The Government’s Productivity Plan
Debate between Lord Johnson of Marylebone and Iain Wright(7 years, 2 months ago)
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The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
I thank the hon. Member for Hartlepool (Mr Wright) for opening this debate and the hon. Members who have taken part in this afternoon’s excellent proceedings. I welcome the Committee’s decision to focus on the challenge of boosting productivity in the UK; it is one of the Government’s key economic priorities over this Parliament, as we of course recognise that this is the route to raising living standards for people in the UK. Since the financial crisis, we have focused on stabilising the economy, tackling the deficit and creating jobs. As hon. Members have said, the UK has seen strong growth since then: the economy has grown by more than 14% since 2010—that is the second fastest growth rate among major advanced economies, after the United States; employment has reached a record high, with 2.8 million more people in work now than in the first quarter of 2010; and unemployment is at its lowest level for 11 years.
However, if we raised our productivity by just one percentage point every year, within a decade we would add £240 billion to the size of our economy—that is £9,000 for every household in Britain. That is why the Government have taken action to improve productivity in the UK economy. As hon. Members have noted, we published “Fixing the foundations: Creating a more prosperous nation”, a plan for productivity growth in the UK over a decade. It outlines how we can encourage further investment in science, education, skills and infrastructure, and how we can promote a dynamic economy through reforming planning laws, boosting competition and creating a northern powerhouse.
Today, I will seek to address some of the Committee’s concerns and report back to the House on some of the progress we have made in implementing the plan’s commitments. Before doing so, I would like to tackle the questions the hon. Gentleman put about the status of “BIS 2020” and the impact of the machinery of government changes he mentioned on the delivery of the plan. The principles behind the “BIS 2020” work are still important: creating a simpler, cheaper and better Department by 2020. Recent events reaffirm the importance of our becoming increasingly flexible and able to respond rapidly to the demands of new priorities. Given the machinery of government changes, we will be considering in the coming months how the reform plans of BEIS—of its two predecessor Departments—should be best aligned.
Mr Iain Wright
The Minister is giving a similar answer to the one given by the Secretary of State before Christmas, but the new Department has now been in operation for seven months and the Minister still cannot say what the savings will be and what activities will be stopped. Does he really think that is good enough, seven months into the new Department’s life?
Joseph Johnson
As I said, the alignment of the two Departments’ work programmes is complex, but the process is well under way. Further reports will be made available to the Select Committee in due course.
In its report, the Select Committee expressed concerns about the clarity of the productivity plan’s objectives and the extent to which it represented a new plan for productivity growth. The plan sets out clear objectives that directly target the high-level drivers of productivity performance. It also contains several innovative new policies, such as the commitments to set up a national roads fund and a network of prestigious institutes of technology.
The report also questioned the extent to which Ministers are engaged in the implementation of the plan’s policies. The ministerial team regularly discusses issues relating to the main policies in the productivity plan at several Cabinet Committees, including the Economy and Industrial Strategy Committee. Alongside the Cabinet Committees, the Government have set up a series of implementation taskforces, which are attended by relevant Ministers and senior officials. For example, the earn or learn taskforce is supporting the Government’s commitment to reach 3 million apprenticeships starts in England by 2020, which is one of the many ways the Government are addressing the skills challenges the country faces.
As recommended by the Select Committee, our response includes an update that details the progress made on and future implementation of each of the plan’s 172 commitments. It shows that more than a third of commitments have now been fully delivered, and that outstanding commitments remain on track. For example, we have published a new national infra- structure delivery plan, which details more than £100 billion of planned public investment in infrastructure to 2021; we finalised the funding policy for the apprenticeship levy ahead of its introduction in April 2017; and, through the Housing and Planning Act 2016, we legislated for key planning reforms, such as automatic permission in principle on brownfield sites.
Further mayoral devolution deals have been signed in Liverpool, Sheffield and the west midlands and we have increased the annual investment allowance to £200,000, which is its highest ever permanent level. We also announced at autumn statement a new national productivity investment fund, which will provide £23 billion of additional investment between 2017-18 and 2021-22. That will be targeted at four critical areas for improving productivity: housing, transport, digital communications, and R and D.
Industrial Strategy
Debate between Lord Johnson of Marylebone and Iain Wright(7 years, 7 months ago)
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The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
By speaking relatively early in the debate rather than at the end, I want to signal that the Government do not intend at this stage to have the last word on the country’s industrial strategy. Such plans, which must command the support of successive Administrations, must be built on strong foundations of engagement, discussion and careful consultation across the Government and, indeed, across the country. As has been said, they should not be imposed from 1 Victoria Street or, indeed, anywhere else in Whitehall.
The industrial strategy is under development, as hon. Members have observed, so now is not the time to set out detailed plans for our approach. We expect to publish a discussion paper around the time of the autumn statement and then a response from the Government in the new year, 2017.
Joseph Johnson
At the autumn statement this year.
Let me give Members a broad overview of the context in which we are developing the industrial strategy and a flavour for some of the principles guiding us as we do so. First, however, I want to thank my hon. Friend the Member for Warwick and Leamington (Chris White) and the hon. Members for Hove (Peter Kyle), for Edinburgh West (Michelle Thomson)—who is no longer in her place—and for Hartlepool (Mr Wright) for securing the debate and making such powerful contributions.
The UK economy has delivered a huge amount of growth and employment over recent years. Unemployment has been reduced from 8% in 2010 to 5% now, while full-time employment has climbed from 70% to 74% over the same period—a faster rate of employment growth than France, Germany or the USA. But, as the Prime Minster has made clear, our economy is not working perfectly. Gains are not always shared across the country and too many people are losing out. We want to deliver an economy that works for everyone.