28/02/2017 House of Commons

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

would welcome the opportunity for this house to debate the

supplementary Estimates affecting the Department of business, energy

and industrial strategy, an honour and pleasure to chair this committee

and I'm fortunate to lead a committee with excellent honourable

members and I see some of them in the Chamber today. HE LISTS NAMES

And what we try to do, as well as remembering the constituencies, is

to work out together to put in place policies so workers have high wages,

higher skills, protection, working in firms that are productive,

competitive, profitable and have barriers to scale up and removed.

The title of the debate references the governments productivity plan

and I will come onto that at the moment. However, given the debate is

about the estimates, I want to mention a couple of points regarding

them. On a broader point, in my time in this house, it has struck me as

odd, concerning, that billions of pounds of taxpayers money voted

through on the nod without any debate, scrutiny or challenge. This

debate is about government proactivity and most of the

contributions will be on that document that is over to becoming

obsolete. At the end of it, we are asked to approve billions of pounds.

The manner in which estimates are presented are opaque and unhelpful,

difficult to follow the money. Departments produce annual reports

which are more helpful asking -- and scrutinised by Lex committees and

the NA oh conducts its own work but the point of this place is to

scrutinise, challenge the executive and permit the government's wish to

tax the general public and I'm far from convinced the current system

allows that to happen in an effective manner so I look forward

to the procedures committee coming up with more radical improvements in

this area. Supplementary estimates reflect the machinery of government

changes with business innovation and skills and energy and climate change

can together and losing responsibilities for further and

higher education and exports. They had savings targets of 16 and 17%

respectably by 2020. The former business Department had business

2020 containing proposals to make cuts in this period including

regional growth, pushing the Northern Powerhouse and the closure

of the Sheffield office. A large part of the savings from the old

business Department was to be achieved through changing the way

further education and higher education would be funded but given

the changes this option is no longer available and so on the point I made

earlier, regarding the opaqueness of the Estimates, it is impossible to

tell based upon the information in front of us as to what the plans

savings of the new department are and whether business 2020 is

continuing. I asked the Secretary of State when he came before the Select

Committee whether similar savings of 16 or 17% would be required and he

confirmed that saying business 2020 was no longer available because it

was a new department but did not offer an alternative. When I asked

what things are Department would stop doing to make the cuts, the

secretary of state said we will set out the proposals to the part that

-- to the Department and the committee will want to see that and

I'm happy to send them to committee, we take the opportunity of the two

departments coming together, re-engineer the way the department

is run to make sure you take advantage of the big opportunity to

tie things up here internally. However, no such proposals have been

brought forward. I would be grateful if the minister could outline in the

response what the specific savings the new department have to make and

precisely how he intends to make those savings, including what

activities will be stopped. This is in the context of the supplementary

Estimates before us, stating administration costs are rising from

425 points ?6 million this year to ?528.5 million next year. But no

explanation in the memorandum is given. Could the minister provide

one? I turn now to the productivity plan, the fact regarding the

performance is well rehearsed but it is worth reiterating. Productivity

has stalled. GDP is 17% below the 35 year long-term trend and has

exceeded the peak it reached prior to the global financial crash. We

are falling further behind our major competitors, Al Puck -- output per

hour in a G-7 was 18% below the G-7, the widest gap in productivity since

records began in 1991. Within that statistic shows a marked difference

between performance between ourselves and competitors. We are

above Japan by 16 percentage points. Italy is 10% more productive than we

are, the US and France are 30% more productive than we are and Germany

is 36% more productive than we are. Of course, all developed countries

productivity was badly jolted as a result of the global crash but the

gap between our long-term productivity trends and our

competitors in the G-7 is twice as big. Productivity gains the way real

wage growth and living standards can rise. Dessie except where there is

high unemployment, they have a higher proactivity figure but we put

the people to work in lower value activities which is better than them

being out of work because the best way to get a better job is to start

off on a job that isn't a good one. I will respond in a moment. I do not

think that helps living standards or constituents or the long-term

competitiveness of the nation. It is little wonder given the intimate

link between productivity and pay that recruitment said productivity

isn't everything but almost everything. Reflecting this, wage

growth has been anaemic, in a period 2007 until 2015, British workers

suffered a bigger fall in wages than in any other advanced country with

the exception of Greece. Average pay fell in real terms more than 10%.

Under the same period, real wages grew in France by 11% and in Germany

by 14%. Median pay for workers here is still around 5% below its

precrisis peak. There has been a lost of wage growth for our

constituents, British workers. And yet headline nationwide figures for

productivity as concerning as they are masked stark differences in

regional proactivity. The only other region with productivity above the

UK average was the south-east of England at 9% above-average. The

regions of the North, Midlands and the North East and others on the

committee and the honourable gentleman for Warwick and Lymington,

our regions have proactivity levels between ten and 50% below the UK

average. In terms of the Nations cup productivity in Scotland which

includes the constituency of the honourable lady for Edinburgh West

is 2% below the national average whilst in Wales it is 19% below the

average. Were it not for the performance of London and the

south-east, the gap between ourselves and our major rivals with

whom we compete for orders and trade and market share would be even more

dire. I would like to comment that habitually in this place we look at

productivity of ourselves against the G-7 but I recall a debate on

this matter this time last year where I did some research into

looking at medium-size countries like Norway where the productivity

levels were significantly higher than any of the G-7 countries and I

wonder if he will go on and elaborate and explore how the scale

of these medium-size countries could be a factor for productivity? I will

talk about scale when it comes to sizes of firms as opposed to sizes

of nations but I think this is an important point. And the point I

would like to make is I do not think this is a dry or dusty economic

treaties. What it is is real and unsatisfactory productivity growth

across the UK and that is affecting the living standards of our

constituents for members on the Select Committee and the whole

house. That is why we wanted to examine the government productivity

plan. This is not about dragging London and the south-east back but

moving the regions and nations closer to the economic performance

of the capital. And it seems to me the particular distinctive structure

of the economy also can be acting as a drag on economic performance. Four

fifths of our economy is services, that is higher than any other G-7

country. In the main, or that the service sector has driven economic

recovery since the downturn, the sector in the main and in general

tends to have lower productivity in manufacturing. Moreover, in the past

30 years, we have seen a shift in the nature of the jobs in this

country. For every ten Middle skills jobs disappeared in the UK in the

1990s and the 21st century, for .5 of the replacement jobs for high

skilled and 5.5 for low skilled. In Ireland, the ratio was 8-2 in favour

of high skilled jobs. In France and Germany, the ratio was 7-3.

The major nature of the economy and a school set, a major rivals are

going higher up the value chain than we are. -- skill. Britain is a

nature is not of shopkeepers then certainly of small businesses. The

21st century the number of small businesses in the UK has increased

each and every year by 3% to reach no 5.5 million. 2 million more

businesses than in the year 2000. However the proportion of firms that

employ people has fallen in the same period around about a third of

companies in term 2000 to around a quarter to day. Micro-businesses,

those enterprises employing fewer than ten people, account for 96% of

all businesses in the UK. I think the domination of small businesses

in the economy as a vocations for productivity levels. They cannot

take advantage of economies of scale and have more difficulties in

accessing finance for new products and process development and skill of

activity. They may find it difficult to find the time not merely to

fulfil existing orders but identify opportunities and secure bigger

contracts both domestically and affecting both markets. They cannot

afford armies of procurement or export tips. Does he agree with me

that certain sectors of industry such as tourism with jobs that are

are needed are in fact of low skilled jobs such as running a

caravan park? I think he makes an important point. I honestly want to

see a pound generated throughout the economy but I would like the

structure and model of our economy to move higher up the value chain

than perhaps running a caravan park as he suggests. Another big factor

determining productivity levels is investment in R There has been an

average growth rate of 4.2% since 1991 and on the face of this it is

impressive. It has been stated that the business enterprise of the

component of our expenditure is low by international standards even

allowing for structural differences between countries. It is also

concentrated in the hands of a very few large firms and a small number

of industrial sectors in which they are based. Seven seconds of our

economy account for over two thirds of all spend on R . The

pharmaceutical sector accounts for a large part of R The automotive

industry is 13% and aerospace is 8% of the total. An investment in R

is also the hands of foreign-owned businesses. 25 years ago 73% of

business R was by British owned firms and 20 7% by four Bill of --

by foreign firms. No more than half is run by overseas firms. R May

fall and jobs and securities here may be cut to safeguard the whole

market. I take the point regarding the stickiness of that investment

but it is also a tribute to the University in this country and the

skills that they specialise in that they choose to come here to base R

sources in the UK. In regards to bang for the buck they amount the TV

sector provides -- UK sector provides is a magnet in contrast to

the stickiness of foreign investment. We have to make this

country as an attractive proposition for foreign direct investment as we

can. In the same way referring to London and the south-east pulling up

by productivity levels. I would like to think what productivity and

investment levels might be if they did not have this foreign direct

investment. I think that is really important. In terms of the overall

R spend including Government as well as business, we have never

spent the OECD budget. In the last 35 years or so we've always get 2%

of gross domestic product spent on R that was in the overall amount

is usually 1.6 1.7% which is not good enough to maintain our living

standards are see productivity rise. It is clear productivity would Mrs

need to be addressed. The previous Government produced the productivity

land. As a committee we welcome the attention of the Government is

pressing matter. But we thought that the plan lacked focus and could not

demonstrate how success would be judged. Rather than being a clear

and distinctive road map or strategy as to how the UK would close the

productivity gap it disappointed by being a collection of existing

policies but nothing new, nothing distinctive. The plan had 15 areas

covering all aspects of Government and business activity, and cost

prating skills and R -- Inc. It had no metrics evaluate success and

failures. All the productivity plan was a Treasury initiative. Clear

lines of communication accountability were nonexistent.

Business and Treasury ministers came before a committee and said the plan

was monitored through civil servants which seemed somewhat relaxed since

this was meant to be the most pressing economic chance for

Government to deal with. They seem to forget it was actually

ministerial subcommittee which they were members. I want to finish by

saying productivity series The Simpsons 2015. -- stays the same. He

is giving a superb speech about the impact productivity. Can he just say

a couple more awards about the machinery of Government and

delivering a productivity plan. It is a shocking fact that ministers

came before our committee and were totally unaware that their

responsibilities to the productivity plan were being scrutinised higher

Cabinet subcommittee. Can you see going forward the role of the

machinery of Government and the role of the central Government Treasury

in scrutinising their crucial role in delivering for the organisations

out there on the front line? One of the weaknesses of Government and

this is not based in terms of the colour of administrations but the

nature of a culture of Whitehall is that it is very silo -based. This

seems to be a very clear lack of coordination. The more the nature of

pressing economic challenges that needs to be a greater monitoring and

supervision of scrutiny and coordination across Government. It

would be interesting placed upon the status of the plan to hear what that

actually is at the moment. As I said productivity plan seem to be sorted

out of 15 is seen to be intensely fashionable but only for around 12

months. The new buzz phrase is industrial strategy. I welcome the

willingness of the Government to embrace the phrase industrial

strategy is somehow a potentially positive thing. It does exemplify

one of the problems faced. It has 12 pillars as opposed to 15. So we're

seeing some degree of efficiency there. We have the tenancy from

successive governments to announce a new initiative from year to year and

policy for its like a butterfly from one year to the next with little if

any impact on the ground upon firms and the living standards of our

constituents. That is to the detriment of long-term economic

competitiveness. He says it makes no influence on the productivity. In

ten places it has a hugely damaging impact. Take investment in new

build. Then the pipeline it is working on it swept away because of

the policy of the Government. In respect to energy policy that

constant changing can really undermine long-term investor

confidence and make sure that foreign direct investment and other

investment can be attracted to this country. I think what businesses

requires as much certainty as possible. Things change and of

course that is the case but to try to have a very clear road map is to

play we're trying to get to and try to minimise as much as possible is

really important. My right hon will find for walking at the point is

that the largest peace in our productivity puzzle is that we have

essentially traded some of the productivity for very high levels of

employment and that is a good thing. -- walking hand. -- Wokingham.

Employment is crucial and idea that we have recognisable is unemployment

is a good thing, however the nature of that employment, we want to see

good full-time employment and permanent contracts and people

secured and that jobs and able to invest in their own lives and on

committees were some degree of confidence. Where we have moved in

the last 20 or 30 years is much more insecurity and more precarious form

of employment which can be bogus self-employment as US contracts

agency work. I think we need to think of what provision we have had

economy. -- zero hours. Is it pitiful wages or making sure we can

pull the activities of Government and business together to move people

up there skills chain. I think it is easier to get a higher pay and more

skills and working smarter if you start, space of everyone being in

work. -- if you start from the place of everyone being in work. The Right

Honourable gentleman must accept that and experience of the last 510

years to get a good job the best position is to be in employment are

ready that people are stuck on low pay zero hours contract and

precarious employment and that has no moving on and no social mobility

and progress. On that basis I do hope that the industrial strategy

lends the lessons from the productivity plan. We on the select

committee out later this week publishing our report into the

Government 's industrial strategy and we hope some of the matters

which are not addressed in the productivity plan with longer term

focus for more policy certainty and greater collaboration and

cooperation across Government. Right across Whitehall departments. The

lack of meaningful metrics and milestones of measurement of

success. If it is to work and succeed industrial strategy cannot

be merely this year 's model. It needs to be a thoughtful and well

established cornerstone of an economic and business policy

framework and actually economic and business mindset to increase

productivity to compete with the rest of the world and improve the

living standards for all in this country. Chris White. I am delighted

to follow the member for Hartlepool and I would like to put on record

what an excellent cheer of the committee hears. Although he does

seem to have a temptation of being a bit more of glass up empty man.

Particularly in this debate. I know he does support many of the measures

in terms of the productivity plan and the terms of industrial strategy

and we do as a committee very much share some very similar views on

this with the notable exception of my honourable friend from Bedford,

perhaps. Improving productivity in the UK has to be a priority. If we

are to achieve our economic growth potential. I welcome the premise

behind the Government 's productivity plan and in equal

measure suggests that it should continue to be scrutinised by

Parliament and by the committee as we work to address the fact that our

productivity is below the European average. What is worth noting is

that this is the case despite having the employment situation that I

think we currently enjoy and I would agree with the right Honourable

member for Wokingham this puts us in a good position to create greater

productivity moving from low paid to higher paid jobs.

There is much to be positive about and I am sure this trend can be

reversed. As co-chair of the all-party manufacturing group, I

know of the immense value of automation and technological

advances to the sector. Continuing to invest in innovation can be

instrumental in improving productivity. It is vital to

recognise the role of industry for .0 of the fourth industrial

revolution. It it will develop the economy. Japan and Germany are all

ready embracing the concept and the UK must develop solid foundations on

which to build our manufacturing capability. I give way. He mentioned

Germany and the importance of manufacturing, does he agree one

lesson from Germany is the importance on technical education

and this government's record on improving infant ships is to be

commended? -- apprenticeships. I'm grateful. Sometimes we are in danger

of thinking Germany are so far ahead and advanced that we should try to

do own thing. They have a number of ideas which we can borrow and learn

a great deal from. I think that will be the format, the forum we can

advance significantly in terms of manufacturing. Quite a bit of the

problem resides in the public sector, not the private sector. Our

best car plants are world beaters, Network Rail publicly owned is way

behind Continental Railways in productivity so we have the solution

in our own hands in the public sector. I would agree with his point

on automotive plants, I will not criticising Network Rail today

because they have announced they will be installing lifts in my local

railway station! I congratulate them profusely on that. Coming onto the

catapult network is a good example of innovation. For every pound of

investment, ?15 of benefit is returned and we should remember that

when we come towards the budget of what advantage these catapult

centres can make. 69% of business can be found in the manufacturing

sector highlighting how important it is to the wider economy. The UK is

championing the idea of horizontal innovation whereby intelligence and

technologies can be shared across industries. This could have a

significant impact on how sectors like shipbuilding and construction

can learn from the best practice of industries like the automotive

sector. Through life engineering services, increasingly on the agenda

with manufacturers going beyond production to maintaining

responsibility for the maintenance of systems through the life of that

product. I commend Cranfield University for its work in this area

and I'm pleased to co-chair a council bring together industry

leaders to discuss how best to develop services. One area the UK is

leading international parts is additive Manufacturing and 3D

printing which we can see in the high valuing -- the centre in Ansty.

We are starting to see a recovery but activity is outstripping

Manufacturing. It is well documented UK productivity is weak and

stubbornly so is the point my honourable member for Hartlepool was

making. Job quality through wages, skills and training or employment

security must continually improve for us to reverse poor productivity

growth. As a Midlands MP I take interest in the Midlands engine

initiative and look forward to the publication of the regional strategy

which I have the minister may give us more light when he comes to his

remarks. The Midlands has a rich tradition of manufacturing and

camera at the forefront of a manufacturing renaissance in this

country. But productivity in West Midlands as has been noted has been

consistently falling against the UK average. The Midlands engine is a

welcomed initiative, developing the skills we need in key industries

such as the automotive sector which we so heavily rely on. In Treasury

questions I asked the Chancellor a question on the provision of

adequate energy supply as electric vehicles become more prevalent.

Companies such as JR are are developing technologies to shape the

future of the sector. They cannot do so without the necessary

infrastructure. Electric cars will be the future and it's important we

provide the necessary power to build the batteries in the vicinity of the

car plants. This is the kind of joined up approach which will be

important. The final point of the 15 plan including emphasis rebalancing

the economy and regional empowerment, London the Southeast

contributes an enormous amount the national economy but it should be

powered from every part of the country. This is where the

industrial strategy... I give way. He talked about the historical low

productivity in the west Midlands, one of the critical reasons for that

might be under investment in transport infrastructure, road and

rail network in the west Midlands is hampering very strong underlying

economic fundamentals around exporting. We need a higher rate of

investment in infrastructure. I most certainly agree and I think this is

where we should be looking at productivity plans and an industrial

strategy which includes issues such as infrastructure and this is where

the West Midlands combined authority and they can come together and

address these issues such as the transport infrastructure more

effectively. To allow for a strong economic growth, investing in

infrastructure will make the productivity and increased

productivity whether transport, or digital services. As with all of

these initiatives, it's important individuals feel a part of a

regional or national growth. This can be beneficial for job

satisfaction, increasing the likelihood of the productivity plan

and achieving its AMs. I would like to highlight the need with a plan to

be measured against clearly defined objectives -- its AMs. A looser

framework lacks the required precise approach with timescales.

Identifying the changing landscape of the economy and the skills

required to keep pace with the change will be making a phenomenal

challenge. Encouraging greater uptake of certain subject is key. It

is clear productivity is an issue that urgently needs addressing. I

welcome the governments determination to put productivity at

the heart of the industrial strategy and suggest we must prioritise

investment in our MD and improving job quality. Embracing new

technologies should be central to the approach. I start first of all

by congratulating the honourable member for Hartlepool and his

committee for the sterling work they have been doing in this area. I was

intrigued at the outset of the remarks when he talked about the

nature of these estimate debates and the weakness of them. It is a

reminder of the way in which I face this house for the first time when

elected back in May 20 15. To walk around and find all this peculiar

signs like here is the vote office and the one thing you cannot do is

vote. And here is the estimates debate and the one thing we are

unable to do is to properly scrutinise the estimates and I think

that is something which will certainly need to be addressed in

the longer run. I was also taken with the member for Warwick and

Leamington and the way he talked about the importance of innovation

for productivity. This reminded me of an old teacher of mine Professor

Tom Burns who in 1960 wrote a book along with Graham Stalker caught the

management of innovation and though it is now, family years ago is that?

50, 60 years ago... Estimate! A long long time ago. 57 years ago. The

lessons back then when he talked about the growth, is as relevant

today as to what is involved in innovation. He argued there were two

main types of skills and knowledge that needed to be deployed and

developed in society. One was the ability to have what he called

analytical skills, we might relate these to stem subjects and other

types of quantitative skills, DVD ability to analyse problems and

weaknesses whether technology or social feats or whatever. That is

not enough. We all know we can analyse problems, we could or

perhaps agree in this house what the level of unemployment is, for

example but we would have recipes for how to deal with it. Society had

to be good to developing creative skills whether through simple

creative thinking but he was thinking more widely about the way

in which you bring decision-making judgment skills to enhance the

capacity to meet new challenges. And then he said there was another thing

and he drew on what happened in Scotland's in the 18th century at

the time of the Enlightenment and the ideas produced there. His

argument was it wasn't just that we had some uniquely brilliant

individuals, for the first time what you had was effective networking of

people, the networking of ideas, not building false barriers between

people whether by subject or geography. I would say that is

something we should reflect on today. Too often we see people

getting stuck in silos of professionalism and it is not shared

and networked enough and therefore the possibilities do not come to

fruition in the way they might. Finally, he said that we had to have

circumstances where people valued and encouraged the application of

novelty. Experimentation. And what we all know is if that is done well,

it will inevitably lead to risk-taking which has to be part of

the recipe. One thing I think governments are very bad at doing,

of all hues, is putting in place policies where they recognise you

are going to generate some things that might fail but it is worth it

because we will also generate other things that are a great success. I

think... He is making an excellent speech and I concur with what he

suggests in terms of the entrepreneurs who are the wealth

creators being given both the framework to succeed and the

framework to fail and witty therefore agree it is not just

looking at our innovation structures but also systemic issues like

banking whether small business fails they can be hauled over the Coles

and lose everything and we need to change some of the way we do

business in this country. I quite agree with the honourable member. I

asked the question today of the Chancellor of the Exchequer which

attracted one of the typical nonanswers and it was do you not

think there is a case given what has happened to businesses over the last

number of years with the RBS -- cash and the like, would it not be

appropriate to have a duty of care towards the business community and

SMEs? We need to look more widely at the way we create a context that

will support innovation and risk-taking. What study has the

government taken in Scotland's of the impact on Scottish productivity

of the quite pronounced decline in output from the North Sea as the

season ashore and what can they do to offset that? I think the best

thing I can do is leave it to my honourable friend who was an expert

in these matters. I am aware the Scottish government has been

undertaking considerable work in this matter and at the moment there

is also a commission could gross commission under way and part of

that is looking precisely at that matter. It has to report. On the

points he is answering in relation to oil and gas, he might agree with

me that the SNP are doing quite a lot around this, locally in Aberdeen

we will hold a meeting next week so the supply chain companies can learn

about alternative methods of capital financing to secure those industries

in the city so in the future they can continue exporting.

All you are here addressed, I think the honourable member for Horsham

raised important as our society for university and the production of

high levels of knowledge and research capability and how that was

a very important thing if we're going to drive up levels of

productivity. I'm can create a tally with in that. I do think that a --

the universities are under strain at the moment they have never faced

before. It is a threat created the research community by the Government

's attitude towards EU nationals. I could take you to universities in

Scotland and show you people who are leaving and planning to leave the

university and research committee because of the uncertainty that has

been created by this Government. I think if there's one thing they

could do today very quickly to secure a research committee it would

be to give absolute guarantees that they are welcome and will carry all

the rice with them into the future. In terms of what Scotland would need

this difference here. -- there is a difference. One of them is in an

attitude towards aggression. I would argue that what we need is more

aggression of the right kind. That -- immigration. One of the examples

as Tier one visas. The part of Tier one visas that is aimed at

investors, the Government raised a few years ago the amount of money

they would have to half to bring into the economy to investment in

British businesses underrate it to a minimum of ?2 million. I would be

very happy for Scotland to contract -- attract investors coming in to

Scotland with a little bit less than ?2 million. Another aspect of Tier

one visas as the Minister knows is the entrepreneurship bizarre. The

entrepreneurship visas in this country, if you live here in England

and Scotland and you want is someone who is already a resident here, you

do not need to have bags of cash to become an entrepreneur. Some of our

most wonderful entrepreneur started with very little but an idea. What

do we say to people who want to come because entrepreneurs? We say you

have to produce in advance and be assessed by the Home Office a

business plan, produce a business plan about how you will start a

business in the UK without being in the UK. That strikes me as a problem

to begin with. You have to have a minimum of ?50,000 in your back

pocket to bring an idea to invest here along with a business plan.

Something we would never ask of people who live here domestically. I

think things could be done to sort out some of the supply-side

blockages that are preventing is attracting some of the investors and

entrepreneurs who could do so much to help build capacity and improve

the longer run productivity in our society. Finally if I could just

just touch on in this debate, many years ago in 1991 in the ever days

of competence -based qualifications, there was a body called a national

council for vocational qualifications, based in London. I

received a call from them and they asked me because I'd seen a

television problem if I would come down and give them some advice.

Since they waved at check in front of me and being a Scotsman I readily

agreed to come down and a bit of advice. What is said to be then was

we have a problem with competence -based assessment. We are unsure if

it is actually delivering an accredited Google for the

confidence. -- what be said to me then. I had an article published

Willis said the method of competence -based assessment is operated in the

UK will generate a vast number of false positives, that is a large

number of people who are receiving qualifications that are not actually

competent. That may be one of the contributing factors to the fact

that there is no evidence at all that those coming into the labour

market with competence -based altercations are doing anything to

enhance productivity in our society. I think that is a long way to go.

I'm privileged to take part in this debate. It is a great honour to

follow the Honourable member from Kirkcaldy and Cowdenbeath. I also

listen to you with great enthusiasm. It is also great to be here with my

fellow members from the select committee. To add to my honourable

friend from Bedford, it is a great privilege to serve under the

chairmanship of the ordinary member for Hartlepool. -- honorary. The

importance of productivity highlighted by my right honourable

friend the Chancellor of the Exchequer in his Autumn Statement in

November, in his speech he highlighted how the UK is trailing

behind several countries in terms of productivity including the United

States and Germany. Sitting to tackle this problem he announced ?23

billion worth of investment designed to improve emphasis on

infrastructure and housing. This along with the productivity plan and

industrial strategy illustrates this Government commitment and

determination to make the UK the best place in the world. Forgive me

interrupting. Making interesting argument. On the Chancellor 's

productivity innovation plan the largest proportion of funding of ?23

million is for House construction. How does that aid productivity? I

will be coming onto that. I do apologise. I am having difficulty

seeing today so please shout loudly if you want to intervene. UK, the

best place in the world. Having spent most of my 11 retail and

manufacturing I'm aware of the challenges facing the sector that

are not unique to this sector. It can be seen throughout industry and

have the right incentive business and industry will flourish and we

just need to provide these conditions and the productivity plan

addresses it. It is essential to improve the quality of primary and

secondary education and provide an adequate start for people heading

into further education, apprenticeships and employment. I

welcome the recognition from the Government that these improvements

to basic skills like numeracy and literacy play a vital role and they

are putting these skills at the heart of the reforms. It is school

provision in general that I wish to talk on today. The competitiveness

of the UK in the open market is no more than ever important following

the result of last year 's referendum as we seek to find new

avenues for investment and trade. The potential opportunities this

could contribute to our nation 's productivity should not be

underestimated. New capital and more competition and new technologies

will be vital as we look to compete with the rest of the world. From

Derby North prospective success of the Midlands engine is incredibly

important to me. It cannot just increase positivity but also

supports a vision for a successful United Kingdom. We have a strong

offering in the year Midlands that we can growth. -- in the Midlands.

Can deliver growth. It is sustainable. The Midlands engine

must focus on elements give us a competitive advantage. Our advantage

is our expertise in key sectors especially manufacturing. We have a

high debt and take -- we have a high-density of original equipment

manufacturers such as Rolls-Royce and the and Toyota. -- bombarded. --

Bomabrdia. I met with two award winners today who both worked for

Rolls-Royce in my constituency. Would she agree with me that

apprenticeships play a vital part in the skills needed to improve

productivity and congratulate Katie and Ryan on their success? I will

come onto the apprenticeship levy as well. It is essential we do not

apprenticeship levy and I welcome that because it encourages large

businesses to invest in their workforce and the future which will

again ensure the UK has a skilled workforce and is in the years to

come. During my time as an MP I have regularly had that more needs to be

done to tailor skills to play to local strengths. Brilliant work is

being done in Derby to try to tackle the problems such as in response of

the needs of businesses such as Rolls-Royce and Bombardia University

recently opened a new science and technology and maths building. The

initiative is being built to make employers and apprenticeship

providers to take the skills. An example is the recently opened

construction academy in Derby North which looks to encourage and train

young people in the much-needed Scylla percolating -- the

much-needed skill of Brick Lane. -- brick laying. They will not only set

the foundations for growth but keep the East Midlands and UK on the map.

There is a reported 82,000 strong annual engineering skills gap which

is clearly cause for concern. It is widely recognised in Derby at the

local supply chain of workers struggling to keep up with the

demand of employers needs. However there are positive signs that the

smart investment arm of this long-term vision that comes from the

proximity plan, that problems can be overcome. The Government assured

that is committed to tackling productivity problem for the latest

new funding and capital are in education and infrastructure for

research and development. I believe it is imperative that we support the

plans outlined as we to implement a long-term vision for our country.

Feel that for Derby and the East Midlands there are some great

proposals with the plan that will go a long way to addressing specific

concerns. We will also address the issues of productivity across the

UK. It is a pleasure to take part in this debate. I would particularly

like to commend the Honourable member from Hartlepool for his

leadership and membership of the select committee. I would like to

rated by Tim made. Fixing the foundations, our productivity plan

was published in July 2000 and 15. If we step back and think about the

radical changes we have seen them, we have a new business strategy and

new Prime Minister and Cabinet and fundamentally new knowledge and ship

with the EU. -- new relationship. It is indeed a moving target. It is up

in the macro of relationships of how we get policy provision by guides

going forward. I accept it as a real challenge. The most important of all

of those is Brexit. And how the Government response to Brexit will

be crucial to any industrial strategy productivity plan. Premises

come and departments get renamed but leaving the European Union will take

massive energy to get anything positive out of it. What worries me

is the rhetoric I've heard so far. It does not fill me with a great

deal of faith. We are undermining some of the very noble intentions of

the productivity plan and industrial strategy and putting up barriers

will have an impact on productivity and I am in no way convinced by some

of the grandiose sentiments that if everything doesn't work out we can

revert to the WTO in terms of revising and agreeing schedules

which most people don't seem to be aware is a massive amount of work in

itself. It is probably not a surprise team members in the select

committee as I focus on Scotland. In terms of productivity in Scotland a

good job has been made of it. Our output per hour is much the same as

the average in the UK and we have managed to close a larger gap. As

has been commented previously, in terms of the wider UK we're frankly

nowhere and I managed to find a statistic from last year the show

that Norway has 77% ahead of the UK in terms of productivity.

Ending the free movement of people for us in Scotland and reducing

labour mobility is a fundamental issue for us. There could be an

impact on reduced inward investment which impacts on higher

productivity. So, in terms of commitment 55 and the productivity

plan, the response from the government for a continuation of the

long-term decarbonisation of the industry sector through

cost-effective low carbon investment, a call for an upgrade in

infrastructure and the delivery of affordable energy and clean growth,

however this government has undermined these laudable AMs by

selling off the green investment bank with undue haste. I understand

in principle why you might want to capital raise but the green

investment bank was clear it does not need to capital raise until

2018. I also point out in terms of the nature and type of projects in

redressing market failure, I have a concern there will be a gap, market

failure has been effected or blocked by the introduction of the green

investment bank in some areas but other areas it needs to be

addressed. Is she aware that on the green investment bank Macquarie bank

wants to buy it so it can exclude competitors from taking part in

local authority environmental investment schemes, the result is

selling the bank means less competition in environmental

investments and reduced productivity in the long run. I am aware of that

and I have had conversations to my investigations with the minister,

with McQuarrie and the green investment bank and the concern

underlying all of this is potentially Scotland risks losing an

asset in terms of the headquarters in Edinburgh, despite any assurances

of the preferred bidder McQuarrie, I will be watching carefully because

there is a risk we lose head office functions and the board and in terms

of building an infrastructure that enables productivity and these

things are succeed. If we put in an investment, public capital

investment and do not get the value, that seems to be short-sighted and

misguided. So, without the firm commitment to maintaining jobs in

Scotland, the regional disparities we see in Scotland that all the

proactivity plans and strategies in the world will not address if we

roll away these things. So, and the green agenda and carbon capture and

storage we have spent ?100 million on two competitions to kick-start

the technology, we heard yesterday that it is difficult and I accept

that, we have two be prepared to take risks to drive things forward

for future gain. If we do not press ahead with some of these proposed

projects, our country could lose a competitive advantage and we cannot

forget about that in terms of driving forward productivity. Of

most concern to me is some of the narrative around the narrow-minded

and isolationist views brought out by some of the debates around

Brexit. There is a pervasive narrative that sounds isolationist

and disappointing in terms of the wealth of opportunities in renewable

energy. A new interconnector between Scotland and Norway will allow the

transfer of wind power and hydropower between those nations

allowing both countries to cut emissions. This is not the time for

retreating. Construction has started on a new gigawatts interconnector to

France and that demonstrates our interdependence. Moving away from

energy and other issues affected by Brexit in productivity,

international students in this country. In the report on

productivity we said we recommend the government does not allow

migration pressures to influence student or post at the visa

decisions. It is illogical to educate standards only for them

before they have had an opportunity to contribute. A remarkable young

man in my constituency has awarded a huge sum of money to do a Ph.D. In

civil and coastal engineering and has no sooner completed its van

turfed out and the level of his ground-breaking research and

commitments frankly is exactly the sort of person we want to keep in

Scotland. We saw the Prime minister refused to consider removing

students from net migration targets and I hope she'll reconsider as

international student numbers are ready beginning to fall. We cannot

allow our position as a world leader for international students to be

eroded by a dogmatic fixation on an arbitrary target of tens of

thousands. The Scottish higher education sector is a success story

and we should look at the possibility of posts are the work

Visa future for Scotland. The UK government might be looking at that

in the south of England but that does not help universities in my

constituency. Absolutely. Fundamentally I agree with you and

of course part of the problem is sold by dozen -- devolving powers to

Scotland so we can protect our own higher education sector. We also

heard that Brexit has had a chilling impact on investment. Investment is

vitally important for industrial strategy and productivity and

capital investment is vitally important for Edinburgh. The

government used finance figures as a measure of success. Finally the

productivity plan wanted to help deliver a Europe more dynamic and

outwardly focused by exhilarating integration of the single market,

completing trade agreements and improving the quality of regulation.

I hope fundamentally the prime minister takes serious note of the

Scottish government proposals to keep Scotland in the EU. And at

least first comeback having substantive discussions on what is

contained in the paper. And formulated a response, Scotland

regarded as vital. We are committed and dedicated to growing the

economy, creating wealth, increasing productivity but we cannot do it on

our own and we need help and we are ambitious. We want Scotland to grow.

Do not hold us back. I am most grateful. I was thinking long and

hard about the wise words of the honourable lady who preceded me. We

are showing the way, UK economy, a high-quality debate. It has been a

good debate today. Started by the proposer, the honourable for

Hartlepool, a pleasure to work and his joint chairmanship of the Select

Committee and with other members. There is some news this afternoon.

Having worked on that, I give way. I hope it is due to the success of

this house the joint working on the Select Committee has seen this

afternoon Sir Philip Green agreed to pay 383 billion into the pension

scheme. 363 million and I also heard that number. I too hope it may be a

tribute to the work of the committee and the joint chairs but having

taken part in the investigation, I do not take anything at face value

and I hope if I do some proper research first before saying how

happy I am. I hope there will be happiness for the pension is

involved. In his introduction, the proposer quoted Paul Kruger.

Productivity is not everything. But in the long term it is almost

everything. It is rare I should concur with the Economist but on

this uniquely packs he is uniquely right. There are two clauses to the

sentence. The first productivity isn't everything, I agreed with the

interventions made and will go on for a minute regarding employment.

We have got to start the realisation that when we company canonically

could be a lot worse. Many of us recall vividly the impact of the

recessions of the 1980s and 1990s, homes repossessed cofactor is laid

waste, mass unemployment. It is bad enough this time round and

rebalancing the fiscal position is still a challenge we are undergoing.

But coming through the 2008 crisis, the worst since the 1930s we have

had some stellar successes. We have grown the economy since 2010 faster

than any other country in the G-7 other the US, the highest rate of

employment on record, houses with no work in them are at the lowest level

for 30 years and youth unemployment is less than 6%. Yes, it's is

strange to say this and I admire the French greatly and I admire French

productivity, we have much to learn and do but I would rather be here

debating a plan for improving long-term productivity than be

standing in the French Assembly trying to defend large rates of

youth unemployment. I hope I will be forgiven by any economist and there

was distinguished economist and statistician even if he cannot count

up to 57 in the Chamber this afternoon and I hope they will

forgive me for saying whenever something is referred to as a

long-term problem by an economist, it normally means they find it hard

to measure it in the short term. Great trends in productivity are

easy to spot, especially after the event. Instantaneous judgments are

worse and forecasting is less easy. Before tackling what we should do

better, we should keep and our eye on where we are currently on

productivity. The recession was different to its predecessors, a

policy not always adhered to, there are some ghastly scandalous examples

which have been highlighted by the none of the East Lothian but by and

large there was a policy at the top levels of banks to practice

forbearance and by HMRC on businesses combined with base rates

at low levels providing the lifeline to the recession for many firms.

This went with a grain of how businesses wanted to operate.

Businesses in the 1980s and 90s remember how frustrating it was to

fire highly trained and experienced and loyal employees only to try to

be recruited the same individuals to three years later. They wanted to

avoid those problems and it's the tributes to employees and unions as

well that there is a recognition that constraint wage growth would

allow more to stay employed through the recession. The legacy of that is

clear, we have not had the increase in unemployment which has helped to

flatter the productivity growth of many of our competitors. I'm glad of

it. I believe labour force that retains its skills and practices is

a vital asset in itself. I written employment is a boost -- high rates

of employment is a boost to the UK and negative on productivity. We are

not alone in having high rates of employment, the German economy was

referred to which is 20% more productive than we despite similar

employment rates. I would only note of caution about Germany and it's

incredibly impressive productivity performance. We are dealing with two

different economies. Their economy has an unrivalled capacity to put

its capital goods, they are in demand for emerging markets going

through strong periods of growth underpinning firm foundations in net

economy. But there is a caveat and in my prior employment speaking to

German businesses they were acutely aware that while they were producing

assets of huge value and hugely sought over at the current phase of

expansion, they look to our economy and ability to deliver on services

and on tech as potentially the drivers of the next phase of

economic development. I do not for one second suggest we should rest on

our laurels, especially as my spirit of sectors in the UK financial

services and North Sea oil have suffered most in the last decade. We

need to broaden and drive the overall success of the economy which

goes without saying. We should not dismiss to Beverley the strength of

the platform for which we start. The plan has been made more solid

but I did ten pillars of Wisdom published earlier this year. I would

like to pick up three of the broad themes within it. Infrastructure, as

this house will be aware, we have one of the most congested road

structures. There was a psychological benefit or so in terms

of spending and investing in the private sector. I welcome the

decision on the third runway at Heathrow and the ongoing delivery of

Crossrail. They have a psychological benefit way ahead of the practical

benefits and that is immense. It may sound weird that I endorse what the

government are doing on the Northern Powerhouse. For anyone who has taken

more than a slight look at the housing numbers needed in Mid

Sussex, anyone who has in tilt, when it is running, the congestion on

Southern Rail or tried the 23 will know why support for balance growth

in the economy is general right the way across the UK. On our people,

they are our country's most important asset. It's the importance

of the parity of esteem between university students and those who

choose more vocational routes. I warmly welcome the government's

boost and the continuing commitment to new ventures and assisting in the

key phase between product development and product is launched.

It's the biggest boost to research and development since 1979. This is

the right point in the cycle to be making this investment. However in

the long term growth should not be seen as the only way forward.

Investment can oil the wheels. It is the private sector that we must look

to to take up the challenge and to invest. They will be doing so with a

government on a par to long-term fiscal stability, that is driving up

education and training standards and is also prepared to take the

difficult decisions on our infrastructure. Now is the time to

be investing in the UK economy. Nissan, Facebook and Google are

showing the way. UK companies should continue to take up the pot luck.

Now is the time to invest and it went just be our productivity growth

rate that increase. It is a real pleasure to follow the member for

Horsham, with whom I sat on the joint committee for BHS. And also so

many colleagues from the select committee. The honourable member for

Edinburgh West, who as ever, demonstrated she is a strong voice

for Scotland on the committee. Our excellent chairman of the committee

and also my honourable friend the member is for Derby North, Warwick

and Leamington. Many members have already mentioned that it's very

welcome to the government's focus on productivity and whilst many

economic indicators goods, we have had the debate this afternoon about

the falling unemployment, productivity remains stubbornly

poor. The work stubbornly has been mentioned several times this

afternoon. If we are to ensure a sustainable economic recovery, one

which is resilient, we need to address the issue of productivity.

Let's be honest, the need to address productivity is not something new.

It is an issue that successive governments of all political parties

have struggled to tackle. The government's recognition and focus

on looking at improving our productivity was first introduced

with the publication of the productivity plan back in 2015 and

as previous members of the committee have already outlined, we conducted

an enquiry looking at this. I wanted to pick up on a number of points and

concerns the committee raised in relation to the productivity plan.

One was the lack of real focus in the plan and more specifically the

lack of measurable objectives, and that's something I want to come back

to. The lack of real plan in terms of implementation and milestones and

time frames and to be honest, the sense that in some ways the plan was

a bit of a basket of different policies rather than a strategic

plan for the future. Some of these issues are relevant one we look at

the industrial strategy which was published, the Green paper being

published earlier this year. I think it is fair to say, I'm looking at

the chairman of the committee for a not at this point, that in the

government's responds the fact that they did provide measurable

objectives was welcome. Not that necessarily the committee agrees

with all of them, but the recognition that there were

measurements in the. The focus on productivity is mentioned this

afternoon has really continued as the government, has been central to

the government's energy since the new Prime Minister took office. The

Prime Minister is clear that she wants to create an economy that

works for everyone and a key part of delivering this will be developing

this new strategy, which saw the publication of the Green paper in

January. I want to pull out something that was in the Secretary

of State's introduction in the industrial strategy Green paper. It

states the government is committed to a modern strategy. Its objective

is to improve the living standards than economic growth by end --

improving productivity and driving growth across the country.

Productivity is at its heart. Many members have already mentioned, I'm

sorry to repeat the same points, but our productivity is poor. We

underperform what we are compared to international counterparts,

equalling fifth with Canada a month G-7 countries. Our productivity is

18 points below the G-7 average, but looking at this regionally, there's

significant disparity. It's a point the Chancellor may back in January.

The challenge is to work out how to spread across the best practice in

productivity so that all regions and all corners and sectors of our

economy can share in his productivity performance and bus

deliver higher wages and living standards about the lee-macro as

that implies. London has the highest productivity, which is not

surprising. What was worrying to me as a Staffordshire MP was the

position of the West Midlands. We are the worst performing in this

region. The question I have been asking myself is why is the West

Midlands performing so poorly on what we need to do to address this?

The member for Derby North, the member for Warwick and Leamington

talked about manufacturing and some of the excellent manufacturing

businesses we have in the West Midlands. We have got Gael are, JCB,

Toyota, Rolls-Royce, just to name a few. Is it about the make-up of our

businesses or is it, as my honourable friend, the member health

Owen and rally, ... I will give way. Was she agreed that as well as road

productivity, rail and freight productivity is important. We need

to make sure that freight and rell can get out through Felixstowe and

improvements to that line or essential. I am grateful for the

intervention. Some members might hope that I don't stop to talk about

rail into much detail. I've spoken about it a lot in this house. He

makes an incredibly important point and when you look at the West Coast

Main line one of the issues we have is in terms of capacity, both with

passenger and freight. This is a key part of the transport infrastructure

that we need to look at. Road and rail amongst other things. One of

the questions I wanted to ask the Minister in the context of this

regional disparity is what is being done to look at the drivers of the

disparity are? What we need to do in the different regions to address

this. I will give way. There is perhaps a third reason why

manufacturing areas like her own find it difficult to compete with

European levels of productivity and it's the fact that actually, we have

a small equity market for medium scale industrial firms. They have to

rely on bank financing which is inefficient. Compare to the United

States and Germany where you can get equity funding, it's easier to

expand if you are a medium-sized Manufacturer. The honourable member

makes an interesting point and also one we explored as a select

committee in terms of access to finance because there is an

overreliance on bank lending. There are a plethora of ways we can

finance small businesses. People aren't necessarily looking at all

the options available to them. Looking at regions, in terms of

devolution, local authorities, my area, and I would also be interested

to understand what support the government will give to those

different organisations and bodies in the context of trying to improve

productivity in those areas. Another point I wanted to pick up on is it's

very evident in the productivity plan and in the industrial strategy

that they require cross Whitehall consideration. Before I go into the

detail on that, in terms of the productivity plan, it was led by the

Treasury. The industrial strategy is largely led by the Department for

business, energy and industrial strategy. To what extent does the

Treasury have input in terms of the industrial strategy? What is the

relationship between these two bounce. -- plans. How would the two

plans work together and who will manage them? They have come from two

different departments in the first instance. The other noticeable thing

is we have talked today about transport, skills, digital

infrastructure, this requires the many different departments to really

buy into the delivery and one we're looking the industrial strategy, to

deliver this we need to have all the departments fully bought into it. If

I detect exports instance, during this Parliament there has been a

real focus on different departments owning exports and taking degrees of

responsibility. It's welcome news the Prime Minister has a committee

that she chairs and the secretary for state on this sits on the

subcommittees. What is the government doing to ensure that the

industrial strategy is truly embedded into each of the

departments and they take responsibility and are accountable

for its delivery? Therefore in turn they will improve productivity.

There's one more point I want to make and that is measures of

success. The member for Warwick and Leamington touched on this. It goes

back to the point I made about the productivity plan at the beginning.

We have concerns that the productivity plan was lacking in

terms of a measurable matrix. One thing is noticeable is if you ask

people what they define industrial strategy to be, you get a wide range

of answers to that question and I do feel we do need to be very clear in

terms of what it is, but also how it is going to be measured, so we can

assess whether we are succeeding or otherwise.

Productivity takes time to see if we improve so I would be interested to

understand what is being done in the short-term to assess our progress in

terms of productivity improvement. I am conscious I have taken too much

time, as many members mentioned, I think we all welcome this focus on

productivity, number of people have talked about the balance between

productivity and employment rates. We do need to try and tackle this

ongoing issue that has been faced for decades. And as a West Midlands

MP, we really do need to look at how we can rebalance and improve our

productivity is in the region and I do not want to see a West Midlands

at the bottom of the English areas. To conclude, I welcome the

industrial strategy because it does look to have productivity at its

heart. But we do need to have commitments across government, we

need to look at how this works at a regional level and also have clear

metrics. It is a pleasure to speak in this debate and I can take this

opportunity to congratulate the chair of the Select Committee and

the other members of the committee on their success in pursuing

tenaciously Philip Green and I have heard during the debate they have

had some success and team is making a payment equivalent to four super

yachts! It showed and persistent Select Committee can get results. I

do not intend to speak the long having spoken in two similar debates

on this topic in the last year or two although as other members have

said as a result of a management change productivity plans have

become industrial strategies but hopefully most of the salient points

remain from the previous one. The first point I wanted to make was the

one I made in my intervention, we must proceed with caution before we

are blas about the incredible job creation record this government and

its predecessor have had this to be my constituency in Newark

unemployment is around half %, the average wage in my town remains

pretty low at 22 or ?23,000 a year. Like other members I would like to

see wages rise and none of my constituents stuck in poor paid low

skilled jobs. I want everyone to have the dignity and security of a

job but the fulfilment of a career path to better pay and better

skilled employment. We have to be careful before wishing away those

jobs and one piece in the productivity puzzle is explicable,

the fact we have had high levels of employment while our competitors

have not. The nurse in this house would wish to replicate the levels

of employment in other countries -- none of us. Immigration has played a

part in that, high levels of migrants coming in to my community

have put pressure and have led to little pressure on wages, low

skilled and unskilled work of food production, agriculture, the care

sector they have seen no demand really to increase wages in the last

five years or more. That will change with Brexit but also a major

challenge to my local economy as to the whole country if we can maintain

this level of employment in those circumstances. Having said that, it

is obviously all of our objective is to go from a country of employed

people to people who are well paid. He makes some good points about the

productivity challenges and stagnation and low wages. But I

would caution on the point about the care sector and the fact it is due

to the fat workers from the EU or overseas are filling jobs there are

huge challenges in the care sector in finding enough people to do that

work from overseas or within Britain and the solution to long-term wages

is not going to be solved by Brexit. I am sorry if I chose my words

poorly but the point I was making is we need to exercise caution because

one effect is high levels of immigration have meant wages have

been suppressed but as we leave the European Union, we need to ensure

people continue to do those jobs were the care sector or in food

production. There was a challenge ahead for the government to maintain

levels of employment but to be a better paid workforce. Secondly, a

major contributor to loss of productivity or stagnating

productivity recently has been the decline in the financial services

sector since 2008 and the crash and that is not just in London but in

Edinburgh, Scotland and Manchester and Nottingham and related companies

like experience where we have seen fewer jobs and less productivity. No

one is a friend of investment bankers but they are productive

members of the economy for these purposes and we need to be careful

how we accommodate the financial services sector post Brexit. I am

fairly optimistic about the future knowing those investment bankers and

lawyers who I spoke to were not been following entreaties to move to

France and the socialist economy. We do need to be careful about how we

proceed in tackling the productivity gap. I am cautious about spending

more money and getting the country into further debt. The national debt

is ?1.8 trillion and increasing at ?5,000 per second. Levels of

austerity have been grossly overstated, public spending has only

fallen by five or 6% in real terms since 2010 although it has fallen as

percentage of GDP, it remains a major problem and I am concerned in

this house fewer and fewer right honourable member is even mention

the debt and deficits in our national dialogue and that needs to

change because the greatest threat for the economy and proximity is the

debt we leave future generations. I presume he is aware that when Harold

Macmillan was Chancellor the national debt was double what it is

now, even though you doubled it in ten years, it was double as a

proportion of GDP and the economy was growing faster. The problem with

high levels of debt is not just passing it on but the consequences

for future din orations meaning higher taxes, less competitive

economy and poorer productivity and just because many of our competitors

around the world whether the USA or otherwise have chosen to go down the

same path does not mean we should follow it. I want a government that

tackles the debt and the deficit aggressively in the years to come. I

am cautious of spending money trying to tackle the productivity gap on

high expenditure infrastructure projects which have overoptimistic

claims resulting in politicians being the promoter and the scrutiny

of the projects. HS2 falls into that category. I welcome the

infrastructure commission, I hope it has teeth and this will provide some

balance and ensure we start investing in the infrastructure

projects which improve productivity and take long-term decisions for the

future of the country. With the national debt on the scale we have,

borrowing for rushed shovel body products that projects will add to

the debt burden necessitating future tax increases and the less

competitive economy. I am in favour of investing in long-term come in

infrastructure projects which promote long-term growth which do

not necessarily cost the earth and which at the highest productivity

potential. Secondly I am interested in supply-side reforms which cost

little or nothing at all like deregulation and tax implication

which will easily pay for themselves by creating a lower tax economy to

benefit for years to come. Let me take each in turn. To create a

longer term higher growth investment plan, which tackles high levels of,

at low levels of productivity, areas have been discussed I have some

sympathy with. The levels of congestion on the roads is a major

issue we have as the members have mentioned amongst the most congested

roads in the G-7, this does not necessarily require the most

expensive road investment strategies, requires bypasses,

junctions, pothole investment, in Newark it is one of the most

congested towns in the Midlands and to free up the congestion would make

a major boost to the economic prospects of the whole of the East

Midlands. We should take long-term decisions where they are expensive

such as investing in Heath Row, no government that believes in tackling

the productivity gap or putting us in the right position to be a global

trading nation could afford to let that decision be pushed further into

the future. There are less sexy decisions to do with long-term

infrastructure which are important, we heard one from Suffolk earlier

about trying to sort out freight on the roads and rail. The head of the

government Midlands engine will be making that a priority in his

forthcoming report. And lastly, it is important we take seriously

reducing energy costs for manufacturing and other parts of the

economy. Whilst producing a sustainable energy economy and

ecosystem is important to us, we are pricing out many of the most

important Manufacturing businesses with expensive energy projects. I am

concerned about the decisions of the government have taken recently which

have produced extremely expensive projects which we will have to pay

for four years to come. I think it's imprudent to close the power

stations which were operating the heavily well and helping to keep

energy costs down for consumers and businesses. Looking to supply-side

reforms, in a time I have available, tax simplification is extremely

important. No government frankly sits... The former Chancellor to go

interest in this matter and created a tax simplification office but

roads have a little happens and the tax code only increased in length.

This is something that does not need to cost anything at all to the

taxpayer but admitted huge difference in making it easier not

harder to employ people, to grow the economy and to get investment in. In

terms of tax competitiveness, it is important we continue the pattern

created by the previous Chancellor reducing Corporation Tax, the most

competitive in the world, there may be new challenges from the United

States but it is important we persist. It was right of the former

Chancellor to reduce capital gains tax despite some rather

opportunistic criticism from Labour, capital gains tax will remain higher

under the Conservative government van at the end of the Gordon Brown

era so that really was baffling by Labour but we do need the most tax

competitive economy we possibly can. We spoke about research and

development or ready and I thought incentives for research and

development and reliefs have been effective speaking to companies

large and small in my constituency. I would like to see this continued.

I think as we approach Brexit, it's important the department now starts

to look industry by industry at what low-cost deregulation we could

achieve which doesn't sacrifice workers' rights, which does not

infringe a sensible environmental protections that which might be a

game changer in those industries. In the two or three industries I have

worked in, the legal sector, running an auction house, there are European

regulations which I do not think the repeal would be offensive but which

would give us a competitive advantage over our major competitors

in other countries. I will not bore the house with the details but the

government should now be working on a sector or industry basis coming up

with what those might be in preparation for the departure from

the EU. The penultimate point I wanted to make was I think we also

need to give greater thoughts to the long-term sustainability of the

British economy posted by am concerned about the deficit and

welfare and I think an area that should be looked at by government is

our state retirement age. It is inevitable with an ageing population

more of us will need to work longer. This produces a number of major

challenges if you work in sectors like on a shop floor or heavy

industries where it is extremely tiring and people do need to retire

or change career later but it is inevitable the government will look

at this and do it quickly if we want to signal to the markets are

continued careful stewardship of the economy.

In closing it is extremely important, particularly as we are

leaving the European Union and setting our sights on the world

beyond, that we invest more in developing the kind of

entrepreneurial culture that this country has not been able to

replicates. I'd like to see allowances preserved or increased. I

would like a focus on longer term investments. Most of those beliefs

are available after only a year of holding assets. Of course. Would the

honourable member agree with you point I made that the tier one Visa

regime is counter-productive in that respect? Much more could be done to

encourage entrepreneurs to come here. I'm sympathetic to that

argument. There is a lot more we can do when we create our own

immigration system to attract the most talented people from around the

world, including entrepreneurs. Examples of countries like Israel

and Australia that have different systems to our own for attracting

entrepreneurs are ones we should look at. Particularly the Israeli

example that has had a lot of success. It's also incumbent on this

house to place creating an entrepreneurial culture at the heart

of everything we do and that includes tax rates, meaning

enterprise needs to find a reward. It means considering the 45p rate of

tax. These are difficult choices, but if we want to inspire a

generation to innovate and create businesses, we have two ensure that

those people feel they are fully rewarded here, particularly versus

our competitors. Our competitors are the same as they were before. There

are places like Singapore, Dubai, places where entrepreneurs can keep

the lion's share of the profits. I'm not for a moment suggesting that we

go as far as that, but we have to view our competitors much more

widely than we do today. I'm grateful for this opportunity to

speak in the debate and thank the select committee for their continued

work. It's a great treasure to follow my honourable friend. I agree

with almost everything he said in this debate. Just to remind everyone

while we are here, this is the estimates about, supplementary

estimates about the Department for industrial strategy. It's where

government owns up at the end of the year for which it is spending too

much or too little, what it's going to invest. Sometimes it's

outstanding amounts of money in the variants. This year for this

department there is a request for further resources, that's to be

expended, not exceeding ?10.7 billion. Capital purpose needs to be

reduced by ?10.5 billion and the sum authorised issue out of consolidated

funds be reduced by ?13.8 billion. Those are large movements and to

spread the Minister Pozner brushes, he knows this is because of major

structural changes in the department over the year that has moved the

Department from being a current expenditure heavy sector to one that

will be much more focused on capital. What I would like to say is

I challenge anyone if they have looked at document eight shee 946,

if you can wade through that and understand where the money is going,

then you are a better person than I. I'd like to say to my honourable

friend the member for Orpington, could he challenged the government

to put in a couple of things? The first is when we are looking at

variance at the end of the air and departments are looking for more or

less money, for them to actually say, here is where we have saved

money. We've had a number of points made today about people accepting

that we have to live within our means, so why can we not use this

end of year accounting to say these are the areas where we wish to save

money. It is a good opportunity to get that message out. Secondly on

the capital budget side, it would be nice in a summary at the end of the

year to have a sense of the return on whether capital is going, --

where the capital is going. That is the overall part of estimates I

would like to make. Just the few things that might make it easier for

those of us who can't look at six columns of numbers to easily to

understand what is going on. Were also talking about the context of

the productivity plan and the document about industrial strategy.

Those two documents sit as two parts. I welcome the initiative that

the member for Tatton and the current Secretary of State for DC

jee did in pulling together these various products into a productivity

brand. Lizzie had a single document that we could evaluate projects

against and to which we could hold the government to account about this

crucial issue of productivity. Productivity is one of those

surrounds that politicians like to grab a hold of so that they can

worry. We lie worrying more than we like being happy and when it comes

to the national economy it's either got to be a balance of payments

deficit or it's got to be our poor productivity level that politicians

want to grab. Politicians like to do that because they like to intervene

in the economy and improve it. In many instances the government plays

a positive and active role in the economy, but when it looks to do too

much then it has to know when to stop. They make of the

recommendation to my friend the Minister? Which is he learns this

most important word in his deliberations and that is the word

no. No, we're not good to spend money on that or invest in that

project. No, that rate of return on what you are proposing is incorrect

because he is good to be inundated by requests from a variety of people

who will attach the request to the broad principles in the productivity

plan, or to the even broader principles in the industrial

strategy in order for those idea to gain favour. He will have two very

deeply and make a number of people disappointed. -- he will have to. As

the honourable member for Newark was saying. We have a responsibility to

future generations and we cannot carry on living beyond our means. We

need to have an acute sense that if we are investing for the future that

the rate of return will benefit them before we spent essentially what is

the money. The productivity plan had another tremendous advantage which

was it focused our attention on not only how much we are spending, but

how quickly we implemented the projects to which the government is

committed. In the plan and I think subsequently from the national

infrastructure commission, one of the projects that was sort of highly

was the Oxford to Cambridge corridor which connects the Milton Keynes and

Bedford and on to Cambridge. I'm very pleased to say that the

Department for Transport has heard that message and is coming forward

with new ideas for making that happen in a faster time frame than

perhaps was even envisaged at the time of the productivity plan. Can I

ask the Minister to pay particular attention to ways in which

procedures can be enhanced through the interactions of government

departments, that waiting time when a proposal sits in the in tray of

one particular part of this very complex system of organisations and

departments and agencies that have to approve something. That time when

it sits in the inbox of one of those agencies and the time it comes out

of the outbox and goes on to the next department, I think

particularly in aspects of the road highway between Oxford and Cambridge

there is the opportunity to move that time frame forward and I will

be grateful for the opportunity to perhaps talk with the Minister about

that, or to talk with his counterparts in the Department for

Transport. When he said his advice to the Minister was to say no to

project, I assume they aren't the projects he is putting forward,

which are vulnerable once? I hope the Minister would use the same

assessment for all projects. We need to build an economy that works

everyone. We have the tools to do that. It would be good to see

Scotland news the tools available at their disposal rather than

complaining about everyone else. If the Minister believes, as seems to

be the case, that the corridor between Oxford and Cambridge is

important, we have the responsibility to implement those

initiatives as quickly and effectively as possible and to set a

new benchmark for the speed of implementation. I would like to

mention briefly on other aspects in the plan. Firstly, the government's

response talks about the commitment to funding innovation. Yes, yes, yes

is the work, repeated three times, is the word the Minister should be

saying to innovation. It's the government doesn't listen to those

who want to take risks. As we leave the European Union there are

different things we can do, especially on reducing restrictions

to get people investing at earlier stages. Also there is the commitment

to improving management and leadership. That is something that

is easy for us to take for granted. It is one of those softer things in

the way we think about productivity but it is essential that our

management and leadership of our businesses have the resources and

skills and capabilities you would expect from a global leader in

business and for a country that wants to trade freely and openly

with the rest of the world. Finally I would say that in both the

productivity plan and the industrial strategy, my personal feeling is

that there is not reference -- enough reference to the way in

product and work is operating. We heard from the chair of the select

committee about how the lack of security in the Labour markets is a

concern to not just a segment of the people directly affected, but for

all of us who want to see a country and economy that works for all. We

also heard from the member for Warwick and Leamington about the

potential from the fourth Industrial Revolution, but with that great

potential to improve productivity will come dramatic changes in the

skills and work that is required from people currently employed in

very many segments of our economy. What is the government's answer

going to be in those sectors and in those industries when it comes to

what the impact of achieving high productivity is going to be? It's

talking about earlier on one we were talking about earlier on one we were

talking about the past. More people were employed and we should not

throw it away in some pursuit of higher productivity because Bob

should be able to be accomplished. Similarly, we should not just look

to the future for increased productivity if what that means for

many people is that they go to work and have purpose and that is changed

dramatically so we can take up the challenges of the fourth Industrial

Revolution. If the government is silent on that in its productivity

plan over the next few years then it will fail the British people. From

what we hear from the Prime Minister, she is not doing that. We

need to get into the details of what that will mean as we look to things

that will follow from the productivity plan estimates from

today. Thank you. I would like to begin in the same place as the

honourable member for Hartlepool in terms of talking about this estimate

stad debate being something archaic in that we are not actually with the

exception for the member the Bedford discussing that. The honourable

member for Hartlepool said the report published in 2015 was

becoming obsolete, something that was shown favourably on this process

Instead of discussing how the government spends all its money,

what we kind of looked at and I mean this without a huge degree of this

respect, is the committee presenting their homework to the Chamber and it

has been valid and incredibly instructive as someone who is not a

member of that committee to learn what they have done and I commend

them. The report pulls no punches. Interesting to see what a report

from a Select Committee that didn't have a government majority on it

would say because this does not pull its punches and I commend those

members who have constructively engaged with the process to make

sure the Select Committee does its job of holding the government to

account. So, moving onto the matter which is at hand and the report we

are discussing on productivity, not to repeat what has been said by many

honourable members to any great length but there is clearly an

issue. The general trend of 2% and growth pre-crisis, we are now barely

above that. It is something the Office for National Statistics has

stated is unprecedented in the post-war period. And we are the

second worst in the G-7. I appreciate we have had comments that

these comparisons do not give us all the detail and that is certainly

true but there are some stark comparisons in and around that. One

of the most striking parts from the report was the quote that was made

from, quoted from the honourable member for Edinburgh West about the

post to study work Visa issue and it is worth repeating. The report says

we recommend the government does not allow migration pressures to

influence student or post to study these decisions and should relax the

restrictions. It is illogical to educate foreign students to the

highest standards in the world only for them to leave before they have

an opportunity to contribute to the UK economy. In a nutshell, the

critique of the government's policy on immigration not be put to better

than the report is done. In a period of stagnating productivity growth,

we have seen economic growth. Those things should not go together but

the reason why we have no productivity growth but GDP growth

is largely down to immigration. With the pulling up the drawbridge to

immigration we would have to get serious about productivity because

if we do not get growth immigration, I will be concerned about where we

do get growth from at all. The member for Kirkcaldy said it is

clearly nailing some of the imponderable follies around the

immigration system that does not work for the economy. I fear these

things are only going to get worse. Immigration is only part of the

debate around the economy and productivity is an important part of

that debate. How do we go about boosting productivity? There was a

general consensus perhaps with varying degrees of enthusiasm but we

need to invest in infrastructure, roads, railways, bridges, airports

and digital infrastructure. We need to invest in skills and training, to

see page growth, we need to see inclusivity in the workforce and a

greater degree of internationalisation. The Honourable

member Bedford suggested the SNP should get on with doing some of

these things rather than criticising what others do. I can tell him we

have done these things and the result of that is between the

financial crisis in 2007 and just now, Scottish proactivity in