech car parts plant, creating 300 new jobs. Swedish-owned Filtermist opened its brand-new global headquarters on the same site recently.
The value of the fourth industrial revolution to Telford’s economy cannot be overstated. It is bringing high-skilled jobs, renewed optimism and record levels of employment —and all to an area that has never had it easy. The last blast furnaces blew out in the 1960s. The last of the mines were closed in the 1970s. Then Telford was hit hard by the recession in the 1980s and 1990s, becoming an unemployment blackspot, and it once again suffered in the recession of 2008-09.
Telford has a proven ability to adapt, innovate and evolve. The Telford spirit first shown by the ironmasters is ensuring that Telford continues to overcome obstacles, find solutions to problems, and never give up. Once again, Telford is leading the way. I pay tribute to the excellent work of council officers at Telford and Wrekin Council and to the Marches local enterprise partnership, which has worked so hard to make this possible. It is currently in the process of submitting a very fine growth fund bid to the Department for Communities and Local Government to further improve Telford’s ability to take advantage of the fourth industrial revolution through the Enterprise Telford initiative.
My right hon. Friend Sajid Javid, who visited Telford on many occasions when he was Secretary of State for Business, Innovation and Skills, has always paid tribute to its success and potential for growth in taking advantage of the new economy. He very kindly told this House in June that he will work with me in every way to secure Telford’s bright future. I mention this now because in his new role at the Department for Communities and Local Government he will be considering the bids for growth fund money. I will be reminding him of the fantastic work being done in Telford, and particularly the merits of the Enterprise Telford bid.
Revolution is all about new opportunity: the opportunity to press a reset button and start all over again. In any revolution, as Justin Madders eloquently said, there will be winners and losers, but in the fourth industrial revolution, as with the first, Telford is a winner.
I congratulate Mr Mak and my hon. Friend Peter Kyle on securing this Back-Bench business debate on this very important subject, and expressing my own personal pleasure in having the opportunity to respond on behalf of the Opposition on a subject that, as we have heard, we will no doubt return to many times over the coming years. I welcome the Minister to his place. I am sure that his time leading the Culture, Media and Sport Committee has imbued him with enthusiasm for all things digital. I look forward to hearing about the digital industrial strategy that he has promised us. I am sure that as well as being informed by the past, as his speech was, it will look to the future.
There has been some debate about the origins and the location of the first industrial revolution. Let me just say that it was growing up in the powerhouse of that industrial revolution, the north-east, that inspired me to become an electrical engineer before moving to this place. It is therefore with some pride that I have heard so many hon. Members describe how information technology is at the heart of the fourth industrial revolution. I have been hugely impressed by the technological insight and understanding displayed by so many Members in all parts of the Chamber. That is something that this House will increasingly have need of as we move into the fourth, and fifth, industrial revolutions. It reflects well on the House that we can have such a well-informed and wide-ranging debate on the drivers of that revolution.
Hon. Members have spoken about the incredible technological changes that we are witnessing and how they herald astounding new opportunities: increased connectivity, boosting productivity and social reach; open data, inspiring creativity, bringing together previously separate areas of the economy and empowering citizens; smart meters in our homes, putting us in charge of our energy usage, as well as smart networks and smart grids, improving energy consumption; the use of 3D printers, enabling manufacturing at home; increased automation in industrial manufacturing; and machine learning, making us work faster and create more, which is vital for the UK to stay competitive in the 21st century.
My constituents in Newcastle have seen local government lead on embracing those opportunities. Just last week, Newcastle City Council launched free outdoor wi-fi across the city, benefiting consumers, citizens and businesses and enabling them to reach out to new and improved markets.
As many Members have said, those opportunities also bring challenges. We have a new set of intermediaries, such as Uber and Deliveroo, whose workers are disempowered and to whom they are unaccountable. How much real power does the Uber driver have in relation to Uber? This informal gig economy gives workers little security and few rights. These new business models can also put downward pressure on wages and move business risk on to ordinary people, causing stress and a lack of security, as my hon. Friend Ruth Smeeth has said.
In addition, citizens and consumers face threats to their identity and data. For example, to download an application from the Google Play store, people must first have a Google account, which is used to identify and control their device. How many consumers know that? Indeed, how many MPs in this Chamber right now know who has their data and what they are doing with them? How can we give citizens the skills, as well as the necessary connectivity, to participate fully in the digital economy?
The rise of the algorithmic software application brings many of those challenges to the fore. I have been told that a well-known web-dating application has optimised its match-making algorithm for short-term relationships. That maximises its revenues but leaves consumers entirely powerless to verify where the interests of that algorithm lie.
I am proud that I was the first MP to mention the internet of things in this House. I did so more than five years ago and I believe that it can change our lives more than any technology since electricity, but its lifeblood is data and we have no legislative framework for that. All those challenges have huge implications for the economy and our society, as Members have said. Low, unstable wages prevent people from participating fully in the economy, and they remove demand from it. They also bring higher costs to the public sector, either through a larger demand on benefits or increased reliance on public services. Vulnerability to hacking destroys businesses and livelihoods; it creates instability, which is exactly the opposite of what we want for the economy in the years ahead. In addition, if citizens lack confidence in what happens to their data when the entire economy is digital and based on data, they will lack confidence in our economy.
On skills and connectivity, the digital divide means that whole groups could find the new economy inaccessible. The ever-expanding digital world should be designed not only for a small segment of the population.
I am a digiphile and proud of it, but digital power has not even begun to be distributed fairly. We need more women in technology and better representation of working people and ethnic minorities, so that the fourth industrial revolution represents us all. In fact, the fourth industrial revolution needs a Labour movement to go with it, to create a truly progressive digital economy and to protect those who work in it. Harold Wilson said in his famous 1960s “white heat of technology” speech that innovation is driving us in a new direction, but we need leadership to embrace the changes and to ensure that that direction is for the benefit of us all. The Government’s Digital Economy Bill would be the perfect opportunity to provide such leadership, but it is a squandered opportunity. The Government are managing simultaneously to bury their head in the sand and to jump on any passing bandwagon; that is quite an achievement.
On broadband infrastructure, the Government tendered for failure, designing a process heaped with delays that managed to pay BT to create a new monopoly, which still does not meet the needs of the British people. On data rights and fraud, the Government refuse to deliver a legislative framework that people can understand and rely on. The new digital age needs a new set of digital rights. Who owns my data? Who owns my identity? That requires active participation by digitally savvy citizens, consumers and workers.
As my hon. Friend Stephen Kinnock has said, while the Government should be setting out a vision for our digital future—one that encompasses the new Department for Business, Energy and Industrial Strategy, Innovate UK, the research councils, the manufacturing catapult, which the Minister mentioned, and the digital catapult, which I do not think he mentioned—they are instead squabbling over their un-plan for Brexit. We have been told that “Brexit means Brexit”, but we have been given no details about what that will look like.
On immigration, the Prime Minister has ruled out a points-based system, but she has given no indication of how the UK’s flourishing technical sector, which is part of the basis for the fourth industrial revolution, will be able to employ or retain people with the skills that it needs. The Government are also failing to make plans to bring the benefits of the digital single market to the UK. The Government need to focus on the new economy. They must respond to the challenges of identity, data, algorithms, labour rights and digital inclusion.
We must not suffer from the faults of the first industrial revolution, which my hon. Friend Justin Madders highlighted. We do not want the modern-day equivalent of nine-year-olds going down mines, or of limbs being lost in the unguarded looms of the workplace. Labour Members will work to bring about a progressive industrial revolution, and we hope that Conservative Members will see the future and want to be part of it.
We have had a positive, insightful and wide-ranging debate, and I thank Peter Kyle for co-sponsoring the motion. He gave an eloquent and impressive speech, and I was particularly pleased to hear references in it to Margaret Thatcher. The hon. Gentleman is a great credit to his party.
I thank the Minister for his full response. I was heartened by his commitment to ensuring that the fourth industrial revolution has an important place at the heart of the Government’s new industrial strategy. As the Government move forward with their proposals, it is important to make sure that the fourth industrial revolution is built in, and not bolted on, to their strategy. I was particularly heartened to hear about the Minister’s personal involvement in the fourth industrial revolution, including his flat-pack car, which I look forward to seeing in action.
I thank all hon. Members who have spoken, from across the House, for their speeches and for the time and thought that they have put into preparing for today’s debate. It was good to hear about the excellent examples—whether local businesses, universities, research centres, enterprise zones or other forms of engagement—from constituencies across the country of engagement in the fourth industrial revolution. This must be a national success, not just a regional one. I thank the Opposition Front-Bench representatives for their contributions, because this is an important cross-party issue.
Britain is in a strong position to become a world leader in the fourth industrial revolution. We must adopt the pro-free enterprise, pro-innovation approach that has given the country success in the past. I thank the House for the opportunity to debate this important issue.
Question put and agreed to.
That this House
acknowledges that the UK is in a strong economic position to take advantage of the Fourth Industrial Revolution;
welcomes the view of the World Economic Forum that fusing physical, digital and biological technologies can promote further economic growth;
notes that small and medium-sized businesses across the country contribute invaluable expertise and market leadership;
and calls upon the Government to continue introducing and supporting policies that keep the UK at the forefront of this revolution in the future.
On a point of order, Madam Deputy Speaker. As you will be aware, very important concerns have been raised in House about the leaking of a draft report from the Committees on Arms Export Controls, of which I am a member. I share the deep concerns about the leaks and their ability to frustrate our proceedings. May I ask you, first, to provide us with an update on that process?
I wish secondly to raise a separate matter relating to the Committees on Arms Export Controls. Madam Deputy Speaker, you will be aware that the Committees are formed of four constituent Committees—the Defence Committee, the Foreign Affairs Committee, the International Development Committee and the Business, Innovation and Skills Committee, which I am sure will be replaced by the new Committee. Members of all those Committees are allowed to attend the Committees on Arms Export Controls, to take part in their proceedings and to vote. Given the very serious matters that the Committees are investigating at the moment, is it in order for their members to withdraw from the proceedings at a crucial moment to frustrate other members moving on to formal consideration of such matters in the Committees—they declared that they were withdrawing with the express intent to prevent such proceedings from taking place—with the knock-on effect that other members of the constituent Committees were not therefore able to speak, vote or take part in the further proceedings of the Committees? Is that in order, because it seems to me that it is not? These are very important matters, and Parliament should be able to proceed in holding the Government to account.
I thank the hon. Gentleman for notice of his point of order. I am aware that he has spoken to the Clerk of the House and the Speaker’s Office. The hon. Gentleman is aware that this point of order was raised both yesterday and earlier today, and the Speaker gave a very full response on both matters the hon. Gentleman raises.
On the first matter, there has not been an update, other than what the Speaker said during points of order today. He was very clear to say that this is not actually a matter for the Chair. It is not for the Speaker of the House of Commons to decide what is proper conduct or what is disorderly in Select Committees. Individual members of Committees are certainly allowed to leave whenever they want to. Again, whether the timing of that has been decided elsewhere is not a matter for the Chair—either me or, indeed, the Speaker.
The Speaker has said very clearly that it is for the Liaison Committee to look at this matter and then for the Committee concerned to decide whether it is serious enough for it to make a special report which would be referred to the Privileges Committee. That is the proper way to proceed. If the hon. Gentleman looks at Hansard, he will see a very full exchange between the Chairs of the Foreign Affairs Committee and of the Defence Committee and Mr Speaker during points of order today. I refer the hon. Gentleman to the answers that the Speaker has given. I thank him for advance notice of his point of order.