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Industrial Strategy

Part of Laser Misuse (Vehicles) Bill [Lords] (Programme) – in the House of Commons at 5:14 pm on 18th April 2018.

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Photo of Adrian Bailey Adrian Bailey Labour/Co-operative, West Bromwich West 5:14 pm, 18th April 2018

I welcome this industrial strategy for two reasons in particular. First, it recognises that business productivity is vital for growth, competitiveness, our standard of living and the funding of our public services. Secondly, it acknowledges that the hidden hand of free-market competition is inadequate to ensure that market forces will deliver resources in a way that will both maximise our economic potential and meet our social needs.

I am less convinced that the strategy fully grasps and incorporates the challenges that come from recognising that our taxation policies, public spending priorities and regulation are all vital to our productivity. An industrial strategy is vital to ensure that they underpin and help, not hinder, our objective.

I acknowledge that balancing conflicting public priorities with the need to promote our productivity is not always easy. Different Departments have different priorities, but the success or failure of the strategy will ultimately depend on the ability of the Department for Business, Energy and Industrial Strategy to get other Departments to sign up to and promote the strategy’s objectives in their departmental priorities. My right hon. Friend Mr McFadden raised that issue, and the Secretary of State made reassuring noises, which was good, but I must mention one or two obstacles that have emerged since the strategy’s publication and cause me grave concern.

I represent a constituency that is heavily dependent on the success of the motor industry. Indeed, it has been a great success, with 70% of the cars that are manufactured in Britain—we are almost at record levels—exported abroad, including 56% to Europe. Productivity in that industry is vital to our national productivity and our balance of payments. Leaving aside the industry’s issues around Brexit, the ill-considered and hasty announcement by the Department for Environment, Food and Rural Affairs on the target abolition of diesel engines, however worthy, has caused havoc in the industry. The Society of Motor Manufacturers and Traders has aptly called it the demonisation of diesel. Arising from that, Jaguar at Solihull is laying off 1,000 workers and Vauxhall is closing 326 dealerships. That is hardly a ringing endorsement by other Departments of the strategy’s importance.

I fully understand the support for research and development and the extra funding for life sciences, but the strategy fails to recognise that success will depend on recruiting from schools students who take STEM subjects. There is an acute shortage of those, and although the problem is partly cultural, it is also due to the inadequacy of school funding for delivering the necessary courses and equipment.

We have some of the best universities in the world—I am not talking down Britain; they are terrific. However, to maximise their potential, they need to be able to recruit the best brains from all over the world. Unfortunately, as a result of the Home Office visa regime, there is currently a perception that Britain is no longer the best place to come for would-be students from other countries. We are taking a declining proportion of an expanding market. The Windrush scandal has exposed the culture of the Home Office, which does not seem to be signed up to the crucial objective that the strategy and our economy need.

I could mention many other aspects, but in the time available, I will finish by considering another element that I welcome: the independent strategic council—effectively, an Office for Budget Responsibility for the strategy. It is designed to develop and measure success and evaluate strategic performance. It could be crucial, but I emphasise to the Minister that it must not just be a monitoring body. It must be tasked with identifying blockages to performance not just in BEIS but in other Departments as well. How it develops will be a test of the Government’s commitment to the strategy. I suspect it will become more unpopular the more successful it is. It is a challenge, and I wish it well.