28/02/2017

:00:00. > :00:00.the government proactivity plan. The question is as on the order paper. I

:00:00. > :00:00.would welcome the opportunity for this house to debate the

:00:00. > :00:08.supplementary Estimates affecting the Department of business, energy

:00:09. > :00:13.and industrial strategy, an honour and pleasure to chair this committee

:00:14. > :00:16.and I'm fortunate to lead a committee with excellent honourable

:00:17. > :00:34.members and I see some of them in the Chamber today. HE LISTS NAMES

:00:35. > :00:40.And what we try to do, as well as remembering the constituencies, is

:00:41. > :00:45.to work out together to put in place policies so workers have high wages,

:00:46. > :00:49.higher skills, protection, working in firms that are productive,

:00:50. > :00:54.competitive, profitable and have barriers to scale up and removed.

:00:55. > :00:58.The title of the debate references the governments productivity plan

:00:59. > :01:02.and I will come onto that at the moment. However, given the debate is

:01:03. > :01:07.about the estimates, I want to mention a couple of points regarding

:01:08. > :01:14.them. On a broader point, in my time in this house, it has struck me as

:01:15. > :01:19.odd, concerning, that billions of pounds of taxpayers money voted

:01:20. > :01:23.through on the nod without any debate, scrutiny or challenge. This

:01:24. > :01:26.debate is about government proactivity and most of the

:01:27. > :01:32.contributions will be on that document that is over to becoming

:01:33. > :01:38.obsolete. At the end of it, we are asked to approve billions of pounds.

:01:39. > :01:42.The manner in which estimates are presented are opaque and unhelpful,

:01:43. > :01:46.difficult to follow the money. Departments produce annual reports

:01:47. > :01:52.which are more helpful asking -- and scrutinised by Lex committees and

:01:53. > :01:56.the NA oh conducts its own work but the point of this place is to

:01:57. > :02:02.scrutinise, challenge the executive and permit the government's wish to

:02:03. > :02:06.tax the general public and I'm far from convinced the current system

:02:07. > :02:10.allows that to happen in an effective manner so I look forward

:02:11. > :02:14.to the procedures committee coming up with more radical improvements in

:02:15. > :02:20.this area. Supplementary estimates reflect the machinery of government

:02:21. > :02:23.changes with business innovation and skills and energy and climate change

:02:24. > :02:31.can together and losing responsibilities for further and

:02:32. > :02:35.higher education and exports. They had savings targets of 16 and 17%

:02:36. > :02:42.respectably by 2020. The former business Department had business

:02:43. > :02:47.2020 containing proposals to make cuts in this period including

:02:48. > :02:50.regional growth, pushing the Northern Powerhouse and the closure

:02:51. > :02:53.of the Sheffield office. A large part of the savings from the old

:02:54. > :02:57.business Department was to be achieved through changing the way

:02:58. > :03:02.further education and higher education would be funded but given

:03:03. > :03:07.the changes this option is no longer available and so on the point I made

:03:08. > :03:10.earlier, regarding the opaqueness of the Estimates, it is impossible to

:03:11. > :03:15.tell based upon the information in front of us as to what the plans

:03:16. > :03:19.savings of the new department are and whether business 2020 is

:03:20. > :03:24.continuing. I asked the Secretary of State when he came before the Select

:03:25. > :03:29.Committee whether similar savings of 16 or 17% would be required and he

:03:30. > :03:37.confirmed that saying business 2020 was no longer available because it

:03:38. > :03:39.was a new department but did not offer an alternative. When I asked

:03:40. > :03:42.what things are Department would stop doing to make the cuts, the

:03:43. > :03:45.secretary of state said we will set out the proposals to the part that

:03:46. > :03:48.-- to the Department and the committee will want to see that and

:03:49. > :03:54.I'm happy to send them to committee, we take the opportunity of the two

:03:55. > :03:57.departments coming together, re-engineer the way the department

:03:58. > :04:03.is run to make sure you take advantage of the big opportunity to

:04:04. > :04:07.tie things up here internally. However, no such proposals have been

:04:08. > :04:11.brought forward. I would be grateful if the minister could outline in the

:04:12. > :04:16.response what the specific savings the new department have to make and

:04:17. > :04:21.precisely how he intends to make those savings, including what

:04:22. > :04:26.activities will be stopped. This is in the context of the supplementary

:04:27. > :04:35.Estimates before us, stating administration costs are rising from

:04:36. > :04:39.425 points ?6 million this year to ?528.5 million next year. But no

:04:40. > :04:45.explanation in the memorandum is given. Could the minister provide

:04:46. > :04:54.one? I turn now to the productivity plan, the fact regarding the

:04:55. > :05:01.performance is well rehearsed but it is worth reiterating. Productivity

:05:02. > :05:04.has stalled. GDP is 17% below the 35 year long-term trend and has

:05:05. > :05:11.exceeded the peak it reached prior to the global financial crash. We

:05:12. > :05:17.are falling further behind our major competitors, Al Puck -- output per

:05:18. > :05:23.hour in a G-7 was 18% below the G-7, the widest gap in productivity since

:05:24. > :05:27.records began in 1991. Within that statistic shows a marked difference

:05:28. > :05:33.between performance between ourselves and competitors. We are

:05:34. > :05:39.above Japan by 16 percentage points. Italy is 10% more productive than we

:05:40. > :05:45.are, the US and France are 30% more productive than we are and Germany

:05:46. > :05:50.is 36% more productive than we are. Of course, all developed countries

:05:51. > :05:58.productivity was badly jolted as a result of the global crash but the

:05:59. > :06:00.gap between our long-term productivity trends and our

:06:01. > :06:06.competitors in the G-7 is twice as big. Productivity gains the way real

:06:07. > :06:14.wage growth and living standards can rise. Dessie except where there is

:06:15. > :06:17.high unemployment, they have a higher proactivity figure but we put

:06:18. > :06:21.the people to work in lower value activities which is better than them

:06:22. > :06:26.being out of work because the best way to get a better job is to start

:06:27. > :06:36.off on a job that isn't a good one. I will respond in a moment. I do not

:06:37. > :06:40.think that helps living standards or constituents or the long-term

:06:41. > :06:44.competitiveness of the nation. It is little wonder given the intimate

:06:45. > :06:49.link between productivity and pay that recruitment said productivity

:06:50. > :06:56.isn't everything but almost everything. Reflecting this, wage

:06:57. > :07:01.growth has been anaemic, in a period 2007 until 2015, British workers

:07:02. > :07:05.suffered a bigger fall in wages than in any other advanced country with

:07:06. > :07:10.the exception of Greece. Average pay fell in real terms more than 10%.

:07:11. > :07:18.Under the same period, real wages grew in France by 11% and in Germany

:07:19. > :07:27.by 14%. Median pay for workers here is still around 5% below its

:07:28. > :07:30.precrisis peak. There has been a lost of wage growth for our

:07:31. > :07:35.constituents, British workers. And yet headline nationwide figures for

:07:36. > :07:44.productivity as concerning as they are masked stark differences in

:07:45. > :07:49.regional proactivity. The only other region with productivity above the

:07:50. > :07:53.UK average was the south-east of England at 9% above-average. The

:07:54. > :08:03.regions of the North, Midlands and the North East and others on the

:08:04. > :08:06.committee and the honourable gentleman for Warwick and Lymington,

:08:07. > :08:13.our regions have proactivity levels between ten and 50% below the UK

:08:14. > :08:16.average. In terms of the Nations cup productivity in Scotland which

:08:17. > :08:21.includes the constituency of the honourable lady for Edinburgh West

:08:22. > :08:25.is 2% below the national average whilst in Wales it is 19% below the

:08:26. > :08:30.average. Were it not for the performance of London and the

:08:31. > :08:34.south-east, the gap between ourselves and our major rivals with

:08:35. > :08:41.whom we compete for orders and trade and market share would be even more

:08:42. > :08:45.dire. I would like to comment that habitually in this place we look at

:08:46. > :08:49.productivity of ourselves against the G-7 but I recall a debate on

:08:50. > :08:52.this matter this time last year where I did some research into

:08:53. > :08:58.looking at medium-size countries like Norway where the productivity

:08:59. > :09:04.levels were significantly higher than any of the G-7 countries and I

:09:05. > :09:08.wonder if he will go on and elaborate and explore how the scale

:09:09. > :09:14.of these medium-size countries could be a factor for productivity? I will

:09:15. > :09:21.talk about scale when it comes to sizes of firms as opposed to sizes

:09:22. > :09:26.of nations but I think this is an important point. And the point I

:09:27. > :09:35.would like to make is I do not think this is a dry or dusty economic

:09:36. > :09:38.treaties. What it is is real and unsatisfactory productivity growth

:09:39. > :09:42.across the UK and that is affecting the living standards of our

:09:43. > :09:46.constituents for members on the Select Committee and the whole

:09:47. > :09:50.house. That is why we wanted to examine the government productivity

:09:51. > :09:55.plan. This is not about dragging London and the south-east back but

:09:56. > :10:00.moving the regions and nations closer to the economic performance

:10:01. > :10:04.of the capital. And it seems to me the particular distinctive structure

:10:05. > :10:09.of the economy also can be acting as a drag on economic performance. Four

:10:10. > :10:15.fifths of our economy is services, that is higher than any other G-7

:10:16. > :10:20.country. In the main, or that the service sector has driven economic

:10:21. > :10:25.recovery since the downturn, the sector in the main and in general

:10:26. > :10:29.tends to have lower productivity in manufacturing. Moreover, in the past

:10:30. > :10:34.30 years, we have seen a shift in the nature of the jobs in this

:10:35. > :10:41.country. For every ten Middle skills jobs disappeared in the UK in the

:10:42. > :10:48.1990s and the 21st century, for .5 of the replacement jobs for high

:10:49. > :10:53.skilled and 5.5 for low skilled. In Ireland, the ratio was 8-2 in favour

:10:54. > :11:03.of high skilled jobs. In France and Germany, the ratio was 7-3.

:11:04. > :11:09.The major nature of the economy and a school set, a major rivals are

:11:10. > :11:24.going higher up the value chain than we are. -- skill. Britain is a

:11:25. > :11:27.nature is not of shopkeepers then certainly of small businesses. The

:11:28. > :11:32.21st century the number of small businesses in the UK has increased

:11:33. > :11:37.each and every year by 3% to reach no 5.5 million. 2 million more

:11:38. > :11:41.businesses than in the year 2000. However the proportion of firms that

:11:42. > :11:47.employ people has fallen in the same period around about a third of

:11:48. > :11:50.companies in term 2000 to around a quarter to day. Micro-businesses,

:11:51. > :12:00.those enterprises employing fewer than ten people, account for 96% of

:12:01. > :12:03.all businesses in the UK. I think the domination of small businesses

:12:04. > :12:08.in the economy as a vocations for productivity levels. They cannot

:12:09. > :12:11.take advantage of economies of scale and have more difficulties in

:12:12. > :12:15.accessing finance for new products and process development and skill of

:12:16. > :12:19.activity. They may find it difficult to find the time not merely to

:12:20. > :12:24.fulfil existing orders but identify opportunities and secure bigger

:12:25. > :12:28.contracts both domestically and affecting both markets. They cannot

:12:29. > :12:36.afford armies of procurement or export tips. Does he agree with me

:12:37. > :12:40.that certain sectors of industry such as tourism with jobs that are

:12:41. > :12:49.are needed are in fact of low skilled jobs such as running a

:12:50. > :12:54.caravan park? I think he makes an important point. I honestly want to

:12:55. > :12:59.see a pound generated throughout the economy but I would like the

:13:00. > :13:06.structure and model of our economy to move higher up the value chain

:13:07. > :13:15.than perhaps running a caravan park as he suggests. Another big factor

:13:16. > :13:23.determining productivity levels is investment in R There has been an

:13:24. > :13:30.average growth rate of 4.2% since 1991 and on the face of this it is

:13:31. > :13:35.impressive. It has been stated that the business enterprise of the

:13:36. > :13:39.component of our expenditure is low by international standards even

:13:40. > :13:43.allowing for structural differences between countries. It is also

:13:44. > :13:47.concentrated in the hands of a very few large firms and a small number

:13:48. > :13:54.of industrial sectors in which they are based. Seven seconds of our

:13:55. > :14:05.economy account for over two thirds of all spend on R . The

:14:06. > :14:14.pharmaceutical sector accounts for a large part of R The automotive

:14:15. > :14:21.industry is 13% and aerospace is 8% of the total. An investment in R

:14:22. > :14:28.is also the hands of foreign-owned businesses. 25 years ago 73% of

:14:29. > :14:53.business R was by British owned firms and 20 7% by four Bill of --

:14:54. > :15:04.by foreign firms. No more than half is run by overseas firms. R May

:15:05. > :15:11.fall and jobs and securities here may be cut to safeguard the whole

:15:12. > :15:14.market. I take the point regarding the stickiness of that investment

:15:15. > :15:19.but it is also a tribute to the University in this country and the

:15:20. > :15:29.skills that they specialise in that they choose to come here to base R

:15:30. > :15:38.sources in the UK. In regards to bang for the buck they amount the TV

:15:39. > :15:41.sector provides -- UK sector provides is a magnet in contrast to

:15:42. > :15:45.the stickiness of foreign investment. We have to make this

:15:46. > :15:53.country as an attractive proposition for foreign direct investment as we

:15:54. > :15:57.can. In the same way referring to London and the south-east pulling up

:15:58. > :15:59.by productivity levels. I would like to think what productivity and

:16:00. > :16:03.investment levels might be if they did not have this foreign direct

:16:04. > :16:11.investment. I think that is really important. In terms of the overall

:16:12. > :16:18.R spend including Government as well as business, we have never

:16:19. > :16:28.spent the OECD budget. In the last 35 years or so we've always get 2%

:16:29. > :16:35.of gross domestic product spent on R that was in the overall amount

:16:36. > :16:40.is usually 1.6 1.7% which is not good enough to maintain our living

:16:41. > :16:43.standards are see productivity rise. It is clear productivity would Mrs

:16:44. > :16:47.need to be addressed. The previous Government produced the productivity

:16:48. > :16:51.land. As a committee we welcome the attention of the Government is

:16:52. > :16:55.pressing matter. But we thought that the plan lacked focus and could not

:16:56. > :16:59.demonstrate how success would be judged. Rather than being a clear

:17:00. > :17:04.and distinctive road map or strategy as to how the UK would close the

:17:05. > :17:07.productivity gap it disappointed by being a collection of existing

:17:08. > :17:12.policies but nothing new, nothing distinctive. The plan had 15 areas

:17:13. > :17:22.covering all aspects of Government and business activity, and cost

:17:23. > :17:27.prating skills and R -- Inc. It had no metrics evaluate success and

:17:28. > :17:35.failures. All the productivity plan was a Treasury initiative. Clear

:17:36. > :17:40.lines of communication accountability were nonexistent.

:17:41. > :17:43.Business and Treasury ministers came before a committee and said the plan

:17:44. > :17:46.was monitored through civil servants which seemed somewhat relaxed since

:17:47. > :17:49.this was meant to be the most pressing economic chance for

:17:50. > :17:52.Government to deal with. They seem to forget it was actually

:17:53. > :18:06.ministerial subcommittee which they were members. I want to finish by

:18:07. > :18:15.saying productivity series The Simpsons 2015. -- stays the same. He

:18:16. > :18:22.is giving a superb speech about the impact productivity. Can he just say

:18:23. > :18:25.a couple more awards about the machinery of Government and

:18:26. > :18:30.delivering a productivity plan. It is a shocking fact that ministers

:18:31. > :18:33.came before our committee and were totally unaware that their

:18:34. > :18:38.responsibilities to the productivity plan were being scrutinised higher

:18:39. > :18:43.Cabinet subcommittee. Can you see going forward the role of the

:18:44. > :18:47.machinery of Government and the role of the central Government Treasury

:18:48. > :18:50.in scrutinising their crucial role in delivering for the organisations

:18:51. > :18:55.out there on the front line? One of the weaknesses of Government and

:18:56. > :18:58.this is not based in terms of the colour of administrations but the

:18:59. > :19:05.nature of a culture of Whitehall is that it is very silo -based. This

:19:06. > :19:08.seems to be a very clear lack of coordination. The more the nature of

:19:09. > :19:12.pressing economic challenges that needs to be a greater monitoring and

:19:13. > :19:18.supervision of scrutiny and coordination across Government. It

:19:19. > :19:23.would be interesting placed upon the status of the plan to hear what that

:19:24. > :19:28.actually is at the moment. As I said productivity plan seem to be sorted

:19:29. > :19:34.out of 15 is seen to be intensely fashionable but only for around 12

:19:35. > :19:39.months. The new buzz phrase is industrial strategy. I welcome the

:19:40. > :19:42.willingness of the Government to embrace the phrase industrial

:19:43. > :19:47.strategy is somehow a potentially positive thing. It does exemplify

:19:48. > :19:51.one of the problems faced. It has 12 pillars as opposed to 15. So we're

:19:52. > :20:02.seeing some degree of efficiency there. We have the tenancy from

:20:03. > :20:06.successive governments to announce a new initiative from year to year and

:20:07. > :20:12.policy for its like a butterfly from one year to the next with little if

:20:13. > :20:16.any impact on the ground upon firms and the living standards of our

:20:17. > :20:23.constituents. That is to the detriment of long-term economic

:20:24. > :20:29.competitiveness. He says it makes no influence on the productivity. In

:20:30. > :20:37.ten places it has a hugely damaging impact. Take investment in new

:20:38. > :20:46.build. Then the pipeline it is working on it swept away because of

:20:47. > :20:48.the policy of the Government. In respect to energy policy that

:20:49. > :20:55.constant changing can really undermine long-term investor

:20:56. > :21:01.confidence and make sure that foreign direct investment and other

:21:02. > :21:04.investment can be attracted to this country. I think what businesses

:21:05. > :21:09.requires as much certainty as possible. Things change and of

:21:10. > :21:14.course that is the case but to try to have a very clear road map is to

:21:15. > :21:28.play we're trying to get to and try to minimise as much as possible is

:21:29. > :21:33.really important. My right hon will find for walking at the point is

:21:34. > :21:36.that the largest peace in our productivity puzzle is that we have

:21:37. > :21:40.essentially traded some of the productivity for very high levels of

:21:41. > :21:54.employment and that is a good thing. -- walking hand. -- Wokingham.

:21:55. > :21:57.Employment is crucial and idea that we have recognisable is unemployment

:21:58. > :22:03.is a good thing, however the nature of that employment, we want to see

:22:04. > :22:10.good full-time employment and permanent contracts and people

:22:11. > :22:12.secured and that jobs and able to invest in their own lives and on

:22:13. > :22:19.committees were some degree of confidence. Where we have moved in

:22:20. > :22:25.the last 20 or 30 years is much more insecurity and more precarious form

:22:26. > :22:31.of employment which can be bogus self-employment as US contracts

:22:32. > :22:40.agency work. I think we need to think of what provision we have had

:22:41. > :22:43.economy. -- zero hours. Is it pitiful wages or making sure we can

:22:44. > :22:53.pull the activities of Government and business together to move people

:22:54. > :22:57.up there skills chain. I think it is easier to get a higher pay and more

:22:58. > :23:04.skills and working smarter if you start, space of everyone being in

:23:05. > :23:09.work. -- if you start from the place of everyone being in work. The Right

:23:10. > :23:13.Honourable gentleman must accept that and experience of the last 510

:23:14. > :23:20.years to get a good job the best position is to be in employment are

:23:21. > :23:27.ready that people are stuck on low pay zero hours contract and

:23:28. > :23:36.precarious employment and that has no moving on and no social mobility

:23:37. > :23:40.and progress. On that basis I do hope that the industrial strategy

:23:41. > :23:44.lends the lessons from the productivity plan. We on the select

:23:45. > :23:46.committee out later this week publishing our report into the

:23:47. > :23:49.Government 's industrial strategy and we hope some of the matters

:23:50. > :23:55.which are not addressed in the productivity plan with longer term

:23:56. > :24:04.focus for more policy certainty and greater collaboration and

:24:05. > :24:07.cooperation across Government. Right across Whitehall departments. The

:24:08. > :24:11.lack of meaningful metrics and milestones of measurement of

:24:12. > :24:14.success. If it is to work and succeed industrial strategy cannot

:24:15. > :24:19.be merely this year 's model. It needs to be a thoughtful and well

:24:20. > :24:22.established cornerstone of an economic and business policy

:24:23. > :24:27.framework and actually economic and business mindset to increase

:24:28. > :24:29.productivity to compete with the rest of the world and improve the

:24:30. > :24:40.living standards for all in this country. Chris White. I am delighted

:24:41. > :24:44.to follow the member for Hartlepool and I would like to put on record

:24:45. > :24:50.what an excellent cheer of the committee hears. Although he does

:24:51. > :24:58.seem to have a temptation of being a bit more of glass up empty man.

:24:59. > :25:02.Particularly in this debate. I know he does support many of the measures

:25:03. > :25:07.in terms of the productivity plan and the terms of industrial strategy

:25:08. > :25:13.and we do as a committee very much share some very similar views on

:25:14. > :25:20.this with the notable exception of my honourable friend from Bedford,

:25:21. > :25:26.perhaps. Improving productivity in the UK has to be a priority. If we

:25:27. > :25:28.are to achieve our economic growth potential. I welcome the premise

:25:29. > :25:34.behind the Government 's productivity plan and in equal

:25:35. > :25:37.measure suggests that it should continue to be scrutinised by

:25:38. > :25:42.Parliament and by the committee as we work to address the fact that our

:25:43. > :25:50.productivity is below the European average. What is worth noting is

:25:51. > :25:54.that this is the case despite having the employment situation that I

:25:55. > :26:03.think we currently enjoy and I would agree with the right Honourable

:26:04. > :26:09.member for Wokingham this puts us in a good position to create greater

:26:10. > :26:17.productivity moving from low paid to higher paid jobs.

:26:18. > :26:26.There is much to be positive about and I am sure this trend can be

:26:27. > :26:30.reversed. As co-chair of the all-party manufacturing group, I

:26:31. > :26:34.know of the immense value of automation and technological

:26:35. > :26:39.advances to the sector. Continuing to invest in innovation can be

:26:40. > :26:44.instrumental in improving productivity. It is vital to

:26:45. > :26:51.recognise the role of industry for .0 of the fourth industrial

:26:52. > :26:57.revolution. It it will develop the economy. Japan and Germany are all

:26:58. > :27:00.ready embracing the concept and the UK must develop solid foundations on

:27:01. > :27:09.which to build our manufacturing capability. I give way. He mentioned

:27:10. > :27:13.Germany and the importance of manufacturing, does he agree one

:27:14. > :27:18.lesson from Germany is the importance on technical education

:27:19. > :27:25.and this government's record on improving infant ships is to be

:27:26. > :27:33.commended? -- apprenticeships. I'm grateful. Sometimes we are in danger

:27:34. > :27:37.of thinking Germany are so far ahead and advanced that we should try to

:27:38. > :27:44.do own thing. They have a number of ideas which we can borrow and learn

:27:45. > :27:47.a great deal from. I think that will be the format, the forum we can

:27:48. > :27:54.advance significantly in terms of manufacturing. Quite a bit of the

:27:55. > :28:00.problem resides in the public sector, not the private sector. Our

:28:01. > :28:05.best car plants are world beaters, Network Rail publicly owned is way

:28:06. > :28:08.behind Continental Railways in productivity so we have the solution

:28:09. > :28:18.in our own hands in the public sector. I would agree with his point

:28:19. > :28:22.on automotive plants, I will not criticising Network Rail today

:28:23. > :28:26.because they have announced they will be installing lifts in my local

:28:27. > :28:35.railway station! I congratulate them profusely on that. Coming onto the

:28:36. > :28:40.catapult network is a good example of innovation. For every pound of

:28:41. > :28:46.investment, ?15 of benefit is returned and we should remember that

:28:47. > :28:50.when we come towards the budget of what advantage these catapult

:28:51. > :28:55.centres can make. 69% of business can be found in the manufacturing

:28:56. > :29:02.sector highlighting how important it is to the wider economy. The UK is

:29:03. > :29:05.championing the idea of horizontal innovation whereby intelligence and

:29:06. > :29:10.technologies can be shared across industries. This could have a

:29:11. > :29:16.significant impact on how sectors like shipbuilding and construction

:29:17. > :29:22.can learn from the best practice of industries like the automotive

:29:23. > :29:26.sector. Through life engineering services, increasingly on the agenda

:29:27. > :29:29.with manufacturers going beyond production to maintaining

:29:30. > :29:34.responsibility for the maintenance of systems through the life of that

:29:35. > :29:40.product. I commend Cranfield University for its work in this area

:29:41. > :29:43.and I'm pleased to co-chair a council bring together industry

:29:44. > :29:50.leaders to discuss how best to develop services. One area the UK is

:29:51. > :29:53.leading international parts is additive Manufacturing and 3D

:29:54. > :30:00.printing which we can see in the high valuing -- the centre in Ansty.

:30:01. > :30:07.We are starting to see a recovery but activity is outstripping

:30:08. > :30:13.Manufacturing. It is well documented UK productivity is weak and

:30:14. > :30:18.stubbornly so is the point my honourable member for Hartlepool was

:30:19. > :30:24.making. Job quality through wages, skills and training or employment

:30:25. > :30:31.security must continually improve for us to reverse poor productivity

:30:32. > :30:34.growth. As a Midlands MP I take interest in the Midlands engine

:30:35. > :30:38.initiative and look forward to the publication of the regional strategy

:30:39. > :30:42.which I have the minister may give us more light when he comes to his

:30:43. > :30:45.remarks. The Midlands has a rich tradition of manufacturing and

:30:46. > :30:50.camera at the forefront of a manufacturing renaissance in this

:30:51. > :30:56.country. But productivity in West Midlands as has been noted has been

:30:57. > :31:02.consistently falling against the UK average. The Midlands engine is a

:31:03. > :31:06.welcomed initiative, developing the skills we need in key industries

:31:07. > :31:12.such as the automotive sector which we so heavily rely on. In Treasury

:31:13. > :31:17.questions I asked the Chancellor a question on the provision of

:31:18. > :31:22.adequate energy supply as electric vehicles become more prevalent.

:31:23. > :31:26.Companies such as JR are are developing technologies to shape the

:31:27. > :31:30.future of the sector. They cannot do so without the necessary

:31:31. > :31:34.infrastructure. Electric cars will be the future and it's important we

:31:35. > :31:38.provide the necessary power to build the batteries in the vicinity of the

:31:39. > :31:47.car plants. This is the kind of joined up approach which will be

:31:48. > :31:51.important. The final point of the 15 plan including emphasis rebalancing

:31:52. > :31:53.the economy and regional empowerment, London the Southeast

:31:54. > :31:57.contributes an enormous amount the national economy but it should be

:31:58. > :32:04.powered from every part of the country. This is where the

:32:05. > :32:07.industrial strategy... I give way. He talked about the historical low

:32:08. > :32:14.productivity in the west Midlands, one of the critical reasons for that

:32:15. > :32:19.might be under investment in transport infrastructure, road and

:32:20. > :32:22.rail network in the west Midlands is hampering very strong underlying

:32:23. > :32:28.economic fundamentals around exporting. We need a higher rate of

:32:29. > :32:32.investment in infrastructure. I most certainly agree and I think this is

:32:33. > :32:39.where we should be looking at productivity plans and an industrial

:32:40. > :32:45.strategy which includes issues such as infrastructure and this is where

:32:46. > :32:49.the West Midlands combined authority and they can come together and

:32:50. > :32:55.address these issues such as the transport infrastructure more

:32:56. > :33:01.effectively. To allow for a strong economic growth, investing in

:33:02. > :33:04.infrastructure will make the productivity and increased

:33:05. > :33:08.productivity whether transport, or digital services. As with all of

:33:09. > :33:12.these initiatives, it's important individuals feel a part of a

:33:13. > :33:16.regional or national growth. This can be beneficial for job

:33:17. > :33:21.satisfaction, increasing the likelihood of the productivity plan

:33:22. > :33:27.and achieving its AMs. I would like to highlight the need with a plan to

:33:28. > :33:33.be measured against clearly defined objectives -- its AMs. A looser

:33:34. > :33:42.framework lacks the required precise approach with timescales.

:33:43. > :33:45.Identifying the changing landscape of the economy and the skills

:33:46. > :33:52.required to keep pace with the change will be making a phenomenal

:33:53. > :33:57.challenge. Encouraging greater uptake of certain subject is key. It

:33:58. > :34:00.is clear productivity is an issue that urgently needs addressing. I

:34:01. > :34:04.welcome the governments determination to put productivity at

:34:05. > :34:10.the heart of the industrial strategy and suggest we must prioritise

:34:11. > :34:14.investment in our MD and improving job quality. Embracing new

:34:15. > :34:23.technologies should be central to the approach. I start first of all

:34:24. > :34:27.by congratulating the honourable member for Hartlepool and his

:34:28. > :34:33.committee for the sterling work they have been doing in this area. I was

:34:34. > :34:37.intrigued at the outset of the remarks when he talked about the

:34:38. > :34:42.nature of these estimate debates and the weakness of them. It is a

:34:43. > :34:48.reminder of the way in which I face this house for the first time when

:34:49. > :34:53.elected back in May 20 15. To walk around and find all this peculiar

:34:54. > :34:58.signs like here is the vote office and the one thing you cannot do is

:34:59. > :35:02.vote. And here is the estimates debate and the one thing we are

:35:03. > :35:05.unable to do is to properly scrutinise the estimates and I think

:35:06. > :35:13.that is something which will certainly need to be addressed in

:35:14. > :35:17.the longer run. I was also taken with the member for Warwick and

:35:18. > :35:21.Leamington and the way he talked about the importance of innovation

:35:22. > :35:30.for productivity. This reminded me of an old teacher of mine Professor

:35:31. > :35:33.Tom Burns who in 1960 wrote a book along with Graham Stalker caught the

:35:34. > :35:45.management of innovation and though it is now, family years ago is that?

:35:46. > :35:56.50, 60 years ago... Estimate! A long long time ago. 57 years ago. The

:35:57. > :36:04.lessons back then when he talked about the growth, is as relevant

:36:05. > :36:07.today as to what is involved in innovation. He argued there were two

:36:08. > :36:12.main types of skills and knowledge that needed to be deployed and

:36:13. > :36:18.developed in society. One was the ability to have what he called

:36:19. > :36:23.analytical skills, we might relate these to stem subjects and other

:36:24. > :36:28.types of quantitative skills, DVD ability to analyse problems and

:36:29. > :36:32.weaknesses whether technology or social feats or whatever. That is

:36:33. > :36:36.not enough. We all know we can analyse problems, we could or

:36:37. > :36:42.perhaps agree in this house what the level of unemployment is, for

:36:43. > :36:47.example but we would have recipes for how to deal with it. Society had

:36:48. > :36:54.to be good to developing creative skills whether through simple

:36:55. > :36:56.creative thinking but he was thinking more widely about the way

:36:57. > :37:02.in which you bring decision-making judgment skills to enhance the

:37:03. > :37:08.capacity to meet new challenges. And then he said there was another thing

:37:09. > :37:13.and he drew on what happened in Scotland's in the 18th century at

:37:14. > :37:19.the time of the Enlightenment and the ideas produced there. His

:37:20. > :37:23.argument was it wasn't just that we had some uniquely brilliant

:37:24. > :37:28.individuals, for the first time what you had was effective networking of

:37:29. > :37:32.people, the networking of ideas, not building false barriers between

:37:33. > :37:38.people whether by subject or geography. I would say that is

:37:39. > :37:42.something we should reflect on today. Too often we see people

:37:43. > :37:48.getting stuck in silos of professionalism and it is not shared

:37:49. > :37:52.and networked enough and therefore the possibilities do not come to

:37:53. > :38:02.fruition in the way they might. Finally, he said that we had to have

:38:03. > :38:07.circumstances where people valued and encouraged the application of

:38:08. > :38:16.novelty. Experimentation. And what we all know is if that is done well,

:38:17. > :38:20.it will inevitably lead to risk-taking which has to be part of

:38:21. > :38:26.the recipe. One thing I think governments are very bad at doing,

:38:27. > :38:31.of all hues, is putting in place policies where they recognise you

:38:32. > :38:36.are going to generate some things that might fail but it is worth it

:38:37. > :38:44.because we will also generate other things that are a great success. I

:38:45. > :38:49.think... He is making an excellent speech and I concur with what he

:38:50. > :38:54.suggests in terms of the entrepreneurs who are the wealth

:38:55. > :38:57.creators being given both the framework to succeed and the

:38:58. > :39:00.framework to fail and witty therefore agree it is not just

:39:01. > :39:06.looking at our innovation structures but also systemic issues like

:39:07. > :39:10.banking whether small business fails they can be hauled over the Coles

:39:11. > :39:16.and lose everything and we need to change some of the way we do

:39:17. > :39:22.business in this country. I quite agree with the honourable member. I

:39:23. > :39:25.asked the question today of the Chancellor of the Exchequer which

:39:26. > :39:30.attracted one of the typical nonanswers and it was do you not

:39:31. > :39:36.think there is a case given what has happened to businesses over the last

:39:37. > :39:42.number of years with the RBS -- cash and the like, would it not be

:39:43. > :39:47.appropriate to have a duty of care towards the business community and

:39:48. > :39:50.SMEs? We need to look more widely at the way we create a context that

:39:51. > :39:59.will support innovation and risk-taking. What study has the

:40:00. > :40:02.government taken in Scotland's of the impact on Scottish productivity

:40:03. > :40:05.of the quite pronounced decline in output from the North Sea as the

:40:06. > :40:12.season ashore and what can they do to offset that? I think the best

:40:13. > :40:19.thing I can do is leave it to my honourable friend who was an expert

:40:20. > :40:22.in these matters. I am aware the Scottish government has been

:40:23. > :40:27.undertaking considerable work in this matter and at the moment there

:40:28. > :40:31.is also a commission could gross commission under way and part of

:40:32. > :40:41.that is looking precisely at that matter. It has to report. On the

:40:42. > :40:47.points he is answering in relation to oil and gas, he might agree with

:40:48. > :40:54.me that the SNP are doing quite a lot around this, locally in Aberdeen

:40:55. > :40:59.we will hold a meeting next week so the supply chain companies can learn

:41:00. > :41:03.about alternative methods of capital financing to secure those industries

:41:04. > :41:10.in the city so in the future they can continue exporting.

:41:11. > :41:20.All you are here addressed, I think the honourable member for Horsham

:41:21. > :41:23.raised important as our society for university and the production of

:41:24. > :41:29.high levels of knowledge and research capability and how that was

:41:30. > :41:34.a very important thing if we're going to drive up levels of

:41:35. > :41:44.productivity. I'm can create a tally with in that. I do think that a --

:41:45. > :41:49.the universities are under strain at the moment they have never faced

:41:50. > :41:53.before. It is a threat created the research community by the Government

:41:54. > :41:57.'s attitude towards EU nationals. I could take you to universities in

:41:58. > :42:03.Scotland and show you people who are leaving and planning to leave the

:42:04. > :42:07.university and research committee because of the uncertainty that has

:42:08. > :42:13.been created by this Government. I think if there's one thing they

:42:14. > :42:16.could do today very quickly to secure a research committee it would

:42:17. > :42:23.be to give absolute guarantees that they are welcome and will carry all

:42:24. > :42:34.the rice with them into the future. In terms of what Scotland would need

:42:35. > :42:39.this difference here. -- there is a difference. One of them is in an

:42:40. > :42:49.attitude towards aggression. I would argue that what we need is more

:42:50. > :43:01.aggression of the right kind. That -- immigration. One of the examples

:43:02. > :43:05.as Tier one visas. The part of Tier one visas that is aimed at

:43:06. > :43:09.investors, the Government raised a few years ago the amount of money

:43:10. > :43:16.they would have to half to bring into the economy to investment in

:43:17. > :43:25.British businesses underrate it to a minimum of ?2 million. I would be

:43:26. > :43:28.very happy for Scotland to contract -- attract investors coming in to

:43:29. > :43:35.Scotland with a little bit less than ?2 million. Another aspect of Tier

:43:36. > :43:39.one visas as the Minister knows is the entrepreneurship bizarre. The

:43:40. > :43:44.entrepreneurship visas in this country, if you live here in England

:43:45. > :43:50.and Scotland and you want is someone who is already a resident here, you

:43:51. > :43:54.do not need to have bags of cash to become an entrepreneur. Some of our

:43:55. > :44:00.most wonderful entrepreneur started with very little but an idea. What

:44:01. > :44:03.do we say to people who want to come because entrepreneurs? We say you

:44:04. > :44:09.have to produce in advance and be assessed by the Home Office a

:44:10. > :44:14.business plan, produce a business plan about how you will start a

:44:15. > :44:20.business in the UK without being in the UK. That strikes me as a problem

:44:21. > :44:23.to begin with. You have to have a minimum of ?50,000 in your back

:44:24. > :44:26.pocket to bring an idea to invest here along with a business plan.

:44:27. > :44:34.Something we would never ask of people who live here domestically. I

:44:35. > :44:37.think things could be done to sort out some of the supply-side

:44:38. > :44:41.blockages that are preventing is attracting some of the investors and

:44:42. > :44:44.entrepreneurs who could do so much to help build capacity and improve

:44:45. > :44:56.the longer run productivity in our society. Finally if I could just

:44:57. > :45:03.just touch on in this debate, many years ago in 1991 in the ever days

:45:04. > :45:08.of competence -based qualifications, there was a body called a national

:45:09. > :45:12.council for vocational qualifications, based in London. I

:45:13. > :45:15.received a call from them and they asked me because I'd seen a

:45:16. > :45:21.television problem if I would come down and give them some advice.

:45:22. > :45:26.Since they waved at check in front of me and being a Scotsman I readily

:45:27. > :45:30.agreed to come down and a bit of advice. What is said to be then was

:45:31. > :45:39.we have a problem with competence -based assessment. We are unsure if

:45:40. > :45:43.it is actually delivering an accredited Google for the

:45:44. > :45:52.confidence. -- what be said to me then. I had an article published

:45:53. > :45:55.Willis said the method of competence -based assessment is operated in the

:45:56. > :46:02.UK will generate a vast number of false positives, that is a large

:46:03. > :46:08.number of people who are receiving qualifications that are not actually

:46:09. > :46:14.competent. That may be one of the contributing factors to the fact

:46:15. > :46:17.that there is no evidence at all that those coming into the labour

:46:18. > :46:21.market with competence -based altercations are doing anything to

:46:22. > :46:27.enhance productivity in our society. I think that is a long way to go.

:46:28. > :46:34.I'm privileged to take part in this debate. It is a great honour to

:46:35. > :46:40.follow the Honourable member from Kirkcaldy and Cowdenbeath. I also

:46:41. > :46:47.listen to you with great enthusiasm. It is also great to be here with my

:46:48. > :46:54.fellow members from the select committee. To add to my honourable

:46:55. > :46:59.friend from Bedford, it is a great privilege to serve under the

:47:00. > :47:09.chairmanship of the ordinary member for Hartlepool. -- honorary. The

:47:10. > :47:12.importance of productivity highlighted by my right honourable

:47:13. > :47:17.friend the Chancellor of the Exchequer in his Autumn Statement in

:47:18. > :47:22.November, in his speech he highlighted how the UK is trailing

:47:23. > :47:25.behind several countries in terms of productivity including the United

:47:26. > :47:32.States and Germany. Sitting to tackle this problem he announced ?23

:47:33. > :47:35.billion worth of investment designed to improve emphasis on

:47:36. > :47:39.infrastructure and housing. This along with the productivity plan and

:47:40. > :47:41.industrial strategy illustrates this Government commitment and

:47:42. > :47:49.determination to make the UK the best place in the world. Forgive me

:47:50. > :47:57.interrupting. Making interesting argument. On the Chancellor 's

:47:58. > :48:01.productivity innovation plan the largest proportion of funding of ?23

:48:02. > :48:09.million is for House construction. How does that aid productivity? I

:48:10. > :48:15.will be coming onto that. I do apologise. I am having difficulty

:48:16. > :48:23.seeing today so please shout loudly if you want to intervene. UK, the

:48:24. > :48:28.best place in the world. Having spent most of my 11 retail and

:48:29. > :48:32.manufacturing I'm aware of the challenges facing the sector that

:48:33. > :48:38.are not unique to this sector. It can be seen throughout industry and

:48:39. > :48:41.have the right incentive business and industry will flourish and we

:48:42. > :48:46.just need to provide these conditions and the productivity plan

:48:47. > :48:50.addresses it. It is essential to improve the quality of primary and

:48:51. > :48:54.secondary education and provide an adequate start for people heading

:48:55. > :48:57.into further education, apprenticeships and employment. I

:48:58. > :49:00.welcome the recognition from the Government that these improvements

:49:01. > :49:05.to basic skills like numeracy and literacy play a vital role and they

:49:06. > :49:09.are putting these skills at the heart of the reforms. It is school

:49:10. > :49:13.provision in general that I wish to talk on today. The competitiveness

:49:14. > :49:17.of the UK in the open market is no more than ever important following

:49:18. > :49:23.the result of last year 's referendum as we seek to find new

:49:24. > :49:25.avenues for investment and trade. The potential opportunities this

:49:26. > :49:29.could contribute to our nation 's productivity should not be

:49:30. > :49:33.underestimated. New capital and more competition and new technologies

:49:34. > :49:38.will be vital as we look to compete with the rest of the world. From

:49:39. > :49:48.Derby North prospective success of the Midlands engine is incredibly

:49:49. > :49:51.important to me. It cannot just increase positivity but also

:49:52. > :49:54.supports a vision for a successful United Kingdom. We have a strong

:49:55. > :50:04.offering in the year Midlands that we can growth. -- in the Midlands.

:50:05. > :50:10.Can deliver growth. It is sustainable. The Midlands engine

:50:11. > :50:19.must focus on elements give us a competitive advantage. Our advantage

:50:20. > :50:29.is our expertise in key sectors especially manufacturing. We have a

:50:30. > :50:32.high debt and take -- we have a high-density of original equipment

:50:33. > :50:51.manufacturers such as Rolls-Royce and the and Toyota. -- bombarded. --

:50:52. > :50:56.Bomabrdia. I met with two award winners today who both worked for

:50:57. > :50:59.Rolls-Royce in my constituency. Would she agree with me that

:51:00. > :51:06.apprenticeships play a vital part in the skills needed to improve

:51:07. > :51:12.productivity and congratulate Katie and Ryan on their success? I will

:51:13. > :51:18.come onto the apprenticeship levy as well. It is essential we do not

:51:19. > :51:21.apprenticeship levy and I welcome that because it encourages large

:51:22. > :51:27.businesses to invest in their workforce and the future which will

:51:28. > :51:32.again ensure the UK has a skilled workforce and is in the years to

:51:33. > :51:36.come. During my time as an MP I have regularly had that more needs to be

:51:37. > :51:40.done to tailor skills to play to local strengths. Brilliant work is

:51:41. > :51:45.being done in Derby to try to tackle the problems such as in response of

:51:46. > :51:52.the needs of businesses such as Rolls-Royce and Bombardia University

:51:53. > :51:56.recently opened a new science and technology and maths building. The

:51:57. > :52:00.initiative is being built to make employers and apprenticeship

:52:01. > :52:03.providers to take the skills. An example is the recently opened

:52:04. > :52:07.construction academy in Derby North which looks to encourage and train

:52:08. > :52:19.young people in the much-needed Scylla percolating -- the

:52:20. > :52:25.much-needed skill of Brick Lane. -- brick laying. They will not only set

:52:26. > :52:34.the foundations for growth but keep the East Midlands and UK on the map.

:52:35. > :52:39.There is a reported 82,000 strong annual engineering skills gap which

:52:40. > :52:42.is clearly cause for concern. It is widely recognised in Derby at the

:52:43. > :52:47.local supply chain of workers struggling to keep up with the

:52:48. > :52:51.demand of employers needs. However there are positive signs that the

:52:52. > :52:55.smart investment arm of this long-term vision that comes from the

:52:56. > :52:59.proximity plan, that problems can be overcome. The Government assured

:53:00. > :53:03.that is committed to tackling productivity problem for the latest

:53:04. > :53:06.new funding and capital are in education and infrastructure for

:53:07. > :53:11.research and development. I believe it is imperative that we support the

:53:12. > :53:16.plans outlined as we to implement a long-term vision for our country.

:53:17. > :53:18.Feel that for Derby and the East Midlands there are some great

:53:19. > :53:23.proposals with the plan that will go a long way to addressing specific

:53:24. > :53:32.concerns. We will also address the issues of productivity across the

:53:33. > :53:37.UK. It is a pleasure to take part in this debate. I would particularly

:53:38. > :53:41.like to commend the Honourable member from Hartlepool for his

:53:42. > :53:48.leadership and membership of the select committee. I would like to

:53:49. > :53:53.rated by Tim made. Fixing the foundations, our productivity plan

:53:54. > :53:56.was published in July 2000 and 15. If we step back and think about the

:53:57. > :54:03.radical changes we have seen them, we have a new business strategy and

:54:04. > :54:10.new Prime Minister and Cabinet and fundamentally new knowledge and ship

:54:11. > :54:16.with the EU. -- new relationship. It is indeed a moving target. It is up

:54:17. > :54:21.in the macro of relationships of how we get policy provision by guides

:54:22. > :54:26.going forward. I accept it as a real challenge. The most important of all

:54:27. > :54:31.of those is Brexit. And how the Government response to Brexit will

:54:32. > :54:37.be crucial to any industrial strategy productivity plan. Premises

:54:38. > :54:41.come and departments get renamed but leaving the European Union will take

:54:42. > :54:44.massive energy to get anything positive out of it. What worries me

:54:45. > :54:49.is the rhetoric I've heard so far. It does not fill me with a great

:54:50. > :54:54.deal of faith. We are undermining some of the very noble intentions of

:54:55. > :54:58.the productivity plan and industrial strategy and putting up barriers

:54:59. > :55:03.will have an impact on productivity and I am in no way convinced by some

:55:04. > :55:09.of the grandiose sentiments that if everything doesn't work out we can

:55:10. > :55:11.revert to the WTO in terms of revising and agreeing schedules

:55:12. > :55:17.which most people don't seem to be aware is a massive amount of work in

:55:18. > :55:22.itself. It is probably not a surprise team members in the select

:55:23. > :55:29.committee as I focus on Scotland. In terms of productivity in Scotland a

:55:30. > :55:33.good job has been made of it. Our output per hour is much the same as

:55:34. > :55:37.the average in the UK and we have managed to close a larger gap. As

:55:38. > :55:44.has been commented previously, in terms of the wider UK we're frankly

:55:45. > :55:50.nowhere and I managed to find a statistic from last year the show

:55:51. > :56:10.that Norway has 77% ahead of the UK in terms of productivity.

:56:11. > :56:17.Ending the free movement of people for us in Scotland and reducing

:56:18. > :56:23.labour mobility is a fundamental issue for us. There could be an

:56:24. > :56:28.impact on reduced inward investment which impacts on higher

:56:29. > :56:32.productivity. So, in terms of commitment 55 and the productivity

:56:33. > :56:38.plan, the response from the government for a continuation of the

:56:39. > :56:43.long-term decarbonisation of the industry sector through

:56:44. > :56:46.cost-effective low carbon investment, a call for an upgrade in

:56:47. > :56:53.infrastructure and the delivery of affordable energy and clean growth,

:56:54. > :56:57.however this government has undermined these laudable AMs by

:56:58. > :57:04.selling off the green investment bank with undue haste. I understand

:57:05. > :57:07.in principle why you might want to capital raise but the green

:57:08. > :57:12.investment bank was clear it does not need to capital raise until

:57:13. > :57:16.2018. I also point out in terms of the nature and type of projects in

:57:17. > :57:24.redressing market failure, I have a concern there will be a gap, market

:57:25. > :57:27.failure has been effected or blocked by the introduction of the green

:57:28. > :57:35.investment bank in some areas but other areas it needs to be

:57:36. > :57:43.addressed. Is she aware that on the green investment bank Macquarie bank

:57:44. > :57:48.wants to buy it so it can exclude competitors from taking part in

:57:49. > :57:55.local authority environmental investment schemes, the result is

:57:56. > :57:57.selling the bank means less competition in environmental

:57:58. > :58:03.investments and reduced productivity in the long run. I am aware of that

:58:04. > :58:06.and I have had conversations to my investigations with the minister,

:58:07. > :58:12.with McQuarrie and the green investment bank and the concern

:58:13. > :58:16.underlying all of this is potentially Scotland risks losing an

:58:17. > :58:22.asset in terms of the headquarters in Edinburgh, despite any assurances

:58:23. > :58:25.of the preferred bidder McQuarrie, I will be watching carefully because

:58:26. > :58:31.there is a risk we lose head office functions and the board and in terms

:58:32. > :58:37.of building an infrastructure that enables productivity and these

:58:38. > :58:41.things are succeed. If we put in an investment, public capital

:58:42. > :58:48.investment and do not get the value, that seems to be short-sighted and

:58:49. > :58:51.misguided. So, without the firm commitment to maintaining jobs in

:58:52. > :58:55.Scotland, the regional disparities we see in Scotland that all the

:58:56. > :59:00.proactivity plans and strategies in the world will not address if we

:59:01. > :59:08.roll away these things. So, and the green agenda and carbon capture and

:59:09. > :59:13.storage we have spent ?100 million on two competitions to kick-start

:59:14. > :59:20.the technology, we heard yesterday that it is difficult and I accept

:59:21. > :59:26.that, we have two be prepared to take risks to drive things forward

:59:27. > :59:32.for future gain. If we do not press ahead with some of these proposed

:59:33. > :59:38.projects, our country could lose a competitive advantage and we cannot

:59:39. > :59:43.forget about that in terms of driving forward productivity. Of

:59:44. > :59:46.most concern to me is some of the narrative around the narrow-minded

:59:47. > :59:52.and isolationist views brought out by some of the debates around

:59:53. > :59:56.Brexit. There is a pervasive narrative that sounds isolationist

:59:57. > :00:00.and disappointing in terms of the wealth of opportunities in renewable

:00:01. > :00:05.energy. A new interconnector between Scotland and Norway will allow the

:00:06. > :00:07.transfer of wind power and hydropower between those nations

:00:08. > :00:15.allowing both countries to cut emissions. This is not the time for

:00:16. > :00:19.retreating. Construction has started on a new gigawatts interconnector to

:00:20. > :00:27.France and that demonstrates our interdependence. Moving away from

:00:28. > :00:30.energy and other issues affected by Brexit in productivity,

:00:31. > :00:34.international students in this country. In the report on

:00:35. > :00:41.productivity we said we recommend the government does not allow

:00:42. > :00:45.migration pressures to influence student or post at the visa

:00:46. > :00:52.decisions. It is illogical to educate standards only for them

:00:53. > :01:01.before they have had an opportunity to contribute. A remarkable young

:01:02. > :01:06.man in my constituency has awarded a huge sum of money to do a Ph.D. In

:01:07. > :01:11.civil and coastal engineering and has no sooner completed its van

:01:12. > :01:16.turfed out and the level of his ground-breaking research and

:01:17. > :01:23.commitments frankly is exactly the sort of person we want to keep in

:01:24. > :01:27.Scotland. We saw the Prime minister refused to consider removing

:01:28. > :01:29.students from net migration targets and I hope she'll reconsider as

:01:30. > :01:37.international student numbers are ready beginning to fall. We cannot

:01:38. > :01:43.allow our position as a world leader for international students to be

:01:44. > :01:50.eroded by a dogmatic fixation on an arbitrary target of tens of

:01:51. > :01:56.thousands. The Scottish higher education sector is a success story

:01:57. > :02:03.and we should look at the possibility of posts are the work

:02:04. > :02:06.Visa future for Scotland. The UK government might be looking at that

:02:07. > :02:12.in the south of England but that does not help universities in my

:02:13. > :02:18.constituency. Absolutely. Fundamentally I agree with you and

:02:19. > :02:22.of course part of the problem is sold by dozen -- devolving powers to

:02:23. > :02:31.Scotland so we can protect our own higher education sector. We also

:02:32. > :02:36.heard that Brexit has had a chilling impact on investment. Investment is

:02:37. > :02:41.vitally important for industrial strategy and productivity and

:02:42. > :02:57.capital investment is vitally important for Edinburgh. The

:02:58. > :03:01.government used finance figures as a measure of success. Finally the

:03:02. > :03:06.productivity plan wanted to help deliver a Europe more dynamic and

:03:07. > :03:09.outwardly focused by exhilarating integration of the single market,

:03:10. > :03:19.completing trade agreements and improving the quality of regulation.

:03:20. > :03:22.I hope fundamentally the prime minister takes serious note of the

:03:23. > :03:30.Scottish government proposals to keep Scotland in the EU. And at

:03:31. > :03:35.least first comeback having substantive discussions on what is

:03:36. > :03:40.contained in the paper. And formulated a response, Scotland

:03:41. > :03:44.regarded as vital. We are committed and dedicated to growing the

:03:45. > :03:48.economy, creating wealth, increasing productivity but we cannot do it on

:03:49. > :04:01.our own and we need help and we are ambitious. We want Scotland to grow.

:04:02. > :04:05.Do not hold us back. I am most grateful. I was thinking long and

:04:06. > :04:15.hard about the wise words of the honourable lady who preceded me. We

:04:16. > :04:22.are showing the way, UK economy, a high-quality debate. It has been a

:04:23. > :04:24.good debate today. Started by the proposer, the honourable for

:04:25. > :04:32.Hartlepool, a pleasure to work and his joint chairmanship of the Select

:04:33. > :04:45.Committee and with other members. There is some news this afternoon.

:04:46. > :04:51.Having worked on that, I give way. I hope it is due to the success of

:04:52. > :04:56.this house the joint working on the Select Committee has seen this

:04:57. > :05:08.afternoon Sir Philip Green agreed to pay 383 billion into the pension

:05:09. > :05:12.scheme. 363 million and I also heard that number. I too hope it may be a

:05:13. > :05:18.tribute to the work of the committee and the joint chairs but having

:05:19. > :05:22.taken part in the investigation, I do not take anything at face value

:05:23. > :05:30.and I hope if I do some proper research first before saying how

:05:31. > :05:33.happy I am. I hope there will be happiness for the pension is

:05:34. > :05:39.involved. In his introduction, the proposer quoted Paul Kruger.

:05:40. > :05:45.Productivity is not everything. But in the long term it is almost

:05:46. > :05:55.everything. It is rare I should concur with the Economist but on

:05:56. > :06:03.this uniquely packs he is uniquely right. There are two clauses to the

:06:04. > :06:05.sentence. The first productivity isn't everything, I agreed with the

:06:06. > :06:15.interventions made and will go on for a minute regarding employment.

:06:16. > :06:20.We have got to start the realisation that when we company canonically

:06:21. > :06:25.could be a lot worse. Many of us recall vividly the impact of the

:06:26. > :06:30.recessions of the 1980s and 1990s, homes repossessed cofactor is laid

:06:31. > :06:33.waste, mass unemployment. It is bad enough this time round and

:06:34. > :06:40.rebalancing the fiscal position is still a challenge we are undergoing.

:06:41. > :06:45.But coming through the 2008 crisis, the worst since the 1930s we have

:06:46. > :06:50.had some stellar successes. We have grown the economy since 2010 faster

:06:51. > :06:57.than any other country in the G-7 other the US, the highest rate of

:06:58. > :07:01.employment on record, houses with no work in them are at the lowest level

:07:02. > :07:06.for 30 years and youth unemployment is less than 6%. Yes, it's is

:07:07. > :07:11.strange to say this and I admire the French greatly and I admire French

:07:12. > :07:18.productivity, we have much to learn and do but I would rather be here

:07:19. > :07:23.debating a plan for improving long-term productivity than be

:07:24. > :07:27.standing in the French Assembly trying to defend large rates of

:07:28. > :07:32.youth unemployment. I hope I will be forgiven by any economist and there

:07:33. > :07:38.was distinguished economist and statistician even if he cannot count

:07:39. > :07:41.up to 57 in the Chamber this afternoon and I hope they will

:07:42. > :07:45.forgive me for saying whenever something is referred to as a

:07:46. > :07:49.long-term problem by an economist, it normally means they find it hard

:07:50. > :07:56.to measure it in the short term. Great trends in productivity are

:07:57. > :08:00.easy to spot, especially after the event. Instantaneous judgments are

:08:01. > :08:05.worse and forecasting is less easy. Before tackling what we should do

:08:06. > :08:10.better, we should keep and our eye on where we are currently on

:08:11. > :08:14.productivity. The recession was different to its predecessors, a

:08:15. > :08:19.policy not always adhered to, there are some ghastly scandalous examples

:08:20. > :08:23.which have been highlighted by the none of the East Lothian but by and

:08:24. > :08:29.large there was a policy at the top levels of banks to practice

:08:30. > :08:32.forbearance and by HMRC on businesses combined with base rates

:08:33. > :08:36.at low levels providing the lifeline to the recession for many firms.

:08:37. > :08:40.This went with a grain of how businesses wanted to operate.

:08:41. > :08:46.Businesses in the 1980s and 90s remember how frustrating it was to

:08:47. > :08:50.fire highly trained and experienced and loyal employees only to try to

:08:51. > :08:57.be recruited the same individuals to three years later. They wanted to

:08:58. > :09:00.avoid those problems and it's the tributes to employees and unions as

:09:01. > :09:04.well that there is a recognition that constraint wage growth would

:09:05. > :09:10.allow more to stay employed through the recession. The legacy of that is

:09:11. > :09:14.clear, we have not had the increase in unemployment which has helped to

:09:15. > :09:20.flatter the productivity growth of many of our competitors. I'm glad of

:09:21. > :09:24.it. I believe labour force that retains its skills and practices is

:09:25. > :09:31.a vital asset in itself. I written employment is a boost -- high rates

:09:32. > :09:37.of employment is a boost to the UK and negative on productivity. We are

:09:38. > :09:40.not alone in having high rates of employment, the German economy was

:09:41. > :09:45.referred to which is 20% more productive than we despite similar

:09:46. > :09:51.employment rates. I would only note of caution about Germany and it's

:09:52. > :09:56.incredibly impressive productivity performance. We are dealing with two

:09:57. > :09:59.different economies. Their economy has an unrivalled capacity to put

:10:00. > :10:05.its capital goods, they are in demand for emerging markets going

:10:06. > :10:17.through strong periods of growth underpinning firm foundations in net

:10:18. > :10:21.economy. But there is a caveat and in my prior employment speaking to

:10:22. > :10:25.German businesses they were acutely aware that while they were producing

:10:26. > :10:30.assets of huge value and hugely sought over at the current phase of

:10:31. > :10:35.expansion, they look to our economy and ability to deliver on services

:10:36. > :10:39.and on tech as potentially the drivers of the next phase of

:10:40. > :10:43.economic development. I do not for one second suggest we should rest on

:10:44. > :10:48.our laurels, especially as my spirit of sectors in the UK financial

:10:49. > :10:54.services and North Sea oil have suffered most in the last decade. We

:10:55. > :10:58.need to broaden and drive the overall success of the economy which

:10:59. > :11:00.goes without saying. We should not dismiss to Beverley the strength of

:11:01. > :11:14.the platform for which we start. The plan has been made more solid

:11:15. > :11:22.but I did ten pillars of Wisdom published earlier this year. I would

:11:23. > :11:28.like to pick up three of the broad themes within it. Infrastructure, as

:11:29. > :11:40.this house will be aware, we have one of the most congested road

:11:41. > :11:47.structures. There was a psychological benefit or so in terms

:11:48. > :11:50.of spending and investing in the private sector. I welcome the

:11:51. > :11:57.decision on the third runway at Heathrow and the ongoing delivery of

:11:58. > :12:05.Crossrail. They have a psychological benefit way ahead of the practical

:12:06. > :12:08.benefits and that is immense. It may sound weird that I endorse what the

:12:09. > :12:15.government are doing on the Northern Powerhouse. For anyone who has taken

:12:16. > :12:21.more than a slight look at the housing numbers needed in Mid

:12:22. > :12:26.Sussex, anyone who has in tilt, when it is running, the congestion on

:12:27. > :12:30.Southern Rail or tried the 23 will know why support for balance growth

:12:31. > :12:37.in the economy is general right the way across the UK. On our people,

:12:38. > :12:46.they are our country's most important asset. It's the importance

:12:47. > :12:57.of the parity of esteem between university students and those who

:12:58. > :13:05.choose more vocational routes. I warmly welcome the government's

:13:06. > :13:09.boost and the continuing commitment to new ventures and assisting in the

:13:10. > :13:14.key phase between product development and product is launched.

:13:15. > :13:20.It's the biggest boost to research and development since 1979. This is

:13:21. > :13:34.the right point in the cycle to be making this investment. However in

:13:35. > :13:47.the long term growth should not be seen as the only way forward.

:13:48. > :13:51.Investment can oil the wheels. It is the private sector that we must look

:13:52. > :13:57.to to take up the challenge and to invest. They will be doing so with a

:13:58. > :14:03.government on a par to long-term fiscal stability, that is driving up

:14:04. > :14:06.education and training standards and is also prepared to take the

:14:07. > :14:13.difficult decisions on our infrastructure. Now is the time to

:14:14. > :14:17.be investing in the UK economy. Nissan, Facebook and Google are

:14:18. > :14:23.showing the way. UK companies should continue to take up the pot luck.

:14:24. > :14:29.Now is the time to invest and it went just be our productivity growth

:14:30. > :14:39.rate that increase. It is a real pleasure to follow the member for

:14:40. > :14:43.Horsham, with whom I sat on the joint committee for BHS. And also so

:14:44. > :14:49.many colleagues from the select committee. The honourable member for

:14:50. > :14:56.Edinburgh West, who as ever, demonstrated she is a strong voice

:14:57. > :15:00.for Scotland on the committee. Our excellent chairman of the committee

:15:01. > :15:06.and also my honourable friend the member is for Derby North, Warwick

:15:07. > :15:14.and Leamington. Many members have already mentioned that it's very

:15:15. > :15:17.welcome to the government's focus on productivity and whilst many

:15:18. > :15:21.economic indicators goods, we have had the debate this afternoon about

:15:22. > :15:26.the falling unemployment, productivity remains stubbornly

:15:27. > :15:31.poor. The work stubbornly has been mentioned several times this

:15:32. > :15:40.afternoon. If we are to ensure a sustainable economic recovery, one

:15:41. > :15:46.which is resilient, we need to address the issue of productivity.

:15:47. > :15:50.Let's be honest, the need to address productivity is not something new.

:15:51. > :15:56.It is an issue that successive governments of all political parties

:15:57. > :16:01.have struggled to tackle. The government's recognition and focus

:16:02. > :16:04.on looking at improving our productivity was first introduced

:16:05. > :16:10.with the publication of the productivity plan back in 2015 and

:16:11. > :16:14.as previous members of the committee have already outlined, we conducted

:16:15. > :16:19.an enquiry looking at this. I wanted to pick up on a number of points and

:16:20. > :16:23.concerns the committee raised in relation to the productivity plan.

:16:24. > :16:26.One was the lack of real focus in the plan and more specifically the

:16:27. > :16:32.lack of measurable objectives, and that's something I want to come back

:16:33. > :16:37.to. The lack of real plan in terms of implementation and milestones and

:16:38. > :16:43.time frames and to be honest, the sense that in some ways the plan was

:16:44. > :16:48.a bit of a basket of different policies rather than a strategic

:16:49. > :16:52.plan for the future. Some of these issues are relevant one we look at

:16:53. > :16:56.the industrial strategy which was published, the Green paper being

:16:57. > :17:00.published earlier this year. I think it is fair to say, I'm looking at

:17:01. > :17:06.the chairman of the committee for a not at this point, that in the

:17:07. > :17:12.government's responds the fact that they did provide measurable

:17:13. > :17:15.objectives was welcome. Not that necessarily the committee agrees

:17:16. > :17:23.with all of them, but the recognition that there were

:17:24. > :17:30.measurements in the. The focus on productivity is mentioned this

:17:31. > :17:34.afternoon has really continued as the government, has been central to

:17:35. > :17:38.the government's energy since the new Prime Minister took office. The

:17:39. > :17:43.Prime Minister is clear that she wants to create an economy that

:17:44. > :17:48.works for everyone and a key part of delivering this will be developing

:17:49. > :17:52.this new strategy, which saw the publication of the Green paper in

:17:53. > :17:57.January. I want to pull out something that was in the Secretary

:17:58. > :18:02.of State's introduction in the industrial strategy Green paper. It

:18:03. > :18:05.states the government is committed to a modern strategy. Its objective

:18:06. > :18:13.is to improve the living standards than economic growth by end --

:18:14. > :18:18.improving productivity and driving growth across the country.

:18:19. > :18:22.Productivity is at its heart. Many members have already mentioned, I'm

:18:23. > :18:29.sorry to repeat the same points, but our productivity is poor. We

:18:30. > :18:33.underperform what we are compared to international counterparts,

:18:34. > :18:40.equalling fifth with Canada a month G-7 countries. Our productivity is

:18:41. > :18:52.18 points below the G-7 average, but looking at this regionally, there's

:18:53. > :18:56.significant disparity. It's a point the Chancellor may back in January.

:18:57. > :19:05.The challenge is to work out how to spread across the best practice in

:19:06. > :19:08.productivity so that all regions and all corners and sectors of our

:19:09. > :19:14.economy can share in his productivity performance and bus

:19:15. > :19:25.deliver higher wages and living standards about the lee-macro as

:19:26. > :19:34.that implies. London has the highest productivity, which is not

:19:35. > :19:39.surprising. What was worrying to me as a Staffordshire MP was the

:19:40. > :19:42.position of the West Midlands. We are the worst performing in this

:19:43. > :19:51.region. The question I have been asking myself is why is the West

:19:52. > :19:58.Midlands performing so poorly on what we need to do to address this?

:19:59. > :20:05.The member for Derby North, the member for Warwick and Leamington

:20:06. > :20:07.talked about manufacturing and some of the excellent manufacturing

:20:08. > :20:13.businesses we have in the West Midlands. We have got Gael are, JCB,

:20:14. > :20:22.Toyota, Rolls-Royce, just to name a few. Is it about the make-up of our

:20:23. > :20:35.businesses or is it, as my honourable friend, the member health

:20:36. > :20:41.Owen and rally, ... I will give way. Was she agreed that as well as road

:20:42. > :20:48.productivity, rail and freight productivity is important. We need

:20:49. > :20:54.to make sure that freight and rell can get out through Felixstowe and

:20:55. > :20:59.improvements to that line or essential. I am grateful for the

:21:00. > :21:04.intervention. Some members might hope that I don't stop to talk about

:21:05. > :21:08.rail into much detail. I've spoken about it a lot in this house. He

:21:09. > :21:12.makes an incredibly important point and when you look at the West Coast

:21:13. > :21:20.Main line one of the issues we have is in terms of capacity, both with

:21:21. > :21:23.passenger and freight. This is a key part of the transport infrastructure

:21:24. > :21:31.that we need to look at. Road and rail amongst other things. One of

:21:32. > :21:34.the questions I wanted to ask the Minister in the context of this

:21:35. > :21:46.regional disparity is what is being done to look at the drivers of the

:21:47. > :21:50.disparity are? What we need to do in the different regions to address

:21:51. > :21:56.this. I will give way. There is perhaps a third reason why

:21:57. > :21:59.manufacturing areas like her own find it difficult to compete with

:22:00. > :22:04.European levels of productivity and it's the fact that actually, we have

:22:05. > :22:10.a small equity market for medium scale industrial firms. They have to

:22:11. > :22:14.rely on bank financing which is inefficient. Compare to the United

:22:15. > :22:17.States and Germany where you can get equity funding, it's easier to

:22:18. > :22:23.expand if you are a medium-sized Manufacturer. The honourable member

:22:24. > :22:27.makes an interesting point and also one we explored as a select

:22:28. > :22:32.committee in terms of access to finance because there is an

:22:33. > :22:37.overreliance on bank lending. There are a plethora of ways we can

:22:38. > :22:46.finance small businesses. People aren't necessarily looking at all

:22:47. > :22:52.the options available to them. Looking at regions, in terms of

:22:53. > :22:57.devolution, local authorities, my area, and I would also be interested

:22:58. > :23:00.to understand what support the government will give to those

:23:01. > :23:05.different organisations and bodies in the context of trying to improve

:23:06. > :23:11.productivity in those areas. Another point I wanted to pick up on is it's

:23:12. > :23:22.very evident in the productivity plan and in the industrial strategy

:23:23. > :23:28.that they require cross Whitehall consideration. Before I go into the

:23:29. > :23:34.detail on that, in terms of the productivity plan, it was led by the

:23:35. > :23:40.Treasury. The industrial strategy is largely led by the Department for

:23:41. > :23:47.business, energy and industrial strategy. To what extent does the

:23:48. > :23:54.Treasury have input in terms of the industrial strategy? What is the

:23:55. > :24:05.relationship between these two bounce. -- plans. How would the two

:24:06. > :24:11.plans work together and who will manage them? They have come from two

:24:12. > :24:15.different departments in the first instance. The other noticeable thing

:24:16. > :24:21.is we have talked today about transport, skills, digital

:24:22. > :24:25.infrastructure, this requires the many different departments to really

:24:26. > :24:30.buy into the delivery and one we're looking the industrial strategy, to

:24:31. > :24:39.deliver this we need to have all the departments fully bought into it. If

:24:40. > :24:42.I detect exports instance, during this Parliament there has been a

:24:43. > :24:49.real focus on different departments owning exports and taking degrees of

:24:50. > :25:01.responsibility. It's welcome news the Prime Minister has a committee

:25:02. > :25:06.that she chairs and the secretary for state on this sits on the

:25:07. > :25:11.subcommittees. What is the government doing to ensure that the

:25:12. > :25:13.industrial strategy is truly embedded into each of the

:25:14. > :25:18.departments and they take responsibility and are accountable

:25:19. > :25:23.for its delivery? Therefore in turn they will improve productivity.

:25:24. > :25:28.There's one more point I want to make and that is measures of

:25:29. > :25:31.success. The member for Warwick and Leamington touched on this. It goes

:25:32. > :25:36.back to the point I made about the productivity plan at the beginning.

:25:37. > :25:48.We have concerns that the productivity plan was lacking in

:25:49. > :25:53.terms of a measurable matrix. One thing is noticeable is if you ask

:25:54. > :25:58.people what they define industrial strategy to be, you get a wide range

:25:59. > :26:02.of answers to that question and I do feel we do need to be very clear in

:26:03. > :26:06.terms of what it is, but also how it is going to be measured, so we can

:26:07. > :26:10.assess whether we are succeeding or otherwise.

:26:11. > :26:19.Productivity takes time to see if we improve so I would be interested to

:26:20. > :26:25.understand what is being done in the short-term to assess our progress in

:26:26. > :26:33.terms of productivity improvement. I am conscious I have taken too much

:26:34. > :26:36.time, as many members mentioned, I think we all welcome this focus on

:26:37. > :26:41.productivity, number of people have talked about the balance between

:26:42. > :26:48.productivity and employment rates. We do need to try and tackle this

:26:49. > :26:56.ongoing issue that has been faced for decades. And as a West Midlands

:26:57. > :27:01.MP, we really do need to look at how we can rebalance and improve our

:27:02. > :27:07.productivity is in the region and I do not want to see a West Midlands

:27:08. > :27:15.at the bottom of the English areas. To conclude, I welcome the

:27:16. > :27:20.industrial strategy because it does look to have productivity at its

:27:21. > :27:24.heart. But we do need to have commitments across government, we

:27:25. > :27:33.need to look at how this works at a regional level and also have clear

:27:34. > :27:36.metrics. It is a pleasure to speak in this debate and I can take this

:27:37. > :27:42.opportunity to congratulate the chair of the Select Committee and

:27:43. > :27:45.the other members of the committee on their success in pursuing

:27:46. > :27:51.tenaciously Philip Green and I have heard during the debate they have

:27:52. > :27:56.had some success and team is making a payment equivalent to four super

:27:57. > :28:05.yachts! It showed and persistent Select Committee can get results. I

:28:06. > :28:10.do not intend to speak the long having spoken in two similar debates

:28:11. > :28:13.on this topic in the last year or two although as other members have

:28:14. > :28:17.said as a result of a management change productivity plans have

:28:18. > :28:22.become industrial strategies but hopefully most of the salient points

:28:23. > :28:31.remain from the previous one. The first point I wanted to make was the

:28:32. > :28:35.one I made in my intervention, we must proceed with caution before we

:28:36. > :28:40.are blas about the incredible job creation record this government and

:28:41. > :28:43.its predecessor have had this to be my constituency in Newark

:28:44. > :28:50.unemployment is around half %, the average wage in my town remains

:28:51. > :28:56.pretty low at 22 or ?23,000 a year. Like other members I would like to

:28:57. > :29:00.see wages rise and none of my constituents stuck in poor paid low

:29:01. > :29:05.skilled jobs. I want everyone to have the dignity and security of a

:29:06. > :29:08.job but the fulfilment of a career path to better pay and better

:29:09. > :29:14.skilled employment. We have to be careful before wishing away those

:29:15. > :29:20.jobs and one piece in the productivity puzzle is explicable,

:29:21. > :29:24.the fact we have had high levels of employment while our competitors

:29:25. > :29:27.have not. The nurse in this house would wish to replicate the levels

:29:28. > :29:38.of employment in other countries -- none of us. Immigration has played a

:29:39. > :29:42.part in that, high levels of migrants coming in to my community

:29:43. > :29:50.have put pressure and have led to little pressure on wages, low

:29:51. > :29:54.skilled and unskilled work of food production, agriculture, the care

:29:55. > :30:00.sector they have seen no demand really to increase wages in the last

:30:01. > :30:04.five years or more. That will change with Brexit but also a major

:30:05. > :30:08.challenge to my local economy as to the whole country if we can maintain

:30:09. > :30:15.this level of employment in those circumstances. Having said that, it

:30:16. > :30:23.is obviously all of our objective is to go from a country of employed

:30:24. > :30:30.people to people who are well paid. He makes some good points about the

:30:31. > :30:34.productivity challenges and stagnation and low wages. But I

:30:35. > :30:39.would caution on the point about the care sector and the fact it is due

:30:40. > :30:43.to the fat workers from the EU or overseas are filling jobs there are

:30:44. > :30:48.huge challenges in the care sector in finding enough people to do that

:30:49. > :30:54.work from overseas or within Britain and the solution to long-term wages

:30:55. > :30:58.is not going to be solved by Brexit. I am sorry if I chose my words

:30:59. > :31:04.poorly but the point I was making is we need to exercise caution because

:31:05. > :31:08.one effect is high levels of immigration have meant wages have

:31:09. > :31:12.been suppressed but as we leave the European Union, we need to ensure

:31:13. > :31:17.people continue to do those jobs were the care sector or in food

:31:18. > :31:20.production. There was a challenge ahead for the government to maintain

:31:21. > :31:28.levels of employment but to be a better paid workforce. Secondly, a

:31:29. > :31:31.major contributor to loss of productivity or stagnating

:31:32. > :31:37.productivity recently has been the decline in the financial services

:31:38. > :31:42.sector since 2008 and the crash and that is not just in London but in

:31:43. > :31:48.Edinburgh, Scotland and Manchester and Nottingham and related companies

:31:49. > :31:54.like experience where we have seen fewer jobs and less productivity. No

:31:55. > :31:57.one is a friend of investment bankers but they are productive

:31:58. > :32:02.members of the economy for these purposes and we need to be careful

:32:03. > :32:09.how we accommodate the financial services sector post Brexit. I am

:32:10. > :32:14.fairly optimistic about the future knowing those investment bankers and

:32:15. > :32:20.lawyers who I spoke to were not been following entreaties to move to

:32:21. > :32:27.France and the socialist economy. We do need to be careful about how we

:32:28. > :32:32.proceed in tackling the productivity gap. I am cautious about spending

:32:33. > :32:39.more money and getting the country into further debt. The national debt

:32:40. > :32:44.is ?1.8 trillion and increasing at ?5,000 per second. Levels of

:32:45. > :32:50.austerity have been grossly overstated, public spending has only

:32:51. > :32:54.fallen by five or 6% in real terms since 2010 although it has fallen as

:32:55. > :32:58.percentage of GDP, it remains a major problem and I am concerned in

:32:59. > :33:03.this house fewer and fewer right honourable member is even mention

:33:04. > :33:06.the debt and deficits in our national dialogue and that needs to

:33:07. > :33:12.change because the greatest threat for the economy and proximity is the

:33:13. > :33:17.debt we leave future generations. I presume he is aware that when Harold

:33:18. > :33:21.Macmillan was Chancellor the national debt was double what it is

:33:22. > :33:25.now, even though you doubled it in ten years, it was double as a

:33:26. > :33:32.proportion of GDP and the economy was growing faster. The problem with

:33:33. > :33:36.high levels of debt is not just passing it on but the consequences

:33:37. > :33:41.for future din orations meaning higher taxes, less competitive

:33:42. > :33:47.economy and poorer productivity and just because many of our competitors

:33:48. > :33:51.around the world whether the USA or otherwise have chosen to go down the

:33:52. > :33:56.same path does not mean we should follow it. I want a government that

:33:57. > :34:01.tackles the debt and the deficit aggressively in the years to come. I

:34:02. > :34:07.am cautious of spending money trying to tackle the productivity gap on

:34:08. > :34:12.high expenditure infrastructure projects which have overoptimistic

:34:13. > :34:17.claims resulting in politicians being the promoter and the scrutiny

:34:18. > :34:21.of the projects. HS2 falls into that category. I welcome the

:34:22. > :34:27.infrastructure commission, I hope it has teeth and this will provide some

:34:28. > :34:30.balance and ensure we start investing in the infrastructure

:34:31. > :34:34.projects which improve productivity and take long-term decisions for the

:34:35. > :34:40.future of the country. With the national debt on the scale we have,

:34:41. > :34:46.borrowing for rushed shovel body products that projects will add to

:34:47. > :34:52.the debt burden necessitating future tax increases and the less

:34:53. > :34:58.competitive economy. I am in favour of investing in long-term come in

:34:59. > :35:02.infrastructure projects which promote long-term growth which do

:35:03. > :35:06.not necessarily cost the earth and which at the highest productivity

:35:07. > :35:10.potential. Secondly I am interested in supply-side reforms which cost

:35:11. > :35:15.little or nothing at all like deregulation and tax implication

:35:16. > :35:21.which will easily pay for themselves by creating a lower tax economy to

:35:22. > :35:27.benefit for years to come. Let me take each in turn. To create a

:35:28. > :35:31.longer term higher growth investment plan, which tackles high levels of,

:35:32. > :35:35.at low levels of productivity, areas have been discussed I have some

:35:36. > :35:40.sympathy with. The levels of congestion on the roads is a major

:35:41. > :35:45.issue we have as the members have mentioned amongst the most congested

:35:46. > :35:48.roads in the G-7, this does not necessarily require the most

:35:49. > :35:55.expensive road investment strategies, requires bypasses,

:35:56. > :35:59.junctions, pothole investment, in Newark it is one of the most

:36:00. > :36:02.congested towns in the Midlands and to free up the congestion would make

:36:03. > :36:06.a major boost to the economic prospects of the whole of the East

:36:07. > :36:13.Midlands. We should take long-term decisions where they are expensive

:36:14. > :36:17.such as investing in Heath Row, no government that believes in tackling

:36:18. > :36:22.the productivity gap or putting us in the right position to be a global

:36:23. > :36:27.trading nation could afford to let that decision be pushed further into

:36:28. > :36:31.the future. There are less sexy decisions to do with long-term

:36:32. > :36:34.infrastructure which are important, we heard one from Suffolk earlier

:36:35. > :36:41.about trying to sort out freight on the roads and rail. The head of the

:36:42. > :36:46.government Midlands engine will be making that a priority in his

:36:47. > :36:50.forthcoming report. And lastly, it is important we take seriously

:36:51. > :36:54.reducing energy costs for manufacturing and other parts of the

:36:55. > :37:00.economy. Whilst producing a sustainable energy economy and

:37:01. > :37:03.ecosystem is important to us, we are pricing out many of the most

:37:04. > :37:06.important Manufacturing businesses with expensive energy projects. I am

:37:07. > :37:12.concerned about the decisions of the government have taken recently which

:37:13. > :37:17.have produced extremely expensive projects which we will have to pay

:37:18. > :37:22.for four years to come. I think it's imprudent to close the power

:37:23. > :37:26.stations which were operating the heavily well and helping to keep

:37:27. > :37:33.energy costs down for consumers and businesses. Looking to supply-side

:37:34. > :37:41.reforms, in a time I have available, tax simplification is extremely

:37:42. > :37:49.important. No government frankly sits... The former Chancellor to go

:37:50. > :37:52.interest in this matter and created a tax simplification office but

:37:53. > :37:56.roads have a little happens and the tax code only increased in length.

:37:57. > :37:59.This is something that does not need to cost anything at all to the

:38:00. > :38:04.taxpayer but admitted huge difference in making it easier not

:38:05. > :38:09.harder to employ people, to grow the economy and to get investment in. In

:38:10. > :38:15.terms of tax competitiveness, it is important we continue the pattern

:38:16. > :38:22.created by the previous Chancellor reducing Corporation Tax, the most

:38:23. > :38:26.competitive in the world, there may be new challenges from the United

:38:27. > :38:32.States but it is important we persist. It was right of the former

:38:33. > :38:36.Chancellor to reduce capital gains tax despite some rather

:38:37. > :38:40.opportunistic criticism from Labour, capital gains tax will remain higher

:38:41. > :38:45.under the Conservative government van at the end of the Gordon Brown

:38:46. > :38:51.era so that really was baffling by Labour but we do need the most tax

:38:52. > :38:55.competitive economy we possibly can. We spoke about research and

:38:56. > :39:01.development or ready and I thought incentives for research and

:39:02. > :39:04.development and reliefs have been effective speaking to companies

:39:05. > :39:10.large and small in my constituency. I would like to see this continued.

:39:11. > :39:15.I think as we approach Brexit, it's important the department now starts

:39:16. > :39:19.to look industry by industry at what low-cost deregulation we could

:39:20. > :39:22.achieve which doesn't sacrifice workers' rights, which does not

:39:23. > :39:26.infringe a sensible environmental protections that which might be a

:39:27. > :39:31.game changer in those industries. In the two or three industries I have

:39:32. > :39:37.worked in, the legal sector, running an auction house, there are European

:39:38. > :39:43.regulations which I do not think the repeal would be offensive but which

:39:44. > :39:47.would give us a competitive advantage over our major competitors

:39:48. > :39:52.in other countries. I will not bore the house with the details but the

:39:53. > :39:56.government should now be working on a sector or industry basis coming up

:39:57. > :40:01.with what those might be in preparation for the departure from

:40:02. > :40:06.the EU. The penultimate point I wanted to make was I think we also

:40:07. > :40:09.need to give greater thoughts to the long-term sustainability of the

:40:10. > :40:13.British economy posted by am concerned about the deficit and

:40:14. > :40:18.welfare and I think an area that should be looked at by government is

:40:19. > :40:23.our state retirement age. It is inevitable with an ageing population

:40:24. > :40:30.more of us will need to work longer. This produces a number of major

:40:31. > :40:34.challenges if you work in sectors like on a shop floor or heavy

:40:35. > :40:39.industries where it is extremely tiring and people do need to retire

:40:40. > :40:42.or change career later but it is inevitable the government will look

:40:43. > :40:45.at this and do it quickly if we want to signal to the markets are

:40:46. > :40:51.continued careful stewardship of the economy.

:40:52. > :40:57.In closing it is extremely important, particularly as we are

:40:58. > :41:01.leaving the European Union and setting our sights on the world

:41:02. > :41:07.beyond, that we invest more in developing the kind of

:41:08. > :41:15.entrepreneurial culture that this country has not been able to

:41:16. > :41:20.replicates. I'd like to see allowances preserved or increased. I

:41:21. > :41:24.would like a focus on longer term investments. Most of those beliefs

:41:25. > :41:30.are available after only a year of holding assets. Of course. Would the

:41:31. > :41:37.honourable member agree with you point I made that the tier one Visa

:41:38. > :41:42.regime is counter-productive in that respect? Much more could be done to

:41:43. > :41:46.encourage entrepreneurs to come here. I'm sympathetic to that

:41:47. > :41:51.argument. There is a lot more we can do when we create our own

:41:52. > :41:55.immigration system to attract the most talented people from around the

:41:56. > :41:59.world, including entrepreneurs. Examples of countries like Israel

:42:00. > :42:06.and Australia that have different systems to our own for attracting

:42:07. > :42:11.entrepreneurs are ones we should look at. Particularly the Israeli

:42:12. > :42:20.example that has had a lot of success. It's also incumbent on this

:42:21. > :42:23.house to place creating an entrepreneurial culture at the heart

:42:24. > :42:31.of everything we do and that includes tax rates, meaning

:42:32. > :42:39.enterprise needs to find a reward. It means considering the 45p rate of

:42:40. > :42:43.tax. These are difficult choices, but if we want to inspire a

:42:44. > :42:47.generation to innovate and create businesses, we have two ensure that

:42:48. > :42:54.those people feel they are fully rewarded here, particularly versus

:42:55. > :43:02.our competitors. Our competitors are the same as they were before. There

:43:03. > :43:07.are places like Singapore, Dubai, places where entrepreneurs can keep

:43:08. > :43:12.the lion's share of the profits. I'm not for a moment suggesting that we

:43:13. > :43:15.go as far as that, but we have to view our competitors much more

:43:16. > :43:19.widely than we do today. I'm grateful for this opportunity to

:43:20. > :43:27.speak in the debate and thank the select committee for their continued

:43:28. > :43:32.work. It's a great treasure to follow my honourable friend. I agree

:43:33. > :43:40.with almost everything he said in this debate. Just to remind everyone

:43:41. > :43:49.while we are here, this is the estimates about, supplementary

:43:50. > :43:52.estimates about the Department for industrial strategy. It's where

:43:53. > :43:58.government owns up at the end of the year for which it is spending too

:43:59. > :44:04.much or too little, what it's going to invest. Sometimes it's

:44:05. > :44:06.outstanding amounts of money in the variants. This year for this

:44:07. > :44:16.department there is a request for further resources, that's to be

:44:17. > :44:23.expended, not exceeding ?10.7 billion. Capital purpose needs to be

:44:24. > :44:29.reduced by ?10.5 billion and the sum authorised issue out of consolidated

:44:30. > :44:35.funds be reduced by ?13.8 billion. Those are large movements and to

:44:36. > :44:40.spread the Minister Pozner brushes, he knows this is because of major

:44:41. > :44:44.structural changes in the department over the year that has moved the

:44:45. > :44:48.Department from being a current expenditure heavy sector to one that

:44:49. > :44:55.will be much more focused on capital. What I would like to say is

:44:56. > :45:00.I challenge anyone if they have looked at document eight shee 946,

:45:01. > :45:08.if you can wade through that and understand where the money is going,

:45:09. > :45:15.then you are a better person than I. I'd like to say to my honourable

:45:16. > :45:19.friend the member for Orpington, could he challenged the government

:45:20. > :45:23.to put in a couple of things? The first is when we are looking at

:45:24. > :45:27.variance at the end of the air and departments are looking for more or

:45:28. > :45:32.less money, for them to actually say, here is where we have saved

:45:33. > :45:35.money. We've had a number of points made today about people accepting

:45:36. > :45:41.that we have to live within our means, so why can we not use this

:45:42. > :45:47.end of year accounting to say these are the areas where we wish to save

:45:48. > :45:53.money. It is a good opportunity to get that message out. Secondly on

:45:54. > :45:58.the capital budget side, it would be nice in a summary at the end of the

:45:59. > :46:12.year to have a sense of the return on whether capital is going, --

:46:13. > :46:16.where the capital is going. That is the overall part of estimates I

:46:17. > :46:21.would like to make. Just the few things that might make it easier for

:46:22. > :46:25.those of us who can't look at six columns of numbers to easily to

:46:26. > :46:36.understand what is going on. Were also talking about the context of

:46:37. > :46:45.the productivity plan and the document about industrial strategy.

:46:46. > :46:53.Those two documents sit as two parts. I welcome the initiative that

:46:54. > :47:00.the member for Tatton and the current Secretary of State for DC

:47:01. > :47:14.jee did in pulling together these various products into a productivity

:47:15. > :47:20.brand. Lizzie had a single document that we could evaluate projects

:47:21. > :47:26.against and to which we could hold the government to account about this

:47:27. > :47:29.crucial issue of productivity. Productivity is one of those

:47:30. > :47:35.surrounds that politicians like to grab a hold of so that they can

:47:36. > :47:38.worry. We lie worrying more than we like being happy and when it comes

:47:39. > :47:43.to the national economy it's either got to be a balance of payments

:47:44. > :47:48.deficit or it's got to be our poor productivity level that politicians

:47:49. > :47:53.want to grab. Politicians like to do that because they like to intervene

:47:54. > :47:57.in the economy and improve it. In many instances the government plays

:47:58. > :48:02.a positive and active role in the economy, but when it looks to do too

:48:03. > :48:06.much then it has to know when to stop. They make of the

:48:07. > :48:10.recommendation to my friend the Minister? Which is he learns this

:48:11. > :48:15.most important word in his deliberations and that is the word

:48:16. > :48:19.no. No, we're not good to spend money on that or invest in that

:48:20. > :48:25.project. No, that rate of return on what you are proposing is incorrect

:48:26. > :48:29.because he is good to be inundated by requests from a variety of people

:48:30. > :48:33.who will attach the request to the broad principles in the productivity

:48:34. > :48:40.plan, or to the even broader principles in the industrial

:48:41. > :48:45.strategy in order for those idea to gain favour. He will have two very

:48:46. > :48:57.deeply and make a number of people disappointed. -- he will have to. As

:48:58. > :49:01.the honourable member for Newark was saying. We have a responsibility to

:49:02. > :49:06.future generations and we cannot carry on living beyond our means. We

:49:07. > :49:10.need to have an acute sense that if we are investing for the future that

:49:11. > :49:16.the rate of return will benefit them before we spent essentially what is

:49:17. > :49:21.the money. The productivity plan had another tremendous advantage which

:49:22. > :49:25.was it focused our attention on not only how much we are spending, but

:49:26. > :49:31.how quickly we implemented the projects to which the government is

:49:32. > :49:34.committed. In the plan and I think subsequently from the national

:49:35. > :49:39.infrastructure commission, one of the projects that was sort of highly

:49:40. > :49:43.was the Oxford to Cambridge corridor which connects the Milton Keynes and

:49:44. > :49:46.Bedford and on to Cambridge. I'm very pleased to say that the

:49:47. > :49:50.Department for Transport has heard that message and is coming forward

:49:51. > :49:55.with new ideas for making that happen in a faster time frame than

:49:56. > :50:00.perhaps was even envisaged at the time of the productivity plan. Can I

:50:01. > :50:04.ask the Minister to pay particular attention to ways in which

:50:05. > :50:07.procedures can be enhanced through the interactions of government

:50:08. > :50:12.departments, that waiting time when a proposal sits in the in tray of

:50:13. > :50:17.one particular part of this very complex system of organisations and

:50:18. > :50:21.departments and agencies that have to approve something. That time when

:50:22. > :50:26.it sits in the inbox of one of those agencies and the time it comes out

:50:27. > :50:30.of the outbox and goes on to the next department, I think

:50:31. > :50:34.particularly in aspects of the road highway between Oxford and Cambridge

:50:35. > :50:38.there is the opportunity to move that time frame forward and I will

:50:39. > :50:43.be grateful for the opportunity to perhaps talk with the Minister about

:50:44. > :50:47.that, or to talk with his counterparts in the Department for

:50:48. > :50:56.Transport. When he said his advice to the Minister was to say no to

:50:57. > :51:00.project, I assume they aren't the projects he is putting forward,

:51:01. > :51:07.which are vulnerable once? I hope the Minister would use the same

:51:08. > :51:12.assessment for all projects. We need to build an economy that works

:51:13. > :51:15.everyone. We have the tools to do that. It would be good to see

:51:16. > :51:25.Scotland news the tools available at their disposal rather than

:51:26. > :51:32.complaining about everyone else. If the Minister believes, as seems to

:51:33. > :51:35.be the case, that the corridor between Oxford and Cambridge is

:51:36. > :51:40.important, we have the responsibility to implement those

:51:41. > :51:44.initiatives as quickly and effectively as possible and to set a

:51:45. > :51:49.new benchmark for the speed of implementation. I would like to

:51:50. > :51:58.mention briefly on other aspects in the plan. Firstly, the government's

:51:59. > :52:05.response talks about the commitment to funding innovation. Yes, yes, yes

:52:06. > :52:20.is the work, repeated three times, is the word the Minister should be

:52:21. > :52:25.saying to innovation. It's the government doesn't listen to those

:52:26. > :52:32.who want to take risks. As we leave the European Union there are

:52:33. > :52:42.different things we can do, especially on reducing restrictions

:52:43. > :52:46.to get people investing at earlier stages. Also there is the commitment

:52:47. > :52:51.to improving management and leadership. That is something that

:52:52. > :52:55.is easy for us to take for granted. It is one of those softer things in

:52:56. > :52:59.the way we think about productivity but it is essential that our

:53:00. > :53:04.management and leadership of our businesses have the resources and

:53:05. > :53:07.skills and capabilities you would expect from a global leader in

:53:08. > :53:12.business and for a country that wants to trade freely and openly

:53:13. > :53:18.with the rest of the world. Finally I would say that in both the

:53:19. > :53:21.productivity plan and the industrial strategy, my personal feeling is

:53:22. > :53:26.that there is not reference -- enough reference to the way in

:53:27. > :53:30.product and work is operating. We heard from the chair of the select

:53:31. > :53:35.committee about how the lack of security in the Labour markets is a

:53:36. > :53:39.concern to not just a segment of the people directly affected, but for

:53:40. > :53:45.all of us who want to see a country and economy that works for all. We

:53:46. > :53:50.also heard from the member for Warwick and Leamington about the

:53:51. > :53:53.potential from the fourth Industrial Revolution, but with that great

:53:54. > :53:58.potential to improve productivity will come dramatic changes in the

:53:59. > :54:03.skills and work that is required from people currently employed in

:54:04. > :54:07.very many segments of our economy. What is the government's answer

:54:08. > :54:18.going to be in those sectors and in those industries when it comes to

:54:19. > :54:23.what the impact of achieving high productivity is going to be? It's

:54:24. > :54:24.talking about earlier on one we were talking about earlier on one we were

:54:25. > :54:27.talking about the past. More people were employed and we should not

:54:28. > :54:31.throw it away in some pursuit of higher productivity because Bob

:54:32. > :54:34.should be able to be accomplished. Similarly, we should not just look

:54:35. > :54:43.to the future for increased productivity if what that means for

:54:44. > :54:49.many people is that they go to work and have purpose and that is changed

:54:50. > :54:53.dramatically so we can take up the challenges of the fourth Industrial

:54:54. > :54:56.Revolution. If the government is silent on that in its productivity

:54:57. > :55:00.plan over the next few years then it will fail the British people. From

:55:01. > :55:03.what we hear from the Prime Minister, she is not doing that. We

:55:04. > :55:08.need to get into the details of what that will mean as we look to things

:55:09. > :55:16.that will follow from the productivity plan estimates from

:55:17. > :55:19.today. Thank you. I would like to begin in the same place as the

:55:20. > :55:24.honourable member for Hartlepool in terms of talking about this estimate

:55:25. > :55:38.stad debate being something archaic in that we are not actually with the

:55:39. > :55:47.exception for the member the Bedford discussing that. The honourable

:55:48. > :55:51.member for Hartlepool said the report published in 2015 was

:55:52. > :55:58.becoming obsolete, something that was shown favourably on this process

:55:59. > :56:05.Instead of discussing how the government spends all its money,

:56:06. > :56:12.what we kind of looked at and I mean this without a huge degree of this

:56:13. > :56:16.respect, is the committee presenting their homework to the Chamber and it

:56:17. > :56:19.has been valid and incredibly instructive as someone who is not a

:56:20. > :56:24.member of that committee to learn what they have done and I commend

:56:25. > :56:30.them. The report pulls no punches. Interesting to see what a report

:56:31. > :56:33.from a Select Committee that didn't have a government majority on it

:56:34. > :56:37.would say because this does not pull its punches and I commend those

:56:38. > :56:41.members who have constructively engaged with the process to make

:56:42. > :56:48.sure the Select Committee does its job of holding the government to

:56:49. > :56:52.account. So, moving onto the matter which is at hand and the report we

:56:53. > :56:57.are discussing on productivity, not to repeat what has been said by many

:56:58. > :57:02.honourable members to any great length but there is clearly an

:57:03. > :57:09.issue. The general trend of 2% and growth pre-crisis, we are now barely

:57:10. > :57:15.above that. It is something the Office for National Statistics has

:57:16. > :57:20.stated is unprecedented in the post-war period. And we are the

:57:21. > :57:24.second worst in the G-7. I appreciate we have had comments that

:57:25. > :57:30.these comparisons do not give us all the detail and that is certainly

:57:31. > :57:35.true but there are some stark comparisons in and around that. One

:57:36. > :57:41.of the most striking parts from the report was the quote that was made

:57:42. > :57:48.from, quoted from the honourable member for Edinburgh West about the

:57:49. > :57:51.post to study work Visa issue and it is worth repeating. The report says

:57:52. > :57:56.we recommend the government does not allow migration pressures to

:57:57. > :58:02.influence student or post to study these decisions and should relax the

:58:03. > :58:05.restrictions. It is illogical to educate foreign students to the

:58:06. > :58:09.highest standards in the world only for them to leave before they have

:58:10. > :58:16.an opportunity to contribute to the UK economy. In a nutshell, the

:58:17. > :58:23.critique of the government's policy on immigration not be put to better

:58:24. > :58:27.than the report is done. In a period of stagnating productivity growth,

:58:28. > :58:31.we have seen economic growth. Those things should not go together but

:58:32. > :58:40.the reason why we have no productivity growth but GDP growth

:58:41. > :58:44.is largely down to immigration. With the pulling up the drawbridge to

:58:45. > :58:47.immigration we would have to get serious about productivity because

:58:48. > :58:54.if we do not get growth immigration, I will be concerned about where we

:58:55. > :59:02.do get growth from at all. The member for Kirkcaldy said it is

:59:03. > :59:07.clearly nailing some of the imponderable follies around the

:59:08. > :59:12.immigration system that does not work for the economy. I fear these

:59:13. > :59:16.things are only going to get worse. Immigration is only part of the

:59:17. > :59:21.debate around the economy and productivity is an important part of

:59:22. > :59:25.that debate. How do we go about boosting productivity? There was a

:59:26. > :59:31.general consensus perhaps with varying degrees of enthusiasm but we

:59:32. > :59:35.need to invest in infrastructure, roads, railways, bridges, airports

:59:36. > :59:44.and digital infrastructure. We need to invest in skills and training, to

:59:45. > :59:47.see page growth, we need to see inclusivity in the workforce and a

:59:48. > :59:53.greater degree of internationalisation. The Honourable

:59:54. > :59:58.member Bedford suggested the SNP should get on with doing some of

:59:59. > :00:02.these things rather than criticising what others do. I can tell him we

:00:03. > :00:09.have done these things and the result of that is between the

:00:10. > :00:14.financial crisis in 2007 and just now, Scottish proactivity in

:00:15. > :00:25.comparison to the UK level has risen from 94.5% of the UK level 299.9% in

:00:26. > :00:31.2015. The 2015 growth figures in Scotland were 3.4% in comparison to

:00:32. > :00:38.the 0.9% for the UK as a whole. That is the action we have taken, it has

:00:39. > :00:42.had demonstrable benefits and I urge the minister to look at what we have

:00:43. > :00:49.done in Scotland around this. The honourable member forward-looking

:00:50. > :00:57.mentioned oil gas and there are issues that have been caused in that

:00:58. > :01:02.sector, the Scottish figures do not include the figures for the offshore

:01:03. > :01:06.sector but will include a large amount of the figures that would

:01:07. > :01:10.relate to the onshore activity in oil and gas but the oil and gas

:01:11. > :01:17.sector has a success story to tell in the face of plummeting commodity

:01:18. > :01:21.prices, they have been able to bring costs down dramatically. They have

:01:22. > :01:26.increased efficiency dramatically and they have put their business on

:01:27. > :01:37.a firm footing. They are ready for growth and if the Chancellor... They

:01:38. > :01:40.are ready for growth and with support from the government which

:01:41. > :01:49.holds the key tools for boosting the sector they will grow further. Also,

:01:50. > :01:54.the avoidance of silo working and one thing the oil and gas sector has

:01:55. > :01:57.learnt is looking at other industries for boosting

:01:58. > :02:00.productivity. A fortnight ago I was at the opening of the technology

:02:01. > :02:05.centre in Aberdeen which is a collaboration between the city deal

:02:06. > :02:11.for Aberdeen between the Scottish and UK governments and both local

:02:12. > :02:15.authorities in the region and the opening speaker was the chief

:02:16. > :02:19.executive of the advanced propulsion centre in Coventry, the industry is

:02:20. > :02:23.looking to learn how others have boosted productivity in the face of

:02:24. > :02:27.difficult economic pressure and looking to learn from that. As I

:02:28. > :02:32.say, the Scottish government has invested in these things but one key

:02:33. > :02:41.thing that has led to boosting productivity in Scotland is the

:02:42. > :02:45.introduction of the Scottish government, businesses which have

:02:46. > :02:49.signed up to this and the key component is agreeing to pay the

:02:50. > :02:54.living wage, the real living wage as opposed to the national living wage

:02:55. > :03:02.and to sign up to two out of the other possibilities, no zero hours

:03:03. > :03:08.contracts, investment in youth, balanced workforce, investing in

:03:09. > :03:12.innovation and connecting with communities and prompt payment of

:03:13. > :03:16.suppliers. Those are making a manifest difference and if I can

:03:17. > :03:28.draw attention to the living wage aspect, we had an early intervention

:03:29. > :03:33.who asked the chairman of the Select Committee about caravan parks and

:03:34. > :03:38.how the economy required low skilled workers with low pay. I disagree

:03:39. > :03:42.with that premise. The tourism sector is of vital importance, it is

:03:43. > :03:47.of specific importance to Scotland and having well-trained people in

:03:48. > :03:51.these... Who can welcome people, explain things, the experience built

:03:52. > :03:57.up is of benefit. When companies have higher wages and pay the

:03:58. > :04:01.minimum wage, the experience lower worker turnover and companies spend

:04:02. > :04:06.less on training, less on recruitment and they get a better

:04:07. > :04:10.outcome. Let's not diminish the jobs that may seem on the face of them to

:04:11. > :04:15.be unskilled. If we can invest and treat them properly with the respect

:04:16. > :04:24.they are due, give people a decent wage they will have greater pride in

:04:25. > :04:30.their job and will produce more. I mentioned in the intervention that

:04:31. > :04:36.there have been damaging changes in terms of policy. I welcome the

:04:37. > :04:39.production of the government industrial strategy, I hope they

:04:40. > :04:44.will learn some of the lessons of previous mistakes, the constant

:04:45. > :04:47.change of goalposts which is acute in the energy sector where we have

:04:48. > :04:53.seen expertise built up over a number of years, the productivity

:04:54. > :05:01.increases pulls away because of government changing investment

:05:02. > :05:05.climate. Onshore wind, very little headwind. When it came to decision

:05:06. > :05:10.around carbon capture and storage it was done with precisely zero

:05:11. > :05:17.consultation. That is not good for the economy, not good for

:05:18. > :05:23.productivity growth. I also think we need to focus around Brexit. If we

:05:24. > :05:29.are serious about boosting productivity, let's ask ourselves

:05:30. > :05:33.how is the productivity of exporters going to be increased by having to

:05:34. > :05:38.fill out forms because we have come out of the customs union. They need

:05:39. > :05:43.to do complex processes to export the same goods, more work for the

:05:44. > :05:45.same product, that will not boost productivity. How is the

:05:46. > :05:51.productivity of the university sector going to increase when

:05:52. > :05:56.students and academics and funding previously from the European Union

:05:57. > :05:59.cease to exist because of the hard Brexit. How will our food and drink

:06:00. > :06:08.sector which relies on European union for funding through the Common

:06:09. > :06:14.agricultural policy, they have a huge impact in terms of exports to

:06:15. > :06:18.the single market and where a thousand EU nationals work in the

:06:19. > :06:25.sector, how is the productivity of that sector going to be boosted by

:06:26. > :06:31.Brexit? It is not. We have to face that. The Scottish government,

:06:32. > :06:35.myself and my honourable friend have been clear around how we wish to

:06:36. > :06:40.proceed from the Scottish point of view. We have sought compromise in

:06:41. > :06:44.terms of Brexit, we have looked to ensure the UK as a whole stays in

:06:45. > :06:49.the single market and the customs union because we believe that is the

:06:50. > :06:54.best for the economy and for productivity. But before we get too

:06:55. > :07:02.far down this road, I urge the minister to look at the policy paper

:07:03. > :07:07.the Scottish government put forward and to react. To respectfully agree

:07:08. > :07:13.we will pursue that. To boost productivity, whilst we need to

:07:14. > :07:20.invest in all the things I said before, we also above all need to

:07:21. > :07:23.avoid the hard Brexit it is facing us and I plead with the minister and

:07:24. > :07:32.the government listen carefully and protect Scotland's place in Europe.

:07:33. > :07:39.Thank you. It is a real pleasure to speak in this debate and follow so

:07:40. > :07:44.many excellent and well considered contributions and I draw attention

:07:45. > :07:50.to that which opened the debate of my honourable friend the member for

:07:51. > :07:56.Hartlepool and share of the Select Committee who made almost all the

:07:57. > :08:03.points that I intend to make but made them in a way which was much

:08:04. > :08:07.more eloquent than I could ever hope for and it is one occasion where

:08:08. > :08:17.Newcastle will follow in Hartlepool's train. As many

:08:18. > :08:22.contributions from members emphasised, productivity is a key

:08:23. > :08:28.subject. It is one of the most important challenges facing our

:08:29. > :08:35.economy. The member for Warrington emphasised that, high productivity

:08:36. > :08:44.is collated with high wages and skill levels and if we want that

:08:45. > :08:48.sort of economy as we certainly do, productivity improving productivity

:08:49. > :08:53.must be a key goal. But productivity has fallen consistently under this

:08:54. > :09:02.government. We are now 30% behind Germany, the US and France, the

:09:03. > :09:10.widest gap since 1992. Decades ago. But when there was also another Tory

:09:11. > :09:17.government with a small majority. Since 2010, UK productivity has

:09:18. > :09:22.grown on average by just 0.5% per year. The OECD, the CBI, the OBR and

:09:23. > :09:28.the Bank of England have all expressed concerns that continued

:09:29. > :09:37.low productivity growth is holding back our economy. So, how to improve

:09:38. > :09:43.productivity? Well, it is quite simple. You need to get more out of

:09:44. > :09:51.the same input. That is basically about either people or technology.

:09:52. > :09:58.As the Economist has said, and I quote, productivity comes from

:09:59. > :10:02.allowing people to work more efficiently with state-of-the-art

:10:03. > :10:06.training, technologically advanced machinery and innovative division of

:10:07. > :10:15.labour and harmonious capital labour relations. So, firstly let's look at

:10:16. > :10:22.people and as the member for Horsham said and I agree on this point

:10:23. > :10:29.entirely, people are our key asset as an economy and for businesses.

:10:30. > :10:33.However, this government considers labour to be a commodity and

:10:34. > :10:40.commodities are not productive. Imagine the case, say, the work are

:10:41. > :10:47.sitting at her desk feeling disempowered, undervalued and

:10:48. > :10:52.disenfranchised, of course productivity is lower. But empower

:10:53. > :11:00.her, give her a sense of urgency and her will rise.

:11:01. > :11:02.Skills are an essential part of empowering burqas and improving the

:11:03. > :11:24.productivity. Nothing was committed to skills

:11:25. > :11:31.other than a promise to fund Charlie Masefield 's's proposal to boost

:11:32. > :11:38.management skills across British businesses. Hardly an essential

:11:39. > :11:46.investment. The lack of commitment has been criticised. Unfortunately

:11:47. > :11:55.the government doesn't seem to have taken criticism on board. It is 18

:11:56. > :12:05.months since the productivity plan. It is six months since the select

:12:06. > :12:09.committee's report. Last month the industrial strategy Green paper did

:12:10. > :12:14.not recognise these criticisms at all, simply promising 170 million

:12:15. > :12:20.for high-level technical education when the government has already cut

:12:21. > :12:27.the education budget by 40% in real terms in the last financial year

:12:28. > :12:48.alone. In an area of technological change

:12:49. > :12:52.in which people are living and working longer, lifelong learning

:12:53. > :12:58.should be a key part of any government's strategy to up skilled

:12:59. > :13:10.workers and improve national productivity. We no longer have one

:13:11. > :13:18.job in our career. We need to be able to up skill and respond to

:13:19. > :13:26.changing technological requirements. But the paper contains only a

:13:27. > :13:31.smattering of references to adult learning. This brings me to the

:13:32. > :13:36.second significant factor in productivity. Technologies. There is

:13:37. > :13:41.both opportunity and threat in the technological transformation that we

:13:42. > :13:47.are undergoing. Analysis from the centre of economic policy research

:13:48. > :13:50.demonstrates that industrial robots and information technology can

:13:51. > :13:57.increase both wages and productivity. They also found that

:13:58. > :14:02.increased use of robots raise country's average growth by about .4

:14:03. > :14:10.percentage points across the period 1993 up until 2007. So it is clear

:14:11. > :14:17.that sustainable long-term, smart growth requires significant

:14:18. > :14:22.investment in technology and the select committee's report argued if

:14:23. > :14:26.the government is serious about productivity and competitiveness it

:14:27. > :14:39.needs to commit to a total level of public and private research and

:14:40. > :14:43.development contributions of 3% GDP. But the minister said in advance of

:14:44. > :14:52.the budget that he is proud to commit to a target 3%. Output in

:14:53. > :15:00.Germany is 34% higher than in the UK. The R and D spent in Germany as

:15:01. > :15:04.a percentage of GDP has been at or near the 3% target for many years.

:15:05. > :15:13.Hours spent by contrast has languished at the elite half the 3%

:15:14. > :15:18.target. The productivity question is not only about the development of

:15:19. > :15:22.new technologies. We also need to make sure businesses can use those

:15:23. > :15:26.technologies, utilise the productivity benefits that they

:15:27. > :15:35.bring. That is a crucial point in sectors such as retail, the UK's

:15:36. > :15:41.largest... She has been talking a lot about the targets were how much

:15:42. > :15:47.we invest in R and D, but does she appreciate that there is a way that

:15:48. > :15:50.we account for our R and D investment. If you look at the types

:15:51. > :15:56.of investments in the UK, it's much more favourable. It's not just the

:15:57. > :16:02.quantum of investment, but the returns on the investment. I thank

:16:03. > :16:06.the honourable gentleman for that and I agree with him it is not only

:16:07. > :16:10.about what we invest, it's also about the returns and where those

:16:11. > :16:17.returns go when the investment is made by the public sector, for

:16:18. > :16:22.example. How the public sector make sure that Matt makes sure it reaps

:16:23. > :16:27.the returns. We can use statistics in many different ways. I'm not

:16:28. > :16:45.going to attempt a battle statistics here, but it is clear, the UK is not

:16:46. > :16:50.leading the world in investing in R and D. I'm not sure what the

:16:51. > :16:57.Minister is saying, but I hope at some point to be enlightened. In

:16:58. > :17:04.terms of ensuring that sectors like retail can take up technology, the

:17:05. > :17:08.government's industrial strategy has again got nothing to say. Because

:17:09. > :17:14.the government chose to cherry pick certain favoured sectors for

:17:15. > :17:18.backroom deals, it fails to address the root cause of our productivity

:17:19. > :17:25.crisis and leaves the majority of British workers out in the cold. The

:17:26. > :17:29.importance of skills and technology in improving productivity is key,

:17:30. > :17:33.but we also need a strategic sense of vision and this government's

:17:34. > :17:44.productivity plan is notably absent from that. Absence in the sense of

:17:45. > :17:49.any vision. We need a plan and a strategy and when the government's

:17:50. > :17:56.industrial strategy came out, we saw that it had plenty of pillars, but

:17:57. > :18:07.no vision. If you add the ten pillars in the industrial strategy

:18:08. > :18:11.to two in the productivity plan, it does make sense. The government is

:18:12. > :18:20.building pillars on hot air. I will give way. Surely the honourable lady

:18:21. > :18:24.as she represents and has done for seven years has a seat in the

:18:25. > :18:28.north-east, part of the problem is an over reliance on financial

:18:29. > :18:33.services, construction and government expenditure concentrated

:18:34. > :18:39.in the greater south-east which are government when in power did next to

:18:40. > :18:43.nothing about? I'd like to thank the honourable gentleman for that

:18:44. > :18:46.contribution, but he fails absolutely to recognise the work of

:18:47. > :18:51.the regional development agencies which his government abolished,

:18:52. > :18:58.which were significantly contributing to changing the

:18:59. > :19:05.industrial landscape and to argue, as he appears to be doing, that the

:19:06. > :19:11.financial sector, the construction sector and I forgot the other one he

:19:12. > :19:18.mention, government spending, we absolutely need to diversify that,

:19:19. > :19:23.but we need government to aid that. What he fails to recognise is the

:19:24. > :19:25.role that an intelligent smart government can play in supporting

:19:26. > :19:30.smart sustainable economic growth and for as long as those on that

:19:31. > :19:35.side of the House fail to recognise that, we will not see smart growth

:19:36. > :19:40.in this country. I'll give away one more time. Because I'm fair-minded

:19:41. > :19:43.and generous, I will agree that in the north-east region it was more

:19:44. > :19:49.successful than other regions, but what was found by several academic

:19:50. > :19:57.studies in the period up to 2010 that the inequalities between

:19:58. > :20:02.regions had nothing to do with the regional strategy of the Labour

:20:03. > :20:07.government. Interesting that the gentleman likes to concentrate on

:20:08. > :20:10.the record of the last Labour government, over seven years ago

:20:11. > :20:14.now, is that of looking at the record of this government and the

:20:15. > :20:18.institutions they have or have not put in place and the success or

:20:19. > :20:26.absolute lack of success in either addressing regional imbalances, or

:20:27. > :20:34.in addressing the debt that they have succeeded in increasing.

:20:35. > :20:42.They've enquiries national debt, but not generated long-term growth.

:20:43. > :20:46.Despite the Prime Minister's rhetoric about a new active role for

:20:47. > :20:51.the state in the economy, the average level of public investment

:20:52. > :20:58.in this Parliament is set to be 1.9% of GDP whilst lower than it was

:20:59. > :21:05.during the coalition's austerity agenda and barely half the amount

:21:06. > :21:08.under a Labour government. So the government is effectively reducing

:21:09. > :21:14.private sector investment and public sector investment at the same time.

:21:15. > :21:20.Absolutely taking away the lifeblood that our economy needs. Madam Deputy

:21:21. > :21:30.Speaker, austerity did not deliver smart growth and austerity in all

:21:31. > :21:40.but name will not deliver it either. The Labour Party has committed to

:21:41. > :21:48.investing 250 billion in capital spending Sir -- expenditure. I would

:21:49. > :21:56.ask the Minister to address how he will be able to change our

:21:57. > :22:02.productivity and deliver on smart growth? In conclusion, our country's

:22:03. > :22:09.productivity problem will not solve itself. We need sustained, long-term

:22:10. > :22:16.investment in skills, technology and infrastructure, and this will not be

:22:17. > :22:19.forthcoming unless the government has a clear strategic vision for the

:22:20. > :22:28.future. We need to mobilise both public and private actors, crowding

:22:29. > :22:34.in investors and tackle the root causes of our productivity crisis.

:22:35. > :22:37.It is only by doing that that we can create the high wage, high skill,

:22:38. > :22:46.high productivity economy that this government says it's worth, that the

:22:47. > :22:51.British people deserve and that only a Labour government can deliver. I

:22:52. > :23:00.would like to pack my honourable friend the member for Hartlepool for

:23:01. > :23:05.opening the debate and other members who have taken part in the

:23:06. > :23:13.proceedings. I welcome the challenge of boosting productivity in the UK.

:23:14. > :23:16.It's a key priority. We recognise it is an important route to raising

:23:17. > :23:21.living standards for people in the UK. Since the financial crisis we

:23:22. > :23:26.have focused on stabilising the economy, tackling the deficit and

:23:27. > :23:42.creating jobs. The UK has strong growth in the -- has seen strong

:23:43. > :23:47.growth. Employment has seen a record high. Unemployment is at its lowest

:23:48. > :23:59.level for 11 years. If we raise productivity however, by just 1%, we

:24:00. > :24:02.will add my thousand pounds every household in Britain. That is why

:24:03. > :24:09.the government has taken action to improve productivity in the UK. We

:24:10. > :24:13.published fixing the foundations, creating a prosperous nation. A plan

:24:14. > :24:18.for productivity growth in the UK over a decade. This outlines how we

:24:19. > :24:21.can in courage further investment in science, education, skills and

:24:22. > :24:26.infrastructure and create a dynamic economies through planning laws,

:24:27. > :24:30.boosting competition and creating a Northern Powerhouse. Today I will

:24:31. > :24:34.seek to address some of the committee's concerns a report back

:24:35. > :24:40.to the House on some of the progress we have made. Before doing so I

:24:41. > :24:48.would like to tackle the honourable member for Hartlepool's questions

:24:49. > :24:51.about the status of business 2020 and the government changes he

:24:52. > :25:05.mentioned on the delivery of the plan. The principles behind the

:25:06. > :25:11.beads 2020 work still continue. We need to be flexible and to be able

:25:12. > :25:17.to respond rapidly. We will be considering in the coming months how

:25:18. > :25:26.the reform plans should be best aligned. Is that the Minister for

:25:27. > :25:29.giving way. He is giving a similar answer to what the Secretary of

:25:30. > :25:33.State gave before Christmas, but this new department has been in

:25:34. > :25:36.operation now for seven months and the Minister can still not say what

:25:37. > :25:43.the savings for his department and what activities will be stopped?

:25:44. > :25:48.Does he think seven months into the new department's life that that is

:25:49. > :25:53.good enough? As I said, the alignment of the two work programmes

:25:54. > :25:55.of the Department is a complex process of further reports will be

:25:56. > :26:04.made available in due course. The committee raised concerns about

:26:05. > :26:08.the clarity of the objectives and how it represented a new plan for

:26:09. > :26:13.productivity growth. The plan has had a clear objective directly

:26:14. > :26:16.targeting the high-level drivers of productivity performance and

:26:17. > :26:22.contains a number of new innovative policies such as the commitments to

:26:23. > :26:26.set a A roads fund and a network of technology. The report questioned

:26:27. > :26:31.the extent to which ministers are engaged in the implementation of the

:26:32. > :26:35.plans policies. We regularly discuss issues relating to the main policies

:26:36. > :26:40.at several Cabinet committees including the industrial industrial

:26:41. > :26:43.affairs committee and alongside Cabinet committees the government

:26:44. > :26:48.has set up a series of implementation task forces attended

:26:49. > :26:55.by ministers and senior officials for example the urn or learn task

:26:56. > :27:02.force is supporting 3 million open ship starts by 2020. One of the many

:27:03. > :27:07.ways the government is addressing the skills challenges --

:27:08. > :27:11.apprenticeships. Our response includes an update detailing the

:27:12. > :27:16.progress made and future implementation of each of the plans

:27:17. > :27:20.172 commitments. It shows over a third of commitments have been fully

:27:21. > :27:25.delivered and outstanding commitments remain on track. We

:27:26. > :27:31.published a new national infrastructure delivery plan which

:27:32. > :27:34.details over ?100 billion of planned public investment in infrastructure

:27:35. > :27:39.until 2021, we finalise the funding policy for the apprentice should

:27:40. > :27:41.levy had of its introduction in April and legislated for key

:27:42. > :27:47.planning reforms to the Housing and planning acts like automatic

:27:48. > :27:50.commission on brown field sites. Further devolution deals have been

:27:51. > :27:55.signed in Liverpool, Sheffield and the West Midlands and we have

:27:56. > :28:01.increased investment allowance to ?200,000, the highest ever level. We

:28:02. > :28:06.also announced a new national productivity investment fund

:28:07. > :28:13.providing ?22 billion of investment between 2017 and 18 and 2021, 22

:28:14. > :28:16.targeting four critical areas for improving proteolytic housing,

:28:17. > :28:26.transport and digital communications and are indeed. The new government

:28:27. > :28:36.is... I thank him for giving way, 7 billion over 23 investment fund is

:28:37. > :28:39.put back to 21, of the money is so important for productivity why is

:28:40. > :28:47.the money not brought forward and invested now? This is an ambitious

:28:48. > :28:54.plan which involves expenditure of an unprecedented sum, ?23 billion

:28:55. > :28:56.between 2017 and 2021, the profile of that expenditure is optimised to

:28:57. > :29:04.have the greatest impact on productivity outcomes. On January

:29:05. > :29:08.the 23rd we published a green paper building our industrial strategy

:29:09. > :29:12.which sets out our approach to developing the strategy, the main

:29:13. > :29:16.goal is to improve living standards and economic growth by increasing

:29:17. > :29:24.productivity and driving growth across the whole economy. My

:29:25. > :29:28.honourable friend asked what the relationship is between these plans,

:29:29. > :29:32.they are part of the same family of work that sits beneath the long-term

:29:33. > :29:36.economic plan, the industrial strategy will form a key part of how

:29:37. > :29:43.the government takes forward the productivity agenda set forward and

:29:44. > :29:47.set out in the productivity plan. Crucially, it sets out three key

:29:48. > :29:52.challenges that we must face up to now and in the years ahead. First,

:29:53. > :29:56.to build on our strengths and extend excellence into the future, the UK

:29:57. > :30:02.has real strength but we cannot take the granted. We need to in invest in

:30:03. > :30:06.research and development, and to make ourselves ever more attractive

:30:07. > :30:14.to inward investment and that is why we have announced an additional four

:30:15. > :30:19.points ?7 billion by 2021 -- four points 7 million. This extra ?2

:30:20. > :30:23.billion a year by the end of the parliament is an increase of around

:30:24. > :30:29.20% in total government are indeed spending and more than any increase

:30:30. > :30:35.in any parliament since 1979. The member opposite offered empty

:30:36. > :30:39.promises, we are delivering hard cash and I know which I would

:30:40. > :30:45.prefer. The second challenge is to ensure everyplace meet its potential

:30:46. > :30:48.by closing the gap between the best performing companies, industries,

:30:49. > :30:52.places and people and those which are less productive. We have sectors

:30:53. > :30:57.and businesses which are among the most productive in the world but we

:30:58. > :31:02.also have too many who lie far behind the leaders and bra --

:31:03. > :31:07.driving productivity means we must enable those industries and regions

:31:08. > :31:14.who lack behind to achieve potential. Members asked what it is

:31:15. > :31:18.that creates these divergences in regional productivity, these are

:31:19. > :31:22.complex phenomena, the differences have many factors behind which drive

:31:23. > :31:26.differences in growth and productivity including weaknesses in

:31:27. > :31:32.infrastructure, connectivity, and skills, research and develop it

:31:33. > :31:37.which is correlated with lower levels of productivity and other

:31:38. > :31:44.factors. It is important to note that these structural factors are

:31:45. > :31:59.not alone. The quality of management in our companies is also important.

:32:00. > :32:05.Providing strong sustained leadership, helping support business

:32:06. > :32:08.to business engagement and improving productivity across the business

:32:09. > :32:13.community. A point which my honourable friend for Bedford wanted

:32:14. > :32:18.us to do. We need to make sure the UK is the best place in the world to

:32:19. > :32:22.start and grow the business. The UK has a strong record on business

:32:23. > :32:26.start-ups but too many fail to scale up into the big employers of the

:32:27. > :32:30.future. Through the industrial strategy, we will aim to identify

:32:31. > :32:36.and address the many barriers businesses face to scaling up and

:32:37. > :32:43.growing. We have invested ?400 million in the British business bank

:32:44. > :32:47.to catalyse private sector and we will work with them to further

:32:48. > :32:52.understand the obstacles firms face accessing capital outside London in

:32:53. > :32:57.the south-east. By responding to the challenges presented by each of the

:32:58. > :33:01.strategies in a rigorous and strategic way, we will achieve our

:33:02. > :33:05.objective is to improve living standards and examine growth by

:33:06. > :33:09.increasing productivity across the whole country. Madam Deputy Speaker,

:33:10. > :33:12.everyone to create a country working for everybody, we need to answer

:33:13. > :33:17.this productivity question. We want to see the same high level of

:33:18. > :33:21.success witnessed in the best performing companies, people and

:33:22. > :33:24.places in those areas which are still left behind. We plan a bold

:33:25. > :33:27.new and collaborative approach for industrial strategy in the UK and

:33:28. > :33:33.this is a new approach with the government stepping up, designing a

:33:34. > :33:38.strategy in collaboration with people and organisations across the

:33:39. > :33:41.country, not imposing it from Whitehall. We recognise our

:33:42. > :33:44.productivity challenges but we recognise where we can make

:33:45. > :33:50.improvements and weather can build on strengths to make the UK are more

:33:51. > :33:57.productive prosperous economy. I reiterate my welcome to debate the

:33:58. > :34:02.government threatened to plan. I thank all the members who have

:34:03. > :34:07.contributed today. It seems appropriate that as we were debating

:34:08. > :34:13.news came through of Sir Philip Green providing up to ?363 million

:34:14. > :34:17.in order to try to sort out the pension tobacco he put in place

:34:18. > :34:25.because many of the honourable members who worked so hard on the

:34:26. > :34:30.committee, Horsham, Bedford, Cannock Chase, Derby North add Edinburgh

:34:31. > :34:36.West were forensic and professional putting aside party politics to

:34:37. > :34:42.continue to put pressure on, they should be proud of themselves. I

:34:43. > :34:46.find it appropriate that a great great parliamentarian and a

:34:47. > :34:51.fantastic coach, the member for Birkenhead is also in the Chamber.

:34:52. > :34:56.He especially provided leadership at the joint committee putting pressure

:34:57. > :35:00.on Sir Philip to do the right thing, to right the wrongs he himself put

:35:01. > :35:09.in place so I pay tribute to a great friend of mine. There was a theme

:35:10. > :35:15.there. The economy does not work for everyone. There was a disconnect and

:35:16. > :35:20.went BHS workers faced redundancies and cuts to pensions, Sir Philip

:35:21. > :35:24.Green was getting ownership of a third yacht. There is something

:35:25. > :35:29.profoundly wrong, structural weaknesses need to be put in place.

:35:30. > :35:33.That was the purpose behind the productivity plan and hopefully it

:35:34. > :35:41.is the purpose behind the government industrial strategy but this cannot

:35:42. > :35:48.last for 12 or 18 months. This has to be long-standing to ensure we get

:35:49. > :35:52.permanent change, we address the problems of inadequate investment in

:35:53. > :35:58.infrastructure, skills deficiencies and addressing appalling regional

:35:59. > :36:03.imbalances in productivity and high growth. That is the challenge, I

:36:04. > :36:08.hope we can have a long-term view to make sure industrial strategy can be

:36:09. > :36:13.embedded. Productivity plan is last years think I hope the industrial

:36:14. > :36:21.strategy can persist and last for decades so we can really have an

:36:22. > :36:26.economy that works for everyone. Order, order, the question to

:36:27. > :36:35.dispose of the motion stands until 7pm and a standing order number 54.

:36:36. > :36:38.Point of order. Thank you. The Department for Education briefed the

:36:39. > :36:44.media earlier today they were planning to bring forward a change

:36:45. > :36:46.to the children social work Bill to introduce statutory sex