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Industrial Strategy

Part of Laser Misuse (Vehicles) Bill [Lords] (Programme) – in the House of Commons at 4:49 pm on 18th April 2018.

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Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy) 4:49 pm, 18th April 2018

No, I will not give way. I did say earlier that I would limit the number of interventions. I have a lot to say on this subject, and I am wary about people taking too much time early in the debate.

Carbon capture and storage technology should play a leading role in tackling climate change, yet the UK Government have been complicit in stifling investment to develop this technology, as well as showing a lack of interest in developing and protecting jobs in Scotland. We wholly condemn the decision to cancel the CCS competition, which left Peterhead betrayed, resulting in a damaged relationship between Government and industry as well as a negative legacy on investment and consumer confidence.

We have heard warm words about new investment in CCS, and I welcome that, but what I say constructively to the Secretary of State is that one tenth of the previous required investment will not cut it in terms of making the difference that needs to be made. Sustainable energy has been a success story for Scotland in recent years, and the Scottish Government have set out an ambitious strategy for renewable investment with the powers at their disposal. We firmly believe that supporting long-term energy security and environmental protection should be a key priority for any responsible Government. A robust and sustainable strategy for energy security would not only assist the creation of a low-carbon future, but boost productivity, which has largely flatlined in the UK for far too long.

Scotland’s oil and gas industry still has a prosperous future ahead of it, but support is needed to maximise the longevity and success of this dynamic industry. The industrial strategy has failed to mention any new developments in the oil and gas sector. Although I understand that work is ongoing to develop a sector deal, we remain in the dark about what this might look like. Furthermore, Brexit again poses a risk to the development of this vital sector. The Oil and Gas Institute at Robert Gordon University in Aberdeen has said that the departure from the EU bloc is likely to cost the North sea oil and gas supply chain another £200 million a year in tariffs and export taxes. It is time for the Secretary of State to show the same level of support for the oil and gas sector that has been mooted for the automotive and aviation sectors.

The UK Government have ploughed ahead with costly and ineffective investments in nuclear energy projects such as Hinkley Point C at the expense of the rest of the industry. The UK Government must halt the agenda of unexpected, cherry-picked and damaging announcements and policies in favour of making this a thorough industrial strategy for the supply and demand of energy.

I know that I will please the hon. Member for Spelthorne by saying that the UK Government must now invest more in science, and in research and development. More than 50,000 international students study in Scotland, which is home to 19 educational institutions. The Scottish National party is incredibly proud of Scotland’s world-class university and higher education sector, and will support the necessary steps to ensure that it remains open, outward-looking and inclusive, yet the industrial strategy offers no assurances that this relationship will be protected. I again ask the Secretary of State to make his Government take the opportunity to do this.

Science, and research and development, have the potential to thrive further in Scotland. For example, the life sciences sector in Scotland could be worth £8 billion a year by 2025, according to industry groups. Although we welcome the sector deal for the life sciences, it is particularly worrying that it was agreed without any consultation with the SNP Government. That must not be replicated in any other sector deals.

On trade and inward investment, being a member of the EU means that Scotland’s businesses are operating within the world’s largest trading area of 500 million potential customers. The EU single market is eight times bigger than the UK’s alone. Moreover, trade with EU countries is becoming more important for Scotland. Since 2007, Scottish exports to the EU have grown by more than 25% to more than £12 billion in 2015. Although some steps are welcome, including the creation of an inward investment strategy, the mechanisms offered to overcome the challenges do not go far enough to alleviate the threat posed by the loss of EU single market membership and the trading partners that come with it. The Government must stop their reliance on rhetoric about trade and investment needs, take action to acknowledge the industry’s concerns and work constructively with the Scottish Government to maximise inward investment as part of a genuinely co-operative approach.

Members of the SNP have a shared goal: to make Scotland the best place to live, work and do business. Although the UK Government have overall responsibility for the economy, we will use all the powers that we can in Scotland to try to achieve this. The SNP has had a plan with trade and investment, manufacturing, innovation and employment at its heart for a number of years, and the recent enterprise and skills review aligns its agencies and resources behind those plans.

Since 2007, the Scottish Government’s central purpose has been to create a more successful country through increasing sustainable economic growth. That remains our ambition and is at the core of our single economic strategy, which was published in 2015. The strategy sets out the overarching economic approach of the Scottish Government and is backed by a series of policies to boost economic performance. We are supporting business and growing Scotland’s economy by focusing on investment, internationalisation, innovation and inclusive growth; building on the successes of our enterprise and skills agencies; and developing a system of support for Scottish businesses and the economy.

An overarching strategic board is now in place that will maximise the impact of the collective investment that we make in enterprise and skills development, and will create the conditions for delivering inclusive growth. We have also created a new enterprise agency in the south of Scotland with an interim economic partnership in place, backed with £10 million of investment. We have appointed Benny Higgins to lead the work to establish a Scottish national investment bank to support investment growth, among many other measures.

I have a lot more to say, but I am going to cut my speech short in order to aid progress. On fairness, we have put in place progressive social policies in Scotland. With the cost of living rising, our commitment to our social contract with the people of Scotland is more important than ever, and vital for economic prosperity for all. Conservative Members have referred to the changes to income tax. Indeed, this will make Scotland the fairest-taxed part of the UK, with the majority of taxpayers paying less than elsewhere in the UK. Compared with last year, everyone earning less than £33,000 will pay less tax in Scotland. By choosing a fairer path on taxation, we will protect Scotland’s cherished public services.

Given that the cost of living is rising, we will deliver a minimum 3% pay rise for public servants earning less than £36,500—75% of public sector workers—while those earning more than £36,500 will receive a 2% rise, and a cash cap will be put on increases for those earning more than £80,000. There is new investment to ensure that Scotland is the best place to do business and invest. We are investing an extra £100 million to deliver the best business rates package in the UK, increasing investment in business research and development by 70%, and making a £4 billion investment in vital infrastructure—and doing much more to build a fairer Scotland.

Finally, I have some asks for the Secretary of State. Will he take on board Scotland’s concerns about Brexit and its industrial strategy? The risks are real, as he knows, and they threaten the economy and people’s incomes. With his overarching responsibility for the success or failure of the UK nations’ economies, will he acknowledge that Scotland’s economy, like those of the other nations of the UK, is unique, and will he engage in a meaningful way with the Scottish Government on the industrial strategy so that we can maximise the benefits for all and support some of the key sectors that I have outlined? Does he recognise that we need inclusive growth to prosper and will he ask the Government to put an end to austerity policies that are damaging the lives of thousands of families across all the nations of the UK?