Industrial Strategy
Lord Hennessy of Nympsfield Excerpts(6 years, 3 months ago)
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Lord Hennessy of Nympsfield (CB)
My Lords, why has it proved so tough for successive Governments to shape a successful industrial strategy that inspires, bites and, above all, endures? It is as if the framers of such strategies have been so many sculptors gazing at a rough-hewn piece of marble and discerning in it the outline of a beautifully cut statue, there for the crafting, but the resulting piece of work never quite fulfils the hopes of those who created it.
However, it is a fine and, indeed, noble ambition. As other noble Lords have reminded me, the White Paper before us is the eighth attempt at achieving it since the Second World War. One of the great treats of the debate has been hearing the grandfathers of previous ones explaining what they did, and why and how they did it. I remember as a young journalist on the Times following the political career of the noble Lord, Lord Heseltine, from department to department and noticing that he created an industrial strategy in every department he touched, whether or not it was the policy of the Cabinet to have one in the first place. I watched with great admiration how he did that. The impulse has been within him, I suspect, since school. I would not know; maybe he will tell us.
All the strategies since the war, in their different ways, have involved the best and the brightest in the ministerial suites and policy divisions of Whitehall, as well as those called to the colours from the worlds of industry, commerce, education, science and technology, to help find the multiple and interlocking elements that might lift our economy on to a higher trajectory of performance and growth. Surely, amid the mixture of activities in factory, lab, school and university over the past 71 years since the Attlee Government set up the Central Economic Planning Staff, somehow we could have found the elixir needed to reach, for example, the 4% annual growth rate to which both mainstream political parties pledged themselves—how we would settle for that today—in the early days of NEDO in the early 1960s. We never achieved it, apart from the odd short-lived spurt.
The key ingredients of the problem, which have been well rehearsed by your Lordships today, have been known and analysed, from the Attlee/Morrison/Cripps model of the late 1940s right through to today’s White Paper. They have been poked at and prodded in all the strategies in between as well. What are these deeply ingrained and highly resistant problems that have held back both our society and our economy? There have been three of them and they are interlocked. Several noble Lords have covered the terrain already.
The first is the shortfall in technical skills compared to our needs at home and our competitors abroad. This has been recognised as a UK problem for at least 150 years. The parliamentary commission on endowed schools was hugely impressed by the technical high schools of Prussia. Reporting in 1868, it said that,
“we are bound to add that our evidence appears to show that our industrial classes have not even that basis of sound general education on which alone technical education can rest … and unless we remedy this want, we shall gradually but surely find that our undeniable superiority in wealth and perhaps in energy will not save us from decline”.
What extraordinary prescience.
I cherish the memory of Rab Butler, a great and decent man, but the single greatest missed opportunity was probably the remarkable Education Act 1944, of which I am very fond—it gave me a superb grammar school education—and many others would not be in this Chamber without it. But in it was the provision that, above all, might have avoided the need for this White Paper and this debate. It was for technical education to take off but the technical schools never flourished. They never taught more than 2% of the age group in the post-war years. As for the county colleges, which were going to be set up for FE training—sandwich courses, as we now call them: part-time day release—they were never set up. There within the provisions of the Education Act 1944 was the key remedy on the skills and technical front, but it was not to be.
The second ingrained problem is the difficulty we so often find in industrialising our top-flight science and research. One might call it the “thought in Britain but not made in Britain” syndrome.
The third factor is the low productivity that results from the other two, which leaves us so often trailing in the wake of the world’s leading industrial nations. According to the White Paper, we have but 12 years to break these malign talismans of economic underperformance. As the White Paper says in its concluding section, “Britain and the World”:
“Our aim is that by 2030 we will have transformed productivity and earning power across the UK to become the world’s most innovative economy and the best place to start and grow a business, with upgraded infrastructure and prosperous communities across the country”.
Amen to that shining set of aspirations. I think it is the only one that we can all sign up to, whatever our political or non-political affiliations, our economic philosophy or our leaver or remainer instincts. I was delighted when the noble Lord, Lord Mandelson, indicated that there was, with luck, a consensus waiting across the political Benches on this very question, if on no others.
It is a rarity in our current political landscape to find the possibility of genuine consensus on anything. Our Brexit-infected political ecology has left us, as a very wise friend of mine puts it, as a people seemingly on permanent grudge watch—always looking for things to fall out over rather than to fall in about. This White Paper could be the great shining exception. But signing up to an aspiration is one thing, dancing the multiple steps needed to achieve it quite another. The proposed industrial strategy council, the creation of which I warmly applaud, will need to keep a close watch on all the moving parts of the strategy and the ills it is designed to combat, especially those three horsemen of economic underperformance on which I have concentrated.
I hope that this White Paper might be seen by posterity as one of the master policy documents, such as the Beveridge report on welfare in 1942 or the Robbins report on higher education in 1963, but it has to shine—quickly—as the charter of a great shared national endeavour, because that is what we need it to be, with a dash of real inspiration that reaches into boardroom and production line, trade union and trade association, classroom and lab alike. In so many ways it is a question of spirit, optimism and, above all, tenacity. How we need it to work. The margins within which we are going to operate as a people, a society and an economy are tight and tightening, as the noble Lord, Lord Heseltine, so eloquently warned us earlier. Much, though not all, of the remedy lies in our own hands, in our hearts and our minds, and in our skills and our ingenuity. It is time for all of us to rise to the level of events and finally find that elusive statue lurking in the marble.
Industrial Strategy
Lord Hennessy of Nympsfield Excerpts(6 years, 5 months ago)
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Lord Hennessy of Nympsfield (CB)
My Lords, perhaps I may say how pleased I am to see the noble Lord back on the Government Front Bench, although I miss the noble Lord, Lord Prior, who was always so helpful when he was on the Front Bench. I also welcome the White Paper, which is so critical to the nation’s fortunes, and I hope it will find a very high level of consensus across the party Benches. In this period of continuous political gloom, as it often seems, it is a reason to be cheerful; it is Ian Dury country. I welcome the industrial strategy council, which is an idea that your Lordships’ Select Committee on Science and Technology pushed very hard for. I am very pleased that it is in there. I ask the noble Lord for his individual judgment on which section of the White Paper he thinks is critical to the success of the rest of it and which phrase he hopes will cling to the Velcro of collective memory.
Lord Henley
My Lords, I thank the noble Lord for his welcome and for his very kind words about my noble friend Lord Prior. I would be very grateful if my noble friend was still here doing this, because he played a much larger part in the development of the White Paper than I did. I came somewhat late to it.
If the noble Lord would like me to identify one area, I go back to the five principles that I iterated to the noble Baroness: ideas, people, infrastructure, business environment and places. When the White Paper was developed, I played a small part in its redrafting and in our vision as set out on page 13. I was rather anxious to get the first five points at the top of that page into short, easy, memorable sentences. That is why we talk about a vision for the world’s most innovative economy, good jobs and greater earning power for all, a major upgrade in the UK’s infrastructure, the best place to start and grow a business, and prosperous communities across the UK. I can assure the noble Lord that he will find the whole of the White Paper very good reading. I will have a word with him tomorrow or perhaps the day after and test him on it to make sure he has fully grasped all of it.
Science and Innovation Strategy
Lord Hennessy of Nympsfield Excerpts(6 years, 6 months ago)
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Lord Hennessy of Nympsfield (CB)
My Lords, I declare my fellowship of the British Academy. In this evening’s debate we are dealing with twin themes that have run through the post-war years like a filigree: industrial strategies—the current one is the eighth by my calculation since 1945—and scientific and technological strategies. There have been at least 20 of those, according to a cartography compiled by Dougal Goodman and Darron Stronge for the Foundation for Science and Technology, in which, I should declare, I also had a bit of a hand.
It is interesting that our science and industrial strategies have been run in parallel rather than fused, although it is both cheering and right that science and innovation is the first of the 10 pillars in the latest industrial strategy.
The problems with which both science and industrial strategies have grappled since 1945 have shown a remarkably stubborn persistence. Let us eavesdrop for a moment on the very first: the 1946 Barlow Report on Scientific Man-Power. This is its opening paragraph:
“We do not think that it is necessary to preface our report by stating at length the case for developing our scientific resources. Never before has the importance of science been more widely recognised or so many hopes of future progress and welfare founded upon the scientist. By way of introduction, therefore, we confine ourselves to pointing out that least of all nations can Great Britain afford to neglect whatever benefits the scientists can confer upon her. If we are to maintain our position in the world and restore and improve our standard of living, we have no alternative but to strive for that scientific achievement without which our trade will wither, our Colonial Empire will remain undeveloped and our lives and freedom will be at the mercy of a potential aggressor”.
If we strip out the references to the colonial empire and Joseph Stalin, that, I venture to suggest, could be the opening paragraph of the White Paper which we all await so keenly.
We can pick out three crucial themes from the cataract of post-war reviews and strategies—again, I am grateful for the work of the Foundation for Science and Technology on this. They are these: first, funding. A continuous thread has been the difficulty in meeting the aspiration of successive Governments to raise government spending on science, research and innovation as a percentage of GDP and particularly to persuade the private sector to follow suit—as other noble Lords have highlighted already.
Secondly, commercialisation—the industrialising of our scientific prowess. From the days of Barlow in 1946, there has been a continuous struggle to take the world-class ideas created by UK R&D to the marketplace by converting them into patents which pave the way to commercial opportunities. We have not done well in comparison to most of our competitors.
Thirdly, skills, higher education and productivity. The productivity gap that yawns between ourselves and our chief competitors rings out, tocsin like, as a prime anxiety in all the industrial strategies since the days of the Attlee Government’s Central Economic Planning Staff and the Anglo-American productivity councils established by Sir Stafford Cripps in the years of Marshall aid. It rings out, too, from the latest industrial strategy.
Huge efforts have been put into skills training. The great Robbins report on Higher Education in 1963 placed eloquent stress on the need for more science and technology courses and graduates. Today, the skills, scientific and technical education elements remain a prime concern, with an enhanced national performance ever more vital in a technologically leaping and ever more globalised world.
There are reasons for hope. We are a country and a people distracted by Brexit, edgy and chippy in our often impoverished national conversation, with too many people looking for things to fall out over rather than things to fall in about. I sometimes think, as an old friend of mine puts it, that we have become a country on permanent grudge-watch. Brexit is in danger of making curmudgeons of us all, yet here is an area—the theme for tonight’s debate—where a good, solid consensus is possible, a terrain where science, technology and industrial strategy meet in what is still a great intellectual trading nation. If we get it right this time, great prizes and improved prosperity await. It is tocsin time again. It is time for a burst of shared national endeavour and more than a little dash of optimism.
Nuclear Research and Technology (Science and Technology Committee Report)
Lord Hennessy of Nympsfield Excerpts(6 years, 6 months ago)
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Lord Hennessy of Nympsfield (CB)
My Lords, I add my thanks to the noble Earl, Lord Selborne, for his ever deft chairmanship of your Lordship’s Science and Technology Committee and to its ever helpful staff. I confess that, having left the committee, most Tuesday mornings I now rather pine for our sessions. They were often fun and always fascinating. I declare my fellowship of the British Academy. I have no idea why, but it occasionally looks at the history of civil nuclear power, so I think I ought to.
The question lurking behind tonight’s debate is whether we as a nation have lost our nerve as a serious civil nuclear power. There was a time—when I was a teenager in the early 1960s—when we seemed to be brimming with nuclear nerve, even verve. In 1956, we had become the first nation to provide civil nuclear-generated power into a national grid, when the Queen threw the switch at Calder Hall in Cumberland. As other noble Lords have mentioned, by the early to mid-1960s a fleet of first-generation Magnox stations was coming on stream and they did sterling service to baseload provision over several decades. We also had a plan for the future all mapped out. There was a road map: my noble friend Lord Broers is calling for another one. The second-generation advanced gas-cooled reactors were to fill the gap between the Magnoxes and the fast breeder reactor, whose dome on the prototype site at Dounreay in Caithness stood gaunt but full of promise, looking over the swirling waters of the Pentland Firth, where the North Sea meets the Atlantic. Beyond the fast breeder beckoned the lustrous prospect of nuclear fusion—abundant and clean—which we thought in the 1960s would be transforming world energy about now. Dounreay is being dismantled and cleaned up as we meet and fusion is almost certainly still decades away as a feeder of grids, though I am sure we will get there one day.
Where does the Government’s response to the Science and Technology Committee’s report fit into the wide sweep of UK civil nuclear history? Does it offer the country a fighting chance of leading the small modular reactor generation deploying to maximum and sustained effect our scientific prowess, engineering skills and technological flair? Can we hear a call to arms to restore ourselves as a serious civil nuclear pioneer and pacemaker, no longer reduced, as at Hinkley Point, to buying another country’s technology off a very expensive shelf? Up to a point. Things are moving, but is there enough of what David Lloyd George liked to call “push and go” in Whitehall? I hope there is, that the Minister—for whom I have great respect—can convince your Lordships this evening that there is, and that the cycle of indecision has been well and truly broken.
However, the language of the Government’s reply to the Select Committee report does not exactly glow with a critical mass in the making. There is no ruling out in its prose, but there are tepid signs of ruling in. Let us eavesdrop for a moment on the BEIS draftsmen and women as they crafted paragraph 27:
“As we move to de-carbonise our economy, there will continue to be a demand for the secure, low carbon energy that nuclear provides. This could include energy from SMRs. For example, third generation modular reactors have the potential to play an important role within the near-term electricity generation market, but only if they can reduce costs to a competitive level. While more novel modular reactor technologies offer the potential to deliver major breakthroughs in cost, safety or functionality but are less technologically mature and require further basic research and development support”.
More than a touch of the tentative there, as there is in paragraph 29 with its recognition that:
“Government could have a role in reducing barriers, including on siting and regulatory approvals, which could help de-risk projects and ensuring they are acceptable to the public”.
I counted five coulds in the response to our report.
However, to be fair to Her Majesty’s Government, there is a dash of push and go in paragraph 32. Dealing with the SMR, it declares that:
“We must invest time now to make a strategic decision for the UK—a decision that could have implications stretching many decades into the future”.
Exactly, but can the Minister be more precise than the Government’s response of 13 September, which said that the decision would be taken in the coming months? Paragraph 35 is certainly very welcome, outlining as it does government funding for advanced manufacturing and for the nuclear R&D programme.
I gladly acknowledge that the Government’s reply to the Select Committee report has its touches of pep, but much of it strikes me as a long, weary sigh induced by the feeling that it is all too difficult. I hope that the Minister will sweep this impression away with a burst of brio and enthusiasm and a flurry of reasons to be cheerful. I live in hope.
Industrial Strategy
Lord Hennessy of Nympsfield Excerpts(6 years, 9 months ago)
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Lord Prior of Brampton
Steel is clearly a very important part of any industrial strategy, but I should make it absolutely clear to the noble Lord that this strategy is about the future and not just about incumbents. While there is an important future for steel, there is also the whole new world of digital technologies, which are also very important.
Lord Hennessy of Nympsfield (CB)
My Lords, when your Lordships’ House first debated the Green Paper on industrial strategy, I asked the Minister what were its magic ingredients that had eluded the framers of the previous nine industrial strategies since the Second World War. I wonder whether the consultation has shed any light so that he can give me a considered answer beyond the one that he gave me that day.
Lord Prior of Brampton
I fear that I may be giving the noble Lord almost the same answer, but there are two critical elements of the industrial strategy. One is technical skills, an area where, if we are honest, we admit that we have been struggling since the 1950s, and the second is to build on the extraordinary comparative advantage that we have in our universities.
EU Membership: UK Science
Lord Hennessy of Nympsfield Excerpts(7 years, 1 month ago)
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Lord Hennessy of Nympsfield (CB)
My Lords, I declare my membership of the Science and Technology Committee and add my tribute to the chairmanship of the noble Earl, Lord Selborne. I also declare my fellowship of the British Academy and my professorship of contemporary British history at Queen Mary, University of London.
When violence strikes, as it did yesterday, taking lives, injuring individuals and assaulting the central institution of our open society, it scarcely seems right, in the shadow of tragedy, to return to our disagreements over Brexit. Yet today we find ourselves on a significant patch of the post-referendum landscape, where I hope we can find more to fall in about than to fall out over. By this I mean the desirability—more than that, the powerful necessity—of our country remaining a world-class player in science, technology, the arts, humanities and social sciences; in short, the indispensability of continuing to think heavier than our weight in the world.
We may agree on this crucial shared purpose, but how best to sustain it—even to burnish it still further—in our new geopolitical circumstances, raises a host of questions, many of which are captured in the Select Committee report before us. Ours really is, as other members of the committee have said this afternoon, a time for boldness, not timidity, for building purposefully on past achievements and striving for an even greater national performance.
A powerful contributor to this cause will, I hope and think, be a knowledge of how we acquired our existing prowess—how it has been achieved over many decades. I am delighted to say that the British Academy, encouraged by your Lordships’ Science and Technology Committee, is working on precisely this, analysing the singular and, I have to admit, rather baffling mixed economy that supports the life of the mind in the United Kingdom. I look forward to the results of that study with keen anticipation. We each have a kind of idea of the key factors in our prowess, ranging from the admirable Haldane principle, which helps keep the state an indispensable sponsor but not an unwelcome, overdirecting intruder into the free play of independent inquiry, right through to the dual support system for our university research.
Critical, too, I am sure, to past and current success is the scope given in the UK universities to young researchers to question orthodoxies and to open up new lines of thought; in other words, to not defer to their seniors. Crucial to this is the free movement of talent, not least to and from the nations of the European Union. There can be no tariffs on the exchange of knowledge. Nor should there be post-Brexit any barriers to the free movement of scholars who carry these ideas. The most precious of all common markets has always been the common market of the mind.
In the unfolding cartography of Brexit, the avoidance of boundaries on the scientific, technological and scholarly fronts is therefore a first-order question. Both the Department for Exiting the European Union and the Department for International Trade will need bespoke chief scientists of polymathic gifts to patrol the new rimlands, providing early warning of both problems and possibilities ahead and helping to ensure that our requirements and existing prowess are safeguarded during the great repositioning to come. For the free trade of the mind, in both people and knowledge, is as critical to our fortunes as the free trade of goods and services. Our intellectual and economic well-being depend upon it. It is a question of both funding and spirit—of recognising the sense of urgency required—and it links the uncertainties of Brexit with the wider industrial strategy that Mrs May has striven to make such a shining badge of her premiership so far.
Of all the eight previous industrial strategies since the Second World War, science and technology has more prominence in this one—if last January’s Green Paper is a guide—than in any since the early 1960s, when Harold Wilson used the “white heat” of his wished-for technological revolution to illuminate his path to 10 Downing Street in the autumn of 1964 and his promulgation of Labour’s National Plan a year later. Perhaps the noble Lord, Lord Prior, for whom I have the greatest respect, could promise us a bespoke debate on this, the ninth industrial strategy of his and my lifetimes. I hope he will forgive me if I make plain to other noble Lords that he and I have been engaged in a rolling conversation about what the magic ingredients of the 2017 version might be that were lacking in the previous eight. He might like to give us a little hint of that when he winds up.
What I am sure of is that when economic historians in the 2050s look back on the anxious, neuralgic politico-economics of the early post-referendum period through which we are now living, they will notice just how much was riding on the UK’s science and technology—on Britain as a knowledge power. If we do not get this aspect of our national life right this time, those historians will not spare us, and nor will our people, whose current and future needs this Parliament exists to serve. We have here a consensus in the making. We should act on it—and seize the hour.
Industrial Strategy Consultation
Lord Hennessy of Nympsfield Excerpts(7 years, 3 months ago)
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Lord Prior of Brampton
The noble Lord is referring, I think, to the integration of supply chains, which have now become very global. Certainly, that is particularly true in areas such as satellite technology. Having easy ways of trading with other countries with non-tariff barriers is critical to that. Space technology is exactly the kind of industry that the UK should be fully a part of. It is interesting—you look around the world, and the USA is clearly leading in many of these areas, but if you look at other countries you often find that our technology is very strong. That is not to be complacent. Look at Israel, Switzerland, or Singapore—and look at Ireland, which has done a fantastic job in attracting many of the world’s best companies. If they can do it in southern Ireland, why can we not do it in Northern Ireland, or in the north-east, or the north-west?
Lord Hennessy of Nympsfield (CB)
I add my welcome to this, the ninth industrial strategy since I have been on this earth. In the debate on the Autumn Statement that we had before Christmas I suggested that we were waiting for the eighth, but the noble Lord, Lord Mandelson, got in touch with me and said that I had forgotten his, for which I profoundly apologise. I read them all recently, in the build-up for this great day, and worries about productivity, which the Minister has stressed already, are at the heart of all of them. Can the Minister identify—in his own view, not a collective one—where the magic is in this Green Paper that was absent from all the others? What is there in this Green Paper that will bedazzle economic historians in the 2050s at the foresight the Government showed this day?
Lord Prior of Brampton
That is a good question, and I am sure that the answer will emerge over the next three months of consultation. To be realistic, there is no magic in these things. If you look around the world at countries which have got their industrial strategy right, whether it is Germany and technical education, Singapore and advanced manufacturing, or Switzerland and advanced pharmaceuticals, I am not sure that there is any magic. It is a combination of great research, great technical skills, efficient capital markets and an efficient competition policy. Actually, the UK has not done that badly. Let us not do ourselves down too much. If you look at science, between Oxford, Cambridge and London it is fantastic—absolutely world-class—and we do world-class things in many parts of the UK. However, on the noble Lord’s point, we need to refine this industrial strategy over the next three months, and the six months until the White Paper comes out, so that we are absolutely clear about what really makes a difference. That takes us back to the objectives that the noble Lord, Lord Mendelsohn, mentioned earlier on. We must have very clear objectives.
Hinkley Point C
Lord Hennessy of Nympsfield Excerpts(7 years, 7 months ago)
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Baroness Neville-Rolfe
I cannot agree with the noble Lord. In business you learn from mistakes and—I remember this well—from other people’s mistakes. As I have explained, EDF has learned from Flamanville and Finland, and CGN is already producing a reactor of this kind. The consortium is taking the construction risk. That is one reason why we believe this is a good approach.
Lord Hennessy of Nympsfield (CB)
My Lords, there is a curse on our country when we talk about civil nuclear power. I am old enough to have read the Eagle comic in 1954 and cut out a picture of Calder Hall, which was to provide the first civil electricity in the world. Indeed it did: we had a world lead. The story is tragic ever since. I hope we will not make a mistake of that magnitude this time.
I congratulate the Government on boosting the national security element in future civil nuclear procurement but, alluding to the contribution of the noble Lord, Lord Teverson, I ask the Minister that the submissions her department receives on the small modular reactors be placed in the Library for the illumination of your Lordships. Before we go in for these huge concrete and steel water reactors, maybe the future lies in smaller, safer and cheaper.
Baroness Neville-Rolfe
I will certainly look at what we can do about transparency relating to small nuclear reactors. It is something that, as a new energy team, we are in the process of looking at, as I have already said. The noble Lord, as always, makes a good point about the need for testing this idea.
I did not answer the point from the noble Lord, Lord Teverson, on tidal lagoons. We will take a decision on the future role of tidal lagoons in the UK’s energy mix following the conclusions of an independent review being undertaken by Mr Hendry, the former MP.