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Industrial Strategy

Part of Laser Misuse (Vehicles) Bill [Lords] (Programme) – in the House of Commons at 6:08 pm on 18th April 2018.

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Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Infrastructure and Energy) 6:08 pm, 18th April 2018

The Secretary of State, in his opening remarks, made several mentions of UK success in terms of Nobel prize winners, so I just want to remind the House that Kilmarnock Academy, in my constituency, is one of the few schools in the UK that has educated two Nobel prize winners.

I welcome the publication of the industrial strategy and the fact that the original consultation document recognised some of the failings in UK industry, particularly on productivity. However, the strategy has a glaring omission regarding the challenges—Brexit. The industrial strategy seems to pretend that Brexit is not happening, even though the UK Government’s own analysis shows it will have an impact on the UK economy. We need to know what is going to happen to R&D collaboration and to R&D funding, and we need to take action to mitigate any impact.

We also need to know what is going to happen to other funding streams, such as European regional development fund moneys. In my constituency, industrial engineering units are constructed with the aid of the ERDF moneys. What is going to plug that gap in future? What are the UK Government going to do to provide that assistance to the areas that need that development money? I welcome the industrial strategy’s principles, including the sector deals but, as my hon. Friend Drew Hendry said, the Scottish Government need to be involved and properly consulted on them. They were not consulted on the advanced life sciences sector deal. If they were properly consulted, I am sure we would already have an oil and gas sector deal.

Let us look at what the UK Government have done in recent years to support the oil and gas industry. In the spring 2016 Budget, they reduced the supplementary charge to 10%. That was welcome, but the £1 billion that that cost the Treasury was only a third of the inheritance tax giveaway to millionaires. That shows the Government’s real priorities. In the spring 2017 Budget, there was a paragraph promising another discussion paper. We are still awaiting the appointment of an oil and gas ambassador. In the November 2017 Budget, the transferable tax history mechanism was a welcome measure for the oil and gas industry, but it is predicted to bring an extra £70 million into the Treasury, so it is hardly a concession; it is actually a positive move. Actions are always stronger than words, and so far the UK Government have failed to provide the broad shoulders that we were told about. In the same period, they pulled £1.5 billion from the carbon capture and storage scheme in Peterhead.

Another innovative and possibly world-leading energy project is the proposed renewable energy plant at Grangemouth to replace the existing end-of-life gas turbine station. The new proposals include biomass, which means the project needs access to renewable heat incentive funding and contract for difference funding. Right now, however, the UK Government are seeking to cap the RHI funding available to any scheme at 250 GWh, which would make the project completely unviable. I urge the Secretary of State to do everything he can to make sure that the project goes ahead.

The industrial strategy rightly highlights offshore wind development via the catapult, which is welcome. With onshore wind currently at £57.50 per MWh, we clearly need to continue in this direction, because that provides much better value for money than Hinkley, at £92.50 per MWh. I repeat the plea for onshore wind projects to be allowed to bid in future CfD auctions. That would reinvigorate the industry and provide a boost to engineering and fabrication companies throughout the UK.

Another sector deal that I welcome is the one for the construction industry, which will provide high-paid jobs, but, as I highlighted earlier, the £24 billion giveaway in corporation tax would be better used in the construction industry and would double the money available for the national productivity investment fund over this Parliament. I have one more plea: we really need to see the Ayrshire growth deal happen.